§ 152.08 RENT INCREASE BY APPLICATION TO THE COMMISSION.

   A park owner may seek a rent increase in addition to those permitted by § 152.07 on the ground that it is required to permit a just and reasonable return and maintain net operating income (NOI) in accordance with the following criteria:

   (A)    NOI means gross income less operation expenses.

   (B)    GROSS INCOME includes rents computed as gross rental income at 100% paid occupancy, plus interest from security deposits which shall be imputed at the rate of six percent of all deposits or actual interest, whichever is greater, plus late fees, fees collected for services and amenities not included in space rent including but not limited to, fees for recreational vehicle storage, cable TV, security, use of recreational facilities, income from coin-operated facilities, collections for utility services in excess of that paid by the park to the utility company, and any other income received in connection with use, occupancy or operation of the park, minus uncollected rents due to vacancy and bad debts to the extent that the same are beyond the owner's control. Uncollected rents in excess of three percent of gross rents shall be presumed to be unreasonable unless established other-wise. Where uncollected rents must be estimated, the average percentage of the preceding three years experience shall be used or some other comparable method.

   (C)    OPERATING EXPENSES includes license fees, real property, taxes, assessments, utility costs, except to the extent charges for utilities are not deemed rent and are passed through to residents, insurance, management expenses (owner performed or contracted), including reasonable advertising, accounting and managerial expenses, normal repair and maintenance and allowable legal expenses as set forth below. NORMAL REPAIR AND MAIN-TENANCE includes, but is not limited to, painting, cleaning, landscaping, repair of all standard services including plumbing, carpeting, electrical, furnished appliances and recreational facilities. Owner-performed labor shall be set out separately, documented and computed as compensated at the average hourly rate for such work. OPERATING EXPENSES shall not include:

      (1)   Avoidable and unnecessary increases since the base year;

      (2)   Mortgage principal, interest payments, and payments by the owner under any ground lease;

      (3)   Any penalties, fees, sanctions or interest assessed or awarded for this or any other law;

      (4)   Allowable legal fees include attorney's fees and costs incurred in connection with successful actions to evict residents or recover back rent and matters pertaining to the title of the mobile home park, but do not include fees in actions filed against the city, the Commission or in proceedings brought under this initiative except as follows: reasonable legal fees are allowable for successfully defending an NOI rent increase in court successfully defending a vacancy rent adjustment in court, or defending a rent increase in court approved by the Commission, whether successful or not. However, such legal fees allowable for litigation under this initiative must be amortized over a five-year period. No other attorney's fees are allowable. Park owners shall bear the burden of production and proof of the amount and purpose of such fees including reasonable rate per hour and hours spent and, should they fail to produce such evidence, all such fees shall be disallowed;

      (5)   Depreciation of the property and fees charged to the residents for capital improvements;

      (6)   Any expense for which the owner has been reimbursed for any security deposit, insurance settlement, judgement for damages, settlement or any other method;

      (7)   Reserve accounts.

   (D)   Park owners shall be entitled to increase the park's current NOI by 75% of the increase in CPI since 1984 which shall be the base year. Base year operating expenses and gross income for purposes of these rent adjustment provisions shall mean operating expenses and gross income in the year January 1, 1984 to December 31, 1984. For the purposes of this division, the 1984 CPI shall be 100 and the current CPI utilized in reviewing a rent increase application shall be the CPI last reported as of the date of the application. Gross income and operating expenses shall be adjusted to reflect the portion of the mobile home park that is subject to the initiative. Net income from spaces that are exempted from the initiative shall not be considered.

   (E)   Method of determination.

      (1)   To determine the net operating income during the base year, there shall be deducted from the base year gross income a sum equal to the actual base year operating expenses unless the owner demon-strates to the satisfaction of the Commission that some other 12-consecutive-month period is justified by exceptional reasons independent of the purpose of this subchapter, provided that in all cases, February 1, 1984 shall fall within the 12-month period utilized herein except as provided in subdivision (2) of this division.

      (2)   In the event that the owner did not own the subject park on January 1, 1984, the operating expenses for January 1, 1984, shall be determined in one of the following manners, whichever the Commission determines to be more reliable in the particular case:

         (a)   The previous owner's actual operating expenses as defined above, or where proven to be not available;

         (b)   Actual operating expenses for the first calendar year of ownership discounted by the formula set forth in subdivision (4) of this division.

      (3)   It may be determined that the base year net operating income yielded other than a fair return in which the base year net operating income yielded other than a fair return in which the base year net operating income may be adjusted accordingly. In order to make such determination, at least one of the following determinations is required:

         (a)   The owner's operating and maintenance expenses in the base year were unusually high or low in comparison to other years. In such instances adjustments may be made in calculating such expenses so the base year of operating expenses reflects average expenses for the property over a reasonable period of time. The following factors shall be considered in making this decision:

            1.   The owner made substantial capital improvements during the base year which were not reflected in the rent level;

            2.   Substantial repairs were made due to damage caused by natural disaster or vandalism;

            3.   Other expenses were unreasonably high or low, notwithstanding prudent business practices.

         (b)   The gross income during the base year was significantly lower than normal because of destruction of the premises and/or temporary eviction of construction or repairs, or other special circum-stances.

      (4)   Where the schedule of rent increases, or other calculations require projections of a prior year's income and expenses, it shall be presumed, subject to rebuttal, that operating expenses, exclusive of property taxes and management expenses, increased at the CPI, that property taxes increased at two percent per year, and that management expenses are five percent of gross income.

