HomeMy WebLinkAbout1990-11-27 - ORDINANCES - MH RENT ADJUSTMENT (2)AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF SANTA CLARITA, CALIFORNIA, ADDING
CHAPTER 8.57 TO THE SANTA CLARITA
MUNICIPAL CODE RELATING TO MANUFACTURED
HOME PARK RENT ADJUSTMENT PROCEDURES.
THE CITY COUNCIL OF THE CITY OF SANTA CLARITA
ORDAINS AS FOLLOWS:
SECTION 1. Chapter 8.57 is added to the Santa Clarita
Municipal Code to read:
Chapter 8.57
MANUFACTURED HOME PARR RENT ADJUSTMENT PROCEDURES
8.57.010.
8.57.020.
8.57.030.
8.57.040.
8.57.050.
8.57.060.
8.57.070.
8.57.080.
8.57.090.
8.57.091.
8.57.110.
8.57.120.
8.57.130.
8.57.140.
8.57.150.
8.57.160.
Purpose
Definitions
Applicability
Manufactured Home Rental Adjustment Panel
Registration
Registration Fee
space Rent Agreement Exemption
Space Rent Limit
Space Rent Ceiling Adjustments
Rent Adjustment Hearing
Decision of the Panel
Standards of Reasonableness To
Rent Adjustments
Reduction in Services
Amortization Schedules
Net operating income
Miscellaneous Provisions
Be Applied to
8.57.010. Purpose
A. There is presently within the City of Santa
Clarita a shortage of space for the location of manufactured
.-* homes. Because of this shortage, there is a low vacancy
rate and rents are presently rising rapidly and causing
concern among a substantial number of manufactured home park
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residents in the City. Because of the high cost of moving
manufactured homes, the potential for damage resulting
therefrom, the requirements relating to the installation of
manufactured homes, including permits, landscaping, and site
preparation, the lack of alternative homesites for
manufactured home residents, and the substantial investment
of manufactured home owners in such homes, a virtual
monopoly exists in the rental of manufactured home park
spaces, creating a situation where Park Owners have
potentially unbridled discretion and ability to exploit
manufactured home Park Residents.
B. For these reasons, among others, the Council
finds and declares it necessary to protect the owners and
residents of manufactured homes from unreasonable rent
increases while at the same time recognizing the need of
Park Owners to receive a fair return on their property and
rental income sufficient to cover reasonable increases in
the cost of repairs, maintenance, insurance, employee
services, and additional amenities, and other costs of
operation.
8.57.020. Definitions
A. "Allowable legal expenses" means attorney's
fees and costs incurred in connection with successful good
faith attempts to recover rents owing, and successful good
faith unlawful detainer actions not in derogation of
applicable law, to the extent such costs are not recovered
from tenants. Attorney's fees and costs in proceedings
before the Panel or the Council, or in connection with civil
actions against the City, the Council, or the Panel, are not
allowable as operating expenses.
B. "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, appreciably prolonging its useful life, subject to
the following limitations:
(1) The improvement must have a life expectancy of
three years or more and must be treated as capital
improvements for federal and state income tax
purposes, and may not be deducted for such tax
purposes as expenses.
(2) Normal routine maintenance and repair is not
capital improvement.
p— (3) Insured repairs and replacement are not
capital improvements.
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(4) The improvements must be permanently fixed in
place or relatively immobile.
C. "Capital Replacement" means the substitution,
replacement, or reconstruction of a piece of equipment,
machinery, streets, sidewalks, utility lines, landscaping,
structures, or recreational amenities, which materially
benefits and adds value to the Park.
D. "CPI" means the Consumer. Price Index (all
items) prepared by the Bureau of Labor Statistics for the
Los Angeles -Long Beach -Anaheim area relating to all urban
consumers. 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.
E. "Government Required Services" means services
required by governmental agencies which are new or which are
in addition to those services legally required to be
provided by the park owner or the resident or 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 government upon the park owner.
Such services do not include predictable expenses for
operation of the park, such as common area utilities,
expenses, or expenses which maintain the safe and healthful
use of the park facilities.
F. "Gross Income" shall be as defined in Section
8.57.150 of this Chapter.
G. "Lease" shall mean an agreement between the
Park Owner and the Resident establishing terms and
conditions of a tenancy which includes a predetermined fixed
space rent increase applied for a predetermined length of
time longer than one month.
H. "Manufactured Home" shall be synonymous with
the term "Mobilehome".
