Selma Municipal Code Ch. 5.5 Mobile Home Rent Stabilization

Mobile Homes in the state are exempt from California Rent Control Laws, making rent stabilization a "local control issue." Mobile Home tenants, unlike apartment tenants or residents of rental units, are in the unique position of having made a substantial investment in a residence where their space is rented or leased. Because mobile homes are often owned by senior citizens, persons on fixed incomes, and persons of low and moderate income, exorbitant or frequent rent increases may cause these individuals undue financial hardships.

The purpose of a rent stabilization ordinance is to prevent excessive rent increases and exploitation of the City's current mobile home inventory while maintaining the opportunity for mobile home park owners to receive a fair and reasonable return on their investment. The City's research identified the difficulties senior residents have in making increased payments while being on fixed incomes, the lack of disclosure of justification for mobile home rent increases, and the established rent stabilization ordinances that other comparable jurisdictions have implemented. The Council finds and declares it necessary to protect the owners and occupiers of mobile homes from unreasonable rent increases while at the same time recognizing the need for mobile home park owners to receive a fair return on their investment and rental increases sufficient to cover the increased costs of repairs, maintenance, insurance, upkeep, and additional amenities. (Ord. 2024-5, 6-17-2024)

The following words and phrases when used in this chapter shall for the purpose of this chapter have the meanings respectively ascribed to them in this section:

AFFECTED TENANTS: All tenants in a mobile home park who have been notified that a space rent increase is to become effective within the following twelve (12) months.

BASE RENT: The rent charged for a mobile home space on the effective date of this chapter; or rent charged for a space immediately following the transfer of ownership, vacancy due to eviction, vacancy due to a move off, or subsequent transfers of ownership; or the initial rent charged for a newly created space within an existing mobile home park "Base Rent" shall not include:

1. Utility charges for sub-metered gas and electricity.

2. Capital Expenses authorized under Section 5-5.5-5.

3. Charges for water, refuse disposal, sewer service, and/or other services which are either provided and charged to mobile home residents solely on a cost pass-through basis and/or are regulated by state or local law.

4. Any amount paid for the use and occupancy of a mobile home unit (as opposed to amounts paid for the use and occupancy of a mobile home space).

5. Charges for laundry services.

6. Storage charges.

CAPITAL EXPENSE: A capital replacement of existing facilities or capital improvements, does not exceed ten thousand dollars ($10,000.00) at the time of the effective date of this Chapter and in subsequent years is annually adjusted at the same percentage rate as Base Rent, that materially add to the value of the property, have an expected life of more than one year, and is located within the geographic boundaries of a mobile home park, or outside such boundaries but which are directly and primarily for the benefit of the park. Capital expenses shall be amortized over the useful life of the improvements of the building pursuant to the straight-line depreciation provisions of the Internal Revenue Code, and the regulations issued pursuant thereto. Examples of a capital expense are, but are not necessarily limited to, resurfacing of existing park roadways or replacing underground pipe systems within the park.

CITY: The City of Selma.

CONSUMER PRICE INDEX: All items for the West Region for all-urban consumers as reported by the Bureau of Labor Statistics of the United States Department of Labor.

LANDLORD: The mobile home park owner.

LEASE: A written agreement between a landlord and a mobile home tenant for the use and occupancy of a rental space to the exclusion of others, and consistent with the provisions under Section 5-5.5-3(C).

MAINTENANCE AND OPERATION EXPENSES: All expenses incurred in the operation and maintenance of the mobile home park, but excludes costs identified as exempt from Base Rent Increases in Section 5-5.5-4(E).

MOBILE HOME: A structure transportable in one or more sections, designed and equipped to contain not more than one dwelling unit, and to be used with or without a foundation system.

MOBILE HOME PARK: Any parcel (or two (2) or more contiguous parcels) within the City of Selma where ten (10) or more mobile home spaces are rented or leased for the purpose to accommodate mobile homes used for human habitation.

MOBILE HOME SPACE AND/OR LOT: A portion of a mobile home park designed or used for the occupancy of one mobile home.

OPERATING EXPENSES: Those operating expenses paid by the owner as described in Section 5-5.5-8(A)

PARK OWNER and/or OWNER: The mobile home park owner(s).

RENTAL AGREEMENT: A lease, which is consistent with the provisions as stated under Section 5-5.5-3.

RENT INCREASE: Any additional amount demanded of or paid by a tenant in excess of the rent paid for the mobile home space immediately prior to such demand or payment.

SPACE RENT: Any consideration required for the use and occupancy of a mobile home space in a park including all amenities, utilities, services, and benefits.

SUBSTANTIAL REHABILITATION: Work done by an owner to a mobile home space or to the common area of the mobile home park, exclusive of a capital improvement (as defined within this chapter), the value of which exceeds five hundred dollars ($500.00) which are performed either to secure compliance with any state or local law or to repair damage resulting from fire, earthquake, or other casualty or natural disaster, to the extent such work is not reimbursed by insurance or security deposit proceeds.

