Rent Board Can Control Mobile Home Leases, Court Rules

By Jorge Casuso

Sept. 10 -- In a decision that will protect some of Santa Monica's most affordable housing from rent hikes, an appeals court ruled last week that the City's Rent Control Board can determine whether mobile home leases are exempt from local rent control.

In the case -- which pits the Village Trailer Park (one of only two parks left in the city) and the Rent Control Board -- the court also ruled that an arbitration clause in a mobile home lease does not prevent the board from applying the rent control law to the landlord.

Published Friday, the decision is the latest development in a four-year war between tenants of the 1940s era park at 2930 Colorado Avenue and the landlord, a war that has included several lawsuits, accusations of sabotage and vandalism and a City crackdown for 18 code violations.

"It's important to keep the rents low in the trailer parks, which is the most affordable housing in Santa Monica," said Doris Ganga, the rent board's general counsel.

Rents at the 109-unit park tucked away near the industrial zone at the eastern edge of Santa Monica are among the lowest in city, ranging from $172 to $248 a month, excluding the coaches, which are owned by the tenants, many of them poor and elderly.

In its published ruling, the court also found that a landlord is not entitled to advance notice of a rent control violation before being assessed for charging excess rent and that the rent control board may award the tenant interest on the excess rent collected by the landlord.

The decision came after both parties appealed a trail court ruling that made similar findings but remanded the matter to the rent board for further proceedings.

"Rent control of mobile home parks is a valid exercise of the City's police power as 'a rational curative measure' designed to alleviate a shortage of mobile home spaces and rising rental rates," the Second Appellate District Court wrote.

At the center of the case are 12 tenants who complained to the board in 1999 that they had been charged "excess rent" by the park. The park objected that the board has no jurisdiction to decide whether the leases are subject to -- or exempt from -- the Rent Control Law and requested that the administrative proceedings be dismissed, according to the suit.

The hearing officer overruled the landlord's objection. After a lengthy evidentiary hearing -- the court notes that "the administrative record is several thousand pages long" -- the officer found that the park's leases do not satisfy the requirements for exemption under state law and are subject to the City's Rent Control Law.

The tenants were awarded restitution of the excess rent totaling $63,677.87, including interest.

The Village appealed the administrative decision to the Rent Control Board, which rejected the landlord's argument and adopted the hearing officer's decision. The landlord then took the case to court.

The appeals court ruled that the park was responsible for proving it was exempt from local rent control and that the board has the jurisdiction to issue excess rent decisions.

"When the Board heard the tenants' claim that Village was violating the Rent Control Law by charging excess rents, the burden fell upon Village to present evidence proving that some or all of the leases in question are exempt from local regulation," the appeals court found.

"The Board's administration and enforcement of the Rent Control Law includes setting and regulating rents in the local housing market, as is authorized by the City Charter," the court found. "Issuing excess rent decisions, though judicial in nature, is reasonably necessary to accomplish the Board's primary legitimate regulatory purposes."

The court also found that the arbitration clause in the leases did not exempt the landlord from the local rent control law regulating rents.

"Village cannot exempt itself from the operation of local law by simply announcing that its leases are subject to arbitration," the court found. "If this were the case, every landlord would similarly announce a personal exemption from the law, thereby undermining a local government's legitimate exercise of its police power."

On one point, the appeals court disagreed with the trail court, which ruled that the board did not have the authority to calculate damages.

"The trial court erred by finding that there is no authority for the Board's calculation of damages; furthermore, the exclusion of rent increases helps to effectuate the Board's primary, legitimate regulatory purpose of inducing landlords to comply with the Rent Control Law."

For related stories see:
SPECIAL REPORT: "Trailer Trashed," September 5, 2001
"Trailer Hitch," January 4, 2001