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Landmark Opinion in Mobilehome Park Conversions

Aleshire & Wynder’s Rent Control and Mobilehome Park Law Team (including Partners Bill Wynder, Sunny Soltani, and Associate Jeff Malawy) has scored another significant victory for municipalities inCalifornia regarding the scope of local authority in processing mobilehome park conversion applications to resident ownership.  

After a decade of battles between park owners and municipalities in dozens of lawsuits up and down the state, on August 31, 2010 the Court of Appeal in a landmark published decision confirmed that municipalities’ discretion to approve, deny or regulate mobilehome park conversions is far broader than park owners have long argued.

On August 31, 2010, in Colony Cove Properties, LLC v. City of Carson, et al. (2010) 187 Cal. App. 4th 1487, in a published opinion, the California Court of Appeal, Second Appellate District, held that all local regulation with respect to mobilehome park conversions under Government Code § 66427.5 is not preempted by that section and that municipalities’ responsibilities with respect to mobilehome park conversions are not ministerial. (187 Cal. App. 4th at 1497.) This follows the Aleshire & Wynder victory earlier this year in Carson Harbor Village, Ltd. v. City of Carson, 2nd Appellate District Case No. B211777 (March 30, 2010) (“CHV Decision”) where, for the first time in a decade, a Court of Appeal held that a city has both the discretion and the authority to deny a mobilehome park conversion if it determines the conversion is not bona fide.

The Colony Cove court further clarified the CHV Decision and held that cities have the obligation under the plain reading of Government Code § 66427.5 to “consider” the Survey of Support as part of the hearing and that “considering” is more than receiving a survey and filing it away. The Court specifically held that § 66427.5 requires that a survey be conducted and that the park owner submit "'the results' to the entity or agency 'authorized by local ordinance to approve, conditionally approve, or disapprove the [subdivision] map.' This language alone suggests that the contents of the survey, as opposed to its mere existence, are relevant to the approval process. By thereafter specifically stating that the results are "to be considered as part of the subdivision map hearing prescribed by subdivision (e), the legislature made that intention explicit." (Colony Cove, 187 Cal. App. 4th at 1505-1506 [emphasis added].)

Park owners have long argued that Government Code § 66427.5 preempts all local jurisdiction and that the results of the “survey of support” required in Government Code § 66427.5 are meaningless. They claim that they need only to conduct a resident survey and submit the results to the City – that the City has no authority or discretion to deny or regulate a park owner’s conversion application, even if the survey shows nearly 100% opposition to the conversion. They have also argued over the past decade that municipalities have no discretion to apply any other applicable statutes or use their police powers to address health and safety issues in processing mobilehome park conversions.

As discussed above, the Court unequivocally rejected these arguments and held that a city has both the discretion and the authority to consider the results of the resident survey, and to use those results as a factor in deciding whether to approve or deny a mobilehome park conversion.

Bolstering these important holdings, on the same day Colony Cove was decided, in a companion case, where Aleshire & Wynder, LLP represented the Palisades Bowl Residents Association and filed an Amicus Brief on their behalf, in yet another significant victory, the same Court issued another published opinion confirming the discretion of local municipalities in processing conversion applications. (Pacific Palisades Bowl Mobile Estates, LLC v. City of Los Angeles (2010) 187 Cal. App. 4th 1461.) In the Pacific Palisades case, the City ofLos Angeles had requested the park owner to comply with the Mello Act to provide replacement affordable housing and to obtain the proper coastal permits under the Coastal Act. The Park owner refused and argued Government Code § 66427.5 preempts the City of Los Angeles from considering or applying the Mello Act or the Coastal Act to the conversion application.

The Court concluded that “despite the limiting language in section 66427.5, the Mello Act and Coastal Act apply to mobilehome park conversions within the coastal zone, and [a city] must ensure compliance with those acts in addition to compliance with section 66427.5.” The Court held that “Section 66427.5 is primarily directed to the protection of mobilehome park residents in the event of a conversion of the park to resident ownership” and the limiting language of subsection (e) limiting the scope of the hearing to compliance with § 66427.5 only means that with respect to mitigation of economic impacts on non-purchasing residents the scope of the hearing is limited to § 66427.5; on all other issues, if another state statute governs, the City can consider that as part of the hearing. (Palisades Bowl, 187 Cal. App. 4th at 1482-1486.)

The Colony Cove decision has already been tested and has proved its importance. On September 29, 2010, following Colony Cove, the trial court in Goldstone Trust v. County of Santa Cruz, et al., Santa Cruz County Superior Court Case No. 164458, affirmed the County of Santa Cruz’s denial of the conversion of AlimurMobilehome Park based on lack of resident support. As Judge Volkmann put it during oral argument, “I believe Colony Cove Properties is the appropriate law in this area and I have cited it.” “The survey verified that the residents overwhelmingly opposed the conversion and the County was exercising its appropriate discretion in denying this application.”

For more information, contact our Rent Control and Mobilehome Park Law Team – Partners Bill Wynder (wwynder@awattorneys.com), Sunny Soltani (ssoltani@awattorneys.com), or Associate Jeff Malawy (jmalawy@awattorneys.com).