Chapter 5.13 MOBILE HOME RENT REVIEW AND STABILIZATION*

* Sections 5.13.01 through 5.13.07, codified from Ordinance No. 78-41, as amended by Ordinance Nos. 79-12, effective April 19, 1979, 79-56, effective February 6, 1980, 80-1, effective February 20, 1980, 81-13, effective May 6, 1981, 82-12, effective June 2, 1982 and 85-22, effective November 20, 1985, and replaced in their entirety by Ordinance No. 92-23, effective December 1, 1993.

5.13.01 Preamble: Findings and declaration of purposes.

(a) In 1978, the City enacted a rent stabilization ordinance for mobile home parks. The purposes section of that ordinance stated the following:

“There is presently within the City and the surrounding areas a shortage of spaces for the location of mobile homes. Because of the shortage there is a low vacancy rate, and rents have been for several years, and are presently, rising rapidly and causing concern among a substantial number of the residents of the City. Because of the high cost of moving mobile homes, the potential for damages resulting therefrom, the requirements relating to the installation of mobile homes, including permits, landscaping, and site preparation, the lack of alternative homesites for mobile home residents, and the substantial investment of mobile home owners in such homes, 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 of 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.”

These conditions which justified a rent stabilization ordinance in 1978 justify continuing rent stabilization in the City for mobile homes.

(b) In addition to those conditions, the City makes the following findings:

(1) The substantial investment in mobile homes results not only from the initial costs of the home and transportation to the site where the home will be placed, but also from the requirements relating to installation, maintenance, and repairs of the home, including permits and landscaping.

(2) Once mobile homes are placed on a site, or what is typically referred to as a pad or a mobile home space if placed in a mobile home park, the home essentially becomes fixed and it is extremely expensive to move the home.

(3) In the process of moving a mobile home, there is a potential for significant damage to the home.

(4) Mobile homes are, therefore, in reality “immobile.” Because of this immobility, if a park owner substantially and unreasonably increases the rent charged to a mobile home owner, the home owner does not have the option of simply moving his or her home to another park.

(5) Moreover, except for the addition of thirty-nine (39) spaces to an existing park in 1980, no new mobile home parks with additional spaces have been built in the City in over twenty (20) years and there is currently a shortage of spaces in mobile home parks in the City and surrounding areas for the placement of mobile homes. Thus, alternative sites for the relocation of mobile homes are difficult to find. Alternative sites are also difficult to find due to restrictions on the age, size, or style of mobile homes permitted in many parks. Therefore, if rents increase beyond a home owner’s ability to pay, the home owner’s only option is to sell his or her home in place.

(6) The amount of rent charged has a direct correlation to the sale of the home. If rents are unreasonably high in the market place, or will become unreasonably high upon a sale of a mobile home, home owners will be unable to find a buyer for their home. Home owners thus could be in an awkward situation of simultaneously (a) being unable to afford the rent, (b) being unable to move their home, and (c) being unable to sell their home.

(7) The result of these conditions is the creation of a captive market of mobile home owners and a creation of a great imbalance in the bargaining position of the park owners and mobile home owners in favor of the park owners.

(8) Absent a continuation of rent stabilization in the City, the inequitable market situation threatens to contribute to rapidly escalating rents, and threatens to diminish the value of the investments of mobile home owners.

(9) Any large rent increase will be particularly hard upon mobile home owners because many are senior citizens on fixed incomes.

(10) Therefore, this City Council finds that a continuation of mobile home rent stabilization is necessary to protect owners of mobile homes located in mobile home parks from arbitrary, capricious, or unreasonable rent increases in light of the nature of mobile homes and the mobile home market conditions in Clovis and the surrounding areas, and to protect owners of mobile homes of their substantial investment.

(11) At the same time, the City also recognizes that a rent stabilization ordinance must be fair and equitable for all parties, and provide appropriate incentive for park owners to operate their parks efficiently and profitably, and to ensure that park owners are receiving a fair return on their investment.

(c) The rent stabilization ordinance adopted in 1978 has been declared constitutionally valid. The ordinance has also proven to be beneficial to the citizens of Clovis. However, application of the ordinance has resulted in costly rent review hearings and lengthy litigation.

(d) Park owners are constitutionally entitled to a fair return on their investment in their mobile home park. In any given year, it is presumed that park owners are receiving a fair return on that investment. Traditionally, a base year is chosen which is either the year in which a rent stabilization ordinance is adopted or a previous year. In Clovis, rent stabilization has been in effect since 1978, and it is presumed that park owners have been receiving a fair return on their investment since 1978 and that they are receiving a fair return on their investment today.

(e) The park owners’ primary concern with the 1978 ordinance is that they were unable to impose, if necessary, an automatic increase in rent every year without being subject to rent review to ensure that they continue to receive a fair return on their investment. Another concern was the length of the rent review process which resulted, in part, from having a two-step review process before a five (5) member rent review commission and the City Council.

(f) The home owners’ primary concern with the 1978 ordinance is that it provides them with protection from abuses by park owners, namely, protection from unreasonable rent increases. Home owners want those protections to continue.

(g) In March, 1993, the City Council directed that changes be made to the 1978 rent stabilization ordinance. The purposes were to: (1) avoid the costly hearings and litigation that plagued the 1978 ordinance; (2) continue to provide protection to home owners; (3) ensure that park owners are receiving a fair return on their investment as constitutionally required.

