HomeMy WebLinkAbout2017-06-13 - AGENDA REPORTS - PROPOSED UPDATES TO SANTA CLARITA MUNICIPAL CODE, (2)Agenda Item: 19
CITY OF SANTA CLARITA
Q;" AGENDA REPORT
UNFINISHED BUSINESS
7,
CITY MANAGER APPROVAL: 41
DATE: June 13, 2017
SUBJECT: PROPOSED UPDATES TO SANTA CLARITA MUNICIPAL CODE,
CHAPTER 6.02 - MANUFACTURED HOME RENT ADJUSTMENT
PROCEDURES
DEPARTMENT: Community Development
PRESENTER: Erin Lay
RECOMMENDED ACTION
City Council discuss the proposed changes and provide direction to staff.
BACKGROUND
Chapter 6.02 of the Santa Clarita Municipal Code (Chapter 6.02) - Manufactured Home Park
Renu Adjustment Procedures, was implemented in 1991 to protect manufactured home Park
Residents from excessive space rent increases, while recognizing the legal right of the
manufactured home Park Owners to receive a fair return arz their property and sufficient rental
income to cover reasonable costs. The State of California Department of Housing and
Community Development retains jurisdiction for most issues related to manufactured home
parks, including park operations, sales and registration, leases, maintenance, and construction
permits. The City of Santa Clarita's (City) jurisdiction and authority extends only to those issues
specifically addressed in Chapters 6.02 and 6.04.
Over the last two years, the City Council and staff have beard concerns from Park Residents,
Park Owners, and the Panel regarding the difficulty of the appeal bearing process. City staff
proposed a number of changes to Chapter 6.02 to address those concerns. Those proposed
changes were presented at two public comment meetings held arz April 3 and 4. Approximately
60 individuals collectively attended the public comment meetings and provided staff with
feedback arz the proposed changes. Those attending also commented arz other issues related to
the current implementation of Chapter 6.02.
The proposed changes were presented to the City Council Development Committee
(Kellar/Miranda) arz April 25. The changes were discussed by the Committee and public
comment was received.
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The proposed changes to Chapter 6.02 were presented to the City Couicil on May 9. The City
Couicil commented on a variety of concenis with the proposed changes to Chapter 6.02,
including: the need to make sure that language in Chapter 6.02 would make Park Residents
comfortable with the Hearing Officer concept; that definitions contained in the proposed changes
to Chapter 6.02 would use clear terms; and that comments from public and the City Couicil
would be considered and incorporated into the proposed changes to Chapter 6.02, where feasible.
Park Residents were encouraged to email the City Council with their concerns. The City Couicil
requested that the new language be taken back to the Development Committee for review, and
returned to the City Couicil for further discussion.
Following the May 9 City Council meeting, staff compiled a list of concenis obtained from
comments made at public meetings and written correspondence received by the City Couicil.
Those concerns were organized to track the relevant sections of Chapter 6.02, and discussions
were held with staff and the City Attorney to make additional draft changes to Chapter 6.02.
The City Council Development Committee again met on June 5 to further discuss this item,
which included the additional changes made in response the City Council's direction on May 9
and the public comments.
The following is a synopsis of those comments, with staff responses below each:
I. Section 6.02.020 - Definitions
a. Several commenters requested expanded definitions of terms (i.e. Capital Improvements,
Capital Replacements, Maintenance), along with examples, in Chapter 6.02; it was felt
some terns were not clear for those using the Code.
o A new redline draft of Chapter 6.02 reflecting several expanded definitions is
included with this report.
b. Several commenters stated that it would be good practice to have Park Residents made
aware of Capital Improvements prior to implementation.
o Language encouraging Park Owners to notify Park Residents of planned Capital
Improvements and/or Capital Replacements prior to construction has been included in
the redline version of Chapter 6.02 at Section 6.02.020.
II. Section 6.02.030 - Applicability
a. One commenter requested that Chapter 6.02 should include language informing potential
buyers that long term leases do not fall under purview of Chapter 6.02.
o Language addressing this is already contained in the current version of Chapter 6.02
at Section 6.02.030, and additional language has been added to clarify the issue.
III. Section 6.02.040 - PaneUHearine Officer
a. A request to change the Panel to include two members elected by the Park Owners and
two members elected by the Park Residents, plus a fifth independent member with
professional certification as an "arbitrator" approved by a majority of the Panel, with the
independent member acting as Chair.
o The decision to utilize a Hearing Officer format instead of a Panel format is an item
for City Council consideration; however, the recommendation to move to a Hearing
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Officer process remains because of the numerous complaints and comments the City
has received on all sides of the issue, including from Panel members themselves,
stating that the Panel appeal process is not timely, efficient, or fair to the parties. In
addition, getting a professional arbitrator to volunteer on the Panel is infeasible.
b. Concerns regarding the hiring standards for Hearing Officers.
o Should the City Council decide to use the Hearing Officer format, the process to
procure qualified Hearing Officers, who must have no ties to manufactured home
parks or residences, will be conducted in compliance with all City purchasing
policies. The award of contracts with Hearing Officers will be taken to City Council
for approval, allowing the public to review the procurement process and comment
prior to the selection of a Hearing Officer or Officers.
c. Concems that the Hearing Officer concept will not speedup the appeals process.
o The Hearing Officer process eliminates the need to have two meetings per appeal,
thereby speeding up the process. In addition, several Hearing Officers could hear
multiple appeals simultaneously, rendering opinions faster.
IV. Section 6.02.060 - Park Registration Fee
a. Concent that rent increases can be requested by parks that don't have current registration.
o New language will be included in the redline to address this concent, stating thatno
appeal bearing shall be scheduled or take place regarding a park until that park's
registration fees, including any penalties, are current. In addition, City staff monitors
all Park Owners to ensure payment including payment of late penalties.
V. Section 6.02.080 - Annual Space Rent Adjustment Notice
a. A request that space rent adjustment notices be given by September 1 to allow more time
for appeals.
o State law provides that a Park Owner has a minimum of 90 days to provide notice of
a rent adjustment. The City is therefore preempted by State law to require more notice
be provided to Park Residents.
b. Several individuals felt that staff should validate that rent increase notices are in
compliance with the Ordinance before the notices go to Park Residents.
o The redline of Chapter 6.02 contains new language to address this concerri. These
documents will be due to staff on September 1 to allow reviews to be complete by
September 15; then notices to Park Residents would go out by October 1. Associated
changes were made in 6.02.020 and 6.02.090, moving the CPI calculation date a
month earlier. This will allow sufficient time for Park Owners to prepare their Notices
one monnth earlier than previously required.
VI. Section 6.02.090 - Allowable Methods for Space Rent Adjustments
a. A concent that Park Residents are no longer required to receive supportive documents for
proposed rent increases, previously in Section 6.02.090 B(1)(b).
o Chapter 6.02 never required that each individual Park Resident receive their own
copy of supportive documents. The update in 2015 introduced the requirement, but it
does require that supportive documents be available for review in the individual park
office. The redline changes contain new language to address concems regarding
availability of documents by requiring that supportive documents be available for
review in both the individual park office and at City Hall.
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b. A request for language specifying that only current year costs may be "passed through" to
the Park Residents.
o The currentOrdinance contains language stating that Park Owners can only charge
for items that are completed and paid for within the last 24 months.
c. Concent over the change from "365 -day" to "animal" increases.
o The change from "once every 365 days" to "once each calendar year" was
implemented with the 2015 update of Chapter 6.02. The goal was to allow a Park
Owner to continue to implement rent adjustments on January 1, even if the previous
year's rent increase had been delayed due to a protracted appeal process.
d. Would like supportive documents to be required for Standard increases in govenmennt-
required services and utilities, with only annual increases or decreases allowed.
o The proposed redline includes a requirement for the submittal of documentation for
govenmennt-required services. State law preempts the City's ability to limit Park
Owners to only annual increases.
VII. Section 6.02.120 - Annual Space Rent Adiustmennt Appeal Petitions
a. Request to allow individual Park Resident appeals, not just appeals based on 50% -plus -
one resident in a given park.
o This is an item for City Council consideration; however, the number of appeals could
increase dramatically with such a change, increasing the costs of administering
Chapter 6.02 and appeals as well.
b. Concent that Chapter 6.02 requires use of an official petition form.
o The current language in the Chapter 6.02 under Section 6.02.120 D outlines the
petition form. The use of an official petition form was created in order to provide
assistance to Park Residents as to the information required by Chapter 6.02, and to
assist staff in making timely and efficient reviews of the petitions in order to schedule
an appeal hearing. The current form used was approved by the Panel.
c. Concen that Section 6.02.155 was eliminated in the previous update.
o While the Section was eliminated in the previous update, the language itself was not.
Language formerly in Section 6.02.155 A is now found at Section 6.02.120 D.
Language formerly in Section 6.02.155 B is now found at 6.02.120 G.
VIII. Section 6.02.170 - Decision of the PaneUHearine Officer
a. Request that Panel or Hearing Officer decisions be appealable to the City Council.
o Currently Chapter 6.02 states that decisions of the Panel are not appealable. Part of
the rationale for the Hearing Officer concept lies in the complete impartiality of the
Hearing Officer and their experience in understanding complex issues and rendering
fair opinions, making appeals of decisions unnecessary. If decisions of the Hearing
Officer are made appealable to the City Council, the Hearing Officer essentially
becomes a necessary but ineffective step in the process, with all decisions likely to be
appealed. This ultimately makes the City Council the Panel. This is an item for City
Couicil consideration; however, the recommendation is to continue the practice of
appeal decisions being final. Appeals can be made through a court process.
b. Remove all verbiage requiring Park Residents or Park Owners to use the legal system
when disagreement with an appeal bearing decision is made. Use of the courts is always
an option which can be pursued.
o This language is intended for procedural clarification.
