Yucaipa City Council
July 28, 2025

Commented [K312]: Item No 8K - Replacing Meetings with
Hearings
Formatted: Indent: First line: 0.5"
Commented [KJ13]: Item No. 8P - Clarifying language
( Commented (1014]: Item No. 8Q - Clarifying language

forth its findings and decision, along with an affidavit of mailing, to the park owner and affected park residents.

C. Processing of Appeals from RA decision. All appeals filed shall comply with the filing and posting requirements of Section 1.0004(B) of these Rules. Oppositions that are filed by any person in response to an appeal, shall comply with the filing and posting requirements of Section 1.0004(C) of these Rules.

D. Application Fee for Appeals. The application fee for appeals to the Hearing Officer of Staff Determinations shall be $1,750.00 per application for appeal. The application fee shall be paid in full to the City as a condition of finding that the application is complete, and no hearing shall be set before the Hearing Officer unless the full application fee has been paid.

1.0009. INTERPRETATION AND MODIFICATION OF ADMINISTRATIVE RULES The Council shall adopt and shall be the sole approving body of these Administrative Rules. Any amendment to these Administrative Rules shall be in the form of a draft resolution preparedmade by the resolution -RA and shall be submitted to the City Council for review and approval.

CHAPTER 2. REGISTRATION

2.0001. PURPOSE
The purpose of mobilehome park registration is to enable the RA to control and monitor rents as mandated by the YMC. Park owner registration will provide the RA with information necessary to facilitate the implementation of the YMC and these Administrative Rules.

2.0002. SWORN AFFIDAVIT OR DECLARATION
All registration forms, and any documentation accompanying any registration forms, shall be complete, and shall contain an affidavit or declaration, signed by the park owner or a designated agent, with his/her signature notarized, certifying that the information contained therein is true, correct, and complete. A designated agent shall either be a principal in a licensed property management company, which is contractually bound to operate and manage the mobilehome park, or an individual (not an on -site manager), who is employed by a property owner for the sole purpose of operating the mobilehome park business. This designated agent will provide a declaration, under penalty of perjury, with the registration form affirming that he/she has a contractual arrangement that gives he/she authority to operate and manage all aspects of the mobilehome park business.

2.0003. LEASED CURRENTLY EXEMPT AND 1PRIOH EXEMPT SPACES A. Exempted Spaces under Civil Code Section 798.17. In the event a mobilehome park owner believes that his/her park contains any space which is ^u-b e -to a leas ,which exempts that space from rent regulation pursuant to the Califomia Mobilehome Residency Law (Civil Code Section 798, et seq.) or YMC Section 15.20.030, the park owner shall submit information on the registration form setting forth the date the park or space was initially held out for rent, the duration of each lease, current space rents, effective date of most recent rent increase, lease execution dates, lease expiration dates, last names of the homeowners/tenants of each leased space, all other information required by Sections 2.0004 and 2.0005, and any other information determined to be necessary by the RA to demonstrate compliance with an exemption under Civil Code Sections 798 et seq. or YMC Section 15.20.030.

Mobilehome Park Administrative Rules, Resolution No, 20254-4456 Page 8 Commented [t(115]: Item No. SR - Clarifying language
Commented (1016]: Item No 8E - Clarifying language

In the event that a resident or park owner questions whether the space is exempt the terms of a long term lease or whether the leave is exempt from the rent regulation provisions of YMC Chapter 15.20, he/she may request that the RA review the terms to determine whether it satisfies the requirements for an exemption from space rent regulation-leng-term-lease-eptien mil.

B. Prior Exempted Spaces which are No. Longer Exempt.

For any space that was previously exempt from rent regulation under YMC Chapter 15.20 but such exemption has expired or terminated based -en- pursuant to the provisions of Civil Code Section 7984-7 et seq. or YMC Section 15.20.03
of 2020), the park owner shall submit information on the registration form setting forth the date the park or space was initially held out for rent, the duration of each lease, current space rents determined in accordance with YMC Chapter 15.20, effective date of most recent rent increase, lease execution dates, lease expiration dates, last names of the homeowners/tenants of each space, all other information required by Sections 2.0004 and 2.0005, and any other information determined to be necessary by the RA to demonstrate compliance with Civil Code Sections 798 et seq., YMC Chapter 15.20, and these Rules.

2.0004. SUBMISSION OF COMPLETE INFORMATION REQUIRED
A registration form shall be accepted for filing by the RA only if it contains all information required by the YMC and these Administrative Rules, including but expressly not limited to the required registration fee, affidavit or declaration under penalty of perjury, and all information required by YMC Section 15.20.073 and this chapter. No park owner shall be permitted to apply for any rent adjustment until the RA has accepted the park registration form.

2.0005. TIMES WHEN REGISTRATION IS REQUIRED; REGISTRATION

CONTENTS
Registration is required at the following times:

A. Annual Registration. Annual registration is due no later than the 31st day of January each year and shall include the items listed in this Subdivision. Except as otherwise expressly provided, the following information shall be provided for all spaces in the park, including but not limited to, month -to -month spaces, leased spaces (exempt and non-exempt), spaces occupied by park -owned mobilehomes, spaces occupied by park managers and/or other employees, rent -to -own spaces, and spaces claimed to be exempt from the Ordinance under any other provision of state law:

1. The rents charged for each space in the park.

2. The services/utilities provided as part of the rent.

3. The services/utilities charged separately from the rent.

4. List of amenities provided in park.

5. The last names of the homeowners/tenants of every space in the park

6. -List of leased spaces Iclaimcdi to be (exempt and non-exempt pursuant to Civil Code- ..

Section 798.17) et seq. or YMC Section 15.20.030 and all information required by Section 2.0003.

7. -A registration fee worksheet.

Mobilehome Park Administrative Rules, Resolution No. 20254-4456 Page 9 Commented [1017]: Item No. SE - Clanfymg language
l Formatted: Indent: Left: 0.75", Hanging: 0.25"

8. Registration fee.

9. Significant maintenance performed in the preceding year.

B. New Lease/ Extended Lease Registration. New leases, and existing leases that are renewed or otherwise extended, shall be governed by YMC Section 15.20.073(C).

2.0006. DELINQUENT REGISTRATION
A park owner who fails to comply with the registration provisions outlined in these Administrative Rules or YMC Section 15.20.073 shall not be entitled to charge, collect, retain, or apply for any rent increase permitted by the YMC until a determination is made by the RA that the park owner has brought the park into full compliance with the registration provisions outlined in these Administrative Rules and the YMC,

2.0007. REGISTRATION FEES
A. The fee determined in accordance with these Administrative Rules shall accompany any registration form submitted to the City.

B. Initial and Annual Registration. The Yucaipa City Council has established an initial and annual registration fee of $87.12 per space not exempt from the YMC. The total registration fee is due and payable on or before January 31" of each year. One half ($43.56) of this fee may be passed on to residents of those spaces subject to the YMC, in twelve (12) equal monthly installments of $3.63. This fee may be included in the monthly statement of rent due, but must be itemized separately, and shall not be deemed to be a part of the rent or included in the rent base when calculating rent adjustments.

C. Prorated Registration Fees. In the event a space comes under the jurisdiction of the YMC after January 3151 of each year, a prorated registration fee shall be due and payable no later than January 31st of the following year as part of the Annual Registration application. The total prorated registration fee shall be calculated by determining the number of months remaining in the calendar year, including the initial month the space is subject to the YMC, and multiplying that figure by $7.42. The resulting figure is the total prorated registration fee for that space. One half of this fee may be passed onto the resident of said space in equal monthly installments of $3.71.

This fee must be noticed in accordance with the provisions of State law. This fee may be included in the monthly statement of rent due, but must be itemized separately, and shall not be deemed to be a part of the rent or included in the rent.

D. Prorated Registration Fee Refund. In the event a space under the jurisdiction of the YMC becomes exempt as outlined in YMC Section 15.20.030 after January 31' each year, a park owner may apply for a prorated refund at the time of the annual registration. The prorated refund for said space shall be calculated by multiplying the total number of months that the space was exempt by $7.42. The resulting figure may be deducted from the annual registration fee. The park owner may be required to show proof of exemption for any space for which a prorated registration fee refund is requested.

