Ordinance Number 715ORDINANCE NO. 715
TO TITLE 2. ARTICLE 9 OF THE MUNICIPAL CODE -
AN ORDINANCE OF THE CITY OF SAN JUAN CAPISTRANO,
CALIFORNIA, AMENDING ARTICLE 9, MOBILE HOME PARK
REVIEW COMMITTEE, TITLE 2, ADMINISTRATION, OF THE SAN
JUAN CAPISTRANO MUNICIPAL CODE
THE CITY COUNCIL OF THE CITY OF SAN JUAN CAPISTRANO, CALIFORNIA, DOES
HEREBY ORDAIN AS FOLLOWS:
SECTION 1. Article 9, Mobile Home Park Review Committee, of
Title 2, Administration is hereby amended in its entirety to read as follows:
"Sec. 2-2.901. Findings.
The Council finds and determines that:
(a) There is presently, within the City and the surrounding areas, a
shortage of spaces for the location of mobile homes, resulting in a low vacancy
rate and rising space rents.
(b) Mobile home owners have invested substantial sums in their mobile
homes and appurtenances.
(c) Alternative sites for the relocation of mobile homes are difficult to
find, and the moving and installation of mobile homes is expensive, with possi-
bilities of damage to the units.
The Council, accordingly, does find and declare that it is necessary to
protect the residents of mobile homes from unreasonable space rent increases,
recognizing the need of mobile home park owners to receive a fair, just, and
reasonable return. (Sec. 1, Ord. 439, eff. November 3, 1981, as amended by
Sec. 1, Ord. 507, eff. May 3, 1984)
Sec. 2-2.902. Definition.
For the purposes of this article, unless otherwise apparent from the
context, certain words and phrases used in this article are defined as follows:
(a) "Assessment" shall mean the entire allocation of the cost of
installing, improving, repairing, or maintaining any capital improvement bene-
fiting the resident.
(b) "Committee" shall mean the Mobile Home Park Review Committee
established by this article.
(c) "Consumer Price Index" shall mean the Consumer Price Index for
all urban consumers (CPI -U) published for the Los Angeles -Long Beach -
Anaheim area.
(d) "Maximum allowable increase" shall mean the maximum allowable
increase in mobile home space rent an owner may charge, unless a higher
increase is approved by the City after a petition and hearing as provided in this
article. The maximum allowable increase shall be provided in this subsection
(d) and shall be determined by either of the following formulae an owner may
choose to apply:
(1) Take the operating expenses of the park for the twelve (12) month
period immediately preceding ;he date upon which notification of any rent
increase is to be made; multiply that sum by the percentage of increase in the
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CPI -U appearing in the latest published Consumer Price Index to arrive at the
maximum allowable annual increase in rent for the entire park; and divide the
number of units in the park to compute the maximum allowable annual rent
increase (in dollars) for each space; or
(2) Secure the percentage of annual increase in the CPI -U for the
calendar year immediately preceding the one in which the rental adjustment is
being made; multiply that figure by the rent to be adjusted to arrive at the
maximum allowable rent increase percentage per year; and apply that product
to each space rent.
(3) Effective April 1, 1988, the maximum allowable increase for rental
adjustments occurring under this subsection shall be based upon the percentage
of annual rise in the CPI -U for the previous calendar year. Any rental increase
occurring between October 1, 1987 and March 31, 1988 shall be subject to the
maximum allowable increase computed with the annual rise of the CPI -U for
the 1986 calendar year. of
(4) The percentage increase computed by either/the methods set forth
in this subsection shall be applied to each space and shall not be applied to the
park's mean rent. Moreover, there shall be no more than one increase in space
rents within a park during any twelve (12) month period without the prior
approval of the City.
(5) The occurrence of a vacancy in either a space within a park or a
mobile home unit on a space within a park shall not result in a space rental
increase in excess of the percentage increase allowed once during any twelve
(12) month period by this subsection, unless it results from a petition duly
heard and approved pursuant to Section 2-2.905.
(e) "Owner" shall mean the owner, lessor, or designated agent of a
park.
(f) "Park" shall mean a mobile home park which rents spaces for
mobile home dwelling units.
(g) "Rent" shall mean the consideration charged solely for the use and
occupancy of a mobile home space in a park and shall not include any amount
paid for the use of the mobile home dwelling unit or for facilities or amenities
in a park, other than a mobile home space, or any other fees or charges regu-
lated by a governmental agency and charged to residents on an actual usage
and/or cost basis.
