Chapter 2.56 MOBILE HOME PARK SPACE RENT STABILIZATION

D. Provide mobile home park owners with annual space rent increases which reflect the rate of inflation and cover increases in their operating expenses;

E. Provide a process for ensuring that mobile home park owners may obtain a fair, just and reasonable return;

F. Provide a fair and timely process for addressing and resolving rent issues in mobile home parks; and

G. Protect the investments of mobile home owners in their mobile homes by preventing excessive rent increases upon a change of tenancy at a mobile home space. (Ord. 1030 § 4, 2006. Code 1964 § 2A-1.)

2.56.020 Definitions.

A. “Administrator” shall refer to the City Manager or his/her designee who shall be responsible for the administration of the mobile home rent stabilization ordinance set forth in this chapter.

B. “Affected tenants” means those tenants whose space is not covered by a valid lease meeting the requirements described in California Civil Code Section 798.17(b) or is otherwise legally exempt from local rent control regulation. Such tenants are to be notified that a space rent increase is to become effective. For purposes of providing notice of the increase, providing copies of the rent stabilization ordinance, and support of a rent arbitration petition, each space subject to a rental increase shall be deemed to have only one “affected tenant” for administrative convenience to the park owners. The reference to “all affected tenants” will refer to one representative tenant from each space subject to the proposed rental increase.

C. “Arbitrator” means a person (a) who is neither a tenant as that term is defined in this chapter nor who has an interest in a mobile home park of a nature that would require disqualification under the provisions of the Political Reform Act if the person were an elected official and (b) whom the administrator determines meets one of the following criteria:

1. Completion of a Juris Doctor or equivalent degree from a school of law and completion of a course of training in arbitration which, in the sole judgment of the administrator, provides that person with the knowledge and skills to conduct a space rent dispute arbitration in a professional and successful manner;

2. Completion of at least three arbitration proceedings for a superior court or other public entity that involved issues the administrator finds similar to those raised in space rent dispute arbitrations; or

3. Service as a California superior court or “pro tempore” judge.

D. “Base rent” means the authorized rent, calculated pursuant to the provisions of HMC 2.56.030, plus any rent increase allowed under this chapter.

E. “Capital improvement costs” 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 remaining life of the improvement to the property and which do not normally occur on an annual basis.

F. “Consumer Price Index” means the Consumer Price Index for all Urban Consumers San Jose-San Francisco-Oakland Area, published by U.S. Department of Labor, Bureau of Labor Statistics.

G. “Housing service” means a service provided by the park owner related to the use or occupancy of a mobile home space, which is neither a capital improvement nor substantial rehabilitation as those terms are defined herein, including, but not limited to, repairs, replacement, maintenance, painting, lighting, heat, water, laundry facilities, refuse removal, recreational facilities, parking, security service, and employee services.

H. “Mobile home” means a structure designed for human habitation and for being moved on a street or highway under permit pursuant to California Vehicle Code Section 35790. “Mobile home” includes a manufactured home, as defined in California Health and Safety Code Section 18007, and a mobile home, as defined in California Health and Safety Code Section 18008, but does not include a recreational vehicle, as defined in California Civil Code Section 799.29 or in California Health and Safety Code Section 18010, or a commercial coach, as defined in California Health and Safety Code Section 18001.8 except when such a vehicle has continuously remained within a mobile home park for a period in excess of nine months.

I. “Mobile home park” means any area of land within the City of Healdsburg where two or more mobile home spaces are rented, or held out for rent, to accommodate mobile homes used for human habitation.

J. “Mobile home park owner” or “park owner” means any owner, lessor, or sublessor of a mobile home park in the City who receives or is entitled to receive rent for the use or occupancy of all, or substantially all, of the mobile home spaces located therein, including a representative, agent, or successor of such owner, lessor, or sublessor, and anyone who reports to the Internal Revenue Service any income received or loss of income resulting from such ownership or claims any expenses, credits, or deductions because of such ownership.

K. “Mobile home space” means any site within a mobile home park located in the City intended, designed, or used for the location or accommodation of a mobile home and any accessory structures or appurtenances attached thereto or used in conjunction therewith except (1) sites rented together and concurrently with a mobile home provided by the mobile home park owner and (2) “new construction” as defined by Civil Code Section 798.45.

L. “Mobile home space tenant” or “tenant” means a lessee, or sublessee, or any other person entitled to the use or occupancy of a mobile home space who is not otherwise a party to a rental agreement exempt from regulation under this chapter or pursuant to Civil Code Section 798.17.

