April 21, 2010 -- Mobilehome park residents and local governments up and down the State of California scored a victory when the Court of Appeal issued its decision in Carson Harbor Village, Ltd. v. City of Carson, 2nd Appellate District Case No. B211777, on March 30, 2010. Thanks to the efforts of Aleshire & Wynder partners William Wynder and Sunny Soltani, and associate Jeff Malawy, the decision is the first Court of Appeal decision ever to hold 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.
In recent years, the owners of hundreds of California mobilehome parks have sought to convert their rental parks to a subdivided form of resident ownership, similar to the condo-conversion of an apartment building. Under state law, such conversions eliminate local rent control upon the sale of the very first subdivided lot, and as a result the park residents risk losing not only rent control upon conversion, but nearly all of the equity in their mobilehome coaches as well.
Faced with a duty to approve or disapprove such park-owner-initiated conversions forced upon unwilling residents, California cities and counties have relied on the “survey of support” provisions in state law to make sure conversions in the absence of resident support are in fact bona fide conversions. The “survey” provisions require that the park owner conduct a survey of resident support for the conversion and submit the results of that survey to the local government “to be considered” in making its decision on the park owner’s conversion application. (Government Code Section 66427.5(d).) The Legislature adopted these survey provisions in 2002 to “ensure that conversions . . . are bona fide resident conversions.” Numerous local governments have been threatened with and engaged in lengthy and costly litigation from park owners over the extent to which lack of resident support can be used to deny a conversion.
In Carson Harbor, the city had denied the conversion application by the owner of Carson Harbor Villagebecause the survey results submitted by the park owner failed to demonstrate a bona fide conversion. The park owner sued, claiming that a local government has no authority to determine whether a conversion is bona fide.
The Court of Appeal rejected the park owner’s argument, holding that a city does have authority to deny a conversion if it determines the conversion is not bona fide. The local government must assess whether the park owner has “intent to truly provide for tenant ownership” and the “absence of intent to avoid rent control.” The Court held that a lack of resident support in the survey can be evidence of a non-bona fideconversion.
The decision marks a huge victory for the opponents of forced non-bona fide mobilehome park conversions because in recent years some park owners have attempted to use conversions as a scheme to obtain a lifetime exemption from local rent control ordinances.
In Carson in particular, the decision is the latest in a long string of losses in litigation brought by park owners aimed at destroying Carson rent control. During the last six years, the owner of the Carson Harbor Village park has sued Carson after virtually every single annual rent increase decision granted by the City’s Mobilehome Park Rental Review Board, and has never prevailed in court against Aleshire & Wynder’s mobilehome park team. Partners William W. Wynder and Sunny K. Soltani have successfully defended every single decision of the City’s Mobilehome Park Rental Review Board.
Additionally, in 2008, the same owner mounted a federal court “takings” challenge to Carson’s rent control ordinance, only to once again lose to the Aleshire & Wynder team. The federal case was dismissed in its entirety upon motion by A&W attorneys.
Apparently starving for a victory, in a news alert dated March 31, 2010, Carson Harbor Village attorneys have claimed the Carson Harbor decision is a “favorable ruling” for their park owner clients. Curiously, those same attorneys have petitioned for the Court of Appeal to rehear and decide differently this “favorable ruling.” And they have vowed to take a writ to the Supreme Court to overturn this ruling if their petition for rehearing with the Court of Appeals is denied.
We are therefore once again pleased to announce that Aleshire & Wynder attorneys have successfully defended against just one more of this park owner’s attempts to achieve the “end of mobilehome park rent control in California.” Thanks to A&W’s attorneys, Carson’s rent control continues to protect park residents from excessive and unfair increases in rent and non-bona fide conversions.