ORDINANCE NO._______________ BOARD OF SUPERVISORS, COUNTY OF SAN MATEO, STATE OF CALIFORNIA

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AN ORDINANCE ADDING CHAPTER 1.30 TO THE ORDINANCE CODE, REGARDING MOBILEHOME RENTS

The Board of Supervisors of the County of San Mateo, State of California, ORDAINS as follows:

Section 1. Chapter 1.30 is hereby added to Title 1 of the San Mateo County Ordinance Code to read as follows:

Chapter 1.30

MOBILEHOME RENT CONTROL

Sections:

1.30.010 Findings and Purpose.

1.30.020 Definitions.

1.30.030 Maximum Rent Increase.

1.30.030.1 Administrative Fee.

1.30.030.2 Service Reductions.

1.30.040 Rent Increase in Excess of Increase Allowed under Section 1.30.030.

1.30.050 Powers and Duties of the Hearing Officer.

1.30.060 Conduct of Proceedings, Hearings.

1.30.070 Standard of Review.

1.30.080 Decision of the Hearing Officer.

1.30.090 Tenant's Right of Refusal.

1.30.100 Prospective Buyer Protection.

1.30.110 Severability.

Section 1.30.010 Findings and Purpose.

The Board of Supervisors finds and determines that:

(a) There is presently, within the unincorporated area of the County of San Mateo and the surrounding areas, a shortage of spaces for the location of mobilehomes, resulting in a low vacancy rate and rising space rents.

(b) Alternative sites for the relocation of mobilehomes are difficult to find, and moving and installation of mobile homes is expensive, with possibilities of damage to the units.

(c) Mobilehome owners have invested substantial sums in their mobilehomes and appurtenances. If mobilehome space rents are not regulated, then mobilehome owners may experience severe financial hardships, including the loss of their substantial investments in their mobilehomes and appurtenances, since they do not have the option of moving their mobilehomes to spaces within the area with equivalent or lower rents.

(d) Beginning in April 2001, some mobilehome parks in the County began adopting rent increases that have been substantially in excess of the rate of the increase in the cost of living (as measured by the Consumer Price Index) and also began adopting substantial additional rent increases upon the change of ownership of mobilehomes.

(e) If space rents are allowed to be increased without limits upon a change in the ownership of a mobilehome, then the value of the mobilehome owners' investments may be severely reduced and mobilehome ownership may become financially unfeasible due to the precarious nature of the investment.

(f ) This Board does, accordingly, find and declare that it is necessary to protect the residents of mobilehomes from unreasonable space rent increases and/or assessments, while recognizing the need of mobilehome park owners to receive a just and reasonable return on their investment.

Section 1.30.020 Definitions.

"Capital improvements" means those improvements that materially add to the value of the property and appreciably prolong its useful life or adapt it to new uses and which may be amortized over the useful life of the improvements in accordance with the Internal Revenue Code.

"Consumer Price Index" or "CPI" means the Consumer Price Index for all Urban Consumers for the San Francisco-Oakland-San Jose area, published by the U.S. Department of Labor, Bureau of Labor Statistics.

"Hearing Officer" means the San Mateo County Environmental Services Agency Director or his/her designee.

"Mobilehome" means a mobilehome as defined in section 798.3 of the Civil Code.

"Mobilehome park" means any mobilehome or manufactured home park, as defined in section 798.4 and 798.6 of the Civil Code, which rents or leases spaces in the unincorporated area of San Mateo County.

"Mobilehome park owner" means the owner, lessor, operator or manager of a mobilehome park.

"Mobilehome tenant" means any person entitled to occupy a mobilehome dwelling unit pursuant to ownership thereof or a lease or rental arrangement with the owner thereof.

"Percent Change in Consumer Price Index" means the annual percent change in the Consumer Price Index, calculated to the nearest tenth, published for the month of July, issued in the month of August. In the event that an index is not published for the month of July, the closest preceding month for which an index is published shall be used.

"Rehabilitation" means that work done by an owner to a mobilehome space, or to the common area of the property containing a mobilehome space, which is 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 repair is not reimbursed by insurance proceeds.

"Rent" means the consideration, including any bonus, benefits or gratuity demanded or received in connection with the use and occupancy of a mobilehome space in a mobilehome park, but exclusive of any amounts paid for utilities, the use of the mobilehome dwelling unit, subletting or security deposit.

Section 1.30.030 Maximum Rent Increase.

Except as provided herein, a mobilehome park owner shall not demand, accept or retain rent for a mobilehome space which exceeds the rent in effect on July 1, 2003. If a previously rented mobilehome space was not rented on July 1, 2003, the owner shall not, except as provided herein, demand, accept or retain rent which exceeds the rent in effect during the last month the space was rented prior to July 1, 2003.

The rent payable for use or occupancy of any space in a mobilehome park shall not be increased more than once in any twelve (12) month period. Said rent increase shall not exceed seventy-five percent (75%) of the Percent Change in the Consumer Price Index, or five percent, whichever may be less. The initial twelve month period shall begin on July 1, 2003.