I. "Manufactured Home Park" and "Park" shall be
synonymous with the term "Mobilehome Park" and means an area
of land where.two or more mobilehome spaces are rented or
leased out for mobilehomes used as residences. The term
"Manufactured Home Park" does not include developments which
sell lots for mobilehomes or which provide condominium
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ownership of such lots, even if one or more homes in the
development are rented or leased out.
J. "Manufactured Home Park Owner° or "Park Owner"
means the owner, lessor, operator, manager, or designated
agent thereof, of a manufactured home park in the City of
Santa Clarita.
K. "Manufactured Home Resident" or "Resident"
means any person entitled to occupy a manufactured home as
the owner thereof or pursuant to a rental or lease agreement
with the owner of a manufactured home.
L. "Mobilehome" 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 term
"Mobilehome" includes a manufactured home as defined in the
Health and Safety Code; but does not include either a
recreational vehicle or a commercial coach, as such terms
are defined in the Health and Safety Code.
M. "Net Operating Income" shall be as defined in
Section 8.57.150 of this Chapter.
N. "Operating Expenses" shall be as defined in
Section 8.57.150 of this Chapter.
O. "Panel" shall mean the Manufactured Home Rent
Adjustment Panel, as established by this Chapter.
P. "Rental Agreement" An agreement between the
manufactured home park owner and a resident establishing the
terms and conditions of a month-to-month tenancy.
Q. "Space Rent" The consideration, including any
bonus, benefits, or gratuities demanded 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 residents thereof for which a
separate fee authorized by the Mobilehome Residency Law
(California Civil Code §S 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
Mobilehome 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
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general) where such charges are billed to such a resident
separately from the space rent and such charges are limited
to the actual value of the utility service provided in the
individual Resident.
8.57.030.
ADolicability
A. General. The provisions of this Chapter shall
apply to all Manufactured Home Park sites.
B. -I 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.
C. Rental Agreements - Park. The provisions of
this Chapter shall not apply to any Manufactured Home Park
upon service of proof by affidavit by the Park Owner that
greater than 66% of the occupied spaces in the Park are
subject to the terms of Lease.
Panel. 8.57.040. Manufactured Home Rental Adiustment
A. Establishment. The Manufactured Home Rental
Adjustment Panel of the City of Santa Clarita is hereby
established.
B. Membership. The Panel shall consist of a
total of five (5) members. The membership of the Panel
shall consist of two members elected from and by the Park
Owners and two members elected from and by the Residents,
and one member from a list of five potential members drawn
up by the City Manager, consisting of persons recommended to
the City Manager from Voluntary Mediation Services, Dispute
Resolution Services, or such other conciliation service as
determined by the City Manager. The representatives of the
Park Owners and the representatives of the Residents will
select the fifth member by utilizing the alternate strike
method with the representatives striking first determined by
a coin toss. The election of representatives of the Park
Owners and the Residents to the Panel shall be conducted by
the City Clerk according to rules and regulations
promulgated by the City Manager. Any dispute or contest
regarding an election, the election rules and regulations,
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or election results, shall be determined by the City Manager
and the City Manager's decision shall be final.
C. Term. Each member of the Panel shall serve
for a term of three years. Each member shall hold office
until a new member has been duly appointed.
D. Absences. Any member who is absent, without
sufficient cause, from three (3) consecutive meetings of the
Commission shall be deemed to have vacated his office.
E. Meetings. Except as expressly provided
herein, the Panel shall establish the time and place of its
meetings. All meetings of the Panel shall be conducted in
accordance with the provisions of the Ralph M. Brown Act.
F. 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
Panel in the accomplishment of its duties. The Panel may
make and adopt its own rules and regulations for conducting
its business consistent with the laws of the State, this
Chapter, and any guidelines adopted by the City Council.
Any such rules and regulations shall be reduced to writing
and be on file with the Secretary of the Panel at all
times. The Panel may appoint such officers as it may deem
necessary to carry out its duties hereunder.
G. Staff. The City Manager shall provide all
administrative staff necessary to serve the Panel. The City
Clerk shall serve as the Secretary of the Panel and shall be
responsible for the maintenance of all records of the
Panel. The Secretary of the Panel shall keep a record of
its proceedings, which shall be open for inspection by any
member of the public. The City Attorney or the designee of
the City Attorney shall act as legal counsel to the Panel.