(h) At the direction of the City Council, the City Attorney prepared a proposed draft ordinance to replace the 1978 ordinance. The City Council created a Citizen’s Advisory Committee consisting of home owners and park owners to meet and discuss the proposed ordinance. That Committee has met and the meetings were conducted with the assistance of the offices of the City Manager, City Clerk, and City Attorney.

(i) The home owners and park owners have reached substantial agreement on most provisions of the proposed ordinance as revised.

(1) It is generally agreed that park owners should be allowed to receive a percentage rent increase every year tied to the Consumer Price Index (“CPI”) and that an increase above that is only appropriate if the park owner incurs unusual expenses. A CPI increase would be exempt from rent review, and any other rent increase would not be exempt. Home owners and park owners cannot agree upon which CPI formula to use.

(2) It is also generally agreed that any rent review hearing should be conducted by a professional hearing officer with expertise in rental disputes, preferably having experience in mobile home rent control disputes.

(j) A survey of other California cities that have mobile home park rent control ordinances with CPI formulas shows a broad range of formulas from a straight fifty (50%) percent of the CPI to a straight 125 (125%) percent of the CPI, with numerous variations in between. Many of the formulas are tied to seventy-five (75%) percent of the CPI, often with either a minimum increase usually ranging from three (3%) percent to eight (8%) percent, or a tiered formula. A tiered formula, for example, would be one hundred (100%) percent of the CPI up to five (5%) percent and seventy-five (75%) percent of the CPI in excess of five (5%) percent. Many of the formulas have a cap and a floor, for example, a minimum of three (3%) percent and a maximum of nine (9%) percent. One of the principal reasons for having less than a straight one hundred (100%) percent of the CPI is that all of the mobile home park expenses do not necessarily go up with the CPI.

(k) Under the 1978 ordinance, upon a home owner selling his or her home, or moving his or her home, there is no limit upon which a park owner could raise the rents for new home owners. This is known as vacancy decontrol. Recent case law indicates that a city can lawfully restrict park owners from raising rents upon a home owner selling his or her home. This is known as vacancy control. The purpose for such a restriction is to avoid the awkward situation discussed in subsection (b)(6) of this section. Nonetheless, the City recognizes that the ordinance codified in this chapter must be fair and equitable to all parties, and provide appropriate incentives for park owners to operate their parks efficiently and profitably and, therefore, the City finds that neither full vacancy decontrol, nor full vacancy control is appropriate. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.02 Definitions.

For the purposes of this chapter, certain words and phrases used in this chapter are defined as follows:

“City” means the City of Clovis.

“City Clerk” means the City Clerk of the City of Clovis or the City Clerk’s designee.

“City Manager” means the City Manager of the City of Clovis or the City Manager’s designee.

“Capital improvements” means those new improvements which directly and primarily benefit and serve the existing mobile home park residents by materially adding to the value of the mobile home park, appreciably prolonging its useful life or adapting it to new uses, and which are required to be amortized over the useful life of the improvements pursuant to the provisions of the Internal Revenue Code and the regulations issued pursuant thereto. “Capital improvements costs” shall mean all costs reasonably and necessarily related to the planning, engineering and construction of capital improvements and shall include debt service costs, if any, incurred as a direct result of the capital improvement.

“Capital replacement” means the substitution, replacement or reconstruction of a piece of equipment, machinery, streets, sidewalks, utility lines, landscaping, structures or part thereof of a value of Five Thousand and no/100ths ($5,000.00) Dollars or more which materially benefits and adds value to the mobile home park. “Capital replacement costs” means all costs reasonably and necessarily related to the planning, engineering and construction of capital replacement and shall include debt service costs, if any, incurred as a direct result of the capital replacement.

“Debt service costs” means the periodic payment or payments due under any security or financing device which is applicable to the mobile home park including any fees, commissions, or other charges incurred in obtaining such financing.

“Designated representative” means a person appointed in writing by either (1) a park owner, (2) a resident, or (3) a group of residents, and who is authorized to represent the interests of, negotiate on behalf of, and bind the appointing party.

“Filing” means actual receipt of the item being filed by the person designated in this chapter to receive the item, or by his or her designee.

“Home owner” means any person who has an ownership interest in a mobile home which is under a rental agreement in a mobile home park, or a tenancy in a mobile home park under a rental agreement.

“Maintenance and operation expenses” means all expenses incurred in the operation and maintenance of the mobile home park, including but not limited to: Real estate taxes, business taxes and fees, insurance, sewer service charges, utilities, janitorial services, professional property management fees, pool maintenance, exterior building and ground maintenance, supplies, equipment, refuse removal, and security services or systems.

“Mobile home” means a structure designed for human habitation and for being moved on a street or highway under permit.

“Mobile home park” means an area of land where two (2) or more mobile home sites are rented, or held for rent, to accommodate mobile homes used for human habitation.

“Owner” or “park owner” means the owner of a mobile home park.

“Rent” means the consideration, including any bonus, benefits or gratuity, demanded or received in connection with the use and occupancy of a mobile home space in a mobile home park, including services and amenities, but exclusive of any amounts paid for the use of the mobile home dwelling unit.