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IX. Comments made not relative to specific Sections of Chapter 6.02
a. An individual requested reinstatement of a previous requirement for Park Owners to
reduce space rent, appropriately, when Park services are diminished or eliminated.
o The redline addresses this by adding back language previously in Section 6.02.130.
b. A request was made to reinstate a previous requirement that Park Residents approve
Capital Improvements and Capital Replacements which would subsequently be added to
the Park Residents' space rent.
o That particular provision applied only to rent increases that were requested as a result
of a reduction in Net Operating Income (NOI). The NOI methodology was only used
once in the history of Chapter 6.02 and required accountants be hired to interpret the
information. As a result, the process for requesting a rent increase using the NOI
method was eliminated. No other methods of increases require property owners to get
consent from residents to improve their property.
A number of other comments were made at public meetings regarding the update, but many of
those comments were general in nature, and there was nothing to include in the changes to
Chapter 6.02 based upon those comments. A list of such comments is attached.
At the Development Committee meeting on Juie 5, Committee members discussed the threshold
for appeal petitions, which currently requires signatures from 50% -plus -one of the residents in
the park. The comment was that this threshold may be too difficult, especially in larger parks.
The Committee members also discussed and recommended changing the word from
"encouraged" to "required" relative to Park Owners notifying Park Residents of planned Capital
Improvements and/or Capital Replacements prior to their construction. In order to make
notification a requirement, the following issues need to be resolved: the timing of the notice; the
format of the notice; and whether or not failure to give such notice is grounds for an appeal.
Based on the information received from the public, the City Council Development Committee,
and the City Couicil, staff feels that the proposed changes should address a number of on-going
concems related to the administration of Chapter 6.02. The City continues to be aware of the
need to balance the needs of the Park Owners and Park Residents, and the proposed changes to
Chapter 6.02 are intended to maintain that necessary balance.
Pending the direction of the City Couicil, the potential timeline for the amendments to Chapter
6.02 is as follows:
• Juie 27, 2017 - Present First Reading to the City Council
• July 11, 2017 - Present Second Reading to City Council.
• September 26 or October 10, 2017 -City Council to consider the award of contracts for
Hearing Officers and appropriate funding for the effort.
ALTERNATIVE ACTION
Other action as determined by the City Council.
FISCAL IMPACT
There is no fiscal impact associated with this phase of the update to SCMC 6.02.
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ATTACHMENTS
Matrix of 6.02 Issues - Specific to Sections
Matrix of 6.02 Issues - General Comments
6.02 FINAL REDLINE
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Comments Received from the Public on Specific Sections of Chapter 6.02 with Responses 19.a
Section I Public Comment Received
Staff Comments
Definitions
6.02.020
Requests definitions of: Capital Replacement, Capital Gains, Capital
See Redline version for expanded definitions.
Improvements, and Repair
6.02.020
The existing definition of "Capital Improvement" appears to represent
See Redline version for expanded definitions.
the Ordinance's intent so long as the prospect of "new improvements'
which "materially adding to the value of the park" is understood, and the
definition is not expanded by usino additional outside definitions.
6.02.020
Requests that the Park Owner be required to inform Park Residents of
See Redline version for this new requirement.
tanned Capital Improvements prior to undertaking the pro ed.
6.02.020
The rub comes with the definition of "Capital Replacement". While I
See Redline version for expanded definitions.
recognize the definition's text from other literature I have read, that
definition grossly blurs the line between "park improvements" and
"routine maintenance and repair", unless, "materially benefits and adds
value to the park" is emphasized. Simply replacing an item, which was
allowed to decay because of the lack of routine maintenance or
replacing small business equipment due to wear out, does not add value
and for the purpose of this Ordinance should not be considered Capital
Re Iacement.
6.02.020
Add a definition of Governmental Services, with examples
See Redline version for expanded definitions.
6.02.020
1. Opposed to removing definition of Resident
Proposed language is based on the fact that staff needs sources to
2. Definition of Resident should be equal in people eligible to sign the
verify signatures, and the only two available sources are the rent roll and
same as owner
the State registration. By referencing both sources, the draft attempts to
3. Feels the change in definition of Resident makes appeals difficult
be as inclusive as possible, while still allowing for verification of
ownership.
6.02.020
It is imperative that rent control ordinance 6.02 delineates "standard
Chapter 6.02 already delineates.
rent" vs. "non-standard" rent; and defines each in writing.
6.02.020
Feels that Standard and Non -Standard rent increases are a double dip
See Redline version for expanded definitions.
&
by park owners - owners can charge for same item under both
6.02.090
categories and definitions would help.
Applicability
6.02.030
Feels Ordinance should include language informing potential buyers that
Language in this section addresses this issue but additional language
B
long term leases do not fall under purview of 6.02
was added to Section 6.02.030 for further clarification.
Fifth Panel Member
6.02.040
Change Panel to include 2 members elected by the Park Owners and 2
The intent of the proposed revision is to streamline the appeal process
members elected by the Residents, plus a 5th independent member with
through the use of a neutral Hearing Officer. This is in response to
professional certification as an "arbitrator" approved by a majority of the
complaints from all sides regarding the Panel process. Retaining the
other Panel Members, with the independent member acting as the Panel
Panel does not accomplish that intent.
Chair
6.02.040
Concerned that the 90 day time period will mean that opinions will be in
The Hearing Officer process eliminates the need to have two meetings
by February or March, not any earlier than Panel's decisions
per appeal, thereby speeding up the process. Also, multiple Hearing
Officers could hear multiple appeals simultaneously, rendering opinions
faster.
6.02.040
Doesn't think Hearing Officer will speed up process
The Hearing Officer process eliminates the need to have two meetings
per appeal, thereby speeding up the process. Also, multiple Hearing
Officers could hear multiple appeals simultaneously, rendering opinions
faster.
6.02.040
If the Ordinance continues to use a Panel to decide appeals, both the
The intent of the proposed revision is to streamline the appeal process
Owner's representatives and Residents should have a voice in
through the use of a neutral Hearing Officer. This is in response to
determining the independent member, and the independent member
complaints from all sides regarding the Panel process. Retaining the
should chair the meetings.
Panel does not accomplish that intent.
6.02.040
Questions the City Council's right to eliminate the Panel
The City is not required to have a Panel under State law - the Panel is
entirely a creation of the Council -adopted Ordinance. Accordingly, the
Council retains the authority to convert to a Hearing Officer process.
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Comments Received from the Public on Specific Sections of Chapter 6.02 with Responses 19.a
Section
I Public Comment Received
Staff Comments
Fifth Panel
Member
6.02.040
Requests Hearing Officer hiring Standards be uniform and consistent.
Process to procure qualified Hearing Officers with no ties to
Manufactured Home Parks or Residences will be in compliance with City
Purchasing Policy. Award of contracts with Hearing Officers will be
taken to City Council for approval.
6.02.040
Would prefer use of a Hearing Officer, Park Owners and Residents
As indicated above, the selection of Hearing Officers will be made at a
should have a say in selecting the Hearing Officer and the decision
public meeting. In terms of timing of a decision, the Hearing Officer will
should be rendered shortly after (within days) the appeal hearing's
need sufficient time after the hearing to write up a decision.
conclusion.
6.02.040
No objection to Hearing Officer, but not sure that they will have a vested
The intent of the revision to Chapter 6.02 is that the Hearing Officer
interest in the wellbeing of seniors.
would be a professional and neutral party.
6.02.040
Should the City decide to go with a Hearing Officer, Park Owners and
As indicated above, the selection of Hearing Officers will be made at a
Residents should have a say in selecting the Hearing Officer, and
public meeting. In terms of timing of a decision, the Hearing Officer will
appeal decisions should be rendered immediately at the end of the
need sufficient time after the hearing to write up a decision.
appeal hearin .
6.02.040
Not opposed to Hearing Officer, but would like more information on the
The process to procure qualified Hearing Officers with no ties to
process, requests that Hearing Officer have specific experience in this
Manufactured Home Parks or Residences will be in compliance with City
line of work.
Purchasing Policy. Qualification requirements for Hearing Officers are
proposed in the redline. Award of contracts with Hearing Officers will be
taken to City Council for approval.
6.02.040
In favor of an Independent Hearing Officer. By bringing the Resident
The intent of the revision to Chapter 6.02 is that the Hearing Officer
appeals to an independent entity, it should allow decisions based solely
would be a professional and neutral party.
on the Ordinance promsions.
Park Registration Fee
6.02.060
Rent increases can be requested by parks that don't have current
The proposed redline language would prohibit the scheduling of a rent
registration
increase hearing until registration fees and penalties are paid current.
Additionally, staff monitors compliance and follows up with Park Owners
who are late with registration fees.
Rent Increase Notices and Supporting Documentation
6.02.080
Requests space rent adjustment notices given by September 1 to allow
State law preempts the City's ability to move this timeline. Under State
more time for appeals
law, an Owner is not required to give residents more than 90 days notice
of a proposed increase.