(h) "Resident" shall mean any person entitled to occupy a mobile home
dwelling unit pursuant to the ownership thereof or a rental or lease arrange-
ment with the owner of the subject dwelling unit. (Sec. 1, Ord. 439, eff.
November 3, 1981, as amended by Sec. 1, Ord. 456, eff. June 3, 1982, Sec. 1,
Ord. 507, eff. May 3, 1984, and Sec. 1, Ord. 602)
Sec. 2-2.903. Mobile Home Park Review Committee:
Created: Members: Duties.
(a) Created. A Mobile Home Park Review Committee for the City is
hereby created.
(b) Membership. The Mobile Home Park Review Committee shall
consist of a total of five (5) voting members and three (3) alternates; two (2)
resident electors and one alternate who are mobile home owners; two (2)
mobile home park owners, operators, managers, or agents thereof and one
alternate who are not required to be resident electors; and one resident elector
and one alternate who are neither mobile home owners nor mobile home park
owners, operators, managers, or agents thereof. If, however, any membership
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cannot be reasonably filled from the designated categories, the Council may
appoint such other person who is capable of fulfilling the duties and obligations
set forth in this article. A quorum shall consist of three (3) voting members,
and any action of the Committee shall require an affirmative vote of not less
than three (3) voting members.
(c) Duties. The Mobile Home Park Review Committee shall undertake
and have the following duties, responsibilities, and functions, together with the
powers incidental thereto:
(1) To investigate, hold hearings, mediate insofar as possible, and make
recommendations to the Council on issues, problems, and legislation relating to
mobile home parks;
(2) To meet upon receiving Hearing Officer findings relating to the
propriety of rent increases brought into issue by the filing of a petition by
residents of or an owner of a mobile home park; to conduct a review of
Hearing Officer findings for the purpose of making its own recommendation
regarding the propriety of rent increases to the Council; and
(3) To undertake such. other duties as may be assigned by the Council
from time to time. (Sec. 1, Ord. 439, eff. November 3, 1981, as amended by
Sec. 1, Urgency Ord. 492, eff. September 6, 1983, Sec. 1, Ord 507, eff. May 3,
1984, and Sec. 1, Ord. 526, eff. January 3, 1985)
Sec. 2-2.904. Mobile Home Park Review Committee:
Membership: Meetings: Compensation.
(a) Appointment. Members of the Mobile Home Park Review Commit-
tee shall be appointed by the affirmative votes of not less than three (3)
members of the Council and shall be resident electors of the City, except as
expressly provided in this article.
(b) Service. Each member of the Committee shall serve for a one-year
term.
(c) Removal. Any member of the Committee may be removed from
such office, with or without cause, at any time, by the Council. No such
removal shall be effective unless a motion to that effect, made at a regular,
adjourned regular, special, or adjourned special meeting, is carried by the
affirmative votes of not less than three (3) members of the Council.
(d) Meetings. Except as expressly provided in this article, the
Committee shall establish the time and place of its regular meetings. All such
meetings shall be conducted in accordance with the provisions of the Ralph M.
Brown Act. The Committee shall adopt rules for the transaction of its
business and shall keep a record of its proceedings, which shall be open for
inspection by any member of the public.
(e) Absence of members. Any member of the Committee who is
absent, without sufficient cause, from three (3) successive regular meetings of
the Committee shall be deemed to have vacated his office.
An absence due to illness or an unavoidable absence from the City shall
be deemed an excused absence of sufficient cause provided notice thereof is
given to the secretary of the Committee by such member on or before the day
of any regular meeting of the Committee.
(f) Organization. The Committee shall annually elect one of its
members as Chairman and one of its members as Vice-chairman. Such election
shall take place at the first regular meeting in July.
(g) Vacancies. Qualifications of successors. Whenever a vacancy
occurs on the Committee, such vacancy shall be filled in the manner set forth
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in subsection (a) of this section. Where a vacancy occurs leaving an unexpired
term, the subsequent appointment shall be made for the balance of such
unexpired term.
Except for the removal of a Committee member, as provided in
subsection (c) of this section, or a vacancy due to absence as provided in
subsection (e) of this section, notwithstanding the expiration of the term of a
Committee member, such member shall continue to serve as such until his
successor is appointed and qualified.