“Rent increase” means any additional rent demanded of or paid by a resident for a rental space and related amenities, including any reduction or elimination of amenities without a corresponding reduction in the moneys demanded or paid for rent.

“Rental space” means a space or lot rented in a mobile home park or offered for rent in the City for the purpose of occupancy by a mobile home with all services connected with the use or occupancy thereof.

“Resident” means a home owner or other person who lawfully occupies a mobile home.

“Services” means those actions taken by a park owner which enhance the use of the rental lot or space, including, but not limited to, repairs, replacement, maintenance, painting, heat, hot and cold water, utilities, security devices, laundry facilities and privileges, janitorial service, refuse removal, telephone service, and meeting, recreational, and other facilities in common areas of the mobile home park in which the space or lots are located.

“Tenancy” means the right of a home owner to the use of a space within a mobile home park on which to locate, maintain, and occupy a mobile home, space improvements, and accessory structures for human habitation, including the use of the services and facilities of the park. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.03 Applicability.

The provisions of this chapter shall not apply to any mobile home park which contains fewer than twenty-five (25) spaces. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.04 Increases subject to review: Exceptions.

(a) Except as provided in subsection (b) of this section, any 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.

(b) Park owners may impose rent increases within the following limits without being subject to review under this chapter.

(1) An increase based upon the rent charged on the date twelve (12) months prior to the date the increase is to take effect, multiplied by cost of living factor and rounded off to the nearest dollar. The cost of living factor shall be as follows:

Eighty (80%) percent of the CPI (.80 CPI) where the increase in the CPI is five (5%) percent or less.

Fifty-two (52%) percent of the CPI (.52 CPI), plus 1.4 where the CPI is in excess of five (5%) percent, but equal to or less than ten (10%) percent.

Twenty-three (23%) percent of the CPI (.23 CPI), plus 4.3 where the CPI is in excess of ten (10%) percent.

For example, if the CPI increase is seven (7%) percent, the cost of living factor would be computed as follows: (.52 x 7.0) = 3.64 + 1.4 = 5.04. The cost of living factor is 5.04. (See Exhibit A attached to the ordinance codified in this chapter and found on file in the office of the City Clerk).

“CPI” shall mean the percentage change in the Consumer Price Index for CPI-W Urban Wage Earners and Clerical Workers, All Items U.S. City Average, published by the United States Department of Labor, Bureau of Labor Statistics and Research, over the most recent twelve (12) month period for which figures are available through the month before the month preceding the date notice of the rent increase is given. The most recently published CPI figure available at the time the rent increase notice is given shall be used for the calculation. The City will supply to each park owner/representative the published CPI figure to be used in any rent increase. Each park owner/representative shall post such document in areas easily seen by residents of the park. Such areas would include, but are not necessarily limited to, the recreation area (if applicable), the office area, and the mail box area. The park owner/representative shall also provide a copy of such document with any notice of a rent increase.

(2) Following an in-place sale turnover of a rental space:

(i) The park owner may increase the rent to an amount that is not more than five (5%) percent above the rent for that space. An “in place sale/turn over” shall mean the transfer, sale, or conveyance of a mobile home that will remain in the same mobile home space after such transfer, sale or conveyance.

(ii) No increase in rent shall be allowed when:

(aa) A mobile home is removed from its space for the purpose of installing another mobile home in its place by the same home owner;

(ab) When a surviving spouse inherits an interest in a mobile home;

(ac) A home owner who acquires for owner occupancy another mobile home within the same park.

(3) The rent increases allowable under this section are the maximum rent increases which may be imposed without being subject to rent review. Nothing herein is intended to prohibit or discourage a park owner from imposing rent increases below the maximum allowable under this section, or a zero increase.

(4) The City finds that the CPI and vacancy control formulas set forth in this section are rationally and reasonably related to the purposes of this chapter. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.05 Limitations on rent increases.

(a) Each park owner/representative shall establish an anniversary date for all space increases, except space increases for “an in-place sale turnover” pursuant to Section 5.13.04(2). Such yearly increases, if any, except as specified in this section, shall be enacted only on the anniversary date of that park. The increases allowed by the terms of this chapter shall be applied equally on such annual basis to all spaces subject to an increase as provided in this section. The anniversary date shall be at least one year following the last rent increase imposed prior to the effective date of this ordinance.

(b) Any home owner of any park who has become a home owner within the three (3) months preceding the anniversary date for an anticipated rent increase shall be excluded from such rent increase as may occur on the anniversary date of the park until such time as three (3) months shall have elapsed, at which time any rent increase imposed against them shall not exceed the amount imposed against all other spaces in the park. Thereafter, the home owner shall be subject to the anniversary date.

(c) If due to an unforeseen emergency a park owner’s cost to operate and maintain the park escalates to such an extent that the park owner will suffer undue hardship if not allowed a rent increase prior to the anniversary date, the park owner may notice a rent increase other than on the anniversary date, subject to the rent review proceedings under this chapter. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.06 Notices.

(a) At least sixty (60) days prior to any increase in rents, the park owner shall provide each home owner with written notice of the amount of current rent and the amount of the proposed increase. Effective January 1, 1994, the park owner shall provide the required notice at least ninety (90) days prior to an increase in rents.

