HomeMy WebLinkAbout7/16/2003 - STAFF REPORTS (15) DATE: July 16,2003
TO; CITY COUNCIL
FROM: CITY ATTORNEY
INTRODUCE BY TITLE ONLY AND WANE FURTHER READING, "AN ORDINANCE
OF THE CITY OF PALM SPRINGS, CALIFORNIA, ADDING SECTION 4.08.136 TO THE
PALM SPRINGS MUNICIPAL CODE, RELATING TO RENTAL ADJUSTMENTS
FOLLOWING CONVERSION OF RENTAL MOBILE HOME PARKS TO RESIDENT
OWNERSHIP."
RECOMMENDATION:
The City Attorney recommends that, in order to implement the teachings of the Court of Appeals
in El Dorado Palm Springs, Ltd. v. City of Palm Springs, 96 CaLApp.4th 1153 (2002), on a
prospective basis, the City Council take the following action:
Introduce by title only and waive further reading of an ordinance entitled "AN
ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA, ADDING
SECTION 4.08.136 TO THE PALM SPRINGS MUNICIPAL CODE,
RELATING TO RENTAL ADJUSTMENTS FOLLOWING CONVERSION OF
RENTAL MOBILE HOME PARKS TO RESIDENT OWNERSHIP."
SUMMARY:
Govermnent Code §§ 66427.4 and 66427.5 provide mechanisms by which rental mobile home
parks may be converted from a landlord-tenant form of ownership to resident ownership. Though
not envisioned within this State statutory scheme, case law now allows an owner of a rental
mobile home park to make application to convert a mobile home park from a landlord-tenant
form of ownership to a resident form of ownership through use of a statutory scheme which was
primarily intended to facilitate resident initiated mobile home park ownership conversions.
Within the City of Palm Springs, at least one such mobile home park owner, EI Dorado Palm
Springs, Ltd., has undertaken such a park-owner initiated conversion. That conversion sparked
significant disputes between the mobile home park owner, the resident homeowners' association,
and the City of Palm Springs, resulting in litigation by and between these parties. In a published
appellate decision, entitled El Dorado Palm Springs, Ltd. v. City of Palm Springs, 96
CaLApp.4th 1153 (2002), the Count of Appeals for the Fourth Appellate District, Division 2,
held as follows:
"We are. . . concerned about the use of the section [Government Code § 66427.5]
to avoid local rent control, especially since the section does not state when the
rent control phase out in section 66427.5, subdivision (d) becomes applicable,
and it provides no time limits for the completion of the conversion. The City is
also concerned that there could be an abuse of the conversion process: 'Under the
argument of Amicus, Appellant could simply purchase one of the newly created
subdivided units, price. . . the remaining units at prohibitively expensive
amounts, and obtain for himself a 'life time exemption' from Pahn Springs RenAoo /�
1003/021/25012 vl 04
Control ordinances.' . .. Section 66427.5 cannot be used to evade a local rent
control ordinance. We also agree. . . that the section may not be used to justify
preemption of a local rent control ordinance if the conversion is unsuccessful. "
Following the decision of the Court of Appeals in El Dorado, the State legislature passed into
law Assembly Bill No. 930, which amends Government Code § 66427.5 to add subsection (d)
thereto. The stated purpose of the legislature in adopting Assembly Bill 930 was to "address the
conversion of a mobile home park to resident ownership that is not a bona fide resident
conversion. . . ." The legislature went on to find and determine that" in enacting this act
[Assembly Bill No. 930,] it was the intent of the Legislature [to ensure that conversions pursuant
to Section 66427.5 of the Government Code] are bona fide resident conversions."
BACKGROUND:
The ordinance presented for consideration and possible action the City Council has been drafted
to be consistent with the teachings of the Court of Appeals in the El Dorado opinion, and to
implement the intent of the legislature in its adoption of Assembly Bill No. 930. The Ordinance
will apply to all subdivision map or other applications to convert rental mobile home parks from
landlord-tenant form of ownership to a resident form of ownership, regardless of the manner in
which such conversion is initiated, and will apply after the effective date, which will be 30 days
following second reading and adoption by the City Council. The ordinance will not apply to any
pending conversion for which a tentative or final map has already been approved.
