If a mobilehome park owner proposes to convert the park from a tenant community into a resident-owned community, then pursuant to state law, a certain proportion of the residents in the park must give consent via tenant survey. In 218 Properties v. City of Carson (May 14, 2014, B241969) — Cal.App. 4th — [2014 Daily Journal D.A.R. 6032], a California Court of Appeal held that overwhelming tenant opposition in the survey response can support a city council’s denial of a conversion, but a tepid resident response does not support the denial of a conversion.
A mobilehome park owner can convert a park from a community occupied by tenants who rent their lots, into a community in which residents own their own lots. Upon conversion of a portion of a mobilehome park to resident ownership, the remaining rental spaces are no longer subject to local rent control, but low-income tenants are still protected by state rent control.
Unscrupulous park owners can abuse the conversion process by pursuing a “sham” conversion by selling one lot after the conversion, which would terminate local rent control for the entire park. To prevent sham conversions, the California legislature added a tenant-survey requirement to the mobilehome park conversion requirements. The survey requirement mandates that local agencies “consider” the survey’s results as part of its review of the proposed conversion.
218 Properties, LLC (“218”) and Imperial Avalon Mobile Estates, LLC (“Imperial”) sought to convert their respective mobilehome parks in the City of Carson (“City”). The 218 park’s survey found that 20 of the 21 residents opposed the conversion and the other resident failed to respond. The Imperial park’s survey had a much lower response rate. Out of the 225 units, only 83 residents responded and 18 favored conversion. In both cases, the City’s Planning Commission approved the conversion but the City Council reversed the decision, citing the tenant survey results.
218 and Imperial appealed the council’s decision. The trial court reversed the council’s decision in both cases, finding that the survey results did not constitute substantial evidence showing that the conversions were bona fide. The City appealed.
The Court of Appeal (“Court”) held that the survey requirement was not simply ministerial; survey results can constitute substantial evidence showing that conversions are not bona fide. However, the dramatically different survey results warrant different outcomes. The 218 park survey showing near-universal opposition to the conversion supported the council’s decision to deny the conversion. On the other hand, the Imperial park survey revealed that a majority of the park residents were indifferent to the conversion. Therefore, in the case of Imperial, the survey results did not constitute substantial evidence to deny the conversion.
What This Decision Means To You
Cities that deny the conversion of a mobilehome park on the basis that it is a sham conversion must be careful to support the denial with substantial evidence showing that the conversion is not bona fide. A tenant survey showing overwhelming tenant opposition may be sufficient to support a denial, but cities cannot base their denial on surveys where many of the residents either support the conversion or fail to respond.
If you have any questions concerning this Legal Alert, please contact the following from our office, or the attorney with whom you normally consult.
Jon E. Goetz | 805.786.4302