6.02.080
Residents no longer required to receive supportive documents for
See Redline - New language will make documents available in the Park
proposed rent increases previously in 6.02.090 B 1 b .
office and at City Hall for review.
6.02.080
Feels staff should validate that rent increase notices are in compliance
See Redline - Staff will review notice documents. Documents will be due
with Ordinance before notices go to Residents
to staff on September 1, with the review completed by September 15.
Notices to residents to go out on October 1.
6.02.080
Verification of yearly increase packages by city staff, prior to resident
See Redline - Staff will review notice documents. Documents will be due
notification, would go a long way to reduce the number of appeals. This
to staff on September 1, with the review completed by September 15.
process should include an opportunity for park owners to correct any
Notices to residents to go out on October 1. Associated changes were
item omitted and eliminate any inadvertent errors.
made in 6.02.020 and 6.02.090 moving the CPI calculation date a month
earlier. This will allow sufficient time for Park Owners to prepare their
Notices one month earlier than premously required.
6.02.080
1 recommend having City staff review, seek revisions per the Ordinance
See Redline - Staff will review notice documents. Documents will be due
as required, and approve the compliance of rent increase packages to
to staff on September 1, with the review completed by September 15.
the approved Ordinance, prior to rent increase packages being
Notices to residents to go out on October 1.
presented to the residents. In addition, appeal requests should only be
allowed to proceed when there is a discrepancy noted between
ordinance requirements and the rent increase package.
6.02.080
Requests that Park Owners submit Rent Increase Packages to the City
ISee Redline - Staff will review notice documents. Documents will be due
for verification of the Rent Package against the Ordinance, and provide
Ito staff on September 1, with the review completed by September 15.
a mechanism for Park Owners to amend Rent Packages, as necessary,
Notices to residents to go out on October 1.
to bring them in compliance to the Ordinance.
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Comments Received from the Public on Specific Sections of Chapter 6.02 with Responses 19.a
Section I Public Comment Received
Staff Comments
Methods for Space Rent Adjustments
6.02.090 A
Concerned over change from 365 day to annual increases. (In former
The changes clarify that only one increase is allowed per calendar year,
Ordinance at 6.02.090 B)
while eliminating any confusion about applicable dates that might result
from a protracted appeal process.
6.02.090 C
Feels that supportive documents should be required for Standard
The redline includes language requiring documentation for government
increases in government services and utilities with only annual
pass throughs.
increases or decreases allowed
6.02.090 D
Requests language specifying that only current year costs may be
State law preempts limitations on government pass throughs. Capital
"passed through" to the Residents
expenses are capped at 24 months to accommodate the fact that some
capital projects may start in one year, but not be completed by the cut
off to be included in an annual rent increase notice.
Appeal Petitions
6.02.120 D
Requests to allow individual resident appeals, not just appeals based on
The 50% plus one has been in 6.02 since 1991, and that threshold was
50% plus one Resident in a given park
presumably set to strike a balance between Park Resident and Park
Owner rights. Modification would alter that balance and could increase
the cost of administration of 6.02, if a large increase in appeals resulted.
6.02.120 D
Concerned that Ordinance requires 50% plus 1 on signatures to raise
The 50% plus one has been in 6.02 since 1991, and that threshold was
appeal
presumably set to strike a balance between Park Resident and Park
Owner rights. Modification would alter that balance and could increase
the cost of administration of 6.02, if a large increase in appeals resulted.
6.02.120 D
Concerned that 6.02 requires use of an official petition form
See Ordinance - An official petition form, approved by the Panel, was
created in order to provide assistance to Residents as to the information
required by Chapter 6.02, and to assist staff in making timely and
efficient reviews of the petitions in order to schedule an appeal hearing.
6.02.160
Concerned that Section 155 was eliminated
See Redline - Chapter 6.02 currently contains all provisions of 6.02.155:
6.02.155 A is now in Section 6.02.120 D, 6.02.155 B is now in Section
6.02.120 G.
Reduction in Services
6.02.130
Requests reinstatement of a previous requirement for Park Owners to
See Redline - this Section has been added back as previously written.
reduce space rent, appropriately, when Park services are diminished or
eliminated, the return of Chapter 6.02.130 (Reduction in Services) to the
Ordinance
Prior Notification/Approval
1. Prior consent of Residents on proposed Capital Improvements
The consent of residents was only required for a rent increase based
upon a reduction in Net Operating Income (N01). The provision allowing
for that type of rent increase was only used once in the history of
Chapter 6.02 and required hiring of accountants to interpret the
information. Accordinaly. the N01 procedureswere removed.
Appeal of
Decisions
6.02.150C
Requests reinstatement of a previous requirement that Residents to
The consent of residents was only required for a rent increase based
approve Capital Improvements and Replacements which would
upon a reduction in Net Operating Income (N01). The provision allowing
subsequently be added to the Residents' Space Rent
for that type of rent increase was only used once in the history of
Chapter 6.02 and required hiring of accountants to interpret the
information. Accordingly, the N01 procedures were removed.
6.02.170
Requests Panel or Hearing Officer decisions to be appealable to the
Currently, decisions of the Panel are not appealable, but any party that
City Council
is not satisfied with a decision of the Panel may seek any judicial
remedy provided by law. If decisions of the Panel/Hearing Officer were
appealable to the City Council, the Panel/Hearing Officer essentially
becomes a necessary, but ineffective step, with all decisions likely to be
appealed.
6.02.170
Remove all verbiage requiring Residents or Park Owners to use the
This language is included to provide procedural clarity.
legal system when disagreement with an appeal hearing decision is
made. Use of the courts is always an option which can be persued. Use
of such language comes across as confrontational and unnecessary.
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Packet Pg. 209
General Comments Recevied on Update of SCMC 6.02 19.b
General Comment Received
Staff Comments
It would be a good practice to have residents made aware of Capital
See redline - Park Owners will be encouraged to make Residents aware of
Improvements priorto implementation.
Capital Improvements pdorto implementation
Requests a defined process to allow Resident involvement with the decision
See redline - The proposed language encourages Park Owners to advise
making process on repairs, maintenance, and Capital Improvements.
Park Residents of proposed Capital Improvements.
A common thread expressed at each of the meetings was frustration with the
current Ordinance version and process management by City staff. City staff must
maintain a posture that is perceived to be impartial by all participants.
Establishing a more open and proactive process when Ordinance changes are
determined and proposed would be most beneficial. Comments should be taken
from the participants and the public prior to the staff establishing a change
proposal.
Expressed a desire for a fresh start and would like to see different staff members
manage the process in the future.
Expressed the desire to have the Director of Community Development take a
more active role in management the process. In addition, a suggestion for more
comprehensive training for both staff, Panel Members (if that option is selected)
or Hearing Officer (if that option is selected) be established and conducted.
Residents would prefer using the current CPI, Pass Through, Capital
improvement Process outlined in the current Ordinance.
Residents would prefer using the minimum 3% or Pass Through and Capital
The Council removed the 3% floor during the last amendments. Any return
Improvement process used in the previously approved Ordinance version with
to that floor would be at the Council's discretion.
exception of the need to obtain 50%+ 1 residents vote to approve Capital
Improvements.
No matter if a Panel or a Hearing Officer is used, operating cdteda must be set to
only allow decisions relative to Ordinance cdteda be made. Outside criteria must
not be used.
The Rent Panel or Hearing Officer should provide the City Council with a yearly
Staff updates the City Council following all appeal hearings.
report.
Increasing the burden on the Residents to raise an appeal, as outlined in the
current Ordinance proposal, is a bad idea and not workable. If the process was
working well, appeals would be minimized. We need to re-establish trust
between Park Owners, Residents and City staff. Increasing the burden on
Residents is counterproductive to making it happen.
Has a unique perspective - Has been both a Panel Member and a Park Owner's
representative that went before the Panel on an appeal.
A panel of this type only works when all members come to the table without
preconceived notions of "what's right." The Ordinance was designed to allow for
standard increases based on the Consumer Price Index, and non-standard
increases based on expenditures for projects that are capital
improvements/replacements. The Ordinance allows residents receiving a non-
standard rent increase to appeal the increase. City staff, Residents, and Park
Owner representatives have already spent countless hours trying to define and
clarify this Ordinance - to go back again for more of the same would only
continue this "never ending story."
There is no need to "reinvent the wheel" regarding capital vs. maintenance costs
— the IRS has already done that for us. The IRS has very clear and concise
definitions for capital expenditures. Again, an independent Hearing Officer
should have the knowledge and capability to review the expenditure then follow
the IRS criteria and make their decision.
I am opposed to allowing Park Owners and Residents to add definitions to the
Ordinance, or allow lengthy interpretations of the Ordinance. This is the very
reason the City is trying to find an alternative way to administer this Ordinance.
The appeals that were heard by the Panel in 2016 were riddled with
"interpretations" with verbal references made to the "spilt" and "intent" of the
Ordinance.
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General Comments Recevied on Update of SCMC 6.02 19.b
General Comment Received
Staff Comments
In 2016, the City spent over $400,000 on Panel appeal hearings, public meetings
With few public members attending, legal expenses, staff time, etc. If I was a
taxpayer in Santa Clarita I would be livid! As an alternative that could make
Santa Clarita a better place for all — spend that money on a rent subsidy program
to provide assistance to residents that are truly in need. This program could be
supported by both the City and property owners.