The stated purpose of this ordinance is to facilitate and to provide a mechanism by which a
"certificate of bona fide conversion" be obtained for any subdivision map or other application for
conversion of a rental mobile home park to residents ownership (regardless who initiated the
proceedings for such conversion). The ordinance requires the Rent Review Commission to make
findings determining that an owner-initiated conversion or a resident-initiated conversion of a
rental mobile home park will result in a conversion to resident ownership, in fact.
l,j David J. Aleshire
City Attorney
�__.�
APPROVED:
City Manager—�
ATTACHMENTS:
Ordinance No. An Ordinance adding Section 4.08.136 to the Palm Spring Municipal
Code
1003/021/25012 vl /��
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF PALM SPRINGS,
CALIFORNIA, ADDING SECTION 4.08.136 TO THE
PALM SPRINGS MUNICIPAL CODE, RELATING TO
RENTAL ADJUSTMENTS FOLLOWING CONVERSION
OF RENTAL MOBILE HOME PARKS TO RESIDENT
OWNERSHIP.
THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, DOES
ORDAIN as follows:
SECTION 1. Chapter 4.08 of the Palm Springs Municipal Code, relating to rent
control in mobile home parks, is hereby amended by adding thereto a new section to be
numbered 4.08.136, and reading, in its entirety, as follows:
"4.08.136 Rent Adjustments Following Conversion of Rental
Mobile Home Park to Resident Ownership.
(a) Scope & Intent. This section requires any subdivider to obtain
a certificate, as defined hereinafter, from the rent review commission prior
to adjusting the rent payable for any residential rental unit(s) in excess of
the amount of such rent allowed by Chapters 4.02, 4.04, and/or 4.08.
Except for a subdivider(s) who has/have obtained the certificate required
herein, this section bars any rent adjustment following the
commencement of sales or offers for sale of any residential rental unit(s)
within any any rental mobile home park that is the subject of a map,
pursuant to Government Code § 66427.5, or other subdivision map or
application for conversion to resident ownership. This section is intended
to protect non-purchasing residents of residential rental unit(s) within a
rental mobile home park from any rent adjustment not authorized by
Chapters 4.02, 4.04, and/or 4.08 and to protect from a sham, fraudulent,
failed, or other non-bona fide conversions to resident ownership as
prohibited by El Dorado Palm Springs, Ltd. vs. City of Palm Springs
(2002) 96 Cal.App.4th 1153.
(b) Maps or Applications for Conversion of One or More
Residential Rental Units Within a Rental Mobile Home Park to Resident
Ownership. In addition to any other requirement of state or local law, any
subdivider seeking to adjust rents on any residential rental unit(s) in
correction with the conversion of a rental mobile home park to resident
ownership, pursuant to Government Code § 66427.5 or through any other
subdivision map or application, which is otherwise subject to regulation
under Chapters 4.02, 4.04, and/or 4.08 of this code, shall first obtain from
the rent review commission, prior to adjusting the rent amount for any
residential rental unit(s) therein, a certificate of bona fide conversion
finding and determining that the conversion to resident ownership is bona
fide within the meaning of law, and not undertaken as a sham, fraudulent,
or failed conversion to remove any residential rental unit(s) proposed to
be converted to resident ownership from the protections of the City of
Palm Springs Municipal Rent Control. �/ A
1003/001/25010 vi /[-
(c) Content of Application for Certificate of Bona Fide Conversion
to Resident Ownership. The certificate required herein shall be sought
pursuant to a written application filed with the rent review commission
under Section 4.08.070(f)(2), which application shall include the following
information: (i) a copy of a resident support survey, conducted either in
the manner prescribed by Government Code § 66427.5(d)(1), or in some
other manner acceptable to both the subdivider and a resident
homeowners' association, demonstrating the numerical support or
opposition of each occupied residential rental unit to conversion to
resident ownership; and (ii) a written appraisal, conducted in accordance
with nationally recognized professional appraisal standards,
demonstrating the residential rental units to be offered for sale are to be
sold for their fair market value; and (iii) a written appraisal, conducted in
accordance with nationally recognized professional appraisal standards,
establishing monthly rental rates for non-purchasing residents following
the date of conversion and consistent with the requirements of
Government Code § 66427.5(f); and (iv) a representation, made in writing
and under oath, from the subdivider certifying that the map or other
application for conversion is intended to facilitate a bona fide conversion
of a rental mobile home park to resident ownership, together with a
description of such marketing plans or incentives, if any, or other actions
proposed to be undertaken by such subdivider to assure a bona fide
conversion of a rental mobile home park to resident ownership.
