§ 9101-11 Procedures for Review of Fair Return Petitions

9101-11. Procedures for Review of Fair Return Petitions.

(a) Right to Petition. A park owner (the “applicant”) may petition for a rent increase in excess of the amount allowed in Section 9101-7 in order to obtain a fair return. The petition shall constitute a ‘fair return application’. No petition for a fair return rent adjustment may be filed pursuant to this Chapter until thirty (30) days after this Chapter goes into effect. After 2016, no petition may be filed in November or December of any calendar year except in cases of exceptional or unforeseen circumstances.

(b) Limit on Frequency of Petitions. Only one (1) petition pursuant to this section may be filed for a mobile home park within a twelve (12)-month period. An exception to this limitation shall be authorized in the event of extraordinary circumstances that could not reasonably have been foreseen at the time the prior petition was filed.

(1) Petition Form Required. Such petition shall be on a form prescribed by the County and filed with a county office or official which is designated by the County to receive it.

(2) Petition Fee. Upon the receipt of a fair return application, the County shall determine if the employment of a certified public accountant or other expert is necessary or appropriate for a proper analysis of the applicant’s petition. Such determination shall be made by County staff assigned for this purpose, or by third party experts retained by the County. If the County so determines, it shall also determine the anticipated cost of employing any such experts. The resulting figure shall be communicated to the applicant. The petition shall not be further processed until the applicant has paid to the County the estimated cost of expert analysis. Any unused portion of the advance payment for expert analysis shall be refunded to the applicant.

(3) Contents of Petition Form. The form may require any information deemed relevant by the County. The form shall include, but not be limited to:

(A) The names and addresses of all mobile home park tenants subject to the rent increase.

(B) A statement of the date the rent increase is proposed to be effective.

(D) An income and expense statement for the base year, the current year, and the three (3) years prior to the current year.

(E) Evidence documenting the income and expenses claimed by the park owner.

(F) All other documentation and opinion testimony upon which the park owner is relying to justify the rent increase.

(G) A statement of the petitioner’s theories in support of the rent increase application.

(4) Notice of Petition. The park owner and County shall provide notice of a petition by:

(a) Sending a hard copy and electronic .pdf copy of the petition to the tenants’ representative;

(b) Providing the County with hard and electronic copies of the petition;

(5) Determination That the Petition Is Complete. County staff will determine if a petition pursuant to this section is complete within thirty (30) days after the petition is submitted and all requested fees are paid. A petition will not be deemed complete if the required fees have not be paid. If the petition is incomplete, County staff will inform the petitioner what additional information is required.

(6) Access to the Petition. The documentation required by this section shall be available for inspection and copying by any person during the normal County business hours. County staff shall make a copy of all submissions by the park owner and the residents in conjunction with a petition, all of which shall be available in the form of an electronic .pdf file.

(7) Cost of Expert Analysis. Upon the receipt of a petition, County staff shall determine if the employment of experts will be necessary or appropriate for a proper analysis of whether the applicant’s petition is complete. If staff so determines, then staff shall also determine the anticipated cost of employing any such experts. The resulting figure shall be communicated to the petitioner. The petition shall not be further processed until the petitioner has paid to the County the estimated cost of expert analysis. Within thirty (30) days after a petition and the required fee, if any, is submitted to the County, staff shall determine if the petition is complete. Any unused portion for payments so collected shall be refunded to the petitioner.

(8) Contents of Expert Analysis. Any analysis pursuant to this subsection shall be in writing and made available to the hearing officer, and shall include a determination of:

(a) Base year and current year rental income;

(b) Base year and current year operating expenses by category;

(d) Base year and current year net operating income;

(e) The percentage change in net operating income between the base period and the current period;

(f) The percentage change in the CPI between the base period and the current period;

(g) The ratio of the percentage change in net operating income to the percentage change in the CPI between the base period and the current period;

(h) The rent adjustment required under an MNOI standard pursuant to chapter.

(9) Submission by Mobile Home Owner Tenants. The mobile home owner tenants may submit a written response to the park owner’s submission within twenty (20) days after the petition is deemed complete.

(1) Once a petition is deemed complete, with any expert analysis completed if required, the petition review process shall automatically commence. A decision on any petition for a fair return adjustment shall be rendered within sixty (60) days of the date that the hearing officer has been chosen unless extended as allowed herein. The decision shall be emailed and sent by mail, with proof of mailing to the park owner, the park owner’s designated representative for the petition, and a designated representative of the residents.