M. “Net operating income” of a mobile home park means the gross income of the park less the operating expenses of the park.

N. “Party” as used in this chapter refers to any affected mobile home tenant and/or park owner involved in proceedings under this chapter.

O. “Percent change in Consumer Price Index” means the annual percent change in the Consumer Price Index (“CPI”), calculated to the nearest tenth of a percent.

P. “Rent increase” means any additional space rent demanded of or paid by a tenant for a mobile home space including any reduction in housing services without a corresponding reduction in the amount demanded or paid for rent. Said increase shall be (1) uniform in percentage rate relative to current base rent or (2) uniform in dollar amount relative to base rent. Failure to reduce rent at the end of an amortization period for a capital improvement cost or for separately billed utilities will be regarded to constitute an unauthorized rent increase for the purposes of this chapter.

Q. “Space rent” or “rent” means the total consideration, including any bonus, benefit, or gratuity, demanded or received by a park owner for or in connection with the use or occupancy of a mobile home space or any housing services provided with the mobile home space. Space rent shall not include any amount paid for the use or occupancy of a mobile home dwelling unit, unless the amount paid for the use or occupancy of a mobile home is or includes consideration paid to a park owner under a rental agreement or other document evidencing tenancy of the mobile home.

R. “Substantial rehabilitation” means that work done by a park owner to a mobile home space or to the common areas of the mobile home park, exclusive of a capital improvement as that term is defined herein, the value of which exceeds $1,000 and which is performed whether 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.

S. “Tenant-to-be” means a person who is not currently a tenant in a mobile home park but is a prospective mobile home space tenant who desires the use of a mobile home space as defined in this chapter and has presented himself/herself to the park owner as such. (Ord. 1084 § 1, 2009; Ord. 1030 § 4, 2006. Code 1964 § 2A-2.)

2.56.030 Base rent.

Except as hereinafter provided, a park owner shall not demand, accept, or retain rent for a mobile home space exceeding the rent in effect for said space on December 31, 2004. If a mobile home space was vacant on December 31, 2004, and no rent was established for said space as of that date, the rent for such space shall not exceed the maximum amount of rent being charged as of that date for any comparable mobile home space within the same mobile home park. (Ord. 1030 § 4, 2006. Code 1964 § 2A-3.)

2.56.040 Residential rent increase limitations.

A. Except as provided in subsection (B) of this section, from and after June 1, 2005, the space rent payable for use or occupancy of any mobile home space shall not be increased, in any 12-month period, more than once. Said increase shall not exceed 100 percent of the percent change in the Consumer Price Index, but in no event shall such increase be greater than six percent of the space rent prior to said increase.

The annual percentage increases authorized by this subsection shall be computed by comparing the CPI published for the month of July, issued in the month of August, with the CPI published at the corresponding time in the previous year. The percentage increase shall be computed to the nearest one-tenth of one percent. In the event that the index is not published for the month of July, the closest preceding month for which an index is published shall be used.

In the event that there is a decrease in the CPI as measured in accordance with the provisions of this subsection, no annual rent adjustment shall be permitted and in subsequent years the amount of any increase in the CPI shall be calculated by measuring the percentage increase in the CPI from the last date that the CPI provided the basis for a rent increase to the most recent CPI.

In the event that in any year a park owner elects not to institute an annual rent increase authorized by this subsection for any or all spaces within a park, said increase may be instituted at a later date; provided, that the park owner notifies each affected tenant annually and notifies all tenants-to-be of the amount of increases that may be imposed pursuant to this provision.

B. In the event a park owner wishes to increase the rent payable for any mobile home space within a 12-month period more than the amount permitted in subsection (A) of this section for any reason, the procedures set forth in HMC 2.56.060 and 2.56.070 shall be followed. In the event a park owner wishes to increase the rent payable for any mobile home space within a 12-month period more than 300 percent of the percent change in CPI, a mandatory meet-and-confer meeting and arbitration shall automatically be required to show good cause why such an increase is necessary. The arbitrator may reduce this proposed increase to a figure determined upon the evidence submitted by the park owner or his representative to be a fair return.

C. A notice of rent increase given by a park owner pursuant to HMC 2.56.060(A), (B) or (C) shall be given in writing at least 90 days before any rent increase is to take effect.

D. A notice of rent increase incorporating within it a proposed capital improvement which is not otherwise authorized as a pass-through pursuant to Civil Code Section 798.49 must be claimed within 12 months of the completion of the project, construction or final billing.

