The court of appeal recently issued opinions in two cases involving applications for mobilehome park conversions. In Pacific Palisades Bowl Mobile Estates, LLC v. City of Los Angeles, (— Cal.Rptr.3d —-, Cal.App. 2 Dist., August 31, 2010), the court considered whether the Mello Act and the Coastal Act apply to conversions of mobilehome parks in the coastal zone. The court held that a local authority must ensure compliance with the Mello Act and the Coastal Act as well as the Government Code section 66427.5, which facilitates the conversion of mobilehome parks to resident ownership. In Colony Cove Properties, LLC v. City of Carson, (— Cal.Rptr.3d —-, Cal.App. 2 Dist., August 31, 2010), the court considered the validity of a city ordinance that specified a level of support from residents at which a conversion would be presumed bona fide. The court held the ordinance is invalid.
Pacific Palisades Bowl Mobile Estates, LLC v. City of Los Angeles
Pacific Palisades Bowl Mobile Estates (“Palisades Bowl”) is a mobilehome park located across the Pacific Coast Highway from Will Rogers State Beach. In 2006, Palisades Bowl notified residents of the park that it intended to subdivide the park for residential ownership. Palisades Bowl went to the City of Los Angeles (“City”) to file an application to convert the park. The Division of Land would not accept the application because it was incomplete. The case manager assigned to the case told Palisades Bowl he would send an e-mail to inform Palisades Bowl what needed to be included in the application. The case manager subsequently sent an e-mail detailing the documents required to be filed with the application. Those documents included an application for a coastal development permit and an application to the Housing Department for clearance under the Mello Act.
Palisades Bowl filed a lawsuit alleging its application should be deemed complete under the Permit Streamlining Act because City failed to compile a checklist of things needed to apply for a mobilehome park conversion, refused to accept the application, and failed to notify it in writing of any deficiencies in the application. The trial court found that, although City probably violated the Permit Streamlining Act by failing to provide a checklist, there was no remedy for City’s failure to comply with the Act. The court further concluded that the case manager’s e-mail substantially complied with the Act’s requirement that City provide Palisades Bowl with a written completeness determination.
City eventually told Palisades Bowl that the following items were required to be included with its application: “a Mello Act clearance, a coastal development permit from the City and the Coastal Commission, and a complete tentative tract map application.” The trial court found that the Act did not require Palisades Bowl to complete the tentative map act application because the case manager’s e-mail did not list it as a missing item. The court further found Palisades Bowl did not have to comply with the Mello Act and the Coastal Act.
The court of appeal first found that the trial court did not abuse its discretion when it concluded Palisades Bowl was not entitled to have its application deemed complete because of City’s failure to comply with the Permit Streamlining Act. First, the Permit Streamlining Act does not require an application to be deemed complete if a city fails to maintain a checklist that lists the information that is needed to complete a mobilehome park conversion. Second, although the City wrongly refused to accept Palisades Bowl’s application, the City’s action is irrelevant because “the City acted on the application by timely sending an e-mail explaining why the application was incomplete.” Finally, the court concluded that the case manager’s e-mail met the completeness determination requirement because it communicated that the application was not complete and that Palisades Bowl needed to provide specific items in order for the application to be deemed complete.
The next issue before the court was whether Government Code section 66427.5 precludes the City from requiring Palisades Bowl to also comply with the Mello and Coastal Acts. Government Code section 66427.5 provides residents of a mobilehome park with protection when a park is converted to resident ownership. Under this section, the subdivider must give each tenant the option to purchase the subdivided unit, file a report on the impact of the conversion upon the residents of the park, give a copy of the report to each resident, and obtain a survey of support of the residents for the conversion. Section 66427.5 also provides that the subdivider will “be subject to a hearing by a legislative body or advisory agency, which is authorized by local ordinance to approve, conditionally approve, or disapprove the map.” However, the scope of that “hearing shall be limited to the issue of compliance with this section.” Section 66427.5 further provides protection for “lower income households” by providing rent controls for the duration of the tenants’ mobilehome tenancies.
The Mello Act was enacted “to preserve residential housing units occupied by low- or moderate-income persons or families in the coastal zone.” Under the Act, local governments must not authorize the conversion or demolition of residential dwelling units occupied by families of low or moderate income unless there has been a provision made for replacement of those units with units for low or moderate income families.
The Coastal Act represents “an attempt to deal with coastal land use on a statewide basis.” The California Coastal Commission has the primary responsibility for implementation of the Act, but local governments may have their local program certified to issue coastal development permits. In certain areas, a permit must be obtained from both the Coastal Commission and the local government. Here, City exercised its option to develop a coastal development permit program in 1978. Where a dual permit is required, a permit must first be obtained from the City before one may apply to the Coastal Commission for a permit.