H. Quorum. Three (3) members shall constitute a
quorum, so long as such quorum consists of at least the
member elected by the Residents, at least one member elected
by the Park owners, and the member selected by the alternate
strike method. A majority vote of all members, i.e., three
(3) votes, is required for adoption of any findings and/or
order pertaining to an application filed hereunder and for
the adoption, amendment, or repeal of any rules and
regulations of the Panel, or to take action on any other
matter.
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I. Duties. The Panel shall undertake and have
the following duties, responsibilities, and functions,
together with all powers reasonably incidental thereto:
(1) To meet from time to time as may be specified
by the rules and regulations of the Panel in order
to carry out its duties.
(2) To require such registration of manufactured
home parks as the Panel may deem necessary to
enable it to carry out its duties.
(3) To make adjustments in space rent ceilings as
provided for in this Chapter.
(4) To make such studies, surveys, and
investigations, conduct such hearings, and obtain
such information as is necessary to carry out its
powers and duties.
(5) To adopt, promulgate, amend, and rescind such
administrative rules as may be necessary to
effectuate the purposes and policies of this
Chapter and to enable the Panel to carry out its
powers and duties hereunder.
(6) To undertake such other related duties as may
be assigned by the City Council.
8.57.050. Registration.
Within sixty (60) calendar days after the effective
date of this Chapter, Park Owners shall register all
manufactured home parks and manufactured home rental spaces
within such parks with the City Clerk.
The initial registration shall include: the
name(s), business address(es), business telephone number(s)
of each person or legal entity possessing an ownership
interest in the Park and nature of such interest; the number
of manufactured home rental spaces within the Park; the name
and address of each Resident; a rent schedule reflecting
space rents within the Park on the effective date of this
Chapter; a listing of all other charges, including utilities
now included in space rent, paid by Residents within the
Park, and the approximate amount of each such charge; and
the name and address to which all required notices and
correspondence may be sent.
The City Clerk is hereby empowered to require such
re -registration as it deems necessary.
*� No Park Owner shall be eligible to receive any rent
ceiling adjustment as provided for under the provisions of
this Chapter unless such current registration as may then be
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required for the manufactured home park is on file with the
City Clerk at the time the petition for the rent ceiling
adjustment is filed.
The registration requirements provided for in this
section or which may be established by the City Clerk shall
apply to all Manufactured Home Parks, including those exempt
from the space rent ceiling limitation by reason of the
existence of a valid space rent agreement.
8.57.060. Registration Fee.
A. Establishment of Fee. At the time of initial
registration or any subsequent registration, Park Owners
shall pay to the City of Santa Clarita such registration fee
for each manufactured home rental space within the Park as
may be established by resolution of the City Council. Half
of the fee may be apportioned equally among the spaces in
the Park and charged by the Park Owner to the Residents
according to said apportionment by a single annual bill
which shall be sent to each Resident within thirty (30) days
after the fees have been paid to the City. Such fees shall
not be included in the rent. Such registration fee shall
not apply to parks and spaces exempt from this Chapter by
State law (inclusive of Civil Code Section 798.17).
B. Penalty. If a Park Owner does not pay the fee
Provided for in subsection A 'above, within the time period
established therein, a late charge shall be assessed in an
amount as established by resolution of the City Council.
C. Unpaid Fees. No hearing or other proceeding
shall be scheduled or take place, and no space rent
adjustment will be granted or will take effect for any
manufactured home park for which there is an unpaid
registration bill. No exemption from the provisions of this
Chapter which are effective by reason of the existence of a
valid space rent agreement shall be effective for any
manufactured home park for which there is an unpaid
registration bill.
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. Accounting of Funds. The City Manager is
hereby directed to maintain an accurate accounting of all
direct and indirect costs of administering the regulations
contained in this Chapter. The City Manager shall submit a
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report to the City Clerk and City Council of such costs and
any recommendation for a change in the registration.fee at
least annually from and after the effective date of this
Chapter.
8.57.070. Space Rent Agreement Exemption.
A. Space Rent Agreements. Any manufactured home
park which is subject to a space rent agreement meeting the
criteria set forth below shall be exempt from the space rent
ceiling provisions of this Chapter for the duration of such
agreement.
B. Space Rent Agreement Criteria. An exemption
as provided for in subsection A hereinabove, shall be
effective only if the space rental agreement meets the
following criteria:
(1) The agreement between the Park Owner and the
residents thereof must establish a space rent
schedule for the Park for a minimum period of two
(2) years from the date of commencement of the
agreement.