E. Subject to HMC 2.56.050, when a mobile home space becomes vacant or the ownership of a mobile home is changed or transferred, the park owner may not raise the monthly rent unless the increase has been specifically authorized under this chapter or is authorized pursuant to Civil Code Section 798.17. (Ord. 1030 § 4, 2006. Code 1964 § 2A-4.)

2.56.050 Establishment of new base rent.

A. A park owner shall be permitted to charge a new base rent for a mobile home space whenever a lawful space vacancy occurs. For purposes of this chapter, a “lawful space vacancy” is defined as follows:

1. A vacancy occurring due to termination of the tenancy in accordance with the provisions of Civil Code Sections 798.55 through 798.61, as the same may be amended from time to time; or

2. A vacancy arising from the voluntary removal of a mobile home from the mobile home space by the affected tenant(s). A removal of a mobile home from a space for the purpose of performing rehabilitation or capital improvements to the space, or for the replacement or upgrading of the mobile home by the affected tenant(s), shall not constitute a “voluntary removal” for purposes of this section.

B. When a new base rent is established following the vacancy of a mobile home space pursuant to this section, the park owner shall give written notice to the incoming affected tenant of the 12-month anniversary date for rent increases allowed under this chapter. Said notice shall include a specific provision notifying the incoming affected tenant that the space rent may be subject to stabilized rent increases pursuant to the provisions of this chapter. (Ord. 1030 § 4, 2006. Code 1964 § 2A-4.5.)

2.56.060 Information to be supplied to tenants.

A. Within 30 days after the operative date of the ordinance codified in this chapter and upon rerenting of each mobile home space thereafter, the park owner shall supply each affected tenant with a current copy of this chapter.

B. Whenever the park owner serves a notice of rent increase, except a notice of rent increase provided pursuant to HMC 2.56.040(A), the park owner shall at the same time and in the same manner serve the affected tenants and the administrator with a notice that sets forth all of the following information:

1. Amount of the rent increase both in dollars and as a percentage of existing rent.

2. Documentation supporting the level of increase desired, including:

a. A summary of unavoidable increases in maintenance and operating expenses;

b. A statement of the cost, nature, amortization, and allocation among mobile home spaces of any substantial rehabilitation or capital improvement;

c. A summary of the park owner’s net operating income for the preceding 24 months and for the base year. The summary shall provide a breakdown of income and expenses by category;

d. Other relevant information that supports the level of rent increase desired.

3. The identity of all other affected tenants and the spaces which they rent and a roster of tenants in the park.

4. a. The address and telephone number of the administrator;

b. The fact that the tenant is encouraged to contact the administrator for an explanation of the provisions of this chapter; and

c. The fact that documentation supporting the level of increase is on file with the administrator.

5. A completed copy of the official petition form as prepared and provided by the administrator which initiates the process established by this chapter.

6. If applicable, notification that the proposed rent increase exceeds 300 percent of the change in the consumer price index, and that arbitration is deemed automatically required by the provisions of HMC 2.56.040(B) without any need to file an arbitration petition. Such notices shall bear the following language:

ARBITRATION OF THE PROPOSED INCREASE IS AUTOMATICALLY REQUIRED IN THIS MATTER BY OPERATION OF LAW.

Erroneous use of this notice shall be regarded as an irrevocable stipulation to the jurisdiction of the arbitrator.

C. The park owner shall also serve any tenant-to-be as defined in HMC 2.56.020(S) with a separate “RENTAL OPTION” notice which sets forth the recitations in capital letters as set forth in HMC 2.56.080, Rights of a tenant-to-be.

D. A park owner failing to provide an affected tenant or tenant-to-be and the administrator with the information, documents, and notices required by this section shall not be entitled to collect any rent increase otherwise authorized by this chapter from that tenant nor to any rent increase that might otherwise be awarded by an arbitrator. Such failure by the park owner shall be a defense in any action brought by the park owner to recover possession of a mobile home space or to collect any rent increase from the tenant. (Ord. 1030 § 4, 2006. Code 1964 § 2A-5.)

2.56.070 Rent dispute resolution process.

A. Mandatory Meet-and-Confer Meeting. Except when a park owner elects rent increases permitted under HMC 2.56.040(A), the affected tenants and park owners must, within 30 days¹ of the notice of rent increase, meet and confer with each other’s representatives. Written notice of the date, time and location of the meeting should be provided to all affected tenants and park owners no less than five business days before the meeting. If either the park owners or affected tenants object to the noticed date and time of the meeting and provide due notice of such objection to the administrator, the meeting shall be set at the convenience of the administrator, who shall make an effort to schedule the meeting at a time that representatives of both parties can attend the meeting.