(2) Petition review shall be conducted by a hearing officer pursuant to this section.

(A) Hearing officers shall be licensed attorneys of the State Bar of California in good standing, and shall have no financial interest in mobile homes, mobile home spaces or mobile home parks and shall not have represented mobile home park owners or mobile home park residents in rent setting cases or park closing or park conversions or any disputes between park owners and park residents.

(B) A hearing officer shall be selected through the California Office of Administrative Hearings (OAH). In the event that it is not possible or impracticable to obtain a hearing officer through the OAH, the County may elect to contract with any other statewide or regional agency or office that provides arbitration services or may establish a panel in accordance with the following procedure set forth in subsection (d)(3)(C) of this section.

(C) In the event that a panel of hearing officers is established, County staff shall make all reasonable efforts to ensure that there are at least three (3) qualified candidates to form a panel of prospective hearing officers. Hearing officers shall be selected on a rotational basis from the panel list. A hearing officer shall disqualify himself or herself from serving as hearing officer in a particular matter where he/she has a conflict of interest within the meaning of the Political Reform Act (Government Code Section 87100 et seq.), and shall otherwise comply with the disqualification provisions of Canon 3.E. of the Code of Judicial Ethics. The parties shall be advised in writing of the selected hearing officer, and advised of their right to disqualify the selected hearing officer. In the event of a disqualification, another hearing officer shall be randomly selected from the panel, and a new notice of hearing sent to the parties. Each party shall have the right to disqualify one hearing officer for a particular matter without cause if there are three (3) or fewer hearing officers on the list and may disqualify up to two (2) hearing officers if there are five (5) or more hearing officers on the list.

(A) A review hearing on the petition shall commence within forty (40) days of the selection of a hearing officer unless both parties agree to a different schedule. The hearing shall be completed within fifteen (15) days after it is commenced. These time deadlines may be extended if the hearing officer finds that there is good cause to commence and/or complete the hearing at a later date.

(B) The hearing may be scheduled during the normal business hours of the County unless a majority of the residents that are subject to the petition requests that the hearing be scheduled during the evening. The hearing shall be scheduled at a time that it is convenient for the residents’ and park owner’s representatives.

(C) The presentations of each party at the hearing and of County staff and experts shall be limited to ninety (90) minutes each unless there is good cause for providing a greater period of time. Each party and the County shall be permitted one hour of cross-examination of expert witnesses.

(5) Notice of Hearing. Written notice of the time, date and place of the hearing shall be given once the hearing officer has been chosen at least thirty (30) days prior to the hearing.

(A) Either party or the County may request that additional specific supporting documentation be provided to substantiate the claims made by a party. The request shall be presented in writing to the hearing officer.

(B) The hearing officer may order production of such requested documentation, if the hearing officer determines the information is relevant to the proceedings.

(A) Any response by the residents or the park owner to any report or expert analysis prepared by the County must be submitted to the other parties at least ten (10) days prior to the hearing. The submissions shall be in printed and electronic form.

(B) Rebuttal reports may be submitted by the park owner, residents, and/or County staff and/or a consultant on behalf of the County and provided to the parties at least five (5) days prior to the hearing.

(A) The hearing shall be conducted in accordance with such rules and regulations as may be promulgated by the County and any rules set forth by the hearing officer.

(B) The hearing officer shall have the power and authority to require and administer oaths or affirmations where appropriate, and to take and hear evidence concerning any matter pending before the hearing officer.

(C) The rules of evidence generally applicable in the courts shall not be binding in the hearing. Hearsay evidence and any and all other evidence which the hearing officer deems relevant and proper may be admitted and considered.

(D) Any party or such party’s representative, designated in writing by the party, may appear at the hearing to offer such documents, oral testimony, written declaration or other evidence as may be relevant to the proceedings.

(E) The hearing officer may grant or order not more than two (2) continuances of the hearing for not more than ten (10) working days each. Additional continuances may be granted only if all parties stipulate in writing or if the hearing officer finds that there is a good cause for the continuance. Such continuances may be granted or ordered at the hearing without further written notice to the parties.

(F) A tape recording of the proceedings shall be made by County staff in a format that is easily made available and is easily usable.