(b) If the increase is exempt from review under this chapter, the owner shall provide, on a form prescribed by the City, an explanation in clear and concise terms of the reason the increase is exempt from review. The owner shall make specific reference to the appropriate sections of this chapter, and the owner shall also provide documentation and factual data to justify the exemption.

(c) If the increase exceeds that which is exempt from review under this chapter, the owner shall provide, on a form prescribed by the City, an explanation in clear and concise terms of the reason the rent increase exceeds that amount. The owner shall make specific reference to the provisions of this chapter that would authorize a hearing officer to impose an increase above that which is exempt, and the owner shall also provide documentation and factual data to justify such an increase.

(d) A copy of the notice, together with the supporting documents and data, shall be posted once in areas easily seen by the residents of the park. Such areas shall include, but are not necessarily limited to the recreation area (if applicable), the office area, and the mail box area (if applicable). The notice and supporting documents, together with details as to which spaces in the park will be affected, shall also be provided to the City Manager.

(e) Failure to comply with the notice provisions of this section shall render the notice invalid and a resident may withhold the amount of the rent increase as provided for in Section 5.13.20(a). (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.07 Initiation of rent review process.

Any home owner who will be or has been subjected to a proposed rental or service charge increase, not exempted by the provisions of Section 5.13.04, may, by filing a petition and concurrent response, signed by home owners representing more than fifty (50%) percent of the spaces subject to the rent increase, with the City Manager within forty-five (45) days of the date of notice, initiate a rent review hearing process. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.08 Petition: Form.

A petition for rent review must be filed with the City Manager on a form prescribed by the City. The petition shall include the name(s), address(es), and telephone number(s) of the unauthorized home owner representative(s). The petition shall contain the following certification: “I certify under penalty of perjury under the laws of the State of California that the foregoing is true and correct.” The petition shall be dated and subscribed by the petitioners and the place of execution shall be specified. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.09 Concurrent response: Form.

(a) Concurrent with the petition, the home owners shall file a response with the City Manager on a form prescribed by the City. The response shall contain a statement in clear and concise terms as to why the rent increase is subject to review. The response shall also specify in clear and concise terms why, in petitioners’ opinion, the rent increase is not justified under the ordinance. Petitioners shall respond directly to the explanation, documentation and supporting data provided for by the park owners in the notice of rent increase. The response may include supporting documentation and data. Petitioners shall also specify any attempts to resolve the disputed rent increase with the park owners before the filing of the petition.

(b) The concurrent response shall be attached to the petition and be incorporated therein. The certification under penalty of perjury required for the petition shall apply to the concurrent response. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.10 Failure to comply with petition and concurrent response provisions: Failure to provide cash deposit.

A failure to comply with either the petition to concurrent response provisions of Sections 5.13.08 and 5.13.09, or the cash deposit provisions of Section 5.13.11(a), shall render the petition invalid, and no review shall be had under this chapter until compliance with those provisions. Compliance shall occur within fifteen (15) days of a notice of noncompliance. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.11 Cost of filing: Rent review.

(a) The filing of a petition for rent review shall be accompanied by a cash deposit in an amount determined by the City Clerk. The deposit shall be that amount which the City Clerk estimates to cover one-half of the costs of the hearing. Upon receipt of the petition and cash deposit from the home owners, the City Manager shall provide the park owner with a copy of the petition and concurrent response and shall require from the park owner a cash deposit in the same amount. All or part of the cash deposit shall be used to pay for the rent review hearing established hereunder. If the cash deposit exceeds the cost of the hearing, the excess shall be refunded and divided equally between the home owners and the park owner. The City Clerk may require an additional deposit to cover the costs not covered by the initial deposit, the additional amount to be carried by both parties equally.

(b) The City Manager shall send the copy of the notice and concurrent response to the park owner along with the request for a cash deposit via certified mail. The park owner shall have fifteen (15) working days from the City Manager’s mailing of the notice to provide the cash deposit. If the park owner fails to provide the cash deposit within the time specified herein, that portion of the request and notice of rent increase which exceeds the amount exempted under Section 5.13.04 shall be disallowed by operation of law and shall be deemed to be a waiver of a right to a hearing thereon. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.12 Creation of a fund to cover home owners’ costs of the hearing.

The City Clerk shall establish a fund for each mobile home park to be used by the home owners to cover their costs of the hearing. Each fund shall be placed in a separate interest-bearing account. The moneys used to create the fund shall come from a separate Two and no/100ths ($2.00) Dollar fee added to the home owners’ monthly rental bill. The City shall collect the fees from the park owners in connection with the park owners’ water bill. Every home owner shall pay the Two and no/100ths ($2.00) Dollar fee toward the fund and every park owner shall collect the Two and no/100ths ($2.00) Dollar fee from the home owners and remit that money to the City Clerk with the park owners’ water bill. If a home owner fails to make the required Two and no/100ths ($2.00) Dollar fee, the park owner may submit a sworn statement to that effect, identifying which home owners did not pay the Two and no/100ths ($2.00) Dollar fee, and the park owner may deduct that amount from the money it remits to the City. The Two and no/100ths ($2.00) Dollar fee shall be collected until each park fund reaches a cap of Two Thousand and no/100ths ($2,000.00) Dollars. The home owners may use the funds for their share of the deposit required under Section 5.13.11(a) of this chapter, and any other costs associated with the hearing, including professional services. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.13 Petition/response: Effect of timely filing.