At the meeting, representatives of the parties should exchange documentary evidence that the parties in good faith then know will be used to support their respective positions in an arbitration and discuss the issues in dispute. In the case of a park owner, all financial data upon which any proposed increase is claimed shall be supplied to tenant representatives at least 96 hours before the meet-and-confer meeting.

1. Sanctions. A park owner’s failure to provide the minimum information required by this chapter set forth under subsection (A)(2) of this section or attend the hearing shall require the administrator to suspend further proceedings under this chapter. The park owner’s application for a rent increase under such circumstances shall be deemed defective, without force or effect, and deemed withdrawn. Renoticing of the increase shall be required to reinitiate an application for rent increase.

2. Minimum Meet-and-Confer Information. The park owner has a duty to provide adequate information to the tenants regarding the park’s net operating income sufficient for a reasonably sophisticated inquiry into the financial status of the park owner’s business. This will consist of true and accurate book entries or other competent evidence of gross income including, but not limited to, gross rents, interest upon security and cleaning deposits, income from ancillary services (submetering of utilities, laundry facilities, etc.) and true and accurate book entries or other competent evidence of operating expenses including, but not limited to, license fees, property taxes, utilities, insurance, management expenses, landlord-performed labor, building and grounds maintenance, legal fees, auto and truck expenses, employee benefits, permits, refuse removal, and similar additional expenses.

B. Petition in Opposition of a Proposed Rent Increase. If discussions between park owner and affected tenants do not resolve the dispute between them, the affected tenants or their representative may file with the administrator a petition for space rent review and a copy of the notice of rent increase, if available, within 21 days after the date upon which the rent increase notice is received.

The administrator shall not accept a petition for filing unless it has been signed by at least 51 percent of all affected tenants.

If a petition which meets the requirements of this section is filed, the rent increase is not effective and may not be collected until and to the extent it is awarded by an arbitrator or until the petition is abandoned. As used herein, the term “abandoned” refers to lack of prosecution of the arbitration by the mobile home tenants’ representative(s). An automatic arbitration based upon a 300 percent CPI increase will not require active tenant prosecution, although such prosecution will not be prohibited. The term “prosecution” refers to actively pursuing necessary steps toward preparing the tenants’ case for the arbitration hearing.

C. Contents of Petition.

1. The petition for space rent review shall set forth the total number of affected rented spaces in the mobile home park, shall identify the space occupied by each tenant and shall state the date upon which the notice of the rent increase was received by the tenant(s).

2. After obtaining the required signatures, the tenant(s) shall deliver the petition or mail it by registered or certified mail to the administrator at the following address (or to any successor address or agency):

City of Healdsburg

Planning and Building Development

401 Grove Street

Healdsburg, CA 95448

No petition shall be accepted unless it is accompanied by the requisite number of signatures and is received by the administrator within the 21-day period set forth in subsection (B) of this section. The administrator shall provide a copy of the completed petition form to both parties and the arbitrator within five business days of receipt.

D. Information Questionnaire. After the administrator has accepted a petition for space rent review, the administrator shall remit to the park owner and tenants an information questionnaire in such form as the administrator may prescribe. The completed information questionnaire must be returned to the administrator, and a copy must be provided to the arbitrator and to the opposing party at least 10 days prior to the date scheduled for hearing of the petition by the arbitrator.

E. Assignment of Arbitrator and Hearing Date. Upon receipt of the petition, or in the event of an automatic arbitration, the administrator shall, within five business days, assign an arbitrator. The administrator shall set a date for the arbitration hearing no sooner than 15 days nor later than 30 days after the arbitrator is assigned. The park owner and affected tenant(s) shall be notified in writing by the administrator of the date, time, and place of the hearing; this notice shall be served either in person or by regular mail.

F. Arbitration Hearing.

1. The rules of conduct of the hearing shall include the following:

a. The park owner and tenant(s) may appear at the hearing and offer oral and documentary evidence.

b. Both the park owner and tenant(s) may designate a representative or representatives to appear for them at the hearing.

c. The arbitrator may, for good cause, grant or order one continuance not to exceed 15 days to each party from the date of the hearing.

d. The burden of proving that the amount of rent increase is reasonable shall be on the park owner by a preponderance of the evidence.

e. The hearing need not be conducted according to technical rules relating to evidence and witnesses.

f. The rules of evidence and manner of producing evidence shall be those rules set forth in California Government Code Section 11513 for the conduct of hearings under the Administrative Procedure Act.

g. These rules may be relaxed at the discretion of the arbitrator in the interests of justice.