There is a conflict between section 66427.5 and the Mello and Coastal Acts because section 66427.5 requires City to limit its hearing on whether to approve the application for conversion to the issue of compliance with section 66427.5. The Mello Act, however, requires City to deny the conversion application unless Palisades Bowl makes provision for the preservation of low- and moderate-income housing units. The Coastal Act requires Palisades Bowl to apply to the City and Coastal Commission and then for City to review the application for a coastal development permit.
The court of appeal held section 66427.5 “does not preclude the City from imposing conditions and requirements mandated by the Mello Act and the Coastal Act on a subdivider seeking to convert to resident ownership a mobilehome park located in the coastal zone.” Section 66427.5 does not provide the protection for moderate- and low-income persons that is clearly mandated by the Mello Act. The Coastal Act “seeks to ensure a balance between protection of coastal resources and development, by providing a comprehensive statutory scheme regulating land use planning throughout the coastal zone.” Given the “paramount concern” for protection of coastal resources, the court concluded City can impose the requirements of both the Mello and Coastal Acts.
Colony Cove Properties, LLC v. City of Carson
The Colony Cove case also dealt with section 66427.5. Pursuant to section 66427.5, parties who seek to convert a mobilehome park to resident ownership must “obtain a ‘survey of support of residents of the mobilehome park’ and submit the results of the survey to the local entity or agency ‘to be considered as part of the subdivision map hearing.’” The subdivision map hearing must be limited to the issue of compliance with section 66427.5.
Colony Cove Mobilehome Park (“Colony Cove”) is located within the boundaries of the City of Carson (“City”). City enacted an ordinance which provided that if a survey conducted pursuant to section 66427.5 reveals 50 percent or more of the residents of a mobilehome park support a conversion, the conversion “would be presumed bona fide.” If a survey shows that 35 percent or fewer residents support the conversion, the conversion “would be presumed not bona fide.” If resident support falls between 35 and 50 percent, the ordinance requires the owner “to demonstrate a plan to convey the majority of the lots to current residents within a reasonable period of time.”
Colony Cove brought a lawsuit against City to challenge the ordinance. The trial court issued a writ which directed City to vacate the ordinance. The trial court concluded that pursuant to “section 66427.5 the City’s responsibilities when faced with a mobilehome park conversion application were essentially ministerial — that the City was merely to determine whether the survey had been received and filed in accordance with the statute, not to evaluate its contents.”
The court of appeal rejected the trial court’s conclusion that City’s role was purely ministerial. However, the court concluded City’s ordinance conflicts with section 66427.5 and is therefore invalid.
The requirement that a subdivider obtain a survey of support from residents was added to section 66427.5 in 2002. Section 66427.5 now provides that (1) a subdivider must obtain a survey of support from residents, (2) the survey must be “conducted in accordance with an agreement between the subdivider and a resident homeowners’ association, if any, that is independent of the subdivider or mobilehome park owner,” (3) a written ballot must be used, (4) each occupied mobilehome space must have one vote, and (5) the survey’s results must “be submitted to the local agency upon the filing of the tentative or parcel map, to be considered as part of the subdivision map hearing prescribed by subdivision (e)” of section 66427.5. Subdivision (e) provides that the “subdivider shall be subject to a hearing by a legislative body or advisory agency, which is authorized by local ordinance to approve, conditionally approve, or disapprove the map.” The scope of that hearing, however, must “be limited to the issue of compliance with [section 66427.5].”
The court examined the legislative history of section 66427.5 and concluded that the Legislature deprived local agencies of the authority to enact more stringent measures relating to the conversion of mobilehome parks to resident ownership. In fact, the Legislature specifically rejected a proposal when it enacted the 2002 amendment “that would have granted local agencies the authority to impose any ‘additional conditions of approval.'”
The court found the ordinance gives residents of a mobilehome park additional rights not afforded by section 66427.5. The ordinance essentially gives residents “veto power over the conversion by creating a presumption that a conversion is not bona fide if fewer than 35 percent of residents support it.” Also, the ordinance “greatly increases the owner’s burden if fewer than 50 percent of residents support it” because the owner is required to prepare a “viable plan” to sell the majority of the units in the conversion to current residents of the mobilehome parks.” As a result, the ordinance “potentially provides residents additional financial inducements not conferred by statute” because the subdivider could have “to offer current residents financial incentives to buy.” The court concluded that the ordinance “is an ‘improper addition to the exclusive statutory requirements of section 66427.5.'”
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