The provisions of this section shall apply regardless of whether there is a change in the mobilehome tenant occupying the space, or a change in ownership of the mobilehome.

Section 1.30.030.1 Administrative Fee.

An administrative fee shall be collected by the mobilehome park owner from the mobilehome park's tenants with their monthly space rents and shall be paid to the County on a bi-annual basis. The purpose of this surcharge is to reimburse the County for the expenses associated with enforcing and defending the provisions of this chapter. The initial administrative fee shall be set at two dollars ($2.00) per month per mobilehome space. The amount of the administrative fee for subsequent years shall be annually set by resolution of the Board of Supervisors.

Section 1.30.030.2 Service Reductions.

In the event the mobilehome park owner eliminates or reduces services or maintenance that had been provided on the base year date, then the rent shall be reduced by an amount that is proportionate to the value of the eliminated or reduced services or maintenance.

Any tenant or tenants who believe that they have been subjected to any such elimination or reduction of services or maintenance shall be entitled to file with the Hearing Officer a service-reduction rent-adjustment petition that requests that their rents be reduced by an appropriate amount. Any such service-reduction petitions shall be considered under the procedural provisions for considering rent-adjustment petitions that are set forth in Sections 1.30.050 and 1.30.060, below.

Section 1.30.040 Rent Increase in Excess of Increase Allowed Under Section 1.30.030.

A. If a mobilehome park owner believes that the maximum rent permitted by Section 1.30.030 of this chapter denies the park owner a fair return, an owner may request an adjustment in rents according to the provisions of this section. However, no owner of a mobilehome park may request more than one adjustment to rents during the twelve (12) month period following the first full day the rent increase authorized by Section 1.30.030 is put into effect.

B. An owner may request an adjustment in excess of the rent increase authorized by Section 1.30.030 by conforming to the following procedures:

1. The owner of a mobilehome park seeking an adjustment in rents must submit a petition for rent adjustment to the Hearing Officer. The petition shall contain relevant and detailed documentation supporting the level of rent increase requested.

2. The petition shall be filed with the Hearing Officer no later than sixty (60) days before the desired date the requested rent increase is to take effect.

3. The petition shall contain a copy of a certified letter sent to the affected tenants notifying them of the petition and the amount of increase requested.

4. The petition shall contain a statement attesting to the availability of any records required by the Hearing Officer to complete his or her review of the request for rent adjustment. Records shall include, but not be limited to, any audits of the mobilehome park's books, financial statements, and records relating to any governmental or utility assessments which have been levied upon the mobilehome park.

5. The petition shall be accompanied by a check or money order in the amount of two thousand dollars ($2,000.00) to cover costs incurred by the County in fulfilling the Hearing Officer's responsibilities. The fee is nonrefundable. However, at the conclusion of the hearing, and upon making a finding that the petitioner has both successfully pursued the petition and pursued it in good faith, the Hearing Officer may grant to the petitioner a monthly surcharge to be added to the rents of the tenants to recover this fee paid to the County. Such a surcharge shall be a limited-duration pass-through to be paid monthly by the tenants over a period of five years.

6. The petition shall be submitted under penalty of perjury.

Section 1.30.050 Powers and Duties of the Hearing Officer.

The Hearing Officer shall have the following powers and duties:

A. To receive, investigate, hold hearings on, and pass upon the petitions for rent adjustment;

B. To make or conduct such independent hearings or investigations as may be appropriate to obtain such information as is necessary to carry out his or her duties;

C. To adopt, promulgate, amend and rescind administrative rules to effectuate the purposes and policies of this chapter;

D. To prescribe the form for petitions for rent adjustment, including a formula that is consistent with the standard set forth in Section 1.30.070 below, for determining whether a mobilehome park owner is receiving a fair return on his or her investment such that the net operating income achieved by the park during the twelve (12) months preceding the last rent increase prior to the effective date of this chapter, with an appropriate allowance for inflation and properly amortized new capital improvements, is maintained.

E. To maintain for five years rent adjustment hearing files and dockets listing the time, date, and place of hearings, the parties involved, the addresses involved, and the final dispositions of the petitions.

Section 1.30.060 Conduct of Proceedings, Hearings.

A. Within fourteen (14) days of receiving a petition for rent adjustment the Hearing Officer shall determine if the information set forth in the petition is complete. If the Hearing Officer determines that the information set forth in the petition is complete then the Hearing Officer shall set a date for the hearing and shall notify all affected parties by mail of the date and time of the hearing at least 14 days before the hearing. If the Hearing Officer determines that the information in the petition is not complete then the Hearing Officer shall order the petitioner to produce the information that is needed to complete the petition. No hearing shall be set if the Hearing Officer determines the information contained in the petition is not complete until the Hearing Officer concludes that the deficiency is remedied. The date of filing the petition shall be the date of the receipt of the fully completed petition, with all informational deficiencies remedied and all required fees paid to the County, as determined by the Hearing Officer.