Upon filing of a timely and completed petition for rent review, along with the completed concurrent response, that portion of the requested and noticed rental increase (and only that portion) which exceeds the amount exempted under Section 5.13.04 shall not take effect unless and until such time as the hearing officer allows such increase or portion thereof pursuant to the provisions of this chapter. That portion equal to the amount exempted under Section 5.13.04 shall be allowed to take effect as noticed. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.14 Rent review hearing.

(a) Upon receipt of a timely and completed petition for rent review, along with the completed concurrent response, the City Manager shall refer the petition for a hearing.

(b) A hearing officer shall be appointed in the following manner:

The City Manager shall develop a list of at least three (3) nominees, and the home owners or park owners may submit a list of additional nominees to the City Manager. All nominees shall:

(1) Be licensed attorneys by the State Bar of California in good standing;

(2) Have professional experience as hearing officers or arbitrators with particular expertise in rental dispute mediation or with experience or training showing the capabilities to deal with the issues found in the rental dispute. Preferably, the hearing officer will have had at least two (2) hearings or arbitrations concerning rent disputes between mobile home park owners and mobile home owners;

(3) Not own an interest in a mobile home park, not be a home owner in a mobile home park, not be an employee, officer, member or otherwise affiliated with any group or organization which has or is viewed by a significant number of park owners or home owners as having taken advocacy positions in rent control matters.

The list of nominees shall include the resumes of each detailing their qualifications. The City Manager shall periodically review its list of nominees, and with respect to nominees submitted by the home owners or park owners, the City Manager shall review the list and conduct such investigation and/or interviews as he or she deems necessary. The City Manager shall consult with both parties in an attempt to select a hearing officer acceptable to both. In the event of disagreement by either or both of the parties, the City Managers selection shall be final.

(c) The hearing officer shall be selected within thirty (30) days of receipt of the park owner’s cash deposit. An extension may be granted upon stipulation of the parties, or for good cause as determined by the City Manager. The maximum period of extension shall be fifteen (15) days.

(d) The hearing officer shall conduct a hearing with the parties, and/or their designated representatives, within thirty (30) days of the date the hearing officer was selected. Prior to conducting the hearing, the hearing officer shall review the notice of rent increase and the petition and concurrent response. The hearing officer shall define the issues to be decided at the hearing and shall notify the parties in advance of the issues. Prior to conducting the hearing, the hearing officer may choose to meet only with the designated representatives of one of the parties at a time.

(e) The hearing shall be informally conducted, and the technical rules of evidence shall not apply, except that irrelevant and unduly repetitious evidence shall be excluded. All evidence shall be received only on oath or affirmation. Each party shall have the right to (1) call and examine witnesses on any matter relevant to the issues of the hearing; (2) introduce documentary and physical evidence; (3) cross-examine opposing witnesses on any matter relevant to the issues of the hearing; (4) impeach any witness regardless of which party first called the witness to testify; (5) rebut the evidence; and (6) to be represented by anyone who is lawfully permitted to do so. The hearing officer shall direct the order of the proceedings.

(f) The burden of proving the reasonableness of the proposed rent increase shall be on the park owner. The burden of proving a reduction in services, which are not acknowledged by the park owner, shall be on the affected mobile home owners alleging that a reduction in services has occurred.

(g) During the hearing process, the concerns of each party shall be discussed and the hearing officer shall indicate the amount and nature of any further information he or she will need from any party in order to reach a determination. All information submitted shall be in writing and shall be certified in the same manner as set forth in Section 5.13.08. Copies of any information submitted to the hearing officer shall be provided to the other party. Each party shall comply with the hearing officer’s request for information within ten (10) working days of the request. For good cause, a reasonable extension of time to comply with the hearing officer’s request may be granted by the hearing officer in up to ten (10) day increments, for a maximum extension of twenty (20) days. The hearing officer may proceed under this part regardless of whether any party defaults in providing any of the requested information.

(h) The hearing officer may take official notice, either during the hearing, or after submission of the matter for decision, of any fact which may be judicially noticed by the courts of this state or of official records, regulations, rules, and decisions of state and local agencies, boards and departments, and of city and county ordinances. In addition, the hearing officer may take official notice of matters in its own files and of prior proceedings under this chapter involving the same issues. If applicable, the hearing officer may also take official notice of any generally accepted technical or scientific matter within the hearing officer’s expertise. The parties present at the hearing shall be informed of the matters to be noticed, and those matters should be noted in the record, referred to therein, or appended thereto. Any such party shall be given a reasonable opportunity on request to refute the officially noticed matters by evidence or by written or oral presentation of authority.

(i) The hearing officer may issue a subpoena for the attendance of witnesses or the production of other evidence at a hearing upon the hearing officer’s own initiative, or upon the written demand of any party. The issuance of such subpoena shall be obtained upon the filing of an affidavit therefor which: (1) states the name and address of the proposed witness; (2) specifies the exact things sought to be produced and the materiality thereof in detail to the issues involved; and (3) states that the witness has the desired things in his or her possession or under his or her control. A subpoena need not be issued when the affidavit is defective in any particular. Any person who refuses without lawful excuse to attend any hearing, or to produce material evidence which the person possesses or controls as required by any subpoena served upon such person as provided for herein shall be guilty of a misdemeanor.