(2) The agreement need not be a formal lease or
follow any prescribed format but the space rent
schedule must be written and binding upon both the
Park Owner and Residents for the duration
thereof. The agreement may contain such other
provisions as may be agreed upon by the parties
thereto.
(3) The agreement must be voluntarily consented tc
by at least one adult resident from more than
sixty-six percent (66%) of the manufactured home
rental spaces within the Park with the exception of
those spaces exempted from the provisions of this
Chapter pursuant to the provisions of Sec.
8.57.030-C. This consent shall be evidenced by the
signature of such adult residents on such consent
form as may be required by the Panel. The consent
form shall be circulated or provided for signature
only in accordance with such rules and regulations
as may be established by the Panel.
C. Expiration of Space Rent Agreement. The
exemption as provided for in subsection A hereinabove, shall
terminate upon the expiration of the space rent agreement
unless such agreement is renewed or extended by mutual
agreement of the Park owner and Residents. Any such renewal
or extension of such agreement must meet the criteria set
forth in subsection B hereinabove.
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8.57.080. Space Rent Limit.
Beginning the first month which commences following
the one hundred twentieth day after the effective date of
this Chapter, no manufactured home 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.
If a Park is exempt from the application of this
Chapter by reason of the existence of a space rent agreement
and this agreement expires, the space rent limit for that
Park shall be the space rent in effect on the date
immediately preceding the date on which the agreement
expires.
8.57.090. Space Rent Adjustments.
A. Prohibition of Adjustments. No increase in
space rent shall be permitted except as provided for herein.
B. Notice. Whenever a Park Owner wishes to
increase the space rent payable for any space, the Park
Owner shall provide the Resident with a notice of proposed
rent increase at least sixty days prior to the effective
date of such increase. The notice of rent increase shall
set forth all of the following information:
(1) The amount of the rent increase both in
dollars and as a percentage of existing rent and
either:
(a) A statement that the Park Owner considers
the rent increase consistent with the limita-
tion set forth in Section 8.57.120-A(1) of
this Chapter; or
(b) Documentation supporting the level of
increase desired including, but not limited
to: a summary of the unavoidable increases in
maintenance and operating expenses; a
statement of the cost, nature, amortization,
and allocation among manufactured home spaces
of any substantial rehabilitation or capital
improvement; the summary of the increased cost
of the Park Owner's debt service and the date
and nature of the sale or refinancing
transaction; a summary of the park owner's net
operating income for the preceding twelve (12)
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months compared to that for the most recent
twelve (12) month period; or other relevant
information that supports the level of rent
increase desired and as may be required by the
Council or the Panel.
(2) The identity of all affected Residents and the
spaces which they rent;
(3) The right of the Resident to request a hearing
before the Panel, pursuant to Subsection D of this
Section.
(4) The Park Owner and Resident shall execute a
single document, stating that the information,
documents, or notices required by this Section have
been received by the tenant. The original of the
document acknowledging receipt of information,
documents, or notices required by this Section
shall be retained by the owner and a copy thereof
provided to the resident. in the event a resident
fails or refuses to execute the document required
herein within ten (10) days after the park owner's
request that the tenant do so, the park owner shall
prepare a declaration under penalty of perjury
stating that the information, documents, or notices
required by this Section have been delivered to the
resident, the date the park owner requested the
resident to sign the joint document acknowledging
receipt, and the date the declaration was executed.
C. Failure to Provide Notice. A Park Owner
failing to provide a Resident the information, documents, or
notices required by this Section shall not be entitled to
collect any rent increase otherwise authorized by this
Chapter from that Resident nor to any rent increase that
might otherwise be awarded by the Panel and such failure by
the Park Owner shall be a defense in any action brought by
the Park Owner to recover possession of a manufactured park
space or to collect any rent increase from the Resident. A
Park Owner may cure the failure to serve any notice or the
obligation to provide information to a resident which is
required under this Chapter by giving such notice or
information before initiating an action for possession of
the space or collecting any rent increase otherwise
authorized hereunder.
D. Effective Date of Adjustment. The rent
increase specified in the notice of rent increase shall
become effective on the date specified in said notice or on
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M-
the sixty-first (61) day after the notice was served on the
resident, unless the Resident requests a hearing on the
proposed rent increase before the Panel. A request for a
hearing must be filed with the City Clerk within twenty (20)
days of service of the notice of proposed rent adjustment.