(h) Reimbursement. Each member of the Committee shall be entitled
to such reimbursement as may be set by the Council. Such members shall be
entitled to reimbursement for expenses incurred in the performance of their
official duties if the same is approved, in advance, by the Council. The
Committee shall not have the authority to expend or authorize the expenditure
of any public funds, except with the prior express approval of the Council.
(i) Terms.
(1) Expiration of terms. The term of a Committee office shall expire
on June 30 of the designated expiration year.
(2) Continuance in office. Each member of the Committee holding
such office on December 5, 1980, shall continue in such office for the term to
which he was appointed; provided, however, the provisions of this article shall
control and govern such continuance in office.
(j) Secretary. The City Manager shall designate the secretary of the
Committee and such other advisory positions as he may deem appropriate. He
shall provide appropriate clerical assistance for the Committee and shall be
responsible for the maintenance of all its permanent records. (Sec. 1, Ord.
439, eff. November 3, 1981)
Sec. 2-2.905. Petition and hearing process
regarding rent increases.
(a) Petition and hearing procedure. Upon the filing with the secretary
of a written petition concerning a proposed or actual increase in rent filed by
an owner or by residents who reside in and represent more than fifty (50%
percent of the inhabited spaces within a park, excluding management, a
hearing thereon shall be conducted by a Hearing Officer within sixty (60)
calendar days, or as soon thereafter as is reasonably practicable, after the
filing of the petition.
The hearing shall be conducted only in the event the petition is filed with
the secretary thirty (30) calendar days following the effective date of the rent
increase which is the subject of the petition.
The Hearing Officer shall be chosen and a hearing conducted in accor-
dance with the Hearing Officer procedure established by the Council.
(b) Purpose of hearings. At the hearing on such petition, the Hearing
Officer shall conduct an investigation to determine if the rent increase in
question exceeds the maximum allowable increase as defined in subsection (d)
of Section 2-2.902 of this article. If the Hearing Officer concludes that the
rent increase exceeds the maximum allowable increase, the Hearing Officer
shall then continue the hearing by receiving all relevant evidence for the
purpose of rendering findings and conclusions as to the propriety of the rent
increase in accordance with the criteria set forth in subsection (g) of this
section.
The Hearing Officer may require either party to a hearing on the petition
to provide any books, records, and papers deemed pertinent, in addition to that
information previously set forth by the parties.
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(c) Hearing Officer recommendations. Within thirty (30) days after
concluding the hearing, the Hearing Officer shall render written findings and
conclusions as to the propriety of the rent increase to the Committee. The
Hearing Officer recommendations shall not be binding.
(d) Committee reviews of Hearing Officer findings. The Committee
shall review the findings and conclusions of the Hearing Officer at its next
available meeting. Its scope of review shall be limited to the written record
consisting of the evidence received by the Hearing Officer, written arguments
of the parties, findings of the Hearing Officer, other relevant matters as
compiled by the secretary of the Committee, and additional oral or written
arguments the parties may wish to make. However, the Committee shall not
receive or consider any additional evidence.
The Committee shall give ten (10) days prior written notice of its
meeting to the parties.
(e) Council reviews. The Council shall review the findings of the
Hearing Officer and the recommendations of the Committee as soon as
reasonably practicable. The Council shall not reopen the hearing held by the
Hearing Officer for the purpose of receiving new evidence unless, in the
discretion of the Council, it is necessary to do so.
The Council may affirm, modify, or reverse the rent increase in question,
but in no case require a reduction lower than the maximum allowable increase.
The Council shall render written findings in support of its conclusions
within thirty (30) days after its meeting, and the decision of the Council shall
be final.
(f) Return of excess rents collected. Any rent increases which are
collected by an owner pursuant to an increase which is the subject of a petition
for hearing, and which later is determined by the Council to exceed the
maximum allowable increase, or such greater increase as the Council approves,
shall be either returned to the residents or credited to future space rents;
provided, however, no increase collected prior to December 5, 1980, shall be
returned.
(g) Criteria to be utilized in rent increase reviews.
(1) Purpose of reviews. The Hearing Officer, the Mobile Home Park
Review Committee, and the Council shall review the rent increase to
determine whether the increase is, or is not, fair and reasonable. Such review
shall be conducted by applying the non-exclusive criteria set forth in
subsection (2) of this subsection (g) to the facts submitted to the Hearing
Officer.