2.0008. DELINQUENT REGISTRATION FEES
A. Penalties. If a park owner fails to pay the required registration fees by January 315t he/she shall not pass the registration fees through to the tenants. Once the registration fees are paid, the park owner may commence passing the registration fees through to the tenants in accordance with the provisions of Section 2.0007. Failure to pay the required registration fees by Mobilehome Park Administrative Rules, Resolution No, 20254-4446 Page 10

a park owner in a timely manner shall also be considered a failure to register as outlined in Section

2.0006.

B. Waiver of Penalties. A waiver of the penalty for failure to pay the required registration fees may be granted by the RA upon a showing of exceptional circumstances beyond the control of the park owner, which made it impossible for the registration fees to be made in a timely manner.

CHAPTER 3. ANNUAL ADJUSTMENT BASED ON THE CPI

3.0001. ANNUAL ADJUSTMENT BASED ON THE CPI
A park owner may increase the rent on a mobilehome space once every twelve (12) months pursuant to YMC Section 15.20.080. Application for a rent increase pursuant to this subsection shall be made to the RA and may be for one or more spaces. The RA shall grant the application within twenty (20) days of receipt of a complete application if it complies with this subsection. If the application is incomplete or does not comply with this subsection, the RA shall notify the applicant in writing of the reasons it is incomplete or does not comply with this subsection within twenty (20) days of receipt of the application. The RA's decision approving an Annual Adjustment shall be final upon the date that the RA mails, by first-class mail, postage prepaid, a copy of the RA's decision, along with an affidavit of mailing, to the park owner.

The Annual Adjustment for each calendar year shall be calculated using the increase in the CPI index for the Riverside -San Bernardino -Ontario areas, All Urban Consumers for the preceding twelve-month period ending November. In the event this index is no longer compiled by the BLS, a successor index shall be used.

The RA shall provide the CPI figures and a calculation of the allowable Annual Adjustment to each park owner by February 1 of each year.

A. Application Approval. An application approval for an Annual Adjustment shall be filed on a form provided by the RA and shall include the following information:

1. The name of the park.

2. The date of the last rent increase for each space and the reason for that increase

3. All spaces for which an Annual Adjustment is being requested.

4. The rent currently being charged for each space.

5. Space vacancies pursuant to YMC Section 15.20.050. In the event that the application includes a vacant space upon which there is no mobilehome, pursuant to YMC Section

15.20.050 (B) (based on a "vacancy" as defined in subsection (1), (2), (3), or (8) of YMC Section

15.20.020), the last rent in effect prior to the space becoming vacant, or the last rent authorized by the City pursuant to any prior Annual Adjustment, whichever was approved later, shall be provided in the application. In the event no rent has ever been charged for that vacant space, or the last rent charged is unknown, the application should so indicate. As used in this section 3.0001, the phrase "the last rent charged" shall mean the last rent, which was actually paid by the most recent resident of that space prior to its vacancy.

Mobilehome Park Administrative Rules, Resolution Na 20254-4436 Page 11

a. In the event that there is no prior last rent charged for that vacant space, or the rent which was actually paid is unknown, or the park owner otherwise fails to document the last rent charged for the vacant space, the initial base rent to be listed for the vacant space in the application shall be determined using the vacancy adjustment formula set forth in Section

3.0001(H) of these Rules.
b. Space rents listed for vacant spaces in the application shall be verified by the RA using information required on, and/or documentation submitted with applicable Schedules of the Annual Registration Application, or the most recent City -approved annual adjustment application, whichever was approved later.
c. The initial base rent for that vacant space as approved by the RA pursuant to subsection (a) shall be used in determining any subsequent rent adjustments authorized under the YMC.

6. Leased -Priori Exempt sSpaces. In the event that the application for an Annual Adjustment includes a space that was previously exempt from space rent regulation eentrel-umler long term lease pursuant to Civil Code Section 798.17 et seq. or YMC Section 15.20.030 and such exemption has expired or terminated, the annual adjustment shall be determined based on the last rent in effect prior to the space becoming subject to rent eentrelregulation, and the date said rent increase was imposed.

7. The amount of the proposed Annual Adjustment.

8. The proposed new rent.

B. Method of Calculation. The Annual Adjustment for each space shall be determined in accordance with the following formula:

1. The prior CPI shall be determined. As determined herein, "Prior CPI" shall mean the CPI used in approving the prior Annual Adjustment or MNOI Adjustment (or in effect on the date of the vacancy adjustment).

2. The current CPI shall be determined. As used herein, "Current CPI" shall mean the CPI most recently available as of the date the application is determined to be complete.

3. The CPI used in the iprioli Annual Adjustment shall then be subtracted from the current CPI. The resulting sum -difference shall be multiplied-by-190divided by the prior CPI. The resulting cum percentage (in decimal form) shall then be divided by the wior CPI The resuIting sum shall then be multiplied by 100% and presented with up to 2 decimal places as a `%' sign Lconverting to whole number form). The result or 4% of ^UFF t ee rent whichever is less, shall be referred to as the "CPI Increase".

4. Each space rent, as determined pursuant to the last approved adjustment, shall be first multiplied by the CPI increase percentage and the resulting number (the rent increase) should then be added to the prior space rent to arrive at the new rent for the space.

5. For any vacant space (based on a "vacancy" as defined in subsection (1), (2), (3), or (8) of YMC Section 15.20.020, the initial base rent determined using the vacancy adjustment formula set forth in Section 3.0001(H) of these Rules shall be inserted on the Annual Adjustment form as the current rent for the vacant space as of the date of application. The initial base rent shall then be multiplied by the CPI increase determined pursuant to subsections (1) through (3) of this Subsection B, and the resulting sum shall be inserted in the application as the new rent to be charged for the vacant space if re -rented prior to the next Annual Adjustment. The anniversary Mobilehome Park Administrative Rules, Resolution No. 20254-4456 Page 12 Commented [K]18): Item No. 8E - Clarifying language
Commented [K719]: Item No. 8S - Clarifying language

date for the Annual Adjustment shall remain the same anniversary date as in effect prior to the vacancy. In the first year of occupancy following re -rental only, the applicable anniversary date may result in an Annual Adjustment imposed less than 12 months prior to the date of re -rental.

6. For any space that was previously exempt from rent rcgulationeontrolLpursuant to a -long-term 1-ase-under-Civil Code Section 798 et seq. or YMC Section 15.20.030 and such exemption has expired or n terminated, a}id-for-whichthe long term lease has expired orterminated , the
determination of the initial Annual Adjustment following termination of the rent-eontrol-exemption shall be determined in accordance with this subsection (6). The last rent in effect under the leng- telm lease exemption provision shall be inserted on the Annual Adjustment form as the current rent for the formerly exempt space as of the date of application. The "prior CPP" shall then be determined. "Prior CPP" shall mean the CPI in effect on the date that the last rent increase was imposed under the long-term lease. The "current CPP" shall be determined in accordance with Subsection (2). The prior CPI shall then be subtracted from the current CPI. The resulting sum shall be multiplied by 100. The resulting sum shall then be divided by the prior CPI. The resulting sum shall then be multiplied by 100%. The result or 4% of current space rent, whichever is less, shall be referred to as the "initial CPI Increase" for the previously exempt space. Subsequent Annual Adjustments shall be calculated in accordance with subsections (1) through (3) of this Section 3.000 1(B).

C. Notice of Adjustment to Resident. The park owner shall notify the residents affected by the Annual Adjustment in accordance with State law. The rent statement or invoice issued to the resident shall include the City approved annual CPI adjustment percentage and the dollar amount of the Annual Adjustment to be implemented on the subject space. A park owner shall not notice an Annual Adjustment prior to approval by the RA and park management shall concurrently post the City notice in the clubhouse, park office and one other location accessible to the residents at the same time as the rent increase notice is issued to the affected resident(s).