Upon receipt of the request for hearing, the City Clerk
shall schedule the hearing to commence no later than thirty
(30) days from the date of receipt of the request for
hearing. The City Clerk shall notify the Park Owner or
other person designated on the Park's registration and the
affected Residents of the time, date, and -place of the
hearing. Such notice shall be mailed, first class postage
prepaid, at least fifteen (15) calendar days prior to the
scheduled hearing date.
8.57.100. Rent Adjustment Hearing.
A. Conduct of Hearing. The Park Owner and
Resident may appear at the rent adjustment hearing and offer
oral and documentary evidence. All parties to a rent
adjustment hearing 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 hearing may be continued
for a reasonable period of time as determined by the Panel
upon the consent of the parties or upon a finding of good
cause for such continuance made by the Panel. All hearings
and deliberations of the Panel shall be open to the public.
B. Rules of Evidence. The hearing 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 hearino.
C. Preserving the Record. The proceedings shall
be tape recorded. Any party who desires that the
proceedings be recorded stenographically, shall make
arrangements with the City Clerk at least five (5) 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 City Clerk. If the
party makes a request for a transcript of the taped
recording at the time of or after the hearing, he or she
shall make arrangements to copy the official tape recording
with the City Clerk. All expenses incurred for the
transcript will be borne by the requesting party.
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D. Subpoenas. The Panel 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 before the Panel upon
request by the Panel. Said subpoenas shall be signed by the
Chairperson or his or her designated substitute and attested
by the Secretary. Failure to comply with such subpoena
shall shall result in contempt proceedings under Government
Code Sections 37106 through 37109.
8.57.110. Decision of the Panel.
The Panel shall render its findings and decisions
on the proposed rent adjustment within ten (10) calendar
days from the date of the close of the hearing. The
Secretary shall, within such ten (10) day period, send a
copy of the Panel's findings and decision to the Park Owner
or other person designated on the Park's registration and,
by first class postage prepaid, to the Resident or Residents
requesting the hearing, and to such other Residents as may
request a copy of the findings and decision. Any decision
of the Panel must be supported by.a preponderance of the
evidence. The decision of the Panel shall be final and
binding on all parties. The Panel's allowance or
disallowance of any rent increase or portion thereof may be
reasonably conditioned in any manner necessary to effectuate
the purpose of this Chapter. After reviewing the record and
any additional evidence requested of the parties which has
been provided, the Panel shall determine the amount of the
rent adjustment, if any, in accordance with the standards
specified in this Chapter, and the adjustment, if any, shall
be effective as of the date for which it was originally
noticed.
8.57.120. Standards of Reasonableness To Be
Applied to Rent Adjustments.
The Panel shall determine whether rent
adjustments are reasonable under the circumstances, taking
into consideration that the purpose of this Chapter is to
permit Park Owners a fair and reasonable return on their
investment, while protecting Residents from arbitrary
capricious, or unreasonable rent increases. The Panel's
determination shall be made with reference to the following
standards:
A. Adjustments deemed reasonable. The following
adjustments in rent shall be deemed reasonable:
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(1) An adjustment of gross space rental income
equal to the lesser of an six percent (6%) increase
or an increase equal to the percentage increase in
the CPI from the date of the most recent initial or
annual adjustment to the date of the notice of
proposed rent adjustment.
(2) A pass through adjustment of the increases in
the cost of government required services.
(3) A pass through adjustment of any increases in
utility costs where such utilities are included in
the space rent.
(4) A pass through of the cost of Capital
Replacement. The cost of Capital Replacement, if
any, must be averaged on a per space basis, and
amortized over a period as specified in Section
8.57.140 of this Chapter, and is to be treated as
an assessment to be paid off over such amortization
period, and excluded from the rent amount on which
calculations of future rent increases are based.
(5) A pass through of the cost of Capital
Improvements approved by a majority of the occupied
lots within the Park. The cost of Capital
Improvements, if any, must be averaged on a per
space basis, and amortized over a period as
specified in Section 8.57.140 of this Chapter, and
is to be treated as an assessment to be paid off
over such amortization period, and excluded from
the rent amount on which calculations of future
rent increases are based.