(2) Non-exclusive criteria. The Hearing Officer, the Committee, and
the Council shall consider all relevant factors, including, but not limited to,
increased or decreased costs to the mobile home park owner attributable to
utility rates, property taxes, insurance, advertising, governmental assessments,
cost -of -living increases attributable to incidental services, normal repairs and
maintenance, capital improvements, except those defined in subsection (h) of
this section, the upgrading and addition of amenities for services, except as
defined in subsection (h) of this section, and a fair rate of return on the
property.
(3) Fair rate of return on property criteria. The Council finds and
declares that the following principles shall be applied in utilizing the fair rate
of return on property standard as a criterion in the review process:
(i) All the provisions of this article shall be applied with the overall
purpose of eliminating the imposition of excessive rents while at the same
time providing park owners with a just and reasonable return on property.
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(ii) The reasonableness of rent increases is not to be determined solely
by the application of a fixed or mechanical accounting formula, such as "return
on investment" or "return on market value" of the property; in particular,
recent court decisions have discouraged the use of a "return on market value"
test.
(iii) The fair rate of return on property is but one of a number of non-
exclusive factors to be taken into account in reviewing the fairness of rent
increases; it is to be given weight, but not to dominate other relevant criteria
in arriving at a final determination.
(iv) The Hearing Officer, the Committee, and the Council shall
impartially consider all relevant evidence in relation to the application of the
non-exclusive criteria. The extent to which the criteria are considered in the
review process, that is, the amount of weight given to any one of the several
criteria, ultimately falls within the wisdom and best judgment of said three (3)
bodies.
(v) In conducting the entire process, guidance should be taken from
leading California case law decisions dealing with rent control issues and in
particular, rent control in mobile home parks. Such cases include: Birkenfeld
v. City of Berkeley (1976), 17 C.3d 165; Gregory v. City of San Juan
Capistrano (1983), 142 C.A.3d 8; Cotati Alliance for Better Housing v. Cotati
(1983), 143 C.A.3d 296; Palisades Shores v. City of Los Angeles (1983), 143
C.A.3d 369; Oceanside Mobile Home Park Owners Association v. City of
Oceanside (1984), 157 C.A.3d 887; and Carson Mobile Home Park Owners
Association v. City of Carson (1983), 35 C.3d 184.
(h) Rent increases and capital improvement upgrade costs.
(1) Capital Improvement upgrade costs. Only those capital
improvement costs incurred to upgrade through additions, alterations or
replacements, park facilities, assets, or amenities, shall not be recouped from
residents through rent increases, or any other special assessment, unless the
following procedure is first followed:
(i) The park owner shall first inform by first-class mail all park
residents of the exact nature, approximate cost, billing method, and billing
duration of the proposed capital improvement upgrade by written notice.
(ii) After allowing the residents a reasonable period of time (of not less
than thirty (30) days) to consider whether the capital improvement cost is one
the residents believe is necessary and desirable, the park owner shall then
obtain formal written consent on a form approved by the City from a simple
majority of the total number of residents in the park. The simple majority
shall be calculated on the basis of one vote per coach space.
(iii) The costs of the capital improvement upgrade shall be prorated and
billed in a method mutually acceptable to the park owner and the residents.
For the purposes of this subsection, "to upgrade" shall mean to raise to a
substantially higher quality, or to substantially improve, the existing level of
service. Examples of capital improvement upgrades include, but are not
limited to, swimming pools, spas, tennis courts, clubhouses, clubhouse
additions, fencing, children's play equipment, and other similar improvements.
(2) Exceptions for governmentally mandated costs. Capital
improvement upgrade costs incurred because of the application of current day
Building Codes, such as, but not limited to, City Building Codes, Health and
Safety Codes, and State, Federal, and Fire Codes, shall be exempted from the
resident consent provision set forth in subsection (1) of this subsection (h). The
park owner shall obtain a written statement from the Building Official
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passage.
verifying that the subject capital improvement upgrade arose from the more
stringent current day Building Code requirements before the exception set
forth in this subsection may be utilized by the park owner.
(i) Leasehold agreement exemptions. Notwithstanding any provision
of this article to the contrary, leasehold agreements (that is, leases other than
tenancies at will or month-to-month) entered into between mobile home park
owners and their residents shall be exempted from the operation of the
petition and hearing review process.