(d) Conduct of Commission Proceedings. Consideration of an
application for certificate of bona fide conversion to resident ownership
shall be conducted in the manner and within the time prescribed by
Section 4.08.080 for hardship rent increase proceedings. Notice of an
application shall be given according to the procedures and practices of
the commission then in effect for hardship rent increases, including the
giving of notice of the filing of the application, date of pre-hearing
conference, if any, and date, time and place of the hearing on the
application; which notice shall be delivered to or posted on each
residential rental unit within the rental mobile home park which is the
subject of an application for conversion from a land-lord tenant form of
ownership to resident ownership. Any prospective purchaser(s) of a
residential rental unit(s), or current resident, or resident homeowners'
association, or city staff shall be entitled to submit information or an
appraisal which sets forth what is considered to be the fair market sales
and/or rental value of the residential rental units that are the subject of an
application.
(e) Grounds for Issuance of Certificate of Bona Fide Conversion.
The rent review commission shall issue to any subdivider a certificate of
bona fide conversion upon finding, by a preponderance of the evidence,
of each of the following: (i) that not fewer than fifty percent (50%) plus
one of any occupied residential rental unit(s) to be offered for sale
pursuant to a map or application for conversion of a rental mobile home
park to resident ownership support such conversion to resident
ownership; and (ii) that the occupied residential rental units to be offered
1003/001/25010 v1 X
for sale and/or rent will be sold and/or rented for an amount not more than
the fair market value of such residential units; and (iii) that any subdivider
has not filed the subdivision map or other application for conversion of a
rental mobile home park to resident ownership for the sole purpose of
removing any occupied resident rental unit(s) therein from the protections
of this Chapter. In the event such subdivider, or a resident, or resident
homeowners' association, or city staff submit(s) a qualified appraisal(s) or
other probative information which determine(s) a fair market sales or
rental value of the occupied residential rental units which, on average,
differ by twenty percent (20%) or greater in fair market sale and/or rental
value, the rent review commission may, as a condition to issuing a
certificate of bona fide conversion, request the parties agree that each
party or each party's appraiser select and jointly provide instructions to a
third-party independent appraiser, and agree to jointly share in the
payment for an independent third appraisal, which third appraisal shall be
deemed by the commission to constitute the fair market sales and rental
values of the occupied residential rental units to be offered for sale.
Provided the subdivider agrees, in writing, to offer each occupied
residential rental unit for sale and/or rent at the appraised fair market
value determined by such third-party appraiser, such agreement shall,
standing alone, entitle such subdivider to the issuance of a certificate of
bona fide conversion without any further showing required hereinabove.
(f) Effect of Failure to Obtain Certificate of Bona Fide Conversion.
With respect to any conversion of a rental mobile home park to resident
ownership for which any subdivider shall have failed to obtain a certificate
of bona fide conversion, as to any non-purchasing resident, the amount of
rent to be paid for such residential rental unit(s) so occupied shall be only
that rent authorized under Chapters 4.02, 4.04, and/or 4.08, as
applicable, of this code.
(g) Violation Not a Misdemeanor. Any violation of this Section
4.08.13 shall not be deemed a misdemeanor, but may result in
administrative action by the rent review commission, pursuant to Section
4.08.070(f)(2), or the civil remedies, pursuant to Section 4.080.120, or as
otherwise provided by law.
SECTION 2. CEQA EXEMPTION. Adoption of this ordinance is not subject to
the California Environmental Quality Act ("CEQA") by virtue of Public Resources Code
§§ 15061(b)(3) and/or 21080.8 so long as the application required herein does not
involve any expansion of the number of residential units within a property to be
continued to be operated as a resident owned mobile home park.