(G) The hearing shall be conducted in a manner that ensures that parties have an opportunity to obtain documents and to obtain information about the theories and facts to be presented by the opposing parties in adequate time in advance of the hearing to enable preparation of a rebuttal.

(9) Required Findings in Decision. Any decision pursuant to this subsection shall include a determination of:

(A) Base year and current year rental income;

(B) Base year and current year operating expenses by category;

(D) Base year and current year net operating income;

(E) The percentage change in net operating income between the base period and the current period;

(F) The percentage change in the CPI between the base period and the current period;

(G) The ratio of the percentage change in net operating income to the percentage change in the CPI between the base period and the current period;

(H) The rent adjustment required under an MNOI standard pursuant to Section 9101-10 and this section.

(10) Conditions for Allowance or Disallowance of Rent Increase. The allowance or disallowance of any proposed rent increase or portion thereof may be reasonably conditioned in any manner necessary to effectuate the purposes of this Chapter.

(11) Deadline for Decision. An application for a fair return adjustment shall be decided by the hearing officer within sixty (60) days of the date that the filed petition, including the receipt of fees, has been deemed complete, unless the hearing officer determines that there is good cause for an extension of this period or the County extends this period due to the length of time required to accommodate scheduling availability and limitations required to obtain the services of a hearing officer.

(12) Notice of Decision. County staff shall mail copies of the decision to the park owner and all affected mobile home park tenants within three (3) days of the decision. Copies of the decision shall be emailed to the park owner and residents’ representative as soon as possible after the decision is made and in all cases within twenty-four (24) hours after the decision is made.

(13) Preservation of Record. Any findings pursuant to this section shall be reported to the County in an agenda packet and permanently preserved in the County records, so that they are available in the event of a future rent increase application involving the same mobile home park.

(A) The parties in any hearing may be represented at the hearings by a person of the party’s choosing. The representative need not be an attorney.

(B) Written designation of representatives shall be filed with the County or the hearing officer.

(C) The written designation of the representative shall include a statement that the representative is authorized to bind the party to any stipulation, decision or other action taken at the administrative hearing.

(15) Modification of Decision in the Event of Mathematical or Clerical Inaccuracies. Any party alleging that the hearing officer’s statement of decision contains mathematic or clerical inaccuracies may so notify the hearing officer and the other party within fifteen (15) calendar days of the mailing of the decision. The hearing officer may make any corrections warranted, and re-file the statement of decision within ten (10) working days after receiving the allegation of the mathematical error. Upon re-filing of the statement, the decision shall be final.

(16) Calculation of Allowable Application Expenses if a Sealed Offer Has Been Submitted. If any sealed settlement offers have been submitted to the County by any parties to the dispute, after the hearing officer determines the allowable rent adjustment pursuant to this section, the hearing officer shall open the sealed offers and make a determination of whether there has been a “prevailing party” and shall announce that determination in the hearing officer’s notice of decision issued pursuant to subsection (d)(12) of this section. Within seven (7) days of receipt of the notice of decision awarding fees, the prevailing party shall submit a written request and accounting of these fees and serve that request simultaneously on all parties by regular and electronic mail. Within seven (7) days of receiving the request by the prevailing party, the opposing party may file an objection to that request. Within seven (7) days of the date that an opposition is submitted or within seven (7) days of the deadline for an opposition, if none is submitted, the hearing officer shall submit a proposed supplemental decision stating the amount of fees included in the award, which shall become final in seven (7) days after the proposed decision, unless either party requests an evidentiary hearing within seven (7) days, in which case a final decision shall be made within seven (7) days after the hearing. If the prevailing party is the mobile home owners’ representative, then the park owner shall file an affidavit with the County, stating that the award of attorneys’ fees has been paid in full and shall not be permitted to implement a rent increase pursuant to this section until such payment has been made. For good cause, the hearing officer may modify the procedure set forth in this subsection for determining an award for a prevailing party.

(e) Overall Period for Review of Fair Return Petition. After a petition is deemed complete, the overall time for conducting a hearing and issuing a final decision by the hearing officer shall not exceed one hundred eighty (180) days, unless the hearing officer determines that there is good cause for extending this deadline or the County extends this period due to the length of time required to accommodate scheduling availability and limitations required to obtain the services of a hearing officer.