D. Eligibility. A space shall not be eligible for an Annual Adjustment (YMC Section

15.20.080) except upon compliance with the following requirements.

1. The park owner shall be in compliance with these Administrative Rules and the YMC.

2. Except as otherwise provided in subsection (D)(3), the space shall not have had an Annual Adjustment (YMC Section 15.20.080) or Maintenance of Net Operating Income (MNOI), Readjustment to Base Year NOI or Fair Return Rent Adjustment (YMC Section 15.20.100) in the preceding twelve (12) months prior to approval by the RA.

3. If the application includes a space that was previously exempt from rent eentrol regulation under a long tarm 1 asc pursuant to Civil Code Section 798,1--7 et seq. or YMC

15.20.030 and such exemption has expired or been terminated, the space shall not have had a rent increase under —the ling terrir--lease--in the preceding twelve (12) months prior to approval by the RA. Subsequent Annual Adjustments shall comply with subsection (D)(2).

4. In the event a resident questions a charge(s) on his/her monthly or other periodic statement, he/she may request that the RA review the statement to determine whether it satisfies the requirements for authorized fees pursuant to Civil Code Section 798.31. In the event the RA determines that a park owner has overcharged a resident, the RA shall instruct the park owner to Mobilehome Park Administrative Rules, Resolution No. 21325,1-44-56 Page 13 Commented 00201: Item No. 8E - Clarifying language

refund the over -charge, including interest at the legal rate of seven percent (7%) per year, compounded monthly.

E. Space vacancies pursuant to YMC Section 15.20.050(A). The space rent upon a "vacancy", as defined in YMC Section 15.20.020, subsections (4), (5), (6) or (7), shall not be increased above the last rent charged prior to such vacancy. The Annual Adjustment application shall list the last rent charged for such space prior to the vacancy.

F. Spaces Previously Exempt. As established pursuant to YMC Section 15 .i20L030-

15.20.050(D) and YMC Section 15,20.080(B) and subsections (A) through (D) of this Section." G. Park Owned Mobile Home Sold to an Existing or New Resident. As established pursuant to YMC Section 15.20.050(C).

H. Vacant Spaces (Vacancy Category Nos. (1), (2), (3), or (8)). In accordance with YMC Section 15.20.050(B), upon "vacancy", as defined in YMC Section 15.20.020, subsection (1), (2), (3), or (8), the park owner may increase the space rent on that mobilehome space by a vacancy adjustment in accordance with the following provisions.

1. Application for a vacancy adjustment pursuant to YMC Section 15.20.050(B) and this subsection shall be made to the RA. The RA shall grant the application within ten (10) days of receipt of a complete application if it complies with this subsection. If the application is incomplete or does not comply with this subsection, the RA shall notify the applicant in writing of the reasons it is incomplete or does not comply with this subsection within ten (10) days of receipt of the application. The RA's decision approving a vacancy rent adjustment pursuant to YMC Section 15.20.050(B) and this section shall be final upon the date that the RA mails, by first-class mail, postage prepaid, a copy of the RA's decision, along with an affidavit of mailing, to the park owner.

2. The vacancy adjustment shall be calculated by the RA in accordance with the following provisions.
a. Step One: The combined average of all rent -controlled spaces in the park shall be determined, using the rents listed in the most recent City -approved annual registration form or Annual Adjustment, whichever was approved later. The RA shall thereafter add ten percent (10%) to the average rent determined pursuant to this subparagraph. The sum shall constitute the vacancy rent adjustment for the space. The sum shall constitute the new base rent for the space.
b. Step Two: The amount determined in Step One shall be set forth in the RA's decision issued to the park owner pursuant to subsection (1) of this Section 3.0001(H). c. Notwithstanding subparagraphs (a) and (b), a park owner shall be entitled to only one vacancy rent adjustment for each annual adjustment period following the occurrence of each vacancy under YMC Section 15.20.050(B).

3. Thereafter, the new space rent determined in accordance with this subdivision (H) shall become the base rent upon which future rent adjustments pursuant to the Ordinance shall be calculated for that space.

I. Effect of Lease upon Mobilehome Abandonment. As established pursuant to YMC Section 15.20.050(B) and Section 3.0001(B), above. If a lease was in place prior to the abandonment of the mobilehome by the prior resident (as abandonment in -place is defined in YMC Mobilehome Park Administrative Rules, Resolution No. 20254-4454 Page 14 { Commented [K7211t Item No. SE -Clarifying language

Section 15.20.020), the lease is null and void and the new owner shall not be bound by the previous lease.

3.0002. CONSUMER PRICE INDEX (CPI).

Consumer Price Index ("CPI") shall mean:

1. For the purpose of calculating the Annual Adjustments for each of the years 1987 through 2018, the "Consumer Price Index" or "CPI" means the CPI index for the Los Angeles - Riverside -Orange Metropolitan Area, All Urban Consumers, published by the Bureau of Labor Statistics, U.S. Department of Labor.

2. For the purpose of calculating the 2019 Annual Adjustment, "Consumer Price Index" or "CPP" means the CPI index for the Los Angeles -Long Beach -Anaheim Metropolitan Area, All Urban Consumers, published by the Bureau of Labor Statistics, U.S. Department of Labor.

3. For the purpose of calculating Annual Adjustments beginning in 2020, the "Consumer Price Index" or "CPI" means the CPI for the Riverside -San Bernardino -Ontario, Metropolitan Area, All Urban Consumers, published by the Bureau of Labor Statistics, U.S.

Department of Labor, or any successor index.

4. For the purpose of calculating Special Rent Adjustments, the "Consumer Price Index" or "CPI" for the years subsequent to 2017 means the CPI for the Riverside -San Bernardino - Ontario, Metropolitan Area, All Urban Consumers, published by the Bureau of Labor Statistics, U.S. Department of Labor, or any successor index.
�HAPTER 4. SPECIAL RENT INCREASES iADJCS"1'ME\"I'SI BY APPLICATION

4.0001. FAIR RETURN
A. Purpose. It is the intent of YMC Section 15.20.100 to establish rents at a level which will provide park owners with a fair and reasonable return on investment while protecting the residents from excessive rent increases.

B. Resident Meeting prior to Special Rent Adjustment Application. The City encourages park owners to voluntarily meet with the residents to discuss the amount and reasons for a proposed rent increase with the affected residents, and to resolve differences and disputes with regard to the amount of the proposed rent adjustment, prior to filing an application for a rent adjustment to the City pursuant to YMC Section 15.20.100(A), (B) and/or (C) and this Chapter.

The park owner and resident representatives may agree upon the procedures for the resident meeting. Suggested procedures for the conduct of a resident meeting may include but are not limited to, the following:

1. The resident meeting should be scheduled at a convenient time and location for representatives of the park owner and residents; and

2. At least thirty days prior to the resident meeting, management should:

Mobilehome Park Administrative Rules, Resolution No. 20254-4456 Page 15 Commented [1022]: Item No 8T - Clarifying language

a. Serve written notice of resident meeting on the park resident representative(s), and post a copy of the notice of the resident meeting at the clubhouse, park office and other location accessible to the residents; and b. Provide information and documentation to the park residents regarding the proposed special rent adjustment, including an explanation of proposed rent increase and reasons therefore in simple and clear language to facilitate resident understanding and discussion between the park owner and residents; and

3. The resident meeting should be conducted in a non -adversarial manner.

4. The City encourges the park owner to include all documentation of any meeting held between the park owner and residents, and the discussion and outcome, in the special rent adjustment application submitted to the City.

4.0002. RENT ADJUSTMENT FORMS AND DETERMINATION OF

COMPLETENESS
A. Forms. Applications for rent adjustments and appeals and for opposition to rent adjustment applications or appeals shall be submitted in accordance with the requirements of this Section.