(j) A record of the entire proceedings shall be made by tape recording or by any other means of permanent recording determined to be appropriate by the hearing officer. The proceedings at the hearing shall also be reported by a stenographic reporter if requested by any party thereto. A transcript of the proceedings shall be made available to all parties upon request and upon payment of the fee prescribed therefor. Such fees may be established by the hearing officer, but shall in no event be greater than the costs involved.

(k) If, during the hearing process, the parties agree to a specific rental increase or to a settlement of the dispute in question, the hearing officer shall prepare a memorandum of agreement so specifying the amount of such increase and/or the terms of settlement. The memorandum of agreement shall be executed by the owner and the home owners of their designated representative(s). The memorandum of agreement shall be final and binding upon the parties and shall not be subject to rent review or further appeal under this chapter. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.15 Hearing: Determination: Effective date of rent increase.

If a memorandum of agreement is not executed by the parties in accordance with Section 5.13.14(k) the hearing officer shall render his or her decision. In the case of a rent increase dispute, the hearing officer shall determine the amount of allowable rental increase, if any, in accordance with the standards of Section 5.13.05, if applicable, and Section 5.13.17, and the increase, if any, shall be effective the date the hearing officer’s decision becomes final, or one hundred ninety-five business days after the notice of the rent increase is given, whichever is sooner. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.16 Hearing: Determination final: Conditions: Costs: Judicial review.

(a) The determination of the hearing officer shall be final, and shall be delivered to the City Manager and the parties in writing, together with written findings of fact supporting such determination within fifteen (15) working days of the close of the hearing. The date the hearing officer issues his or her decision shall be deemed the date the decision becomes final for purposes of seeking judicial review.

(b) The hearing officer’s determination may be reasonably conditioned in any manner necessary to effectuate the purposes of this chapter.

(c) If the hearing officer finds that the proposed rent increase above that which is exempt from review was frivolous and totally lacking in merit, the hearing officer may in its discretion require the park owner to pay to petitioners all or part of petitioners’ costs of the hearing. If the hearing officer finds that the petition was frivolous and totally lacking in merit, the hearing officer may in its discretion require the petitioners to pay to the park owner all or part of the park owner’s costs of the hearing. For purposes of this subsection “costs of the hearing” means those costs recoverable in a court action pursuant to California Code of Civil Procedure Section 1033.5, and shall also include the costs of the hearing officer, but shall not include the costs for professional services incurred by a park owner or home owner.

(d) Any proceeding to obtain judicial review shall be filed within ninety (90) days after the decision of the hearing officer becomes final. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.17 Standards of reasonableness to be applied to rent increases.

The hearing officer shall determine whether rent increases are reasonable under the circumstances, taking into consideration that the purpose of this chapter is to protect home owners from arbitrary, capricious, or unreasonable rent increases, and at the same time permit park owners to receive a fair and reasonable return on their investment. The hearing officer’s determination shall be made with reference to the following standards:

(a) Increases deemed reasonable. Where the amount of the proposed rental increase consists only of passing through one or more of the following:

(1) Costs of capital improvements as defined in Section 5.13.02(d), and approved in writing by a majority of the home owners of the occupied spaces within the park;

(2) Costs of capital replacements as defined in Section 5.13.02(e), subject to a determination by the hearing officer that the park owner has not included depreciation expenses as an operating expense in the calculation of rents. The park owner may demonstrate that depreciation expenses are not treated as an operating expense and included in calculating rents in any manner satisfactory to the hearing officer;

(3) Costs of capital replacement for utility lines shall only be allowed where, and to the extent, the park owner receives less income from utilities than from the expense of administering the sub-metering, and from maintaining and replacing the utility lines as described in Section 5.13.17(b)(4);

(4) Any improvements or replacements regardless of the amount, when such improvements or replacements have been ordered by a court of competent jurisdiction, any city, county or state agency, or are of an emergency nature and required to preserve the health and safety of the home owners;

(5) Costs of capital improvements, if any, must be averaged on a per space basis, and amortized over a period not less than sixty (60) months, and are to be treated as an assessment to be paid off over not less than sixty (60) months, and excluded from the rent amount on which calculations of future rent increases are based. Once the capital improvement(s) is paid off, the home owners’ rent shall be reduced by the amount of any rent increase imposed to cover the capital improvement(s);

(6) Costs of capital replacements, if any, must be averaged on a per space basis, and amortized over a period not less than sixty (60) months, and are to be treated as an assessment to be paid off over not less than sixty (60) months, and excluded from the rent amount on which calculations of future rent increases are based. Once the capital replacement(s) is paid off, the home owners’ rent shall be reduced by the amount of any rent increase imposed to cover the capital replacement(s);

(7) Costs of capital improvements or capital replacement may be passed through only if related to capital improvement or capital replacement work completed during the twelve (12) months preceding the date notice of the rent increase is given and not to any work in progress at the time notice of any rent increase is given.

(b) Standards applicable to rent increases which exceed the foregoing.