B. Standards Applicable to Rent Adjustments Which
Exceed Increases Deemed Reasonable. In order to assure to
Park Owners a fair and reasonable return, the Panel shall,
when the amount of any rent adjustment or portion thereof
exceeds any of the standards identified in subsection A of
this Section, determine what is reasonable under the
circumstances, taking into account all relevant factors,
including the following:
(1) 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:
(a) Refinancing of the outstanding principle
owed for the acquisition of a Park where such
refinancing is mandated by the terms of a
financing transaction made on commercially
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available terms, e.g. termination of a loan
with a balloon payment; or
(b) Increased interest costs incurred as a
result of a variable interest rate loan used
to finance the acquisition of the Park on
commercially available terms.
(c) Increases in rental payments made on
leases of land and under 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 terms
documented in writing. Such increased land
lease rental obligations shall be permitted
only where the Park Owner can show that the
terms of the lease are reasonable and
consistent with prudent business practices
under the circumstances. In refinancing,
increased interest shall be permitted to be
considered as an operating expense only where
the Park Owner can show that the terms of the
refinancing were reasonable and consistent
with prudent business practices under the
circumstances.
(2) The rental history of the Manufactured Home
Park, including:
(a) The presence or absence of past
increases;
(b) The frequency of past rent increases and
the amounts;
(c) The Park Owner's response to any cost
reduction measure;
(d) The occupancy rate of the mobilehome Park
in comparison to comparable units in the same
general area.
(3) The physical condition of the mobilehome 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;
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(4) Any increases or reduction in services during
the twelve (12) months prior to the effective date
of the proposed rent increase.
(5) Existing space rents for comparable spaces in
comparable Parks.
(6) A decrease in net operating income as provided
in Section 8.57.150 of this Chapter.
(7) A fair return on the property pro rated among
the spaces of the Park.
(8) Other financial information which the owner is
willing to provide.
8.57.130. Reduction in Services. No Park Owner
shall reduce or eliminate any service to any rental space
unless a proportionate share of the cost savings, due to
such reduction or elimination, is simultaneously passed on
to the 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 Panel determines that a reduction in services has
effectively resulted in an increase of rent without notice
thereof, the Panel may either order the 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 Resident for such reduction in services.
8.57.140. Amortization Schedule.
For the purpose of determining any rent adjustment
permitted under the provisions of this Chapter, the cost of
capital improvements shall be amortized according to the
following schedule:
Tyne of Improvement
Backflow device
Carpeting
Copier
Copper pipes
Court cover
Drapes
Garden vacuum
Gas barbecue
Gas line
Gas saw
Gas value & fire hydrant
Golf net
Heater motor
Houses
Light fixtures
Linoleum floor
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Amortization Period
10
years
5
years
6
years
10
years
5
years
5
years
5
years
3
years
15
years
4
years
10
years
3
years
5
years
30
years
5
years
5
years
Oven
Patio furniture
6
5
years
Pool heater
5
years
years
Pump
Refrigerator
5
years
Repaint Clubhouse
6
5
years
years
Replaster pool
5
years
Replaster spa
5
years
Reroofing
18
years
Security fence
5
years
Sewer line construction
15
years
Slurry seal
3
years
Solar system
10
years
Street repair
10
years
Street seal
3
years
Street seal, drainage area
3
years
Telephone system
6
years
Tree trimming
5
years
Truck
5
years
Wall, paving
10
years
Wallpapering
5
years
Water heater
10
years
Water softener
5
years
8.57.150. Net Operating Income. In evaluating a
space rent increase imposed by a Park Owner to maintain the
Park Owner's net operating income from the Park, the
definitions and provisions described in this Section shall
apply.
A. Net Operating income (NOI).
For purposes of this Chapter, the Net Operating
Income (NOI) of a manufactured home Park shall equal Gross
Income (GI) less Operating Expenses (OE).
B. Gross Income (GI).
For purposes of this Chapter, the Gross Income (GI)
of a manufactured home Park shall equal the sum of Items
(1), (2), and (3) below, less (4).
(1) Gross space rents, computed as gross space
income occupancy.
(2) Other income generated as a result of the
operation of the Park, including, but not limited
to, laundry and recreational vehicle storage.
(3) Revenue received by the Park Owner from the
sale of gas and electricity to Park Residents where
such utilities are billed individually to the Park
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Residents by the Park Owner. This revenue shall
equal the total cost of the utilities to the
Residents minus the amount paid by the Park Owner
for such utilities to the utility provided, and
minus the State provided allowance for system
maintenance and repair.
(4) Uncollected space rents due to vacancy and bad
debts to the extent that the same are beyond the
Park Owner's control. Uncollected space rents in
excess of three percent (3%) of gross space rents
shall be presumed to be unreasonable unless
established otherwise and shall not be included in
computing gross income. Where uncollected space
rents must be estimated, the average of the
preceding three (3) years experience shall be used,
or some other comparable method.