Bottom-line: Rent Control Ordinances are contentious by their nature - and it
would be unrealistic to believe any Ordinance could be written that satisfies all
parties involved.
While I believe, I understand why the Ordinance uses definitions related to
"Capitalization" of assets, use of this term is widely misunderstood by Residents
as somehow giving the Park Owners an income tax advantage. On the other, the
definitions have given Park Owners the ability to call almost all repairs a Capital
Replacement, which I do not think was the Council's intent either.
I am also sure you are aware, there are two major reasons to "Capitalize" an
asset mtherthan consider it an "Expense". The first being a specific IRS
requirement. The other and more business-related decision, is to spread the cost
of major expenditures over several years to prevent large impacts to a
company's profitability numbers. Neither of which are reasons to add to the
residents monthly rent.
Lack of clear definitions and intent have been a continual issue over the last 2
years. To expedite any future Panel hearings, I would like to make a suggestion.
(I have not polled my contacts about this suggestion). First, a yearly process for
updating Ordinance definitions and clarifications be established. To facilitate the
process, I suggest leaving the current Panel structure in place. Add to the
Ordinance a section, creating the ability ofthe Panel to add definitions and
criteria providing a super majority ofthe Panel 4 of 5 and legal counsel agrees.
The Panel is then obligated to use the added criteria for future hearings until the
City Council "weighs in", with an up or down vote, when the yearly Ordinance
update is brought forth for approval.
Requests language preventing Park Owners from charging Residents amounts
The City is prohibited by case Iawftom requiring submittal oftax returns, so
exceeding actual costs of Capital Improvements or pass throughs, i.e., reduce
City staff is not able to enforce/monitor compliance with tax treatment based
the cost, taking into account reductions in yearly taxes due to write offs.
regulations.
Requests language that will require any rent increase proposed to provide Park
Whether such information is in a particular case needed to support a rate of
Owners "A reasonable rate of return on their investment" be accompanied by a
reasonable return on investment will depend on the nature ofthe increase
disclosure of the Park's profit margin with supporting documentation.
and therefore should be left forthe Park Ownerto provide or Panel/Hearing
Officer to request.
Requests assurances that Park Owners don't claim the same capital
The City is prohibited by case law from requiring submittal of tax returns, so
improvements, maintenance, and repairs on more than the previous year's
City staff is not able to enforce/monitor compliance with taxtreatment based
Federal and State taxes.
regulations.
Concerned that current Ordinance allows owners to include Capital Improvement
Capital expenses are capped at 24 months to accommodate the fact that
costs in Non -Standard increases in previous 24 months, up from 12 months.
some capital projects may start in one year but not be completed by the cut
off to be included in an annual rent increase notice.
Summary of changes suggested are not in the draft.
A summary of suggested changes has been presented to the public on four
occasions and posted on the City's website.
Feels that having to adjust to new rules will be difficult on Residents.
Panel approved summary needs to change
CPI information and appeal petition information to Residents in the Panel
approved summary changes annually, summary will continue to be provided
to Residents in English and Spanish.
Requests consensus of Owners and Residents on changes
Supports continuing to use the elected Panel as the vehicle for helping to select
the independent member and rule on appeals. Either method of using a Panel or
a Hearing Officer need to have both Park Owner and Resident participation. I
also support having the independent Panel Member chair the Panel meetings.
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MANUFACTURED HOME PARK RENT ADJUSTMENT PROCEDURES
6.02.010 Purpose
6.02.020 Definitions
6.02.030 Applicability
6.02.040 fflearing Officer
Qualifications
6.02.050
Registration
6.02.060
Registration Fee
6.02.010
Space Rent Limit
6.02.080
Annual Space Rent Adjustment Notice
6.02.090
Allowable Methods for Annual Space Rent Adjustments
6.02.100
Appeal Considerations
6.02.110
Amortization Schedule
6.02.120
Annual Space Rent Adjustment Appeal Petitions
6.02.130
Change in Ownership Space Rent Adjustment Procedures
6.02.140
Reduction in Services
6.02.150
Vacant Spaces
6.02.160
Appeal Hearings
6.02.110
Decision of the PanelHearing Officer
6.02.180
Miscellaneous Provisions
6.02.010 Purpose.
A. A Manufactured Home Park Resident's (Park Resident) tenancy in a manufactured home
park is substantively different than traditional apartment tenancy in that the Park Resident
owns their manufactured home, while still being subject to space rents. naa
4ow, To move a manufactured home is costly and difficulty aei,a, and there may not
be available spaces in other nearby manufactured home parks in which to relocate,
resulting in the Park Resident having fewer options to move out of the park to find lower
rents.
B. Manufactured Home Park Owners; (Park Owner}, having made a business investment in
the manufactured home park, have— the right to receive a fair return on their property.
Nonetheless, as a result of the unique tenancy circumstances of --••mi4i4areg 488- Park
Residents, Park Owners should be subject to reasonable procedures in the imposition of
space rents.
C. For these reasons, among others, the Lily Council finds and declares it necessary to
provide a process whereby ` ` - a 48m -&Park Residents are not subject to excessive
rent increases, while at the same time recognizing the rights of Park Owners to receive a
fair return and rental income sufficient to cover reasonable increases in the cost of repairs,
maintenance, insurance, employee services, additional amenities, and other costs of
operation.
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D. Further, the intent of this Chapter and its continued implementation is to:
I. Prevent excessive and unreasonable manufactured home park space rent increases;
2. Rectify the disparity of bargaining power that exists between owners of manufactured
homes and owners of manufactured home parks;
3. Provide vAH'H,`
•i41-irea'48-AL Park Owners with an annual "by -right' Standard space
rent increase; and
4. Provide a process for ensuring ` ` - a haffie Park Owners a fair rate of return
where the annual Standard space rent increase does not provide a fair return.
6.02.020 Definitions.
"Capital Improvements" means those new improvements which directly and primarily benefit
and serve the existing residents by materially adding to the value of the park, egpfeei
,,,',,ngitig it , seAll l;sa ubjeet to the folly ,inn limitatie swith a life expectancy of three (3)
years or more. Capital Improvements must be completely new improvements, not a
replacement of existing or previously existing improvements. Expansions of existing Capital
Improvements may be eligible under this definition only if they are wholly new. Capital
Improvements that are required as a result of improperly deferred maintenance are not eligible
Capital Improvements. The Capital Improvement must be permanently fixed in place or
relatively immobile. New furniture, computer equipment, and televisions, or movable music
systems are not Capital Improvements. Examples of Capital Improvements are:
a. Brand new buildings.
b. Physical expansions of existing buildings (additional square footage).
C. Brand new parking areas, sidewalks, or roads in addition to those previously available
to residents.
d. Brand new trees or landscaping in addition to those previously available to residents.
e. New play areas, pools, laundry rooms, common areas, and bathrooms in addition to
those previously available to residents.
Capital Improvement costs eligible to be passed through to Park Residents may be those
which are directly attributable to the Capital Improvement itself and not those ancillary costs
which do not on their own meet the definition of Capital Improvement. Work completed by an
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employee or long-term independent contractor of the park as part of their usual duties is not a
permissible Capital Improvement.
Park Owners are encouraged to notify Park Residents of planned Capital Improvements prior
to their construction.
"Capital Replacement" means the substitution, replacement, or complete reconstruction of a piece
of existing equipment, machinery, streets, sidewalks, utility lines, landscaping, structures, or
recreational amenities; or similar items within the manufactured home park which materially
benefits and adds value to the park -
mm, with a life expectanev of three (3) vears or more. Capital Replacements must
include the substitution or replacement of an entire portion of the existing equipment,
machinery, streets, sidewalks, utilitv lines, landscaping, structures, or recreational
amenities. Capital Replacements that are required as a result of improperly deferred
maintenance are not
i. eligible Capital Replacements. Capital Replacement items must be permanently fixed
in place or relatively immobile. Furniture, computer equipment, televisions, or
movable music systems are not Capital Replacements. Normal routine maintenance
and repair is not Capital Replacement
. Work completed by an employee of the park as
art of their usual duties is not a nermissible Canital Renlacement cost.
Capital Replacements generally occur as a planned activity, with a defined time period for
completion of the project, and are completed by a lane -term independent contractor.
Examnles of what constitutes a Canital Renlacement_ what is a repair_ and what is routine
maintenance are listed below
CAPITAL REPLACEMENT
REPAIR
Replacement of an entire HVAC unit with a new
Replacing parts of an HVAC unit
unit
Replacing the entire roof on a whole building
Repairing a portion of the roof
Replacing the entire pump system for a pool
Replacing parts in a pool pump
Planned replacement of an entire section of
Replacement of a few plants to address
permanent landscaping with all new plants
disease or damage
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Replacing the entire plumbing system in a
building
Repair of plumbing leaks
Replacement of
existing streets
Slurry Seal of streets
Replacement of
a park monument sign with a
Replacement of some portions of an
existing monument sign.
completely new sign.
Replacement of
windows on an entire building to
Replacement of a broken window
increase security and energy efficiency
Replacement of
an entire section of wall or fence
Repair of fallen brick, stones, or wood
Replacement of street signs, parking signs,
or hazard signs
ROUTINE MAINTENANCE
Interior or exterior painting
Replacement of light bulbs
Landscape services, street sweeping, pool
cleaning, ianitorial services
The cost of a Capital Reolacennent for which a Park Owner is covered wider insurance is not
elieible as a Capital Replacement.