(ii) Forms. The City Manager is authorized and directed to develop and
require the completion of forms by interested parties at the time a petition is
received by the secretary. Until such forms are completed to the satisfaction
of the City Manager, or his designated representative, the petition and hearing
process shall proceed no further. (Sec. 1, Ord. 439, eff. November 3, 1981, as
amended by Sec. 1, Ord. 456, eff. June 3, 1982, Sec. 1, Ord. 507, eff. May 3,
1984, Sec. 1, Ord. 526, eff. January 3, 1985, and Sec. 1, Ord. 545, eff. July 18,
1985)
Sec. 2-2.906. Hearing Officer costs. Fee reimbursement.
(a) Administrative fee. There is hereby instituted a $1,000.00 fee to
be paid to the City for costs incurred in invoking the hearing officer procedure
set forth in Section 2-2.905.
(b) $500.00 deposit. At the time the park residents file a petition in
protest of a proposed increase, the petitioners shall simultaneously post a
$500.00 deposit with the Secretary to the Mobile Home Park Review
Committee. The Secretary shall find that the petition is incomplete if the
$500.00 deposit is not posted. Further, the statute of limitation period of
thirty (30) days from the effective date of a rent increase shall continue to run
in the event that the petition has been found to be incomplete.
If the petition is in order and the deposit has been posted, the city shall
promptly notify the park owner that the hearing procedure will be invoked and
that the park owner shall, within ten (LO) days of receipt of notice, post a
$500.00 deposit equal to the petitioners' deposit. Should the park owner not
post the $500.00 deposit within the ten (10) day time limit, the residents shall
be under no legal obligation to pay the proposed rent increase.
(c) Responsibility for payment of administrative fee. At the
conclusion of the administrative hearing, the Hearing Officer, as a part of his
responsibility to make findings, shall make a recommendation as to the
percentage that each party is to pay in satisfying the $1,000.00 administrative
fee. The City Council shall make a final decision regarding the Hearing
Officer's determination based upon the final rent award.
(d) Remedies for nonpayment of administrative fee. Should any party
refuse to pay his portion of the required administrative fee, the City may
pursue any civil remedy available, or in the alternative, refuse to process a
future petition by the same petitioners. In the case of park owner
nonpayment, park tenants shall not be obligated to pay proposed rent increases
until the administrative fee debt has been satisfied. (Sec 2-2.902, Ord. 439,
eff. November 3, 1981, was repealed by Ord 507, eff. May 3, 1984, and added
by Sec. 1, Ord. 613, eff. December 31, 1987)."
SECTION 2. Effective Date.
This Ordinance shall take effect and be in force thirty (30) days after its
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SECTION 3. City Clerk's Certification.
The City Clerk shall certify to the adoption of this Ordinance and cause the
same to be posted at the duly designated posting places within the City and published
once within fifteen (15) days after passage and adoption is required by law; or, in the
alternative, the City Clerk may cause to be published a summary of this Ordinance and a
certified copy of the text of this Ordinance shall be posted in the Office of the City
Clerk five (5) days prior to the date of adoption of this Ordinance; and, within fifteen
(15) days after adoption, the City Clerk shall cause to be published, the aforementioned
summary and shall post a certified copy of this Ordinance, together with the vote for and
against the same, in the Office of the City Clerk.
PASSED, APPROVED, AND ADOPTED this 20th day of October
1992.
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1� ES, MAYOR
ATTEST:
ww'�A'IU KI
Subject to Referendum effective date is 5:00p.m. on Dlay 14, 199J.
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
CITY OF SAN JUAN CAPISTRANO )
1, CHERYL JOHNSON, City Clerk of the City of San Juan Capistrano,
California, DO HEREBY CERTIFY that the foregoing is a true and correct copy of
Ordinance No. 715 which was introduced at a meeting of the City Council of the City
of San Juan Capistrano, California, held on October 6 , 1992, and adopted at
a meeting held on October 20th , 1992, by the following vote:
AYES: Councilmen Friess, Harris, Vasquez and Mayor Jones
NOES: Councilman Hausdorfer
ABSTAIN: None
ABSENT: None
(SEAL) 2 z?� '/ �;
CHERYL JO S CITY L K �—