C. operating Expenses (oE).
For purposes of this Chapter, Operating Expenses
(OE) of manufactured home Park shall include the following:
(1) Real property taxes and assessments.
(2) Utility costs to the extent that they are
included in space rent.
(3) Management expenses, including the
compensation of administrative personnel (may
include the value of any manufactured home space
offered as part of compensation for such services),
reasonable and necessary advertising to ensure
occupancy only, legal and accounting services as
permitted herein, and other managerial expenses.
Management expenses are presumed to be not more
than five percent (5%) of gross income, unless
established otherwise.
(4) Normal repair and maintenance expenses for the
grounds and common facilities, including, but not
limited to, landscaping, cleaning, repair of
equipment and facilities.
(5) Owner performed labor in operating and/or
maintaining the Park. In addition to the
management expenses listed above, where the owner
performs managerial or maintenance services which
are uncompensated, the owner may include the
reasonable value of such services. There shall be
a maximum allowance of five percent (5%) of gross
income unless such a limitation would be
substantially unfair in a given case. It shall be
presumed that a Park Owner must devote
substantially all of his or her time, i.e. at least
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forty (40) hours per week, to performing such
managerial or maintenance service in order to
warrant the maximum five percent (5%) allowance.
No allowance for such services shall be authorized
unless Park Owner documents the hours utilized in
performing such services and the nature of the
services provided.
(6) Operating supplies and equipment such as
janitorial supplies, common areas and landscaping
supplies and materials, and appliances and
equipment if solely devoted to Park operation.
(7) Insurance premiums actually paid.
(8) Reserve for replacement of necessary capital
improvements. This amount shall not exceed five
percent (5%) of gross income. The reserve shall be
documented. The reserve may be included as an
Operating Expense in a particular annual adjustment
only to the extent that additional money is added
to any previously approved reserve, up to a maximum
of five percent (5%) of current gross income.
(9) Necessary capital improvement costs exceeding
reserves for replacement. A Park Owner may include
the costs of necessary capital improvement
expenditures which exceeded reserves for
replacement, if any existed, though not required to
be maintained, for which the Park Owner has been
given prior credit. A necessary capital
improvement shall be an improvement required to
maintain the common facilities and areas of the
Park in a decent, safe and sanitary condition or to
maintain the existing level of Park amenities and
services, and which is dedicated solely to Park
use. Capital improvement includes all loan costs,
origination fees and all interest costs at
commercially available rates, and once fully
reimbursed, shall be ordered deleted from the then
payable space rent paid by the tenant.
Expenditures for capital improvements to upgrade
existing facilities or increase amenities or
services shall be allowable operating expense only
if documented and only if the Park Owner has:
(a) Consulted with the Park Residents prior
to initiating construction of the improvements
regarding the nature and purpose of the
improvements and the estimated cost of the
improvements.
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(b) Obtained prior written consent of at
least one adult Resident from a majority of
the manufactured home rental spaces to include
the cost of the improvement as an operating
expense. Evidence of such consent must be
presented at the time of filing the
application seeking to include such a capital
improvement expenditure as an operating
expense. Any capital improvement expense
shall be amortized over the life of the
improvement as provided in the Amortization
Schedule described in Section 8.57.140.
(c) In the event that the capital improvement
expenditure is necessitated as a result of
an accident, disaster, or other event for
which the Park Owner receives insurance
benefits, only those capital improvement costs
otherwise allowable exceeding the insurance
benefits may be calculated as operating
expenses.
(10) Involuntary Refinancing of Mortgage or Debt
Principal. A Park Owner may, under the provisions
of this subsection be able to include certain debt
service costs as an operating expense in a NOI
adjustment application. 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
terms of a financing transaction entered into prior
to January 1, 1987 made on commercially available
terms, e.g. termination of a loan with a balloon
payment, or (2) increased interest costs incurred
as a result of a variable interest rate loan used
to finance the acquisition of the Park and entered
into prior to January 1, 1987 of the Park on
commercially available terms.
(11) Increases in rental payments made on leases of
land entered into prior to January 1, 1990, as
follows: The Park Owner may include as expenses an
amount not to exceed the increase in such land
lease rental payments occurring since the previous
Panel approved rental adjustment for the Park
where said increase in land lease rental payments
is the result of inflation or the increase in space
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WPX/DCH/ORD06700 (11/09/90)
rental income or based on other terms documented in
writing.