SECTION 3. SEVERIBILITY. If any section, sub-section, sentence, clause or
phrase of this ordinance is, for any reason, held to be invalid or unconstitutional by the
decision of a court of competent jurisdiction, such decision shall not effect the validity of
the remaining portions of the ordinance. The City Council of the City of Palm Springs
hereby declares that is would have passed this ordinance, and each and every section,
sub-section, sentence, clause, or phrase thereof not declared invalid or unconstitutional
without regard to whether any portion of the ordinance would be subsequently declared
invalid or unconstitutional.
1003/001/25010 v1 ���
SECTION 4. EFFECTIVE DATE. This Ordinance shall be in full force and
effect thirty (30) days after passage, and shall not apply to any pending conversion for
which the subdivider has obtained a tentative or final map.
SECTION 5. AUTHORITY TO ENACT. The Palm Springs City Council is
expressly authorized to enact this ordinance by virtue of Municipal Code § 4.08.140
SECTION 6. PUBLICATION. The City Clerk is hereby ordered and directed to
certify to the passage of the Ordinance, and to cause the same or a summary thereof, or
a display advertisement, duly prepared according to law, to be published in accordance
with law.
ADOPTED this day of July, 2003.
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST: CITY OF PALM SPRINGS
By
City Clerk Mayor
REVIEWED & APPROVED AS TO FORM:
1003/001/25010 v1 /S l y
J y
DATE: 'May-?
TO: CITY COUNCIL
FROM: CITY ATTORNEY
1. ADOPT, AS AN URGENCY MATTER, "AN ORDINANCE OF THE CITY OF
PALM SPRINGS, CALIFORNIA, ADDING SECTION 4.08.136 TO THE PALM SPRINGS
MUNICIPAL CODE, RELATING TO THE CONVERSION OF RENTAL MOBILE HOME
PARKS TO RESIDENT OWNERSHIP, AND DECLARING THE URGENCY THEREOF."
2. INTRODUCE BY TITLE ONLY AND WAIVE FURTHER READING, "AN
ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA, ADDING SECTION
4.08.136 TO THE PALM SPRINGS MUNICIPAL CODE, RELATING TO THE
CONVERSION OF RENTAL MOBILE HOME PARKS TO RESIDENT OWNERSHIP."
RECOMMENDATION:
The City Attorney recommends, that in order to implement the teachings of the Court of
Appeals in El Dorado Palm Springs, Ltd. V. City of Palm Springs, 96 Cal.App.41h 1153
(2002), the City Council take the following actions:
1. Adopt, as an urgency ordinance, an ordinance entitled "AN
ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA,
ADDING SECTION 4.08.136 TO THE PALM SPRINGS MUNICIPAL
CODE, RELATING TO THE CONVERSION OF RENTAL MOBILE HOME
PARKS TO RESIDENT OWNERSHIP, AND DECLARING THE
URGENCY THEREOF;" and, simultaneously
2. Introduce by title only and waive further reading of an ordinance
entitled "AN ORDINANCE OF THE CITY OF PALM SPRINGS,
CALIFORNIA, ADDING SECTION 4.08.136 TO THE PALM SPRINGS
MUNICIPAL CODE, RELATING TO THE CONVERSION OF RENTAL
MOBILE HOME PARKS TO RESIDENT OWNERSHIP."
SUMMARY:
Government Code §§ 66427.4 and 66427.5 provide mechanisms by which rental mobile
home parks may be converted from a landlord-tenant form of ownership to resident
ownership. Though not envisioned within this State statutory scheme, case law now
allows an owner of a rental mobile home park to make application to convert the mobile
home park from a landlord-tenant form of ownership to a resident form of ownership
through use of a statutory scheme which was primarily intended to facilitate resident-
initiated mobile home park ownership conversions.
Within the City of Palm Springs, at least one such mobile home park owner, El Dorado
Palm Springs, Ltd., has undertaken such a park-owner initiated conversion. That
conversion sparked significant disputes between the mobile home park owner, the
resident homeowners' association, and the City of Palm Springs, resulting in litigation by
and between these parties. In a published appellate decision, entitled El Dorado Palm
#23766v.1 1 / 'd