RENT INCREASES

Q. We have just received another large rent increase and soon will not be able to afford to live in the park. Doesn’t state law regulate rent increases in mobilehome parks?

A. Except as noted below, state law does not regulate the amount of a rent increase in a mobilehome park. The state Mobilehome Residency Law does require a park to give residents a 90-day written advance notice of a rent increase. If residents are on a long-term lease, the lease would govern the percentage and frequency of rent increases, although increases could not be made more than the minimum (every 90 days) as required by the state’s 90-day notice. At last count, 102 local jurisdictions (mostly cities) have rent control in some form for mobilehome parks. But if residents sign a long-term lease of more than 1 year in length, state law provides the lease is exempt from any local rent control ordinance now in existence or enacted in the future. Under Civil Code Sec. 798.17, homeowners living in the park have a right to review the proposed long-term lease and to reject it within 30 days and opt instead for a 12-month lease agreement or month-to-month rental agreement. If rejected, Sec. 798.17(c) provides that the park cannot charge the homeowner any more rent for a year after the lease was rejected than the rent terms provided for in the rejected long-term lease. This provision was placed in the law to prevent parks from retaliating by raising the rent even higher if a homeowner will not sign the long-term rent control exempt lease. By law a homeowner living in the park is entitled to a 12-month agreement or month-to-month if they ask for it.

PASS-THROUGH FEES

Q. The park has notified us they will be surcharging us for repaving the park streets, above and beyond what we pay for rent. Can the park charge separate “Maintenance” or “Pass-through” fees on top of the rent?

A. Yes, if the resident’s lease or rental agreement – that they have signed – provides for assessments or fees for maintenance or other things. But if not mentioned in the lease, a new fee would have to be for a service actually rendered, such as trash pick-up, and would require a 60-day advance written notice. If the rental agreement does not include fees for certain maintenance or repairs in the park, the park could not legally charge them without the 60-day notice, as it would be a breach of the existing rental agreement. However, if they sign a new lease or rental agreement that includes these fees, residents are agreeing to pay them and will be subject to them. State law does not require a notice requirement for an increase in an already existing fee, although legislation attempting such regulation was passed by the Legislature in 2006 but vetoed by the Governor (AB 2374, Umberg). Those local jurisdictions with mobilehome park rent control may regulate fees or pass-through costs which parks charge their residents. Some ordinances, for example, distinguish capital improvements from maintenance, allowing pass-through of certain capital improvements amortized over a period of time, but not maintenance. State legislation by Assemblywoman Patricia Wiggins a few years ago would have also written such a provision into state law but the bill died due to opposition from park owners and other property interests.

SHORT NOTICE OF RENT INCREASE

Q. Residents of our park received a written notice dated July 1st of a rent increase that will start on October 1st. However, we did not actually receive the notice until it was taped on our door on July 12th. Is this notice legal?

A. No. The Mobilehome Residency Law (MRL), Civil Code Section 798.30 provides for the 90-day written notice of a rent increase before the date of the increase. Civil Code Section 798.32(a) requires a 60-day notice of a fee increase. Section 798.14 provides that any notice required by the MRL shall either be delivered personally or by mail, postage prepaid. In this case, actual receipt of the notice 80 days before the increase is not a 90-day notice. Taping the notice to the door is not sufficient. If the management wants to increase your rent, they will have to mail or personally deliver a new 90-day notice to you. Despite being challenged, if they bill you for the illegal rent anyway, it may be in your best interest to pay the overcharge under protest and go to Small Claims Court with evidence of the faulty notice to recover the difference, rather than risk an eviction for non-payment.

BACK RENT

Q. Recently, we received notice that the management had miscalculated the rent since January 1st of this year and that we will be charged extra back rent payable in 60 days. Can the park charge residents for back rent that was omitted from past rent calculations because of the manager’s mistake?