Such increased land lease rental obligations
shall be permitted to be considered as an operating
expense only where the Park Owner can show that the
terms of the lease are reasonable and consistent
with prudent business practices under the
circumstances.
In refinancing increased interest shall be
permitted to be considered as an operating expense
only where the Park Owner can show that the terms
of the refinancing were reasonable and consistent
with prudent business practices under the
circumstances the terms of commercially available
financing.
(12) All interest expense reported as a deduction
to Federal and State taxing authority.
(13) Operating Expenses shall not include the
following:
(a) Avoidable and unnecessary expenses;
(b) Mortgage principal and interest payments;
(c) Rental payments made on leases of land,
except as provided above;
(d) Any penalty, fees, or interest assessed
or awarded for violation of this or any
other law;
(e) Registration fees required under this
agreement;
(f) Legal fees, except allowable legal
expenses;
(g) Depreciation of the property;
(h) Any expense for which the Park Owner has
been reimbursed.
(i) Attorney's fees and costs incurred in
legal proceedings which relate to challenging
the facial validity of this Chapter.
(j) Any late charges incurred by the Park
Owner for failure to pay registration fee to
the City authorized by this Chapter.
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(k) Attorneys fees and/or costs incurred in
judgments brought against a Park Owner,
arising from a cross-complaint or cross-
complaint in intervention.
D. Burden on Park Owner. All operating expenses
must be reasonable. Whenever a particular expense exceeds
the normal industry or other comparable standard, the Park
Owner shall bear the burden of proving the reasonableness of
the expense. To the extent the Panel finds any such expense
"Panel" to be unreasonable, the Panel shall adjust the
expense to reflect the normal industry or other comparable
standard.
8.57.160. Miscellaneous Provisions.
A. Suspension of Provisions. The provisions of
this ordinance shall remain in full force and effect unless
and until the space vacancy rate of all manufactured home
parks regulated hereunder, except as provided below, exceeds
five percent (5%). The space vacancy rate shall be
calculated by dividing the total number of rental spaces in
the applicable parks into the total number of such spaces
which are not occupied by manufactured homes. Parks which
have not been in operation for more than two (2) years from
the date of occupancy of the first manufactured home, not
including manufactured homes occupied by park owners or
employees thereof, shall not be included in the vacancy
calculation. Upon recognition by the City Council by
resolution that the vacancy rate exceeds five percent (5%),
the provisions of this ordinance shall be suspended. The
provisions shall be automatically reinstituted upon the
adoption of a resolution by the City Council declaring the
vacancy rate to be five percent (5%) or less.
B. Waiver Ability. Rental agreements between a
Park Owner and Resident which are exempted from local
regulation by California Civil Code § 798.17 or other state
statutes, are permitted. The rental rates and other terms
of such agreements shall prevail over regulations and
decisions made pursuant to this Ordinance. For all such
rental agreements which expire, the last monthly rental rate
charged under 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 or regulation of the
Panel for the benefit of a resident is waived, shall be
deemed to be against public policy and shall be void.
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WPX/DCH/ORD06700 (11/09/90)
�1
C. 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 or 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.
D. Subpoenas. The Panel 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 before the Panel upon
request by the Panel. Said subpoenas shall be signed by the
Mayor or his or her designated substitute and attested by
the City Clerk. Failure to comply with such subpoena shall
shall result in contempt proceedings under Government Code
Sections 37106 through 37109.
SECTION 2. The City Clerk shall certify to the
passage of this ordinance and shall cause the same to be
published as required by law.
19-W.
PASSED AND APPROVED this 27th day of November
ATTEST: MAYOR
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WPX/DCH/ORD06700 (11/09/90)
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF Santa Clarita )
I, Donna M. Grindev, , City Clerk of the City of
Santa Clarita do hereby certify that the foregoing Ordinance
No. 90-3 was regularly introduced and placed upon its
first reading at a regular meeting of the City Council on
the 13th day of November , 19 90 That thereafter,
said Ordinance was duly adopted and passed at a regular
meeting of the City Council on the 27th day of
November , 1922-1 by the following vote, to wit:
AYES: COUNCILMEMBERS: Boyer, Heidt, Klajic, McKeon, Darcy
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
CIT CLERK
WPX/DCH/ORD06700 (11/09/90) -24
I