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Park Owners are encouraeed to notify Park Residents of planned Capital Replacements prior w
to their construction. z
"Chapter" means all Sections of Chapter 6.02 of the Santa Clarita Municipal Code.
"CPP" means the Consumer Price Index (all items) prepared by the Bureau of Labor Statistics
for the Los Angeles -Riverside -Orange Cowity area relating to all urban consuners.. published
each year in July for the precedine twelve (12) months. If the method of calculating the CPI is
substantially revised after the adoption of the Ordinance codified in this Chapter, the method
in effect upon adoption of such Ordinance shall continue to be used, or the revised CPI shall
be adjusted by the Finance Director of the City to correspond to such method.
"Govennnen t -_Required Services" means services required by govennnental agencies which
are new or which are in addition to those services legally required to be provided by the Park
Owner or the Park Resident of the park on August 1, 1990. Such services include fees, bonds,
assessments. and charges legally levied by an agency of the federal, state. or local govennnent
Upon the Park Owner. Examples of allowable costs include. but are not limited to: property
taxes. Citv or Cou tv Fire District fees. Citv or Cowitv Vector Control fees. or Citv or Cowitv
Park District fees. Such services do not include predictable expenses for operation of the park,
Packet Pg. 215
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such as common area utilities, expenses, or expenses which maintain the safe and healthful use
of the park facilities.
"Lease" means an agreement between the Park Owner and the Park Resident establishing
terms and conditions of a tenancy which includes a predetennined fixed space rent increase
applied for a predetennined length of time longer than one month.
"Manufactured Horne" shall be synonymous with the tern " tmobileho me," and means a
structure designated or designed for human habitation, transported over the highways to a
permanent occupancy site, and installed on the site either with or without a permanent
foundation. The tern "manufactured home" does not include either a recreational vehicle
or a commercial coach, as such terns are defined in the Health and Safety Code.
"Manufactured Home Park" and "park" shall be synonymous with the tern " tmobileho ne
park"'_ and mean an area of land where two (2) or more manufactured borne spaces are rented
or leased out for owner -occupied manufactured homes used as residences. The tern
"manufactured borne park" does not include developments which sell lots for manufactured
homes or which provide condominium ownership of such lots, even if one or more homes in
the development are rented or leased out.
"Manufactured Home Park Owner" or "Park Owner" mean the owner, lessor, operator,
manager, or designated agent thereof of a manufactured home park in the City of Santa Clarita.
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"Paan ,l�Abbeal Process Summary" means a document approved by the
ormnuiity Development Director (Director}
providing 44R+;; , Park
Owners and Park Residents with a summary of requirements related to the contents of a rent
adjustment notice. and the right of the Park Resident to request a hearing before tfiepaxela
Hearine Officer, pursuant to Section 6.02.120.
"Rental Agreement" means an agreement between the m.,,,..c ,,,. red, eme Park Owner and a
Park Resident establishing the terns and conditions of a month-to-month tenancy.
"Space Rent" means the consideration, including any bonus, benefits, or gratuities, dernanded
or received for or in connection with the use or occupancy of a manufactured home within a
manufactured home park. The use and occupancy of a rental unit shall include the exercise of
all rights and privileges and use of all facilities, services, and amenities accruing to the Park
Residents thereof for which a separate fee authorized by the Mobilehome Residency Law
(California Civil Code Section 798, et seq.) is not charged. Nothing herein shall be construed
to prevent a Park Owner from establishing such fees as may be authorized by the Mobilebome
Residency Law. Space rent shall not include utility charges for utility services, including gas,
electricity, and/or sewer service provided to an individual manufactured home residence (as
opposed to the park in general) where such charges are billed to such a resident separately
Packet Pg. 216
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from the space rent, and such charges are limited to the actual value of the utility service
provided in the individual residence.
6.02.030 Applicability.
A. General. The provisions of this Chapter shall apply to all manufactured home park sites.
B. Leases. The provisions of this Chapter shall not apply to tenancies covered by a lease
agreement in existence at the time this Chapter becomes effective. This exemption shall
apply only for the duration of the lease. Upon the expiration or termination of such lease,
this Chapter shall automatically become applicable to the tenancy. Spaces not covered by
such a lease and not exempt from this Chapter by state law (inclusive of Civil Code
Section 798.17) shall be deemed to be spaces regulated by this Chapter. Residents who
enter into a lease meeting the terms of Civil Code Section 798.17. which includes leases in
excess of twelve (12) months. either when movine into the park or as a current tenant. shall
be subiect to the terms of their lease and not the terms of this Chapter as required by state
law.
6 02 040 nn ,,a t,, a cr.,me Rental A diust,....,,- - l gearing Officer Qualifications
Packet Pg. 217
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A. Appeals shall be beard by an impartial Hearing Officer. A Hearing Officer selected by the
City Council. consistent with the City's for Qualifications process widertaken by
City staff. shall consider and decide appeals for rental increases. nie Hearing Officer shall
be assigned to bear the appeal by the Director within a reasonable period of time after the
Director has accepted an appeal petition as complete. The Hearing Officer shall meet one
of the following criteria:
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1. Completion of a Juris Doctor or equivalent degree from a school of law. and
experience in arbitration. mediation. or conflict resolution which. in the sole iudgment
of the Director. provides that person with the knowledge and skills to conduct a
manufactured home space rent hearing in a professional and successful manner; or
2. Possession of the knowledge and skills to conduct a rent increase hearing. and
completion of at least three (3) rent increase appeal proceedings that involved issues
the Director considers similar to those raised in space rent appeals.
B. Guidelines, Rules, and Regulations. The City Council may from time to time adopt
by resolution such guidelines as it deems necessary to assist and direct the patiel iii
M-1044 ,.44 :.. .........., .,,.,., a , ,.,, ., e ,.....,r, t6 6Ut 4S -a..,. ,...hearing Officer in the
accomplishment of his or her duties.
W. Staff. The City Manager shall provide all administrative staff necessary to serve in
the pm elconducting of appeal hearings. Staff from the Department of Comm-muiityCL
Development shall s aH 444 seeretawy 44ie pm4el a .,.,,, n,,.,"' -. be responsible for the U
maintenance of all records 444 , p wl
appeal bearings. A record of its ..ree , ,,,:.,g. —'+"all bearings shall be kept and shall be R
open for inspection by any member of the public. The City Attorney or the designee of the CL
City Attorney shall act as legal counsel f*H+e4for all appeal hearings. •
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6.02.050 Registration.
A. Registration. Park Owners must register all manufactured home parks and manufactured
home rental spaces within such parks with the Department of Community Development.
The registration shall include all of the following:
1. All information requested on forms sent by the City to the Park Owner for the purpose
of registration; and
2. A rent roll for the month immediately preceding the registration, reflecting the space
number, resident name, space rents, and a listing of all other charges paid by the Park
Resident, including:
a. Utilities not included in space rent;
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b. Any amortized Capital Improvement or Capital Replacement charges; and
c. Any other monthly fees as maybe required of the Park Resident.
B. Re -registration. The Department of Cormmuiity Development is hereby empowered to
require such re -registration as it deerns necessary.
C. Applicability. The registration requirements provided for in this Section, or which may be
established by the Department of Cormmuiity Development, shall apply to all
manufactured home parks, including those exempt from the space rent ceiling limitations
and procedures in the Chapter by reason of the existence of a valid space rent agreement.
6.02.060 Registration Fee.
A. Establishment of Fee. Park Owners shall pay to the City of Santa Clarita a registration fee
for each manufactured home rental space regulated by this Chapter within the park as may
be established by resolution of the City Couicil. Half of the fee paid for each space may
be charged to the Park Resident occupying that space by a separately specified one-time
charge on a space rent bill within sixty (60) calendar days after the fees have been paid to
the City. The registration fee shall not apply to parks and spaces exempt from the payment
of fees by state law (inclusive of Civil Code Section 798.17).
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B. Penalty. If a Park Owner does not pay the fee provided for in Subsection A of this Section
within the time period established therein, a late charge shall be assessed in an amount as
established by resolution of the City Cowicil.
C. Unpaid Fees. No-paxe1 appeal bearing shall be scheduled or take place regarding a park 4f
m4 w4pai4urtil that bark's registration44fees including any penalties aee4q,ed,: a
Leff....yi4ay *1..,44 be n,,,.,,,,..',,,,) are current. Failure to pay a City registration fee is not
growids for a space rent adjustment appeal.
D. Purpose of Fee. The registration fee provided for by this Section is intended to defray
any reasonable and necessary costs associated with the administration of the regulations
contained in this Chapter.
E. Accowrting of Favids. The Director of Conmmmiity Development is directed to maintain an
accurate accowrting of all direct and indirect costs of administering the regulations
contained in this Chapter. The Director,.rrao+i,.....:*-.shall submit to the
City Manager a report of such costs at least annually.
6.02.010 Space Rent Limit.
A. Effective Date. -�rR ~~r~ , ow, -No Park Owner shall charge space rent for any
manufactured home space in an amount greater than the space rent in effect on August 1,
1990, except as permitted pursuant to the provision of this Chapter.