1. As used in these Rules, the following terms have the following meanings:
a. The term "application" shall include the application fee, completed application form (including the proofs of service and posting, declaration under penalty of perjury, and all information and documentation required by the City -approved form) and any and all reports, documents, notice of intent, election ballots, cover letter, notice, secret ballot or other information and documentation necessary to support the requested adjustment, including but expressly not limited to, all other information and documentation required by any other provisions of the Ordinance or these Rules.
b. The term "appeal" shall include the appeal fee, deposit(s), completed appeal form (including the proofs of service and posting, and all information and documentation required by the City -approved form) and any and all information and documentation necessary to support the appeal from the decision of the RA, including but not limited to all information and documentation required by any other provisions of the Ordinance or these Rules. c. The term "opposition" shall include the written explanation of the opposition to the application or appeal, proofs of service and posting of the opposition and any and all information and documentation necessary to support the opposition, including but not limited to all information and documentation required by any other provisions of the Ordinance or these Rules.

2. The City has prepared forms for use in submitting applications and appeals. These forms are designed to ensure that an applicant or appellant submits all necessary information and documentation to support the requested rent adjustment or appeal; to demonstrate that the applicant or appellant has met his/her burden of proof under the Ordinance and these Rules; and to facilitate review and analysis by the RA, and the public hearing before the Hearing Officer. Use of the City -approved application form or appeal form is not required, but submittal of all information and documentation as specified in the City -approved form is mandatory. Applicants and appellants are required to submit all information and documentation requested in the City -approved forms.

All information and documentation submitted with an application or appeal shall be paginated and Mobilehome Park Administrative Rules, Resolution No. 20254-4456 Page 16

shall also be clearly marked to correlate to the specific section and item number of the application form or appeal form to which it pertains. If an applicant or appellant fails to comply with this Section, the RA may deem the application or appeal incomplete. In addition, failure to comply with this Section may result in the Hearing Officer finding that the applicant or appellant failed to meet its burden of proof under the Ordinance and these Rules.

3. Any person wishing to submit any written opposition to rent adjustment application or appeals shall submit at least one copy of such written opposition, along with an electronic copy (jpeg or pdf format), to the RA. All information and documentation submitted with an opposition or response to an application or appeal shall be paginated and shall also be clearly marked to correlate to the specific section and item number of the application form or appeal form to which it pertains. If an opposing party fails to comply with this Section, the RA may deem the opposition incomplete and may refuse to accept the opposition for filing until the opposition complies with the Ordinance and these Rules.

B. Determination of Completeness of Application
Upon receipt of an application for a rent adjustment the RA shall review the application and determine whether the application is complete. As used in these Rules, the term "complete" means that the applicant completed the application form (or submitted a written statement providing all information requested by the application form); paid the requisite application fee and any hearing deposit (if applicable); and submitted all required information and documentation which supports the requested rent adjustment(s).

1. Necessary documentation shall include documentation establishing all categories of information set forth in these Rules to meet the park owner's burden of proof that they are entitled to a rent adjustment. In determining whether the application is complete, the RA shall review the application and its supporting documentation to determine whether the application contains all information and documentation to support each rent adjustment requested. a. In order for an application for rent adjustment submitted under YMC Section 15.20.100(A) and Section 4.0003 of these Rules to be deemed complete, the application shall include all documentation reflecting the amount of each category of income and expense claimed (including all relevant financial statements, including but not limited to, profit and loss statement, general ledgers, and actual invoices, receipts, bills or other documentation substantiating that the income was received or the expense was incurred); that the claimed expenses are reasonable; the CPI indexing factor proposed to be used as the basis for that contention; the factual basis for any claimed amortization period claimed for any amortizable expense; and all other documentation to establish that an MNOI rent adjustment is warranted. b. In order for an application submitted for a rent adjustment under YMC Section 15.20.100(B) and Section 4.0004 of these Rules to be deemed complete, the application shall include, in addition to the requirements of subparagraph (a), all documentation establishing each factor set forth in Section 4.0004(A)(1) through (5) of these Administrative Rules. c. In order for an application submitted for a rent adjustment under YMC Section 15.20.100(C) and Section 4.0005 of these Rules to be deemed complete, the application shall include in addition to the requirements of subparagraphs (a) and/or (b), documentation establishing each factor set forth in Section 4.0005(B)(1) through (6) of these Rules, and documentation establishing that the park owner is entitled to a fair return rent adjustment under any other relevant factors pursuant to YMC Section 15.20.100(C).

Mobilehome Park Administrative Rules, Resolution No. 20254-445 Page 17

d. In order to initiate the procedure for approval of a proposed special rent adjustment by voluntary meet and confer under YMC Section 15.20.100(E), the park owner shall comply with the provisions of Section 4.0006 of these Rules. e. In order for an application submitted for a rent decrease based on discontinuance or reduction in service or amenity under YMC Section 15.20.090 and Chapter 7 of these Rules to be deemed complete, the application shall include all information and documentation establishing each factor set forth in Sections 7.0004, 7.0005(B) (park resident application) and 7.0006(B) (park owner application) of these Rules.

2. Not later than thirty (30) days after the application is filed with the City, the RA shall send written notice to the applicant informing him/her whether the application is complete pursuant to YMC Sections 15.20.105(B) and (E). This completeness determination shall not apply to a proposed special rent adjustment by voluntary meet and confer under YMC Section

15.20.100(E).

3. If the RA determines that the application is complete, hearings on rent adjustment applications filed under YMC Sections 15.20.090 or 15.20.100(A), (B), or (C), or hearings on appeals to the Hearing Officer from a RA decision on an application under YMC Section

15.20.085, shall be processed, heard and determined in accordance with YMC Sections 15.20.105 and 15.20.110. Hearings before the Hearing Officer shall be noticed in accordance with the requirements of these Rules and the Ralph M. Brown Act. A proposed special rent adjustment by voluntary meet and confer under YMC Section 15.20.100(E) shall not be subject to this section.

4. If the RA determines that the application is incomplete, the notice sent by the RA to the applicant shall include a list of the information and documentation required under YMC Sections 15.20.085, 15.20.090, or 15.20.100(A), (B), or (C) and Section 15.20.105 and Chapters 4, 5 and/or 7 of these Rules, in order for the RA to find that the application is complete. The applicant shall have thirty (30) days to submit the additional information and/or documentation.

5. The application or appeal fee shall be paid in cash, or by cashier's check or by money order, made payable to the City of Yucaipa, concurrently with filing the application or appeal. Notwithstanding any other provision of these Rules, no application for rent adjustment, or application for an appeal from any decision of the RA, shall be deemed complete or set for hearing before the Hearing Officer unless the filing fee has been paid by the applicant or appellant.

6. If the applicant fails to submit the additional information or documentation to the city by the deadline, the RA shall notify the applicant in writing that he/she has no more than an additional thirty (30) days to submit the information and documentation necessary to deem the application complete. The RA will also notify the applicant that failure or refusal to submit the necessary information and/or documentation by the stated deadline may impact the Hearing Officer's decision on whether the applicant met his/her burden of proof that he/she is entitled to any rent adjustment or the particular rent adjustment sought by the applicant. If the application is incomplete because the applicant failed to pay the required filing fee, the RA will notify the applicant that the application is incomplete and that the application will not be set for hearing before the Hearing Officer until the applicant has paid the filing fee.

7. Upon a failure or refusal by the applicant to submit the necessary documentation or other information required in order for the RA to deem the application complete under the Ordinance and Rules (other than the failure to pay the required filing fee), the RA shall thereafter serve written notice of the application upon the park residents in accordance with YMC Section

15.20.060, that the application has been deemed incomplete. If the applicant is a park owner, the Mobilehotne Park Administrative Rules, Resolution No. 20254-4456 Page 18

RA shall also serve a copy of such notice, and a copy of the application, upon the park resident representative or noticed in the park in accordance with YMC Section 15.20.060. The park residents shall have the right to submit their response or opposition to the application in accordance with the Ordinance and Rules. The RA shall thereafter schedule a hearing before the Hearing Officer on the application and shall notify the applicant and opposing party(ies) of the date and time of the hearing. The RA may make any appropriate recommendations to the Hearing Officer regarding the application, including but expressly not limited to, the impact of the park owner's failure to submit a complete application upon the RA's ability to determine if the park owner has met his/her burden of proof regarding any particular elements of the application, or whether the park owner has met his/her overall burden of proof to show that he/she is entitled to a rent adjustment, or the amount of the rent adjustment sought in the application.