A. It depends on the situation. If the park rental agreement or lease specifically provides that the rent shall be $500 a month for the term of the lease, and there is no provision in the lease for a contingency, such as an increase due to management error, back rent could not be charged without the park breaching the lease or rental agreement. However if residents have signed a rental agreement that provides that back rent may be charged in the event of a management miscalculation or error, then the additional rent could be charged with a 90-day notice.


CLUB HOUSE DEPOSITS

Q. The park requires us to pay a deposit or fee to use the clubhouse for a homeowner association meeting. Can they do this?

A. No, with certain exceptions. The Mobilehome Residency Law (MRL Section 798.51) provides that a park rental agreement or rule or regulation shall not deny a homeowner or resident the right to hold meetings for a lawful purpose in the clubhouse at reasonable times and in a reasonable manner, when the facility is not otherwise in use. This section also prohibits the park from charging homeowners or residents a cleaning deposit or to require liability insurance in order to use the clubhouse for meetings relating to mobilehome living or for social or educational purposes and to which all homeowners are allowed to attend. However, the park may require a liability insurance binder when alcoholic beverages are served. Although a park could not charge fees for homeowner meetings as described above, impliedly, if a homeowner reserves the clubhouse for a private function, such as a family party or wedding reception, to which all park residents are not invited, the park could charge a fee or deposit.

SECURITY DEPOSITS

Q. When I moved into the park, I had to pay the first and last months’ rent plus a 2-month security deposit. Is that legal?

A. Normally, when a mobilehome owner is accepted for residency in a mobilehome park and signs a rental agreement, the first month’s rent and a 2-month security deposit are required. Security deposits in a park are governed by Mobilehome Residency Law (MRL) Section 798.39, which permits the 2-month security deposit. After one full year of satisfactory residency (meaning all rent and fees have been paid during that time), the resident is entitled to request a refund of the 2-month security deposit, or may request a refund at the time he or she vacates the park and sells the home. Therefore, a last month’s rent requirement, in addition to the security deposit permitted to secure rent payments by the MRL, is questionably legal in a mobilehome park.

DEDUCTING RENT FOR LACK OF PARK UTILITIES

Q. Our park has been without running water off and on for over a month, with no explanation from the park, and residents have had to resort to buying bottled water for drinking or cooking and using local gas stations or fast food restaurants for the bathroom. Can we refuse to pay the rent or deduct a certain amount from the rent for the inconvenience?

A. No. The Civil Code “repair and deduct” statute (part of conventional landlord- tenant law) does not fit this situation because a resident cannot repair a park-wide water problem. Refusing to pay the rent or paying a reduced rent could lead to the residents’ termination of tenancy unless residents are willing to chance an eviction and use the lack of water as a defense in an unlawful detainer action brought against them in court by the park. Instead, residents should file an emergency complaint with the Department of Housing (HCD) or a local enforcement agency if the local agency has jurisdiction over the lack of water in the park. An inspector can then cite the park for failing to provide adequate water and require the park to furnish bottled water and alternative bathing facilities until the water problem is fixed. In the long-run, residents can also sue the park in small claims court for damages for the park’s breach of their rental agreement, which under the MRL requires the park to maintain the common facilities (which include the utilities) in good working order and condition. Legal damages would be similar to an offset to the rent already paid. Residents may also be able to seek a failure to maintain legal action against the park, depending upon the circumstances. Also, see Questions #12 for more information about failure to maintain park facilities.

WITHHOLDING RENT WHEN PARK LOSES PERMIT

Q. My mobilehome park has not paid its Permit to Operate (PTO) fee to the state in over a year. The Department of Housing (HCD) has notified the park that its PTO will be suspended in 30 days and the park cannot legally collect rent from residents unless the park pays the back fee and penalties, but our manager says she will evict anyone who withholds the rent. Can she evict us even though the park’s Permit to Operate has not been valid for a year?

A. It depends. After 30 days, if the PTO is suspended the park will thereafter not be able to legally collect rent from residents until the permit is re-instated, and residents may withhold it. Until the PTO is actually suspended by HCD, however, despite the fact the PTO fee has not been paid to the state in a year, residents who withhold rent from the park may be subject to a notice of termination of tenancy by the management.