2. The arbitrator shall, within 10 days of the hearing, submit by mail a written statement of decision and the reasons for the decision to the administrator who shall forthwith distribute by mail copies of the decision to the park owner and tenant(s). The arbitrator shall determine the amount of rent increase, if any, which is reasonable based upon all the provisions of this chapter.

3. The arbitrator shall not allow more than one rent increase per park per 12-month period absent a showing of unique and extraordinary circumstances justifying such increase.

4. A decision of the arbitrator, rendered in accordance with this section, shall be final and binding upon the park owner and all affected tenants, but shall be subject to judicial review in accordance with the provisions of California Code of Civil Procedure Section 1094.5.

5. Any party may have electronic recording equipment or a court reporter present to record and prepare a transcript of the hearing before the arbitrator; however, such equipment or reporter shall be provided at that party’s own expense.

6. The arbitrator is authorized to modify the basic time periods set forth herein at his or her discretion to promote the purposes of this program; provided, a final decision is rendered within 90 days of the notice of rent increase.

7. Any procedural or jurisdictional dispute regarding the processes set forth herein may be decided by the arbitrator.

G. Right to Contact Administrator. Any party may contact the administrator for an explanation of the provisions of this chapter. (Ord. 1084 §§ 2, 3, 2009; Ord. 1030 § 4, 2006. Code 1964 § 2A-6.)

2.56.080 Rights of a tenant-to-be.

Any person who is a tenant-to-be as defined in HMC 2.56.020(S) must be offered the option of renting a mobile home space in a manner which will permit the tenant-to-be to receive the benefits of the mobile home space rent stabilization program which includes, but is not limited to, rental of a mobile home space on a month-to-month basis; such a person cannot be denied the option of a tenancy 12 months or less in duration. The park owner shall provide each tenant-to-be with a written notification of the option which shall make the following recitation:

UNDER HEALDSBURG MUNICIPAL CODE SECTION 2.56.080, YOU ARE LEGALLY ENTITLED TO CHOOSE A MONTH-TO-MONTH TENANCY OVER ANY OTHER LONGER PERIODIC TENANCY. YOU ARE ADVISED THAT YOU MAY NOT BE ENTITLED TO RENT STABILIZATION (RENT CONTROL) PROGRAM BENEFITS IF YOU CHOOSE A LEASE OF MORE THAN TWELVE MONTHS IN DURATION IF THAT LEASE MEETS THE REQUIREMENTS OF CIVIL CODE §798.17, A COPY OF WHICH HAS BEEN ATTACHED HERETO.

Any effort to circumvent the requirements of this section shall be unlawful and deemed an unfair business practice subject to enforcement under Business and Professions Code Section 17200 et seq. (Ord. 1030 § 4, 2006. Code 1964 § 2A-7.)

2.56.090 Subpoena power.

Subpoenas, including subpoenas duces tecum, requiring a person to appear at a particular time and place to testify as a witness may be issued in connection with any matter pending before an arbitrator, and shall be issued at the request of the administrator, an arbitrator, the tenant(s) or the park owner. Subpoenas shall be issued and attested by the office of county counsel. A subpoena duces tecum shall be issued only upon the filing with the office of county counsel of an affidavit showing good cause for the production of the things to be produced, setting forth in full detail the materiality thereof to the issues involved in the proceedings, and stating that the witness has the desired matters or things in his/her possession or under his/her control, and a copy of such affidavit shall be served with the subpoena. Any subpoena issued pursuant to this chapter may be served in person or by certified mail, return receipt requested, and must be served at least five days before the hearing for which the attendance is sought. Service by certified mail shall be deemed complete upon receipt or five days after mailing, whichever is earlier. Any subpoena or subpoena duces tecum issued pursuant to the provisions of this chapter shall be deemed issued by and in the name of the City Council of the City of Healdsburg. (Ord. 1084 § 4, 2009; Ord. 1030 § 4, 2006. Code 1964 § 2A-8.)

2.56.100 Consolidation of petitions.

As soon as possible after a petition has been filed with respect to mobile home spaces within a single park, the administrator shall, to the extent possible, consistent with the time limitations provided herein, consolidate petitions involving 10 or fewer affected tenants. (Ord. 1030 § 4, 2006. Code 1964 § 2A-9.)

2.56.110 Fair, just and reasonable return.

A. It shall be presumed that the net operating income of the property in the base year provided a fair, just and reasonable return. Said presumption may be rebutted on the grounds set forth in subsection (D) of this section.