8. If an application or appeal is incomplete due to the applicant's or appellant's failure to submit all required information or documentation necessary for the RA to deem the application or appeal complete, the hearing before the Hearing Officer shall be held in accordance with YMC Section 15.20.110.

9. If the RA determined that an application is incomplete, the holding of a hearing on the merits of the application shall not constitute any finding that the application is complete, nor shall it preclude the Hearing Officer from requesting any additional information or documentation from the applicant or opponent(s) during the hearing, or from rendering any decision on the merits of the application or from examining any person testifying before the Hearing Officer at the hearing on the application. Notwithstanding any other provisions under the Ordinance and these Rules, if an application is incomplete, the Hearing Officer shall have the right and authority to issue any appropriate decision on the merits of the rent adjustment application, or any element thereof, including but expressly not limited to, disallowance of claimed expenses or income, modification or denial of the rent adjustment requested in its entirety, or such other actions or findings as deemed appropriate by the Hearing Officer based upon the failure of the applicant to meet his/her burden of proof or otherwise establish entitlement to a rent adjustment under the Ordinance and these Rules.

4.0003. MAINTENANCE OF NET OPERATING INCOME (MNOI) APPLICATION A park owner may apply for a rent increase for the park on the grounds that the rent increases described in Chapter 4 of these Rules and YMC Sections 15.20.100 1,080! and 15.20.085 do not provide a just and reasonable or fair return based on a maintenance of net operating income ("MNOI") formula. This type of application shall be referred to as an MNOI Application.

The Application fee for a MNOI Application shall be $1,750.00 per application and shall be paid prior to the application being declared complete. Notwithstanding any other provision of these Rules to the contrary, no application shall be deemed complete or set for hearing before the Hearing Officer if the applicant fails to pay the required application fee.

A. Base Year CPI

1. 1987 CPI. Except as otherwise provided in subsection (2), for the purposes of calculating rent adjustments under the provisions of this Chapter, the December 31, 1987 Consumer Price Index figure is 114.8.

Mobilehome Park Administrative Rules, Resolution No. 20254-4436 Page 19 Commented [K723]: Item No. 8U - Clarifying language

2. If a park has received a special rent adjustment since 1987, the "base year CPI" shall be as defined in YMC Section 15.20.100(A)(2) for purposes of calculating the new special rent adjustment application under the provisions of this Chapter.

B. "Current" CPI. For the purposes of calculating rent adjustments under the provisions of this Chapter, the "Current" CPI shall be determined as follows: Staff shall be responsible for determining the "Current CPI". For purposes of this provision, CPI shall be determined as follows:

1. If the RA determined that the application was complete, the "Current" CPI shall be the CPI last reported as of the date the application is declared complete.

2. If the RA determined that the application was incomplete, the "Current CPI" shall be the CPI last reported as of the date that the rent administrator mailed written notification to the park owner and residents that the application is incomplete due to the park owner's failure to submit all necessary information and/or documentation by the final deadline required by YMC Section 15.20.105(C).

C. Ir ,ed Space Vucant Spaces .,.,.+Calculation of the NOI Adjustment. Except as otherwise provided in Section 4.0003(H) of these Rules, when calculating the MNOI adjustment or MNOI rent adjustment based on readjusted Base Year NOI pursuant to YMC 15.20.100, the park's NOI shall be calculated for all spaces in the park, including vacant spaces, and all spaces subject to an exemption pursuant to the long term leases as defned in the Califomia Mobilehome Residency Law (Civil Code Sections 798 et seq.) or YMC Section

15.20.030. However, only those spaces, which are not exempt shall receive a rental increase, based upon a prorated allocation of the MNOI adjustment among all spaces in the park. Exempt leased -spaces shall continue to be regulated by the provisions of their leases.

Vacant spaces shall continue to be assigned the last rent in effect prior to the vacancy, as modified by any annual adjustment approved by the City during any such vacancy pursuant to YMC

15.20.050.

D. Definitions. For purposes of space rent adjustment proceedings, the following definitions shall be used:

1. "Net Operating Income" or "NOI" means Gross Income less Operating Expenses.

2. "Gross Income" is defined as follows:
a. Gross rents, computed as gross rental income, plus
b. Interest from rental deposits, unless directly paid by the park owner to the tenants (interest shall be computed at the rate of 5 %z % per annum of all deposits unless such deposits earn greater interest), plus
c. Late fees, fees collected for services and amenities not included in space rent, including, but not limited to, fees for recreational vehicle storage, cable TV, security, use of recreational facilities, income from coin operated facilities, collections for utility service only if the regulation of rates for the service provided are not pre-empted by regulations of the Public Utilities Commission ("PUC"), plus
d. All other income or consideration received or receivable for or in connection with the use, occupancy or operation of the park.

3. "Operating Expenses" shall include the following:
a. Real property taxes and assessments.

Mobilehome Park Administrative Rules, Resolution No. 20254-4446 Page 20 Commented [I0J24]: Item No. 8E - Clarifying language

b. Utility expenses. If the utility service is regulated by the Public Utilities Commission (PUC), those utility expenses are not an allowable operating expense except for expenses attributable solely to the common areas if those expenses have been properly separated from expenses attributable to the provision of service to the individual mobile homes. c. Management expenses (contracted or owner performed), including necessary and reasonable advertising, accounting, insurance, managerial expenses, and allowable legal expenses. Management expenses are presumed to be the same percentage of gross income that were incurred in the base year unless the applicant produces evidence sufficient to justify that expenses increased at a higher rate despite prudent management. In the event the base year expenses are not available they shall be estimated by taking the current expenses and decreasing them downward according to the CPI between the base year and the application year, unless the applicant produces evidence sufficient to establish that management expenses increased at a higher rate despite prudent management.
d. Normal repair and maintenance shall include, but shall not be limited to painting, cleaning, fumigation, landscaping, and repair of all standard services, including furnished appliances, carpeting, recreational facilities, power, electrical, plumbing, sanitary sewer and carpentry.
e. Owner -performed labor, if actually performed by the park owner. Owner - performed labor shall be compensated at the following hourly rates upon documentation being provided, showing the date, time, and nature of the work performed:

General Maintenance:

Skilled Labor:

S 10.3816.16011-
$19.2830.98/hr
Hourly rates will be adjusted pursuant to the change in the Consumer Price Index (CP1) as per Section 3.0002 of these Rules. Hourly rates for general maintenance and skilled labor will be based on January's index and will be reviewed and adjusted during the biennial review process.

Notwithstanding the above, a park owner may receive greater or less compensation for self -labor if it can be shown that the amounts set forth above are substantially unfair in a given case.

There shall be a maximum allowance under this paragraph of five percent (5%) of gross income, unless the park owner demonstrates that such additional expenses were reasonable and consistent with prudent business practices.
f. Operating supplies such as janitorial supplies, gardening supplies, stationery, etc.
g.

License and registration fees required by law to the extent same are not otherwise paid by park residents.
h. Amortizable expenses, as defined in YMC Section 15.20.020. i. Repair work done on or in a mobilehome park in order to comply with an order issued by the building department, or to repair damage resulting from fire, earthquake or other natural disaster, to the extent not otherwise covered by insurance.

J.

Insurance premiums based on the amount of the annual premium. k. Other taxes, fees, and permits.