(1) In order to assure to owners a fair and reasonable return, the hearing officer shall, when the amount of any rent increase or portion thereof exceeds any of the foregoing standards under subsection (a) of this section, determine what is reasonable under the circumstances, taking into account all relevant factors, which may include, but are not limited to, the following:

(i) The rental history of the mobile home park following adoption of the ordinance codified in this chapter;

(ii) The owner’s response to any property tax reduction measure or business tax rate reduction measure;

(iii) The occupancy rate of the mobile home park in comparison to comparable units in the same general area;

(iv) Existing market value of rents for spaces in communities comparable to Clovis;

(v) The physical condition of the mobile home park, including the quantity and quality of maintenance and repairs performed during the last twelve (12) months, provided, however, that if the home owners raise a lack of maintenance or physical deterioration as an issue, the hearing officer shall also consider to what extent the home owners notified the park owner of the physical condition, and to what extent the home owners gave the park owner a reasonable opportunity to cure the physical condition;

(vi) Any increases or reduction in services during the twelve (12) months prior to the effective date of the proposed rent increase;

(vii) Debt service costs used for the servicing of existing debt;

(viii) Debt service costs due to refinancing. In the case of refinancing (other than a refinancing for capital improvements or capital replacement, the debt service cost of which are included as a capital improvement or replacement cost under Section 5.13.02(d) and (e), a rent increase to cover the increased costs of debt service may only be allowed after considering the following factors:

(aa) The purpose of the refinancing;

(ab) The arms length nature of the transaction;

(ac) The owner’s rate of return on the investment;

(ad) The frequency of past resales or refinances;

(ae) The extent to which prior rental increases have made provisions for appreciation of asset value;

(af) Whether not allowing the increase would place a demonstrable financial burden on the continued operation of the mobile home park; and

(ag) Any other factors the hearing officer deems relevant.

If the refinancing is used for extracting equity from the park, the rent increase shall be deemed unreasonable, and the rent increase shall not be allowed.

After considering these factors, the hearing officer may allow all or part of a requested increase to cover debt service costs for refinancing.

(ix) Debt service costs due to a sale. Debt service costs due to a sale may only be allowed if the owner can show:

(aa) That the purchase price of the mobile home park was fair;

(ab) That the interest rate obtained was reasonable in light of existing market conditions;

(ac) That the purchase of the mobile home park was an arms-length transaction; and

(ad) Undue hardship will occur if the owner is not allowed to recover the increased costs of debt service.

In addition, the hearing officer shall consider the extent to which at the time the property was acquired the owner could have reasonably foreseen that such increased expenses would not be covered by the rent schedule then in effect, and the owner’s decision to nonetheless purchase the mobile home park.

If the four (4) criteria are met, and the hearing officer finds that the owner acted reasonably in purchasing the property, the hearing officer may allow all or part of the required increase to cover the costs of debt service due to a sale. The hearing officer may also require that the debt service costs be amortized over a period of years which is determined by the hearing officer to be reasonable.

(2) In determining an owner’s fair and reasonable return, the hearing officer shall consider all relevant factors, such as the owner’s investment in the mobile home park and the owner’s net operating income. Net operating income is defined as gross income less operating expenses.

(3) In any determination of what constitutes a reasonable rent increase under the circumstances, the hearing officer shall consider and weigh evidence establishing the nature and extent of any violations by either the park owners or home owners of the City building and housing codes. Any rent increase may be disallowed, reduced, or made subject to reasonable conditions, depending on the severity of such violations.

(4) The City notes and finds that many mobile home parks in the City use master-meter and sub-meters for electric and gas utilities. Under this method, a master-meter exists for the mobile home park and each mobile home has a sub-meter. The home owners pay their gas and electric directly to the park owners, who in turn, pay the utility company. Each home owner pays utility rates at the exact same rate as other customers within the City. The park owner pays a rate that is discounted by Pacific Gas and Electric. The park owners are responsible for reading the meters every month and maintaining the utility lines within the park. Home owners often assert that the difference between the rate they pay and the discounted rate the park owners pay is a profit and should be included in the park owners’ gross income. The rate the home owners pay and the discounted rate the park owners pay are a matter of public record.

In light of the foregoing, in determining what is a fair return on investment, the hearing officer shall consider as income revenue received by the park owners from the sale of gas and electricity to residents where such utilities are billed individually to the residents by the park owners, which revenue shall equal the total cost of the utilities to the residents minus the amount paid by the park owners for such utilities to the utility provider. At the same time, the hearing officer shall also consider as an operating expense, the park owners gas and electric charges, the park owners’ reasonable cost to administer the sub-metering, including reading the meters, and any costs incurred by the park owners to maintain the utility lines within the parks. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.18 Services.

During the term of operation of this chapter, no owner shall reduce or eliminate any service to any rental space unless a proportionate share of the cost savings, due to such reduction or elimination, is simultaneously passed on to the home owners in the form of a decrease in existing rent or a decrease in the amount of a rent increase otherwise proposed and permitted by this chapter. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.19 Passthrough of utility rebates.

Where a park owner does not include utilities in the base rent and the park owner separately bills home owners for utilities, any utility rebate to the park owner shall be passed through to the home owner. The term rebate does not include the discounted rate provided by Pacific Gas and Electric as described in Section 5.13.17(b)(4) of this chapter. When the utilities are not individually billed, the amount of the rebate shall be considered by the hearing officer as income in any hearing concerning whether the park owners are receiving a fair return on investment. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.20 Resident remedies.