B. A fair and reasonable return is that amount required for the landlord to maintain the base year net operating income adjusted by 100 percent of the percentage increase in the CPI between the base year and the current year. For the purposes of this provision, base year shall be the calendar year 2004 unless the arbitrator finds that there is good cause for using an alternate 12-month period. The current year shall be the calendar year preceding the date of the rent increase application unless the arbitrator determines there is good cause for using an alternate 12-month period.

C. The percentage increase in the Consumer Price Index shall be the percentage increase in the CPI from the midpoint of the base year to the midpoint of the current year.

D. Adjustment of Base Year Net Operating Income. The base year income and/or expenses may be adjusted upward or downward based on one or more of the following grounds:

1. Base rent cannot reasonably be deemed to reflect general market conditions due to unique and extraordinary circumstances. The fact that the rents were below average compared to the rents of comparable mobile home park spaces, by itself, shall not be sufficient to justify a base year rent adjustment.

2. Base year expenses were exceptionally high or low compared to the preceding or following years due to unique or exceptional circumstances.

E. In making any determination pursuant to this section, the arbitrator shall take into account the quantity and quality of maintenance and repairs in the park and any increase or reduction in housing services.

F. Notwithstanding any other provision of this chapter, the arbitrator shall have the authority to consider any other factors and/or grant any rent increase which a court has determined is necessary in order to provide a fair return.

G. A park owner shall be permitted to obtain in advance a determination of the amount of a rent increase that would be authorized for a proposed capital improvement or replacement increase by utilizing the same procedures set forth herein for a fair return rent adjustment. Such an increase shall be conditioned upon completion of the proposed improvements and verification of their costs and other reasonable preconditions. Such a determination shall be made as a part of a determination pursuant to the fair return standards in this chapter. (Ord. 1030 § 4, 2006. Code 1964 § 2A-10.)

2.56.120 Net operating income.

In evaluating a proposed space rent increase from a park owner to maintain the park owner’s net operating income, the following definitions and provisions will apply:

A. “Gross income” means the sum of the following:

1. Gross space rents, computed as gross space rental income at 100 percent occupancy, calculated by annualizing the space rents in effect as of December 31, 2004; plus

2. Other income generated as a result of the operation of the park, including, but not limited to, fees for services actually rendered except that income from the provision of submetered gas and electricity and income that constitutes reimbursement for expenses which are passed through to residents on a pro rata basis shall not be considered; minus

3. Uncollected space rents due to vacancy and bad debts to the extent that the same are beyond the park owner’s control. Uncollected space rents in excess of three percent of gross space rent shall be presumed to be unreasonable unless established otherwise and shall not be included in computing gross income. Where uncollected space rents must be estimated, the average of the preceding three years’ experience shall be used.

B. “Operating expenses” means:

1. Real property taxes and assessments.

2. Utility costs, other than costs excluded by law or by this chapter, to the extent that they are included in space rent.

3. Management expenses including the compensation of administrative personnel, including the value of any mobile home space offered as part of compensation for such services, reasonable and necessary advertising to ensure occupancy only, legal and accounting services as permitted herein, and other managerial expenses. Fees which have not increased by more than the CPI since the base year or are the same percentage of gross income in the base year and the current year shall be presumed to be reasonable. Such presumption may be rebutted by clear and convincing evidence. Rebuttal evidence may include evidence that the fees are exceptionally high by industry standards and/or exceptionally high relative to the value of the services provided or by evidence that the level of management services has increased or decreased since the base year.

4. Normal repair and maintenance expenses for the grounds and common facilities including but not limited to landscaping, cleaning, and repair of equipment and facilities.

5. Park Owner-Performed Labor in Operating or Maintaining the Park. In addition to the management expenses listed above, where the park owner performs managerial or maintenance services which are uncompensated, the park owner may include the reasonable value of such services. Park owner-performed labor shall be limited to five percent of gross income unless the arbitrator finds that such a limitation would be substantially unfair in a given case. No credit for such services shall be authorized unless a park owner documents the hours utilized in performing such services and the nature of the services provided.