B. Within fourteen (14) days of receiving the petition, the Hearing Officer shall also determine if the employment of experts will be necessary or appropriate for a proper analysis of the petitioner's presentation. If the Hearing Officer so determines, the Hearing Officer shall also determine the anticipated costs of employing any such experts. The resulting figure shall be communicated to the petitioner. The petition shall not be further processed until the petitioner has paid to the County the estimated cost of expert analysis. Any unused portion for payment so collected shall be refunded to the petitioner. At the conclusion of the hearing, and upon making a finding that the petitioner has both successfully pursued the petition and pursued it in good faith, the Hearing Officer may grant to the petitioner a monthly surcharge to be added to the rents of the tenants to recover the expert costs paid to the County. Such a surcharge shall be a limited-duration pass-through to be paid monthly by the tenants over a period of five years. Any experts hired pursuant to this section shall be instructed to give an unbiased analysis.

C. The hearing shall be set for a date not less than thirty (30) nor more than one hundred and twenty (120) days after the date of filing the petition for rent adjustment.

D. The park owner and the tenants shall both have the right to request and receive reasonable continuances of the hearing in order to give them sufficient time to retain legal and professional assistance, to evaluate the petition and the information and documentation submitted in support of the petition, and to adequately prepare their support or opposition to the petition.

E. No hearing shall be continued to a date later than one hundred and twenty (120) days from the date of filing the petition for rent adjustment unless the conduct of the petitioner or other good cause is responsible for the delay.

F. During the course of the hearing and pre-hearing process, if the Hearing Officer determines that additional information or documentation is needed from the petitioner to effectively evaluate the petition, then the Hearing Officer shall order the petitioner to produce that information or documentation in a sufficient amount of time to be effectively evaluated prior to the hearing. The tenants or park owner shall be entitled to make reasonable requests to the Hearing Officer that the Hearing Officer order the petitioner to produce additional information or documentation that the opposing side needs to reasonably evaluate the petition and to prepare an effective opposition to the petition.

G. The hearing need not be conducted according to technical rules relating to evidence and witnesses. Any relevant evidence may be admitted if it is the sort of evidence on which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of any common law or statutory rule which might make improper the admission of such evidence over objection in civil actions.

H. In the event that either the owner or the tenants or both should fail to appear at the hearing, the Hearing Officer may hear and review such evidence as may be presented and make such decisions just as if both parties had been present or continue the hearing or dismiss the petition for rent adjustment.

I. Materials received by the Hearing Officer in conjunction with a petition for rent adjustment shall be maintained in the County Clerk's office and shall be available for review by the public during normal working hours.

Section 1.30.070 Standard of Review.

It shall be presumed that the application of Section 1.30.030 of this Chapter to the rents as of the base year date, July 1, 2003, results in a fair rate of return. This presumption can be overcome by a mobilehome park owner demonstrating that a larger increase is needed to achieve a fair return on the park owner's investment, such that the net operating income achieved by the park during the twelve-month period preceding the base year date, with an appropriate allowance for inflation and properly amortized new capital improvements, is maintained. Changes in ownership of the park after the effective date of this Chapter shall not entitle any succeeding park owner to higher rents than would have been paid if the original owner had remained the park owner.

Should it be determined that the base year's net operating income yielded other than a fair return on investment, the base year's net operating income may be adjusted accordingly. In order to make such a determination, the Hearing Officer must make at least one of the following findings:

(1) The mobile home park's operating and maintenance expenses in the base year were unusually higher or lower in comparison to other years. In such instances, adjustments may be made in calculating such expenses so the base year's operating expenses reflect average expenses for the mobilehome park over a reasonable amount of time.

(2) The rent on the base year date was disproportionate in comparison to other years. In such instances, adjustments may be made in calculating such rents so the base year's rents reflect average rents for the mobilehome park owner over a reasonable amount of time, adjusted by 75% of the CPI increase to the base year date.

Section 1.30.080 Decision of the Hearing Officer.

A. The Hearing Officer shall adopt findings and a decision no later than thirty (30) days after the conclusion of the hearing on any petition. All parties shall be sent a copy of the findings and decision.

B. Based on his or her findings, the Hearing Officer shall deny the rent adjustment requested in the petition, grant the request, or set the rent adjustment at an amount less than requested.

C. The action of the Hearing Officer shall be subject to judicial review pursuant to Code of Civil Procedure Section 1094.5.

Section 1.30.090 Tenant's Right of Refusal.

A tenant may refuse to pay any increase in rent which is in violation of this chapter. Such refusal to pay shall be a defense in any action brought to recover possession of a mobilehome space or to collect the rent increase.

Section 1.130.100 Prospective Buyer Protection.

It shall be unlawful for any mobilehome park owner or manager to directly or indirectly require any homeowner or prospective homeowner to sign a rental agreement with a term in excess of twelve (12) months as a condition of residence in a mobilehome park.

Section 1.30.110 Severability.

If any provision of this chapter or application thereof to any person or circumstances is held invalid, this invalidity shall not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application, and to this end, the provisions of this chapter are declared to be severable. This chapter shall be liberally construed to achieve the purposes of this chapter and to preserve its validity.

Section 2. This ordinance shall be effective thirty (30) days from the date of passage thereof.

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