(a) If notice required by Section 5.13.06 is not provided, the resident may withhold the rent increase until such notice is provided.

(b) In any action for recovery of rent or for unlawful detainer based on nonpayment of rent, the resident may defend the action on the ground that the amount of rent claimed is in excess of the rent allowed by this chapter.

(c) Any home owner(s) believing that any of the provisions of this chapter are being violated, shall give written notice of such alleged violation(s) to the park owner/representative and the park owner/representative shall respond in writing within thirty (30) days, denying such allegations or agreeing to correct such violation(s) within the following thirty (30) days. In the event that the park owner/representative shall deny any or all of the allegations and refuse to take corrective action within the following thirty (30) days, the home owner(s) shall have the right to have the matter set for hearing pursuant to Sections 5.13.14 through 5.13.16 of this chapter.

(1) If the home owner(s) elects to have the matter set for hearing, the home owner(s) shall notify the City Manager in writing within thirty (30) days from the date of the park owner/representative’s response or, if the park owner/representative fails to respond, within thirty (30) days from the date that such response was due, whichever is earlier. The notice shall specify the alleged violation(s) and shall be certified in the same manner as set forth in Section 5.13.08.

(2) The home owner(s) notice shall be accompanied by a cash deposit in an amount set by the City Clerk which is estimated to cover one-half of the costs of the hearing. Upon receipt of the notice, the City Manager shall provide the park owner with a copy of the notice and shall require from the park owner a cash deposit in the same amount. All or part of said cash deposits shall be used to pay for the hearing. If the cash deposit exceeds the costs of the hearing, the excess shall be refunded. The City Clerk may require an additional deposit to cover the costs not covered by the initial deposit, the additional amount to be carried by both parties equally. The fund created pursuant to Section 5.13.12 shall be used to cover the home owners’ costs of the hearing only if more than fifty (50%) percent of the home owners have filed a petition pursuant to this section.

(3) The City Manager shall send the copy of the notice to the park owner along with the request for a cash deposit via certified mail. The park owner shall have fifteen (15) working days from the City Manager’s mailing of the notice to provide the cash deposit. If the owner fails to provide the cash deposit within the time specified herein, the hearing officer shall conduct a hearing without the presence of the park owner or the park owner’s representative.

(4) The hearing shall be held and conducted in accordance with the procedures set forth in Sections 5.13.14 through 5.13.16.

(5) If the hearing officer determines that the alleged violation(s) are true and rules in favor of the home owner(s), the hearing officer may, in his or her discretion, require the park owner to pay to the homeowner(s) all or any portion of the home owner(s) costs of the hearing. If the hearing officer determines that the home owner’s decision to seek a hearing was frivolous and totally lacking in merit, the hearing officer may, in his or her discretion, require the home owner(s) to pay all or any portion of the park owner’s costs of the hearing. Costs of the hearing are those as defined in Section 5.13.16(c).

(d) Nothing in this section is intended to limit or preclude any other lawful defense, cause of action or claim of the home owner or park owner in a court of competent jurisdiction. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.21 Retaliation.

(a) No park owner shall in any way retaliate against any resident for the resident’s assertion or exercise of any right under this chapter. Such retaliation shall be subject to suit for actual and punitive damages, injunctive relief and attorney’s fees and costs. Such retaliation shall also be an available defense in an unlawful detainer action.

(b) No resident shall in any way retaliate against any park owner for the park owner’s assertion or exercise of any right under this chapter. Such retaliation shall be subject to suit for actual and punitive damages, injunctive relief and attorney’s fees and costs. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.22 Supplemental with State law.

The city intends that the provisions of this chapter shall be compatible with, and supplemental to, state regulations for mobile home parks, and this chapter shall be interpreted and be applied consistent with State law at all times. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.23 Copy of ordinance to prospective home owners: Notice of exemption from ordinance provisions.

Park owners shall provide prospective home owners with a copy of the ordinance codified in this chapter with any rental agreement offered to the prospective home owner. Park owners shall also inform prospective home owners in any rental agreement offered in excess of twelve (12) months in the first sentence of the first paragraph of the rental agreement, in at least 12-point bold face type if the rental agreement is printed, or in capital letters if the rental agreement is typed, that the rental agreement will be exempt from the provisions of this ordinance, and that upon expiration of the rental agreement the prospective home owner will be subject to the provisions of this ordinance unless other rental agreement in excess of twelve (12) months is executed. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.24 Severability.

If any section, subsection, phrase, or clause of the ordinance codified in this chapter is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portions of this chapter.

The City Council hereby declares that it would have passed the ordinance codified in this chapter and each section, subsection, phrase, or clause thereof irrespective of the fact that any one or more sections, subsections, phrases, or clauses be declared unconstitutional. (§ 1, Ord. 92-23, eff. December 1, 1993)

5.13.25 Termination.

This chapter represents a reasonable compromise between home owners and park owners and it is the intent of the City Council that this chapter shall remain in effect until it is no longer needed. (§ 1, Ord. 92-23, eff. December 1, 1993)