TENANT: A tenant, subtenant, lessee, sublessee, or any other person entitled to the use or occupancy of any mobile home space under a rental agreement, lease, or other expression of tenancy. (Ord. 2024-5, 6-17-2024)

The provisions of this section shall not apply to rent or rent increases for new mobile home parks created after the effective date of this chapter or new individual lots created (above the current number of total spaces within an existing park as of the effective date of this chapter) for a period of twelve (12) months.

(A) The provisions of this chapter shall not apply to rent or rent increases for new and/or relocated mobile homes placed on vacated lots for a period of twelve (12) months following the first day the lot is re-occupied.

(B) The provisions of this chapter shall not apply to any mobile home lot that is under a lease, voluntarily entered into between a landlord and a mobile home tenant where the lease meets all of the following criteria:

1. The lease was entered into on or after the effective date of this chapter;

2. The term of the lease is in excess of a thirty-six (36) month duration;

3. The mobile home lot which is under the lease is used for the personal and actual residence of the mobile home tenant;

4. The first paragraph of the lease contains a provision notifying the mobile home tenant that the mobile home lot will be exempt from the provisions of this chapter; and

5. This exclusion shall apply only for the duration of the term of the lease and any uninterrupted, continuous extensions thereof. If the term of the lease is not extended and no new rental agreement meeting the above stated criteria is entered into, this chapter shall immediately become applicable to the mobile home lot and the last rental rate charged for the lot under the immediately preceding rental agreement shall be the rent for the purposes of determining the base rent under this chapter.

(C) The provisions of this chapter shall not apply to mobile home lots, for a period of twelve (12) months, immediately following:

1. The transfer of ownership after the effective date of this chapter;

2. For any subsequent transfers occurring after the effective date of this chapter; and

3. A vacancy occurring because the prior mobile home tenant was evicted for nonpayment of rent, issuance by the tenant of checks drawn against insufficient funds or closed accounts, chronically late payment of rent, the tenant's commission of waste upon the mobile home and/or lot, the tenant's total disregard for maintenance, the tenant's commission or permitting of a nuisance on the premises, the tenant's use of the premises for an unlawful purpose, or other material violation of a reasonable provision of a written rental agreement.

(D) The provisions of this chapter shall not apply to mobile home lots that are exempt through State Law exemptions such as Civil Code Section 798.45 and Section 798 et seq. or owned by any Government Agencies.

(E) The provisions of this chapter shall not apply to a mobile home park that has entered into a Memorandum of Understanding or other Agreement with the City of Selma for enforcement of rent stabilization provisions consistent or more restrictive with the limits established in Section 5-5.5-4. (Ord. 2024-5, 6-17-2024)

Any base rent increase proposed to take effect on or after the effective date of the ordinance codified in this chapter, shall be subject to this chapter.

(A) Base Rent may be increased to an amount equal to the rent in effect of that current year, adjusted by seventy-five percent (75%) of the increase in the percentage increase in the Consumer Price Index, West Region (CPI), of that year or by three percent (3%), whichever is less.

(B) A 100-day advance written notice of rent increase shall be provided to the tenants. All rent increase notices shall be given to the tenants on the same day each calendar year and subsequent years.

(C) A park owner shall not demand, accept or retain rent for a mobile home space exceeding the rent in effect on the effective date of this chapter, except as provided in this chapter.

(D) Base Rent increases shall not be increased more than once in any twelve (12) month period.

(E) Base Rent increases shall only apply to the base rent for the mobile home space. Annual Government Costs which could include municipal utilities, general property taxes, special property assessments, and governmental regulatory, processing or permitting fees, shall not be calculated within the rent stabilization methodology but shall be itemized for informational purposes to tenants.

(F) Any base rent increase (within any twelve (12) month period) which exceeds the maximum permitted under (5-5.5-4(A)) may be challenged to a formal petition hearing under the provisions of section 5-5.5-6.

1. Any rent increases exceeding the base rent in effect of that current year and are subject to a formal hearing may not become effective or be collected by the landlord until such time that the increase increment is approved under a formal petition hearing. (Ord. 2024-5, 6-17-2024)

(A) A park owner may obtain a pass-through of a capital expense under this section. Any capital expense shall be identified separately and listed on rent statements along with their date of expiration. The owner may request recovery of the cost of materials, labor, construction, interest, and permit fees. All improvements, replacements, or rehabilitations shall have been approved in advance by the majority of the park tenants, and the cost of such items is fully amortized over the useful life of the improvement.

(B) New Capital Expenses: Capital Expenses that did not previously exist in the park shall be deemed "new capital expenses" unless the park owner is required by law to make the capital expenses. A park owner may charge each affected mobile home tenant as additional rent the pro rata share of new service and capital expenses including financing costs subject to the following preconditions:

1. Prior to initiating the service or incurring the capital expense, the park owner must consult with the mobile home tenants regarding the nature and purpose of the improvements and the estimated cost of the improvement.