B. Exemption. If a park space is exempt from the application of the space rent limitation or
registration fee portion of this Chapter by reason of the existence of a space rent agreement
and this agreement expires, the space rent limit for that space shall be the space rent in
effect on the date immediately preceding the date on which the agreement expires. w
6.02.080 Annual Space Rent Adiustment Notice.
A. Notice. Prior to the annual space rent adjustment, the Park Owner shall provide the City
and each Park Resident with a notice of proposed rent :..n "r~a issi+eadiustrnent. The
notice shall be provided to each Park Resident no later than October 1, to be effective
either on January 1 of the following year or on the resident's anniversary date following
January 1.
B. The Annual Space Rent Adiustmennt Notice (Notice) and the documents in support of an
increase. as specified in Section 6.02.080(E). shall be provided to the City. as set forth in
Section 6.020.08001. for a preliminary review no later than September 1 for any increase
proposed to be effective January 1 of the followine vear or on the resident's anniversary
date followine January 1
C. Contents of Notice. All Space Rent Adjustment Notices shall contain all of the following
information:
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A listing of all affected spaces byincludine space number and name only. The 44arxe R
440, " "'tea "' ""arannount of the space rent shall not be included in the listing. Affected
spaces include all those spaces being notified of a proposed space rent adjustment; and
2. A copy of the current Pmwl Appfa,,,edSumnary of this Chapter. The Sum -nary will
be provided annually to the Park Owner by the City for inclusion in the amtf
~"M"�Notice.
C. Standard Space Rent Adjustments. For a space rent adjustment which is based on Section
6.02.090(C) — Standard Space Rent Adjustments:
1. A statement that the Park Owner considers thatportion of the space rent adjustment to
be consistent with the limitations set forth in Section 6.02.090(C) of this Chapter;
2. The amouit of that Park Resident's space rent adjustmentboth in dollars and as a
percentage of existing rent;
3. The amouit of the Park Resident's space rent adjustment attributable to an increase in
govemment-_required services in dollars;. Documentation for that increase must be
provided to the Park Residents and City. consistent with Section 6.02.080(E) below;
and
4. The amouit of the Park Resident's space rent adjustment attributable to an increase in
utility costs in dollars. Documentation for that increase must be provided to the Park
Residents and City. consistent with Section 6.02.080(E) below.
D. Non -Standard Space Rent Adjustments. For a space rent adjustment which is based on
Section 6.02.090(D) — Non -Standard Space Rent Adjustments:
1. A statement that the Park Owner considers thatportion of the space rent adjustment to
be consistent with the limitations set forth in Section 6.02.090(D);
2. The amouit of that Park Resident's space rent adjustmentboth in dollars and as a
percentage of existing rent; and
3. Iiiformation supporting the level of Non -Standard space rent adjustment proposed.
Such information must include the following:
Increases based on Section 6.02.090(D)(1): Specific reference to the
amortization time period assigned to each Capital Improvement or Capital
Replacement as provided for in Section 6.02.110-(A) and any interest costs
being included;
Increases based on Section 6.02.090(D)(2): The mathematical calculations or
summary of the analysis relied upon by the Park Owner to detennine a fair rate
of retum and the annourt of the proposed Non -Standard space rent adjustment
to yield that fair rate ofretum, as provided for in Section 6.02.090(D)(2); and
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ii. A statement informing the Park Resident that the supporting documentation for
the Non -Standard space rent adjustment will be available to Park Residents at
the park management office during all nonnally observed office hours
beginning the same day the Notice is provided.
E. Supporting Documentation. The supporting documentation for a Non -Standard space rent
adjustment shall be kept in the park management office for at least forty-five (45) days,
beginning on the date of the Notice of the proposed rent increase, and will be available for
review by affected Park Residents during all nonnally observed office hours. In cases
where a space rent appeal petition has been submitted which meets the criteria set forth at
Section 6.02.120, the supporting documentation shall remain available until a final
detennination is made on the appeal. The Park Owner shall provide a copy of the
supporting documentation to the City Clerk's office when it is first made available in the
park management office so that affected Park Residents may also review the
documentation at City Hall.
F. During the periods described above, copies of all supporting documents will be provided to
affected Park Residents upon request. A Park Resident may request the documentation in
one or both of the following formats:
1. Physical copies shall be provided at a fee set by the Park Owner, not to exceed $.25
per page; and
2. Electronic copies shall be provided free of charge, in a PDF or similar format, as an
email attachment sent to the requesting Park Resident's email address. CL
G. The padE ~a r sit Mg'ir" eute.Notice will contain a �r gl
r Weil c for the Park Resident to toe m444Or' ,. 4., .,,,:..n,.,. 4., sta4Rgs. attesting that
tlie i i they have been -received b�y
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the texarhtNotice. The original of the si�documenht. acknowledging receipt of
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a�ewiw44ts ar 44atieesthe Notice required by this Section. shall be retained by
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the Park Owner and a copy thereof provided to the Park Resident. In the event a Park
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Resident fails or refuses to exeetilesj�i the deea=n,-i4Notice as required herein within ten
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(10) days after the Park Owner's request that the tenant do so, the Park Owner shall
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prepare a declaration, wider penalty ofperjury, stating that the i4-ft+i6__.a.,-._.. i_.r a_
R
ne4ee5Notice required by this Section ha'Oehas been delivered to the Park Resident, the
date the Park Owner requested the Park Resident to sign the joint document
acknowledging receipt, and the date the declaration was executed.
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H. Submission of Annual Space Rent Adiustmenht Notices to Conmmuiity Development
Department.
a. If a Park Owner intends to notice a rent adiustment at its park for the upcomin
year. the Notice and all supportive documents for the increase required in Section
6.02.080(E) must first be provided to the Community Development Department on
or before September 1. for a preliminary review for consistency with the
requirements of this Chapter. Staff will have until September 15. or the Monday
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followine that date. to notify a Park Owner of anv Notice deficiencies that should
be corrected.
b. If a Park Owner does not aeree with staff s opinion reeardine deficiencies in the
Notice. the Park Owner may appeal that decision to the Hearing Officer. During
such appeal. the Park Owner may still notice its residents by the deadline set forth
in Section 6.02.080(A). and pen -nit the issue to be resolved alone with any other
potential appeal brought by the Park Residents. The Notice must clearly state
which portions of the Notice the City is challenging. The City's detennination with
respect to the preliminary review of the Notice does not preclude any challenge or
appeal of any portion of the Notice or proposed rent adjustment by the Park
Residents.
6.02.090 Allowable Methods for Annual Space Rent Adjustments.
A. Frequency. The annual space rent adjustment may occur only once every calendar year.
B. Annual Space Rent Adjustment Methods. Any annual space rent adjustment shall utilize
the following methods-- (1) an annual space rent adjustment based on Section 6.02.090 (C)
— Standard Space Rent Adjustments; and/or (2) an annual space rent adjustment based on
Section 6.02.090{D} — Non -Standard Space Rent Adjustments.
C. Standard Space Rent Adjustments. The following adjustments in rent shall be permitted c
by right and may not be appealed except in the situations specified in Section 6.02.120(C). �4),
This adjustment shall be calculated using the Consunmer Price Index (CPI) reported each CL
.r4July for the previous twelve (12) month period ofA*t#tiAJuly i through 44y-4Jwie •
30 reported—by the Bureau of Labor Statistics for the Los Angeles -Riverside -Orange
Counhty area.
i. An adjustment of space rent not to exceed the lesser of the annual adjustment in the
CPI reported each At�Uly for the previous twelve (12) month period of A+ �e July
I through 4-ti"Jwie 30 reported by the Bureau of Labor Statistics for the Los
Angeles -Riverside -Orange Counhty areas or five percent (5%). In such cases where the
CPI is at or below zero percent (0%), a reduction in space rent is not required;
2. An adjustment based on the actual increase in the cost of government -required
services; and
3. An adjustment based on the actual increase in utility costs where such utilities are
included in the space rent.
The Director of Community Development or designee, annually, will receive the CPI
updated result and cause notice of such to be mailed to each Park Owner and Park Resident
in the City. Such Standard space rent adjustments will be calculated on the space rent
only, and will not be calculated on monthly costs related to amortized Capital
Improvements or Capital Replacements, utilities, or other costs not part of the space rent.
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D. Non -Standard Space Rent Adjustments. A Non -Standard space rent adjustment may be
based on any of the following:
An adjustment, prorated equally among all the spaces in the park, to pay for the actual
costs of Capital Improvement or Capital Replacement. as defined in the definitions
Section of this Chapter, which were incurred within the twenty-four (24) months prior
to the date of the ,. �.,�Notice, and are not otherwise disallowed by state law.