Iviobilehome Park Administrative Rules, Resolution No. 20254-4446 Page 21 { Commented [1025]: Item No 8V - Labor Cost Update

I. Allowable legal expenses, which include attorney's fees and costs incurred in connection with successful actions to evict residents or recover back rent and matters pertaining to the title or operation of the mobilehome park. In determining the amount of legal expenses to be included in base year or current year operating expenses, if the Hearing Officer determines that the amount of legal expenses is unusually high or not likely to recur on an annual basis, the Hearing Officer may require that the allowable legal expenses be amortized over a five-year period, and only the amortized portion shall be included as an operating expense in the relevant year. For purposes of determining the amortized cost of allowable legal expenses, an interest cost of the lesser of either the current prime rate plus one percent, or the interest rate actually incurred by the mobilehome park owner in paying for the expenses, may be added, provided that rate does not exceed reasonable and prudent financing rates generally available at the time the loan was obtained.
m. Any other allowable expenses for an item that the Hearing Officer finds are unusually high or not likely to recur on an annual basis. Based upon such a finding, the Hearing Officer may require that the allowable expenses be amortized over a five-year period, with an interest allowance in accordance with Subparagraph (m) of this Rule Section 4.0003(D)(3), and only the amortized portion thereof included as an operating expense in the relevant year.

4. Operating expenses shall not include:
a. Mortgage principal and interest payments, land lease expenses or any other debt service.
b. Any penalties, fees or interest assessed or awarded for violation of the YMC or any other state or federal law.
c. Attorneys' fees and legal costs in connection with legal proceedings against the City challenging the YMC or these Administrative Rules, or any other payments made to any organization for purposes of litigating or challenging rent control. d. Depreciation.
e. Any expense for which the owner has been reimbursed by any insurance settlement, judgment for damages, settlement or any other method. f. Fees assessed under Section 2.0007 of these Administrative Rules, to the extent reimbursed by park residents.
g. Any late charges incurred by the park owner for failure to pay any registration fee to the City authorized by the YMC.
h. Any expenses to the extent that they resulted due to the park owner's failure to undertake prudent and ongoing maintenance activities or costs which were caused by unnecessarily and unreasonably deferred negligent, or otherwise improper repair and/or maintenance or other acts or omissions of the park owner, including but expressly not limited to, any expenses incurred with regard to vacant spaces. In acting upon a net operating income adjustment application, the Hearing Officer may reduce allowable operating expenses to the extent that the Hearing Officer finds that any claimed expenses resulted from the park owner's failure to undertake prudent and ongoing maintenance activities or which such costs were caused by unnecessarily and unreasonably deferred negligent or otherwise improper repair and/or maintenance or other acts or omissions of the park owner. i. Expenses for capital improvements, as defined in YMC Section 15.20.085.

Mobilehome Park Administrative Rules, Resolution No. 20254-4436 Page 22

j. Expenses for installation of new improvements and facilities and/or the replacement or reconstruction of existing improvements and facilities which consist of more than ordinary maintenance and repairs, have a useful life of at least five years, and can be depreciated pursuant to the U.S. or California income tax codes, but which do not satisfy the requirements of a capital improvement rent adjustment under Section 15.20.085(A)(1) or an emergency capital improvement rent adjustment under Section 15.20.085(B); and k. Any other expenses for the installation of new improvements and facilities and/or the replacement or reconstruction of existing improvements and facilities which consist of more than ordinary maintenance and repairs and have a useful life of at least five years.

5. In calculating operating expenses for any year, an expense shall be averaged with other expense levels for other years or amortized or adjusted by the CPI or may otherwise be adjusted in order to establish an expense amount for that item which most reasonably serves the objectives of obtaining a reasonable comparison of base year and current year expenses, under any of the following circumstances:
a. An expense item for a particular year is not representative; or b. In the case of base year expenses, when the expense is not a reasonable projection of average past expenditure for that item; or c. In the case of current year expenses, when the expense is not a reasonable projection of future expenditures of that item.

E. Reasonableness of Operating Expenses. The park owner shall have the burden of proving that all operating expenses are reasonable. Whenever a particular expense exceeds the normal industry or other comparable standard, the park owner shall bear the burden of establishing the reasonableness of the expense. To the extent that the Hearing Officer finds any such expense to be unreasonable, the Hearing Officer shall adjust the expense to reflect the normal industry or other comparable standard.

F. Schedule of Increases in Operating Expense. Where scheduling of rental increases, or other calculations, require projections of income and expenses because actual data is not available, it shall be presumed that operating expenses and management expenses, exclusive of property taxes, increase at the rate of the increase in the CPI for the applicable year; and that property taxes increase at two percent (2%) per year.

G. Presumption of Base Year Net Operating Income. For the purposes of calculating an MNOI Application, it shall be presumed in the absence of evidence to the contrary presented pursuant to Section 4.0004 of these Administrative Rules, that the NOI earned by the mobilehome park in calendar year 1987 provided a just and reasonable return to the park. In the event a park has received a special adjustment since the base year, the income and expense year on which the special adjustment was based shall be deemed the base year for the purposes of evaluating a rent adjustment application.

H. Method of Calculation of MNOI Adjustment. The MNOI adjustment for the park shall be calculated as follows:

1. The Base Year CPI and the Current Year CPI shall be determined in accordance with YMC Section 15.20.100(A) and Section 4.0003(A) and (B) of this Chapter.

2. The 1987 Gross Income (or "1987 GI") of the entire park, including leased, vacant and month -to -month spaces, shall be calculated. The 1987 Operating Expenses (or "1987 OE") for Mobilehome Park Administrative Rules, Resolution No. 20254-4454 Page 23

the entire park shall be calculated. The 1987 OE shall then be subtracted from the 1987 GI to arrive at the 1987 Net Operating Income (or "1987 NOI"). In the event a park has received a special adjustment since the base year, the income and expense year on which the special adjustment was based shall be deemed the base year for the purposes of evaluating a special rent adjustment application under this Chapter.
a. Method of Calculation of Rent Adjustment upon Changed Vacancy Rate.

In the event that there has been an increase of more than three percent (3%) in the vacancy rate since the base year, the following provisions shall govern the determination of any rent adjustment under this Section 4.0003:

1. The 1987 GI as determined under Section 4.0003(H)(2), above, shall be divided by the total number of occupied spaces. The resulting sum shall be known as the "1987 GI per rented space."

2. The 1987 OE as determined under Section 4.0003(H)(2), above, shall be divided by the total number of occupied spaces. The resulting sum shall be known as the "1987 OE per rented space."

3. The 1987 rented space OE shall be subtracted from the 1987 rented space GI to arrive at the 1987 rented space net operating income for the rented spaces. The resulting sum shall be known as the "1987 NOI per rented space."

3. The gross income for the twelve (12) months preceding the date of application (or "current GI"), including leased, vacant and month -to -month spaces, shall be calculated. The operating expenses for the twelve (12) months preceding the date of application (or "current OE"), including leased, vacant and month -to -month spaces, shall be calculated. The current OE shall then be subtracted from the current GI to arrive at the net operating income for the twelve (12) months preceding the date of application (or "current NOI"), for all spaces. a. Method upon changed vacancy rate. In the event that there has been an increase of more than three percent (3%) in the vacancy rate since the base year, the following provisions shall govern the determination of any rent adjustment under this Section 4.0003:

I. The current GI, as determined under Section 4.0003(H)(3), above, shall be divided by the total number of occupied spaces. The resulting sum shall be known as the "current GI per rented space."

2. The current OE, as determined under Section 4.0003(H)(3), above, shall be divided by the total number of occupied spaces. The resulting sum shall be known as the "current OE per rented space."

3. The current rented space OE shall be subtracted from the current rented space GI to arrive at the current rented space net operating income per rented space. The resulting sum shall be known as the "current NOI per rented space."

4. Determination of Current MNOI Entitlement
a. For the purposes of calculating the percentage increase in the CPI that is used to determine the percentage increase in NOI over the base year level that would provide a fair return, for the period from December 1987 through December 2017, the Los Angeles -Riverside - Orange Metropolitan Area index shall be used. For the period subsequent to December 2017 to the date used as the current date in the petition the Riverside -San Bernardino -Ontario index shall Mobilehome Park Administrative Rules, Resolution No. 20254-44?6 Page 24

be used. In the event the Riverside -San Bernardino -Ontario index is no longer compiled by the BLS, a successor index shall be used.
b. The 1987 CPI shall then be subtracted from the current CPI, and the difference shall be multiplied by 100. The product shall then be divided by the 1987 CPI to identify the percentage change in the CPI. The percentage change in the CPI shall then be multiplied by

66.67% from December 31, 1987 to October 28, 1996 and 80% of the increase in the CPI from October 29, 1996 to the date that the application is declared complete, (or from October 29, 1996 to the date that the RA mailed written notification to the park owner and residents that the application is incomplete due to the park owner's failure to submit all necessary information and/or documentation by the final deadline required by Section 15.20.105(C) of the Ordinance), and the resulting product shall be known as the "CPI increase." The CPI increase shall then be multiplied by the 1987 NOI (or adjusted NOI, where applicable). The product of this calculation shall then be added to the 1987 NOI. The sum shall be known as the "Current MNOI Entitlement."