6. Operating supplies such as janitorial supplies, gardening supplies, stationery, etc.

7. Insurance premiums prorated over the life of the policy.

8. Other taxes, fees, and permits, except as provided in HMC 2.56.170.

9. Capital improvement costs, subject to the following conditions:

a. Any capital improvement expenses shall be amortized over the reasonable life of the improvement or such other period as may be deemed reasonable by the arbitrator under the circumstances. The amortized cost shall include an interest allowance with an interest rate on the cost of the capital replacement equal to the “average rate” for 30-year fixed rate mortgages plus two percent. The “average rate” shall be the rate Freddie Mac last published in its weekly Primary Mortgage Market Survey (PMMS) as of the date of the initial submission of the petition.

b. In the event that a capital improvement expenditure or operating expense is necessitated as a result of an accident, disaster, or other event for which the park owner received insurance benefits, only those costs otherwise allowable exceeding the insurance benefits may be calculated as operating expenses.

c. In the event the park owner incurred extra costs as a result of unreasonably deferring maintenance, those extra costs shall not be considered as a reasonable operating expense and the allowable expense shall be limited to the cost that would have been incurred if the maintenance had been undertaken in a timely manner.

10. Other reasonable expenses associated with the operation of the park.

C. Reserved.

D. Operating expenses shall not include the following:

1. Debt service expenses or interest allowance, except as provided in subsection (B)(9)(a) of this section.

2. Depreciation.

3. Any expense for which the park owner is reimbursed.

4. Attorneys’ fees and costs incurred in connection with legal proceedings challenging the decision of an arbitrator or the validity or applicability of this chapter.

5. Expenses associated with the provision of submetered gas and electricity and the maintenance of systems related to their provision to the extent that allowances for such expenses are governed by regulations of the Public Utilities Commission.

6. Land lease expenses.

E. All operating expenses must be reasonable. Whenever a particular expense exceeds the normal industry or other comparable standard, the park owner shall bear the burden of proving the reasonableness of the expense. To the extent that an arbitrator finds any such expense to be unreasonable, the arbitrator shall adjust the expense to reflect the normal industry or other comparable standard.

When an expense item for a particular year (1) is not representative; or (2) in the case of base year expenses, is not a reasonable representation of average expenditures for that item in the years preceding and following the base year; or (3) in the case of current year expenses, is not a reasonable projection of future expenditures for that item, said expense shall be averaged with expense levels for other years or amortized or adjusted by the CPI or some other reasonable methodology in order to establish an expense amount for that item which most reasonably serves the objectives of obtaining a reasonable comparison between the recurring level of the expense(s) in the base year and the current year.

F. Expenses which are substantial and do not normally reoccur on an annual basis, including but not limited to expenses associated with fair return hearings pursuant to this chapter, shall be amortized over a reasonable period with an interest allowance in accordance with subsection (B)(9)(a) of this section. (Ord. 1030 § 4, 2006. Code 1964 § 2A-11.)

2.56.130 Obligations of the parties.

A. If a final decision by an arbitrator finds that a proposed increase or any portion thereof that was previously inoperative is justified, the tenants shall pay the amount found justified to the park owner within 30 days after the decision is made, unless the arbitrator determines that the tenants may pay said amount on a monthly basis in order to avoid hardship. In the event that said payments are made on a monthly basis, an allowance shall be made for interest in accordance with the standards applicable pursuant to HMC 2.56.120(B)(9)(a). The increase in rent ordered by the arbitrator shall thereafter become effective on the later of the ninetieth day after the date of the landlord’s notice of rent increase or the thirtieth day following the decision of the arbitrator.

B. If a final decision by an arbitrator finds that an increase or any portion thereof is not justified, the park owner shall refund any amount that had been paid, but found to be unjustified, to the tenant within 30 days after the decision is made. If such refund is not made within the said 30 days, the tenant may withhold the amount from the next space rent(s) due until the full amount of the refund has been made. Notwithstanding the foregoing, if the tenancy of the tenant is terminated for any reason prior to full credit against rent, the balance of the credit due the tenant shall be paid by the park owner within 30 days from the date of termination of the tenancy.

C. Any sum of money that, under the provisions of this section, is the obligation of the park owner or tenant, as the case may be, shall constitute a debt and, subject to the foregoing provisions of this section, may be collected in any manner provided by law for the collection of debts. (Ord. 1030 § 4, 2006. Code 1964 § 2A-12.)

2.56.140 Tenant’s right of refusal.

A tenant may refuse to pay any increase in rent which is in violation of this chapter, provided a petition has been filed and either no final decision has been reached by an arbitrator or the increase has been determined to violate the provisions of this chapter. Such refusal to pay shall be a defense in any action brought to recover possession of a mobile home space or to collect the rent increase. (Ord. 1030 § 4, 2006. Code 1964 § 2A-13.)