Costs must be amortized as permitted in Section 6.02.110. The interest costs incurred
to finance the Capital Improvement or Capital Replacement may be included in the
total axnownt amortized. If such interest costs are included, they may not exceed those
amounts which are based on commercially available rates for financing obtained from
outside sources or the Wall Street Jounial prime rate for funds borrowed intenially;
and/or
2. An adjustment, prorated equally among all the spaces in the park, designed to provide
the Park Owner with a fair and reasonable rate ofretum on investment. This
adjustment must be supported by:
a. An explanation of bow the Park Owner has detennined what it considers to be a
fair rate ofretum. This explanation could include, but is not limited to, documents
supporting the prevailing standards for a rate of return on investments in
manufactured home parks, or other similar investments; and
b. A financial analysis of the proposed rent increase showing information that R
demonstrates *that the proposed increase is necessary to receive a fair CL
rate of return.
v
c. In reviewing a fair rate ofretum increase, the pa44 r4 ne Officer shall detennine
what is fair and reasonable under the circumstances, taking into accownt all relevant w
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factors, which may include the following non-exclusive list of factors: D
i. Debt Service Costs. Where such costs are limited to increases in interest
payments from those interest payments made during the base year which result
from one of the following situations, or the equivalent thereof:
1} Refinancing of the outstanding principal owed for the acquisition of a park
where such refinancing is mandated by the terns of a financing transaction
made on commercially available terns, e.g., tennination of a loan with a
balloon payment; or increased interest costs incurred as a result of a variable
interest rate loan used to finance the acquisition of the park on
commercially available terns; or
2) Increases in rental payments made on leases of land, and wider such
circumstances, the Park Owner may include as expenses an amount not to
exceed the increase in such land lease rental payments occurring since the
previous rental adjustment for the park where such increase in land lease
rental payments is the result of inflation or the decrease in space rental
income, or based on other terns documented in writing. Such increased
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Packet Pg. 225
land lease rental obligations shall be permitted only where the Park Owner
can show that the terns of the lease are reasonable and consistent with
prudent business practices wider the circa nstances. In refinancing,
increased interest shall be permitted to be considered as an operating
expense only where the Park Owner can show that the terns of the
refinancing were reasonable and consistent with prudent business practices
wider the circa nstances.
ii. The rental history of the manufactured home park, including:
1) The presence or absence of past increases;
2) The frequency ofpast rent increases and the annownts;
3) The Park Owner's response to any cost reduction measure; and
4)— lnie occupancy rate of the manufactured home park in comparison
to comparable waits in the same general area.
iii. The physical condition of the manufactured space or the park of which it is a
part, including the quantity and quality of maintenance and repairs performed
during the last twelve (12) months.
iv. Any increases or reduction in services during the twelve (12) months prior to
the effective date of the proposed rent increase.
v. Existing space rents for comparable spaces in comparable parks, with
consideration given to the comparable quality of the park amenities and
services.
vi. A fair retwm on investment prorated among the spaces of the park.
vii. Other financial infonnation in support of the increase.
viii. The cost of Capital Replacennent(s) or Capital Iimprovennent(s) as defined in
6.02.090{D}(1).
E. Duplication of Costs. An amortized Capital Improvement or Capital Replacement cost
imposed as part of a Non -Standard space rent increase permitted in Section 6.02.090
(D)(1) may not be used in the calculation of a subsequent annual increase to recover a fair
and reasonable return on the property as permitted in Section 6.02.090{D}(2). Conversely,
a cost used in the calculation of an increase imposed as part of a Non -Standard increase
permitted in Section 6.02.090(D)(2) may not be used in a subsequent annual increase as
an amortized cost provided for in Section 6.02.090(D)(1). Furthennore, costs that are not
permitted to be passed on to the m.,,,..c 4.w d, erne Park Residents wider state law shall
not be permitted in any rent increase.
6.02.100 Appeal Considerations.
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A. Standard Space Rent Adjustments. In the case of a Standard space rent adjustment,
an appeal may only be brought bee rein the situations outlined in Section
6.02.120(C). In making a detennination, the pFiearine Officer may consider all
relevant information and may request any such information or documentation as #-+ey
deemdeexned necessary, including but not limited to:
1. Verbal testimony
2. Copies of bills, invoices, or statements
3. Copies of receipts or checks
4. Other documents supporting the level of increase proposed
B. Non -Standard Space Rent Adjustments. Iii making 4-�e4a detennination on the appeal
of a Non -Standard space rent adjustment, the pFiearin Officer may consider all
relevant information, including but not limited to:
1. Verbal testimony
2. Copies of documents made available to the Park Residents as part of the noticing
requirement, outlined in Section 6.02.080(D)
3. Other documents supporting the level of increase proposed
C. Burden of Proof. The burden is on the Park Owner to provide sufficient information and
documentation to support the level of increase proposed in a Non -Standard increase. The
pffi+4 Officer will have the authority to detennine the sufficiency of the w
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information and documentation provided. and to request, as *'+�aeexned necessary, D
additional documentation to assist t4etvrin * .nakine a determination. w
6.02.110 Amortization Schedule.
A. For the purpose of detennining any rent adjustment permitted wider the provisions of
this Chapter, the cost of Capital Improvements or Capital Replacements shall be
amortized, according to the following schedule, for those items listed. For items meeting
the definition of Capital Improvement or Capital Replacement herein, but not listed on the
amortization schedule, the amortization period shall be consistent with that prescribed
by federal law for depreciation.
Type of Improvement or Replacement
Amortization period
Backflow device
10 years
Carpeting
5 years
Copier
6 years
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Copper pipes
10 years
Drapes
5 years
Gas barbecue
3 years
Gas line
15 years
Gas valve and fire hydrant
10 years
Heater motor
5 years
Houses
30 years
Light fixtures
5 years
Linoleum floor
5 years
Oven
6 years
Patio furniture
5 years
Pool heater
5 years
Punp
5 years
Refrigerator
6 years
Roofing
18 years
Security fence
5 years
Sewer line construction
15 years
Solar system
10 years
Telephone system
6 years
Water heater
10 years
Water softener
5 years
B. Space Rem Invoice Documentation. Any amortized Capital Improvement or Capital
Replacement cost imposed as part of a Non -Standard space rent adjustment must be clearly
marked on the space rent invoice, or on another document included with the space rent
invoice, with the name of the Capital Improvement or Capital Replacement, the monthly
arnount, and the date the cost will expire.
C. Amortized Costs Not Removed. A request for a hearing based on an amortized cost not
removed in a timely mariner may be part of the appeal petition of an annual space remit
adjustment, or as a separate item. If an appeal petition based on an amortized cost not
removed in a timely mariner is submitted outside the annual space rent adjustment appeal
process, it must meet the requirements of Section 6.02.120-(D) through (G). If the
pm+4 ne Officer detennines that an amortized cost was not removed in a timely
mariner, resulting in overpayment by the Park Residents, the eFHearing Officer may
require the amortized cost to be removed. and may require the Park Owner to reimburse
17 Packet Pg. 228
19.c
affected Park Residents the amount of over -payment, subject to any limitations imposed by
law at the time of the pHearin Officer's decision.
6.02.120 Annual Space Rent Adiustment Appeal Petitions.
A. Time Limits. A petition requesting an appeal bearing for an annual space rent adjustment
as allowed for in this Chapter, must be filed with the Departmenrt of Conmmmity
Development within forty-five (45) calendar days of service of the Notice of proposed
space rent adjustment, or forty-five (45) calendar days from the date of the space rent
increase if no Notice is received, whichever occurs earlier.
B. Insufficient Notice. Appeals maybe filed for either Standard or Non -Standard space rent
adjustments based on the claim that a Notice is insufficient because it does not meet the
requirements of Section 6.02.080. However, ifno appeal petition meeting the
requirements of this Section is received, or if the appeal petition does not identify
insufficiency of the Notice as a cause for appeal, the Notice will be considered valid and
sufficient.
C. An appeal may notbe filed and will notbe beard for a Standard space rent adjustment
based on Section 6.02.090(0), except for one or more of the following reasons:
The CPI percentage adjustment proposed in the Notice is above the actual CPI
percentage provided in the City's most recent notice to the Park Residents and Park
Owners;
2. The increased costs of govemment _required services or utility costs in the proposed
space rent adjustment are greater than the actual costs incurred by the Park Owner; and
3. A Notice that is not substantially in conformance with the requirements of Section
6.02.080.
Appeal Request Form. Appeal petitions must be submitted on an Appeal Request Form
appra,,,ed by btained from the Comm-mwiity Development Department.
-E—D. All pages of the form must be complete, and the petition signature page must
contain signatures from residents of at least fifty percent (50%) of the spaces regulated by
this Chapter and affected by the proposed space rent adjustment, plus one additional
regulated and affected space. Individuals signing the space rent petition must be those
listed on the park rent role or named as the owner on the State reeistration of the
manufactured home on that space. Sienatures of individuals notmeetine that criteria will
not be counted toward the 50% -plus -one requirement.
-F—L. Appeal Justifications. The appeal petition must contain all causes for appeal when
it is submitted. Additional causes for appeal may not be added to the petition after the
petition has been submitted. Ne. 4hst.,.,,,:.,. if ,h , pain ,l :., its i stilt ,:,.., d ,, ,
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6-F. Park Owner Notification. The mond ,44g u144-, 44i4 414e appeal ., -s,City will
provide a full copy of the appeal p 4+4@* for Appeal package to the Park Owners
within ten (10) calendar days of submission of a complete Appeal Package to the
Department of Community Development.
G. Detennination by Director of Comm-muiity Development. It shall be the sole
discretion of the Director of Community Development 04 ee�to detennine if the basis
upon which the pe64a*Reguest for Appeal is filed meets the criteria set forth in *i*
Aapter.Section 6.02.120. No bearing will be scheduled unless such a detennination is
made. Only if the Director detennines that the Request for Appeal meets the criteria of
this Chapter will a bearing be scheduled. However. the Director's detennination that the
Request for Appeal meets the criteria set forth in Section 6.02.120 of this Chapter does not
eliminate the Park Owners right to challenge during an appeal bearing the validity of the
petition or assertions made in the petition during the appeal process.