5. The current NOI shall then be subtracted from the current MNOI entitlement. The positive difference is the amount of the maximum allowed NOI adjustment for the park or ("the park's MNOI adjustment"). If the difference is negative, then the park owner is not entitled to an MNOI adjustment.
a. In the event that there has been an increase of more than three percent (3%) in the vacancy rate since the base year, the current NOI per rented space shall be subtracted from the current MNOI entitlement per rented space. The positive difference is the maximum allowed MNOI adjustment per rented space. If the difference is negative, then the park owner is not entitled to an MNOI adjustment for each rented space.

6. Except as otherwise provided in Subdivision (a) of this Subsection (6), the park's MNOI adjustment shall be allocated among all spaces in the park, including month-te-menth; vacant and -leased -spaces, ided that . adjustment shall be dded to e f _ a rren and all spaces subject to an exemption frern--rent— ntrol pursuant to the California Mobilehome Residency Law (Civil Code Section 798, et seq.) or YMC Section 15.20.030 d-rye adjustmentadtustment-shal4-13e-addeil-te-anyteant-spaee, However, only those spaces which are not exempt or vacant shall receive a rental increase. based upon a A -prorated allocationameunt of the park's MNOI among all spaces in the park. A prorated amount of the park's MNOI adjustment shall be allocated to the individual regulated spaces.ad a tment ^hall be allocated to the indiv dual regulated spaces. To allocate the MNOI adjustment to regulated spaces, the allocation should be made by multiplying the park's MNOI adjustment calculated pursuant to Section 4.0003(H)(5), above, by a fraction which is the number of regulated rental months divided by the total annual rental months for the park.

Exempt leased spaces shall continue to pay the space rent required pursuant to their individual leases. Vacant spaces shall continue to be assigned the space rent that was in effect immediately preceding the vacancy, or the most recent annual adjustment approved by the City for that vacant space under the YMC and these Administrative Rules. a. Rent Adjustment upon Changed Vacancy Rate. In the event that there has been an increase of more than three percent (3%) in the vacancy rate since the base year, the following provisions shall govern the allocation of the rent adjustment. The MNOI adjustment per rented space calculated in Section 4.0003(H)(5)(a), above, shall be the maximum rent adjustment imposed on each month -to -month space. Vacant spaces shall continue to be assigned the space rent that was in effect immediately preceding the vacancy, or the most recent annual adjustment Mobilehome Park Administrative Rules, Resolution No. 20254-4436 Page 25 { Commented (K)26]: Item No. SE - Clarifying language

approved by the City for that vacant space under YMC Section 15.20.050 and these Administrative Rules.

7. In determining operating expenses when there has been an increase of more than three percent (3%) in the vacancy rate since the base year, calculations of base year and current year operating expenses may be adjusted by the Hearing Officer so that a reasonable comparison of the expense charges associated with rented spaces is obtained for the purpose of comparing base year and current year operating expenses and to adjust for in operating expenses due to the increased vacancy rate.

I. Notice of MNOI Adjustment. A MNOI Adjustment is a rent increase, which must be noticed in accordance with State law.

J. Park Owner Did Not Own Subject Property in Base Year. In the event the park owner did not own the subject property during the base year, the operating expenses for 1987 shall be determined based upon the previous owner's actual expenses as defined in Section 4.0003(D).

In the event that an applicant does not have and cannot obtain records due to circumstances beyond the applicant's control (e.g., when the records no longer exist, were destroyed by fire or flood, when the prior owner will not provide the necessary documents), the Hearing Officer may consider actual operating expenses for the first calendar year of ownership, discounted to the base year by the schedule in Section 4.0003(F). This provision would not apply to an applicant who refuses to provide documents and information on the grounds that it is unnecessary, unreasonably burdensome or irrelevant.

4.0004. ADJUSTMENT TO 1987 NOI
A. Rebutting the Presumption of a Fair Return in 1987. YMC Section 15.20.100(A) provides that in the absence of evidence to the contrary that it shall be presumed that the 1987 NOI provided a fair return. YMC Section 15.20.100(B) provides that the owner may rebut this presumption by presenting evidence that the park's 1987 NOI was insufficient to provide a fair return based on one or more of the following circumstances:

1. The park's operating expenses in 1987 were unusually high despite prudent business practices. Evidence that unusual repairs were required, an uninsured loss from natural events or vandalism occurred or that the park was unable to perform necessary repairs or maintenance in prior years resulting in unusually high expenses in 1987 could be used to establish this circumstance.

In this circumstance, the calculation of the park's 1987 NOI may be adjusted by substituting the average of the park's operating expenses over a reasonable time or the average operating expenses in comparable parks in 1987 for the park's actual 1987 operating expenses.

2. Gross income was disproportionately low in 1987 despite prudent business practices. Evidence of a large number of vacancies arising from evictions for cause under State law or the voluntary removal of homes from a park could be used to establish this circumstance.

This circumstance might also arise during the initial years of a park's operation before it has been filled. In this circumstance, the calculation of the 1987 NOI may be adjusted by adding the difference between actual 1987 gross income and that which would have been earned but for this circumstance to the park's 1987 gross income.

3. The rent during 1987 was disproportionately low when compared to rents being charged in comparable parks in 1987 in the City. Evidence that there were no rent increases during 1987 or rents were not established in arm's-length transactions and rents were below those in Mobilehome Park Administrative Rules, Resolution No. 20254-44 Page 26

comparable parks because lower or fewer increases had been imposed in a park than in comparable parks in 1987 or prior years, could be used to establish this circumstance. In this circumstance, the calculation of the 1987 NOI may be adjusted by increasing rental income from those spaces which were charged a disproportionately low rent by the difference between the rents actually charged in the park and the rents charged in comparable parks in 1987.

4. Capital improvements were made during 1987, but were not reflected in rent increases collected in 1987. Evidence that the improvement is completed and operational and evidence of the cost incurred is required to establish this circumstance. In this circumstance, the calculation of the 1987 NOI may be adjusted by adding to the park's gross income the amount of the additional annual revenue which would have been received if a rent increase equal to the cost of the improvement, divided by its useful life and divided by the number of spaces, had been charged during each month of 1987.

5. The rent in 1987 was not sufficient to provide a just and reasonable return by providing evidence of the return actually earned by the park in 1987 and of the return earned by comparable parks in the City in 1987. Examples of the type of information that may be used to establish this circumstance include evidence of the investment in the park, the return earned on that investment, the purchase price of the park and its net operating income in 1987, prior years and subsequent years, and the same information for comparable parks in the City. In this circumstance, the calculation of the 1987 NOI shall be adjusted by adding to the park's 1987 gross income, the amount of rental income required to provide a just and reasonable return in 1987.

B. Burden of Proof. In order to qualify for an adjustment to the 1987 NOI under YMC Section 15.20.100, the owner shall have the burden of proving the existence of one of the circumstances enumerated above and in YMC Section 15.20.100, and of providing reliable, credible evidence of the rents, operating expenses, gross income, NOI and return on investment at the park and comparable parks or of the capital improvement costs which are necessary to make the appropriate adjustment to the 1987 NOI under Section 4.0004(A). In reviewing the evidence and comparing rents, gross income, operating expenses, NOI and return on investment at the park with those at comparable parks, the term "comparable park" shall mean a park in the City subject to the YMC, which has similar quality, number and type of amenities, construction and services, is located in a similar neighborhood and provides similar access and proximity to schools, medical and educational facilities, recreation, entertainment, parks, shopping and other services and amenities and is similarly maintained as the applicant's park.