LATE FEES

Q. I have been charged an outrageous late fee of $50 because I missed payment of my rent and utility bill by one day. Is this kind of late fee legal?

A. Late fees on rents, utility charges or other pass-through fees are not regulated by the Mobilehome Residency Law (MRL), but the courts in California cases involving late fees generally have upheld residential leases with preset late penalties if they bear a reasonable relationship to the actual damages that could be anticipated or sustained by the landlord for late payment, such as administrative costs relating to accounting for and collecting the late payments. For example, a 3% charge for late payment of rent ($15 on a $500 rent bill) is probably going to be construed as reasonable. Whether $50 is reasonable depends on the outstanding amount of the rent and utilities owed that are late. To dispute a late fee, a homeowner would have to file an action for damages in Small Claims Court.

MOBILEHOME PROPERTY TAXES

Q. Why am I required to pay property taxes on my home in the park, as I am only renting the land and already pay the park owner a fee for property taxes on the park? Isn’t this double taxation?

A. Mobilehome owners, who are park residents, pay for the park’s property taxes either through their rent or sometimes through separate pass-through fees for property taxes or property tax increases on the park property. But mobilehome owners may also pay an individual property tax to the county on their home and accessory structures. Prior to July 1, 1980 most mobilehomes were taxed like vehicles by the state with a vehicle license fee (VLF) in lieu of local property taxes. But the law was changed in 1979 to subject new mobilehomes and manufactured homes sold on or after July 1, 1980 to local property taxes instead of the VLF. Older pre-July 1980 homes remain on the VLF unless the owner voluntarily switches the home to the local property tax system. Tax law does not allow the county assessor to base assessment of taxes on mobilehomes in parks on the value of the park land or space. Hence, the homeowner’s property tax on an individual home is a separate tax from the property tax on the park owner’s real estate or park land.

PROPERTY TAXES TOO HIGH

Q. I just received the annual property tax bill for my mobilehome, and my taxes are higher than last year despite the current weak real estate market and the fact that mobilehomes are selling for much less in this park than last year. How can I get my taxes reduced?

A. Local property taxes are based on 1% of the assessed value (AV) of the property or home, plus any local bonded debt, such as school bonds. Under the California Constitution (Article VIIIA), the county assessor may increase the AV by 2% a year, except that when a home is sold and ownership is transferred, the assessor may re-assess the property (usually to the higher selling price or value). Therefore, homes that have been resold in recent years in a “good” real estate market have been reassessed at higher values, sometimes significantly higher, than those that have remained under the same ownership for years with the application of the annual 2% formula. However, with the recent sharp decline in the real estate market, many homes have decreased in value as sales go wanting. Mobilehome owners, like owners of conventional homes, who feel their taxes are too high in the current market, should file an appeal with the county assessment appeals board to see if they can get their AV and thus their taxes reduced. But the burden is on the homeowner to produce evidence that his or her home is worth less than the assessor’s valuation. This can be done by getting a private appraisal(s) and producing documents showing the reduced or selling prices of similar mobilehomes in the park or similar parks in the community. Information on how to apply and the deadlines for applying may be obtained from your local county assessor’s or assessor-tax collector’s office.

SECTION 8

Q. I am low income and have lived in my park five years. After almost two years, my name finally came to the top of the waiting list and I qualified for Section 8 rent assistance, but the park owner says he will no longer accept Section 8 rent. Can he do this?

A. Section 8 is a federal program, and federal law does not require landlords to accept Section 8 vouchers. Those landlords who accept Section 8 enter into agreements or contracts with the county that administers the program and must abide by the Section 8 terms for the period of the agreement, which is normally a set number of years. Because of Section 8 restrictions, some landlords have opted out of Section 8 at the end of their agreements. You will have to contact your county housing authority or the county agency that administers Section 8 in your area about the Section 8 status of your particular park.

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