1. If the Director detennines that ax appeal e"a—aRequest for Appeal does not meet the
criteria set forth in ,,.:n�Section 6.02.120. the Director shall cause the Park
Owner or other person designated on the park's registration and the affected Park
Residents to be notified. Such notice shall be mailed, first-class postage prepaid,
within fifteen (15) calendar days of the submission of the appeal petition; and
2. If the Director detennines that a appeal p 4+4o++ for Appeal meets the criteria rJ
set forth in 4,.:n�Section 6.02.120, he shall cause the Park Owner or other person c
designated on the park's registration and the affected Park Residents to be notified of
the time. date, and place of the hearing. Such Notice shall be mailed. first-class CL
postage prepaid, at least fifteen (15) calendar days prior to the scheduled hearing date. •
v
6.02.130 Chance in Ownership Space Rent Adiustment Procedures.
A. Manufactured Home Sale. Notwithstanding any other provision of this Chapter, if
a manufactured home is voluntarily vacated by all tenants as a result of a sale of the
manufactured home to a new owner, and the manufactured home is not removed from
the site, then the rent may be increased by an amount not to exceed ten percent (10%).
The rent may only be increased pursuant to this Section once in any twelve (12)
consecutive -month period, regardless of additional changes in ownership. A change
in ownership increase does not preclude an annual space rent adjustment in the same
calendar year, so long as all noticing requirements as set forth in Section 6.02.080(C)
are observed.
B. Notice to Prospective Manufactured Home Buyer. As required in Califomia Civil Code
Section 798.74.5, within two (2) business days of receiving a request from a prospective
homeowner for an application for residency for a specific space within a manufactured
home park, if the management has been advised that the manufactured home occupying
that space is for sale, the management shall give the prospective homeowner a
septfttecopy of the State -required document entitled "INFORMATION FOR
19 Packet Pg. 230
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PROSPECTIVE HOMEOWNERS," which will include the space rent for the prospective
manufactured home buyer.
C. Notice to Manufactured Home Seller. The Park Owner will also provide a copy of
,.,r r-AtiR4, r r v,.,..... etj, LT . tR 44."INFORMATION FOR PROSPECTIVE
HOMEOWNERS" to the Park Resident selling their manufactured home. It shall be the
responsibility of the current manufactured homeowner selling the
manufactured home to verify that the proposed space rent for the prospective buyer of their
manufactured home does not exceed the increase allowed in this Section.
D. Remedy. If a ~~r~ 44Rw- Park Resident seller or prospective manufactured home
park buyer believes that the Park ow*erOner is exceeding the permitted ten percent (10%)
increase on space rent for a change in ownership, the party may seek any judicial remedy
provided by law to enforce this Section.
6.02.140 Reduction in Services.
No Park Owner shall reduce or eliminate any service to any rental space unless a proportionate
share of the cost savines. due to such reduction or elimination. is simultaneously passed on to
the Park Resident 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. In any case where the
Hearine Officer determines that a reduction in services has effectively resulted in an increase
of rent without notice thereof. the Hearing Officer may either order the Park Owner to fix.
repair. or otherwise cure the reduction in services. or reduce the rent owed to the Park Owner
in an amount that will compensate the Park Resident for such reduction in services.
6.02.150 Vacant Spaces.
If a space becomes vacant by virtue of there being no manufactured home situated on the
space, or the manufactured home on the space is owned by the Park Owner and the space has
not been rented to a resident for at least thirty (30) calendar days, the space rent may be
increased to a rate as determined by the Park Owner at the time the space is initially rented to a
new manufactured home owner. Once the space is rented to a new manufactured home owner,
all other controls in this Chapter shall become effective.
6.02.160 Appeal Hearings.
A. Conduct of Hearing. The Park Owner and Park Residents may appear at the rent
adjustment bearing and offer oral and documentary evidence. All parties to a rent
adjustment bearing may have assistance in presenting evidence and testimony, and
developing their position, from attorneys, experts, or such other persons as may be
designated by said parties. The bearing may be continued for a reasonable period of time
as determined by the pmwl .. 44e 44, a r#i , . a4i s aa f444di44g 4. gad eaiise
be ,pen to she r..b4c-.Hearine Officer.
B. Timeliness. During the course of an appeal bearing, the eFHearing Officer may request
infonnation from the Park Owners or Park Residents. If such infonnation is not provided
20
Packet Pg. 231
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in a timely mariner, or such information is not sufficient for the pm+4 ne Officer to
make *e4a detennination, the pHearin Officer may disallow all or any portion of the
proposed space rent adjustment. The pai+ l4 earine Officer will have the authority to
detennine the timeliness and sufficiency of any information provided.
C. Appeal Justifications. Rent adjustment bearings for Standard space rent increases may
only be held for the causes specified in Section 6.02.120(B) and (C). Rent adjustment
bearings for Non -Standard increases may be held for causes specified in Section
6.02.120(13`. er ei,h r eatts s a ,, ,,..,,.., ,a to be ...,i,.., ,he ....,... ,.. e fr h , pazH l as eta/.., a
i44 qRk4iR44 6.024-20(9 .
D. Rules of Evidence. The bearing need not be conducted according to the technical rules
relating to evidence and witnesses, as applicable in courts of law. To be admissible,
evidence shall be of the type on which responsible persons are accustomed to rely in the
conduct of serious affairs. A full and fair hearing shall be accorded to the parties to the
hearing.
E. Preserving the Record. The appeal hearine proceedings shall be recorded electronically. c
Any party who desires that the proceedings be recorded stenographically shall make
arrangements with the Department of Coxmmwiity Development at least five (5) calendar ?}
CL
days before the hearing. Any transcripts prepared by a reporter at the party's request shall
be at his or her expense, and the original shall be filed with the Departmexrt of Coxmmwiity
Development. If the party makes a request for a transcript of the electronic recording at c
the time of or after —the bearing, he or she shall make arrangements to copy the official �4),
recording with the Department of Community Development. All expenses incurred for the CL
transcript will be home by the requesting party.
v
F. Subpoenas. The pHearine Officer may issue subpoenas requiring the attendance of
witnesses and/or the production of books or other docu vents necessary for evidence of w
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testimony in any action or proceedings before the ^r~e' upeii request by �h , pmol Flearine D
Officer. Said subpoenas shall be signed by theeHearine Officer or his or her W
designated substitute and attested by /lie seeystaff assigned to the appeal bearing.
Failure to comply with such subpoena shall result in contempt proceedings wider z
Govennnent Code Sections 37106 through 37109. M
6.02.170 Decision of the Hearing Officer
A. Time for Decision. The Hearine Officer shall make a final decision within ninety (90)
days of the assiWarnent of the appeal bearing from the Director. and no later than twenty-
one (2 1) days after the conclusion of the bearine on anv petition. The time limits may be
extended upon consent of the Park Owner
21 Packet Pg. 232
19.c
B. Rent Increases. If the Flearine Officer's detennination is that all or a portion of the
proposed rent increase shall be granted wider the circumstances. then the Hearing Officer
shall grant all or such portion of the rent increase effective as of the time such increase
would have been otherwise effective without the intervention of this Chapter.
47C. Notification of Detennination. The seer �ity shall, within ten (10) days after
such decision is rendered, send a copy of theel's findings and decision, by first class
postage prepaid, to the Park Owner or other person designated on the park's registration
and to the occuparnts of the affected residei�gspaces in the park for which the
space rent adjustment appeal was brought.
4&D. Final Decision. Any decision of the paffE4 ring Officer must be supported by a
preponderance of the evidence. The el's allowance or disallowance of any rexrt
adjustment or portion thereof may be reasonably conditioned in any mariner necessary to
carry out the purpose of this Chapter. The decision of the paxelHearing Officer shall be
final and binding on all parties. and shall not be subject to appeal or any additional pm4
reconsideration. A party not satisfied with —a decision &fes may seek any judicial
remedy provided by law.
6.02.180 Miscellaneous Provisions.
A. Waiver Ability. Rental agreements between a Park Owner and Park Resident which are U
exempted from local regulation by California Civil Code Section 798.17. or other State c
statutes. are permitted. The rental rates and other terns of such agreements shall prevail
over regulations and decisions made pursuarnt to this Chapter. For all such rental CL
agreements which expire, the last monthly rental rate charged wider the rental agreement
shall be the space rent ceiling used to calculate the annual adjustment for the space. Any
other provisions or agreement, whether oral or written, in or pertaining to a rental
agreement whereby any provision of the ordinance or decision ar regeloiaii of the w
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paxelHearing Officer for the benefit of a resident is waived, shall be deerned to be against D
public policy and shall be void. w
B. Severability. If any provision or clause of this Chapter, or the application thereof to any
person or circumstance, is held to be unconstitutional or to be otherwise invalid by any
court of competent jurisdiction, such invalidity shall not affect other Chapter provisions
or clauses or applications thereof which can be implemented without the invalid provision
or clause or application, and to this end, the provision and clauses of this Chapter are
declared to be severable.
C. Subpoenas. The pHearing Officer may issue subpoenas requiring the attendance of
witnesses and/or the production of books or other documents necessary for evidence of
testimony in any action or proceedings. bee re ,he ~r~e' "ell re"est by Ah , ~r~e' Failure
to comply with such subpoena shall result in contempt proceedings under Government
Code Sections 37106 through 37109.
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Packet Pg. 233
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23 Packet Pg. 234
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