2.56.150 Retaliatory acts – Tenants’ right to organize.

No park owner may retaliate against a tenant or tenant-to-be for the tenant’s or tenant-to-be’s assertion or exercise of rights under this chapter in any manner, including but not limited to threatening to bring or bringing an action to recover possession of a mobile home space; engaging in any form of harassment that causes a tenant to quit the premises; dissuading a tenant-to-be from freely exercising his or her legal option to choose a month-to-month rental; decreasing housing services; increasing the space rent; or imposing or increasing a security deposit or any other charge payable by a tenant. The tenants have a right to organize a tenants’ association without hindrance from the park owner to exercise the rights provided under the provisions of the Mobile Home Residency Law and this chapter. (Ord. 1030 § 4, 2006. Code 1964 § 2A-14.)

2.56.160 Solicitation of any petitions by park owners are without force or legal effect within City’s program.

The distribution of a petition or other documents seeking to have mobile home tenants waive rights, abandon a filed petition or in any way affect the entitlement of the tenants to participate in the rent stabilization process authorized under the Healdsburg Municipal Code shall be without force or legal effect within the City’s rent stabilization program. Such documents shall not affect the right of any tenant to participate in the rights, remedies, procedures and processes set forth in this chapter. Efforts to utilize such documents to discourage participation in the City’s rent stabilization program may be deemed retaliatory. (Ord. 1030 § 4, 2006. Code 1964 § 2A-14.5.)

2.56.170 Administration and costs.

The City may contract for services to administer the procedural aspects of this chapter. The costs of administration of this chapter, including all costs of arbitration, shall be paid initially by the City, but to the extent authorized by City Council resolution, the City shall be reimbursed by park owners by imposition of a rent stabilization administration fee chargeable against each mobile home space in the City. A park owner who pays these fees may pass through 50 percent of the fees assessed against a mobile home space to an affected tenant as set forth herein. This fee pass-through must be amortized over a period of not less than 10 months after the park owner is billed for these fees. Failure to timely pass through 50 percent of the fees assessed against a mobile home space will result in the loss of the park owner’s right to do so. The remaining 50 percent of the fees assessed against a mobile home space shall not be passed on in any way to tenants. Fees passed through to tenants as herein authorized shall not be part of the rent base upon which future rent increases can be made.

The fees imposed by this section shall be assessed in July of each year in an amount to be determined by resolution of the City Council and shall be paid by the park owner(s) within 60 days of adoption of such resolution. The manner of payment, delinquency status, and assessment and collection of penalties for delinquent payment of the fees imposed by this section shall be set forth in a separate ordinance of the Council. The City Clerk shall present to the Council a recommended amount of such fee, based on actual charges incurred by the City. (Ord. 1084 § 5, 2009; Ord. 1030 § 4, 2006. Code 1964 § 2A-15.)

2.56.180 Exemption from fees.

Any park owner who believes that he/she may be entitled to a space fee exemption pursuant to Civil Code Section 798.17(b), for a long-term lease or a space which is not subject to rent stabilization administration fees, shall provide the Clerk with the following documentation:

A. The executed lease for each exempt space claimed, including any amendments to said exempt lease;

B. For a newly constructed space, proof that the space was constructed after January 1, 1990 (building permits, etc.). (Ord. 1030 § 4, 2006. Code 1964 § 2A-15.5.)

2.56.190 Nonwaiverability.

Any provision, whether oral or written, in or pertaining to a rental agreement whereby any provision of this chapter is waived or modified, is against public policy and void, except with respect to any rental agreement complying with all of the terms and conditions set forth in Civil Code Section 798.17. (Ord. 1030 § 4, 2006. Code 1964 § 2A-16.)

2.56.200 Penalties and remedies.

In addition to those penalties and remedies set forth in the Mobile Home Residency Law and/or elsewhere in this chapter, the following remedies shall apply:

Any park owner who demands, accepts, receives, or retains any money as rent from a tenant to which the park owner is not entitled under the provisions of this chapter shall be liable to the tenant for any actual damages, attorneys’ fees, and costs incurred by the tenant as a consequence thereof plus a penalty in the sum of three times the amount of money the park owner accepted, received, or retained in violation of the provisions of this chapter or $500.00, whichever is greater. (Ord. 1030 § 4, 2006. Code 1964 § 2A-17.)

2.56.210 Rights of affected tenants reserved.

This chapter shall not be construed to limit or curtail any other action or proceeding which may be pursued by an affected tenant against a park owner or by a park owner against an affected tenant before any court or other body having jurisdiction thereof. (Ord. 1030 § 4, 2006. Code 1964 § 2A-18.)

The term “days” shall mean calendar days unless specifically designated to be other than calendar days.