      (5)   The rent administrator shall grant an increase to an owner, in excess of that allowed by § 152.07(A) and (B), if it finds and determines that it is necessary to provide the owner with a net operating income, after adjustment for 75% of the increase in the CPI, equal to the net operating income, after adjustment of 75% of the increase in the CPI, equal to the net operating income realized for the park during the base year. The percentage rent increase needed to cover increases in operating expenses shall be calculated in the following manner:

Minimum %      Base Year         Current Year

Increase   =   Net Oper.   —   Net Oper.

Required      Income         Income

         (Adj by CPI)

            Current Year Gross Rent

('81 Code, § 8.48.080)

§ 152.09 HEARINGS AND PROCEDURES.

   (A)   All applications pursuant to this section and appeals of decisions of the rent administrator shall be filed on an application form provided by the rent administrator reflecting the various categories of information specified in this initiative that would justify a rent increase. The rent administrator shall have 30 days to determine the completeness of an application and shall notify the applicant in writing within that period of any deficiency in the application.

   (B)   Written notice of the application or appeal shall be mailed to the affected residents or park owner on the date on which it is determined to be complete. The notice shall inform the affected residents or park owner of the right to submit written, documentary and photographic responses to the application or appeal to the rent administrator within 30 days of the date notice of the application is mailed. One copy of the application shall be furnished to the resident representative of the affected residents or the park owner (whichever is not the applicant or appellant) by the rent administrator together with the notice of the application. Other copies of the application may be obtained by residents or other interested parties upon payment of a reasonable charge. The Commission shall hold a public hearing on the application no later than 75 days after the application is determined to be complete and shall render its decision in writing, including findings of fact, within 90 days after the date the application is determined to be complete.

('81 Code, § 8.48.081)

§ 152.10 MAXIMUM INCREASE IN 12-MONTH PERIOD.

   Notwithstanding any other provisions of this initiative, space rent may not be increased in excess of 12% in any 12-month period.

('81 Code, § 8.48.085) Penalty, see Ch. 12

§ 152.11 REGISTRATION, POSTING AND FEES.

   (A)   Every mobile home park shall file an annual registration statement on a form provided by the rent administrator, which sets forth the rent charged for each space in the park, the services included in that rent, and each space that is subject to a long-term lease pursuant to Cal. Civ. Code § 798.17, specified therein and any provisions for periodic increases in rent in such lease no later than February 15 of each year.

   (B)   The City Council shall adopt fees for the following by resolution:

      (1)   Annual registration fees not to exceed $2 per space per month based on the number of spaces in the mobile home park to be used for the cost of administering this subchapter. Such fees shall be paid by each park owner to the city at the time the initial and annual statements are filed. The fee may be apportioned equally among the spaces in the mobile home park and charged by the park owner to the residents according to such apportionment in 12 equal monthly installments which may be included with the monthly statement of rent due, but must be separately itemized. This fee shall not be included in the rent base when calculating rent adjustments;

      (2)   Application fees to cover the costs of processing an application on appeal, including but not limited to, mailing and notice costs, duplication costs, and the cost of an audit by a certified public accountant.

   (C)   A copy of this subchapter shall be posted in the office of every mobile home park and in the recreation building or clubhouse of every mobile home park. A copy of this subchapter shall be shown to every prospective resident of a mobile home park before the resident agrees to any rental agreement or lease. Verification that each prospective resident has reviewed this subchapter prior to agreeing to any rental agreement or lease shall be provided to the rent administrator by filing with the rent administrator a city certification form signed by the resident.

('81 Code, § 8.48.090) Penalty, see Ch. 13

Editor’s note:

   Pursuant to Res. 5416, passed 2-5-01, the annual registration fee shall be $1.00/month.

§ 152.12 RULES AND GUIDELINES.

   The rent administrator may adopt rules and procedures to implement the applications, notices, definitions and other provisions of this subchapter, including any forms required in connection therewith, and for the review of rent increase applications and the conduct of hearings. Such rules and guidelines shall be submitted to the Commission for review and approval.

('81 Code, § 8.48.100)

§ 152.13 AGREEMENTS.

   Nothing in this subchapter shall operate to restrict the right of the resident or management to enter into a agreement in accordance with Cal. Civ. Code § 798.17. Pursuant to Cal. Civ. Code § 798.17(c), the resident shall have the option to reject the offered rental agreement and accept a rental agreement for a term of 12 months or less, including a month to month agreement. No owner may require, directly or indirectly, that any resident or prospective resident sign a lease or rental agreement with a term in excess of 12 months or that provides that it shall be exempt from local rent control as a condition of residency in the park, and no owner may deny a tenancy to a prospective purchaser of a mobile home in the park on the ground that the prospective purchaser will not sign such a lease or rental agreement.

('81 Code, § 8.48.105)

§ 152.14 REMEDIES.

   (A)   Any person who demands, accepts or retains any rent in excess of the maximum rent permitted by this subchapter shall be liable in a civil action to the person from whom such payment is demanded, accepted or retained in the sum of the amount by which the payments demanded, accepted or retained exceed the maximum rent permitted by this subchapter together with reasonable attorney's fees and costs determined by the court. In the case of wilful violation, such person shall be liable for three times the amount together with reasonable attorney's fees and costs. An affected park resident may bring a civil action for declaratory and injunctive relief as well as damages for any violation by a park owner of this subchapter, and the affected park resident shall be awarded attorney's fees and costs if he prevails.

   (B)   The City Council may institute a civil action to compel compliance with this subchapter. The city shall be vigorous in defense of any and all litigation directed toward this initiative.

   (C)   If the owner retaliates against the resident because of the exercise by the resident of any rights under this initiative the owner shall be liable for actual damages, punitive damages in the sum of up to $1,000, costs, and reasonable attorney's fees.

('81 Code, § 8.48.110)