2. Protest in writing by a majority of the tenants (fifty percent (50%) or more) of the occupied spaces within the park is not received. Tenants that do not submit a protest in writing shall be counted as an affirmative vote in favor of the capital expense proposed;

(C) All new fees must be noticed sixty (60) days prior to initiation and be itemized on the resident's bill prior to collection of fees. If the fee or charge has a limited duration or is amortized for a specified period, the expiration date shall be stated on the initial notice and each subsequent billing to the tenants while the fee or charge is billed to the tenant (California Civil Code §798.32(a) of the Mobilehome Residency Law (MRL). (Ord. 2024-5, 6-17-2024)

(A) Any mobile home tenant who will be or has been subjected to a proposed rental increase may file a petition and concurrent response. The petition shall be signed by more than fifty (50%) of the tenants affected by the rent increase. The petition shall be submitted at least forty (40) days prior to when such an increase would otherwise take effect. A submitted petition to the City shall contain the following terms to consider an official petition submittal.

An official Petition submittal must contain the following.

1. Clear and concise terms why, in the petitioner's opinion, the rent increase is not justified under the ordinance. Reference to the specific ordinance in violation must be identified.

2. The printed names of all affected mobile home tenants with their respective space number denoted and original petition signatures, with the date of signature.

3. The total numbers of mobile home rental spaces within the park; and

4. The name, address and space number, and telephone number of the tenants or the tenant's representative filing the petition.

(B) Receipt Of The Petition:

1. Upon receipt of a completed and official petition by tenants, as specified under subsection 5-5.5-4(A), the Community Development Department shall set a date for the next available city council meeting no sooner than ten (10) days nor later than thirty (30) days after the receipt of the completed petition.

2. A notice shall be sent to all affected parties via first class mail by City staff. The notice shall display the date, time, and place of the hearing.

(C) In the event a petition fails to meet all the submittal requirements listed in Section 5-5.5-6(A), City staff shall respond with a statement of the listed deficiencies, within the next ten (10) days. The party filing the petition shall have fifteen (15) days to correct and refile the appeal. If the applicant(s) fail to meet the time limitation the petition shall be deemed to have been abandoned. (Ord. 2024-5, 6-17-2024)

(A) The purpose of the hearing shall be to allow the two (2) parties the opportunity to present their differences concerning the proposed rent increase and settle them in a final manner.

(B) The park owner shall provide clear and concise terms why, in the park owner's opinion, the rent increase is justified under the ordinance section 5-5.5-8. Reference of the specific ordinance must be identified.

(C) Both the park owner and the affected tenants may appear at the City Council hearing and offer oral and/or documentary evidence. Both the park owner and the affected tenants may designate a representative to appear for them at the hearing.

(D) The City Council shall use the standards of review outlined under Section 5-5.5-8 for the hearing proceedings.

(E) If City Council determines that the proposed space rent increase is not reasonable under the circumstances, then that portion of the proposed space rent increase that exceeds the amount allowed under Section 5-5.5-4(A) shall be suspended and the base rent going forward shall be defaulted to seventy five (75%) of the percentage increase in the Consumer Price Index, West Region (CPI), of that year or by three percent (3%), whichever is less.

(F) If the City Council Determines that all or a portion of the proposed rent increase is reasonable under the circumstances, then City Council shall grant all or such portion of the rent increase to be effective as of the time such increase would have been otherwise effective without the intervention of this chapter.

(G) The decision of the City Council is final and binding upon the owner and all affected tenants. Any party disputing the final decision and findings of the City Council may seek review of the arbitrator's actions pursuant to Sections 1094.5 and 1094.6 of the California Code of Civil Procedures. (Ord. 2024-5, 6-17-2024)

In evaluating any proposed space rent increase, that exceeds the maximum permitted under Section 5-5.5-4(A), the following factors should be considered by City Council:

(A) Unavoidable increases in maintenance and/or operating expenses, including but not limited to the reasonable value of:

1. The owner's and/or landlord's labor,

2. Any caretaker's labor;

(B) The physical condition of the mobile home park and the amenities provided for each individual space, including the quantity and quality of maintenance and repairs performed during the preceding twelve (12) months;

(C) Substantial rehabilitation work that has been completed;

(D) Capital expenses that have been added, as long as such work is:

1. Distinguished from ordinary repair and maintenance;

2. A majority of the tenants (fifty percent (50%) or more) of the occupied spaces within the park have protested the proposed expense.

3. Permanently fixed in place or relatively immobile and appropriate to the use of the property;

4. Cost factored must be averaged on a per space basis and amortized over the good faith estimate of the remaining useful life of the improvement and distributed among;

5. Not coin-operated nor one for which a "use fee" or other charge is imposed on the tenants for its use;

6. Does not include depreciation expenses as an operating expense in the calculation of expenses.

(E) A fair and reasonable rate of return on the owner's investment in the park, and other financial information that the park owner is willing to provide. (Ord. 2024-5, 6-17-2024)