4.0005. FAIR RETURN PROVISION
A park owner may rebut the presumption that the increase calculations provided in YMC Section

15.20.100(A) and Section 4.0003 of these Administrative Rules and modified by YMC Section

15.20.100(B), and in Section 4.0004 of these Administrative Rules, are sufficient to provide a just and reasonable return by presenting evidence that the rate of return being earned by the mobilehome park is not just and reasonable.

A. Burden of Proof. The park owner shall have the burden of proving the park is not earning ajust and reasonable return.

B. Relevant Evidence. The Hearing Officer shall consider all relevant evidence, including, but not limited to:

1. The rents being charged for spaces subject to the YMC in comparable mobilehome parks subject to the YMC in the City of Yucaipa.

Mobilehome Park Administrative Rules, Resolution No. 20254-4 Page 27

2. The capitalization rate being earned by the mobilehome park in the application year, each of the preceding five years, and in the first year after the park was purchased. For purposes of this section capitalization rate means the ratio of a park's NOI to its purchase price.

3. The capitalization rate associated with the purchase of comparable mobilehome parks in the application year and the preceding five years.

4. The mobilehome park's pattern of income and expenses over each of the past five (5) years.

5. The quality of the services, amenities and maintenance provided at the mobilehome park and any decrease or increase in services, maintenance and amenities.

6. Any evidence of delay on the part of the park owner in seeking a rent increase pursuant to this section. If the Hearing Officer finds that the park owner unreasonably delayed in submitting a rent increase application pursuant to this section, the Hearing Officer may, at its discretion, grant a rent increase to be implemented in increments over a period not greater than the period of delay.

C. Comparable Parks. As used in Section 4.0005, the term "comparable park" is defined in Section 4.0004(B) of these Administrative Rules.

4.0006. SPECIAL RENT ADJUSTMENT BASED ON VOLUNTARY MEET AND

CONFER AND CONFIDENTIAL BALLOT
A. In accordance with YMC Section 15.20.100(E), any park owner may initiate a voluntary meet and confer process with the residents of the park's regulated spaces to reach agreement with those residents on a proposed special rent adjustment and approval by the RA in place of the application and noticed public hearing process for an MNOI rent adjustment under YMC Section 15.20.100(A) and Section 4.0003 of these Rules, or an MNOI rent adjustment based on a readjusted Base Year NOI under YMC Section 15.20.100(B) and Section 4.0004 of these Rules under this Chapter, and/or a Fair Return rent adjustment under YMC Section 15.20.100(C).

A proposed special rent adjustment by voluntary meet and confer pursuant to YMC Section

15.20.100(E) shall be conducted by the park owner and park residents in accordance with subdivision (B) through (K) of this Section.

B. Terms of Special Rent Adjustment. Any special rent adjustment negotiated between the park owner representatives and park resident representatives and consented to by at least 51% of the residents of regulated spaces may be on any terms as negotiated between the respective parties, subject to the following requirements:

1. The park owner shall not apply for, demand, impose or collect an Annual Adjustment under YMC Section 15.20.080, or a special rent adjustment authorized by YMC Section 15.20.100(A) or (B) less than 12 months after imposition of the special rent adjustment approved pursuant to YMC Section 15.20.100(E) and this Section; and

2. This procedure shall not be applicable to capital improvements, which shall be subject to the capital improvement rent adjustment provisions set forth in YMC Section 15.20.085 of the Ordinance and Chapters 4 and 5 of these Rules, (including but expressly not limited to Sections 4.0003(D)(4)(i) and (j)), 4.0004, 4.0005, and 5.0008).

C. Initiation of Meet and Confer. The park owner shall initiate the meet and confer by service of a written notice on all residents of the regulated spaces in the park and RA, by personal Mobilehome Park Administrative Rules, Resolution No. 20254-4456 Page 28

delivery or first-class mail, along with proof of service of the notice. The written notice shall be consistent with the forms approved by the City, and shall include all of the following:

1. A request for appointment of not more than three (3) persons residing in the regulated spaces to represent the park residents at the meet and confer with the park owner; and

2. The amount of the proposed special rent adjustment, the method by which the proposed special rent adjustment was determined, the base year and current year used in the Meet and Confer Application and that a completed Meet and Confer Application and an MNOI Rent Adjustment and/or MNOI Rent Adjustment based on readjusted MNOI Application, which shall comply with Section 4.0003 and/or 4.0004 of these Rules and YMC Section 15.20.100(A) and (B), along with all information and supporting documentation supporting the proposed special rent adjustment are posted in the clubhouse, park office and one other location accessible to the residents; and

3. The proposed date and location for the meet and confer, which shall occur not more than sixty (60) days following service of the park owner's written notice on the park residents. The meet and confer shall be scheduled at a date, time and location mutually convenient to the park owner representatives and the park resident representatives and shall be scheduled on a date that is not Tess than fourteen (14) days after the park owner's service of the notice on each resident pursuant to this subdivision.

D. Park resident representatives. The park residents may select no more than three person(s) to serve as the park resident representatives in the meet and confer, based on a method determined by the residents of the park. The process by which the park residents select their representative(s) shall be confidential.

E. Mediator. Either party may use a mediator of their choice to assist in the negotiations, with the cost to be borne by the party selecting the mediator or as otherwise determined by mutual agreement between the park owner and park residents.

F. Conduct of meet and confer. Subject to Subdivision (C)(3), the meet and confer shall take place at a mutually convenient date and time, between the park owner representatives and park resident representatives.

G. Confidential Resident Vote. If no agreement is reached at the meet and confer between the park owner representatives and park resident representatives regarding a proposed special rent adjustment, then all further proceedings under this Section shall cease. If agreement is reached at the meet and confer between the park owner representatives and the park resident representatives regarding a proposed special rent adjustment, then a resident vote by confidential ballot shall take place in accordance with the following provisions:

1. Finalization of Ballot Documents. During the meet and confer, upon agreement to a proposed special rent adjustment, the park owner representatives and the park resident representatives shall each sign the following documents:
a. The confidential ballot containing the agreed -upon proposed special rent adjustment to be voted upon by the residents of the regulated spaces in the park; and Mobilehome Park Administrative Rules, Resolution No. 20254-4436 Page 29

b. The agreed -upon notice of results of meet and confer form; and c. The agreed -upon proof of service; and
d. A list of the full names and addresses of the current occupants of each regulated space in the park; and
e. The park owner representatives shall provide the park resident representatives with the originals of these agreed -upon signed documents, along with copies of each agreed -upon signed document in a number equal to at least the total number of regulated spaces in the park.

2. Notice to Residents and Circulation of Ballots. Not later than five (5) days following the conclusion of the meet and confer, the park resident representatives shall serve a copy of the agreed -upon written notice of results of meet and confer, confidential ballot and envelopes, and proof of service on all residents of the regulated spaces on City -approved forms.

The documents shall be served on each resident by the park resident representatives by personal delivery or by First Class mail, postage prepaid, and shall contain all of the following information and documentation:
a. The notice shall be on the City -approved form and shall contain all of the following information:
(1) The date(s) and time(s) when the meet and confer was conducted, and the names, addresses and telephone numbers of the representatives of the park owner and park residents at the meet and confer; and
(2) The agreed upon proposed special rent adjustment; the method by which the proposed special rent adjustment would be determined; and that all documentation upon which the proposed special rent adjustment may be inspected by the residents at the park clubhouse, park office and a third location as determined by the park resident representatives and specified in the notice; and
(3) The right of the residents from each regulated space to vote by confidential ballot on whether or not to consent to the proposed special rent adjustment (based on a vote by one adult resident per space), by submittal of a confidential ballot to the Rent Administrator not later than fifteen (15) days following service of the notice upon the resident by the park resident representative, and insertion of the specific deadline date by which the confidential ballot must be filed with the Rent Administrator; and (4) That the resident or a representative of a resident must return the confidential ballot to the Rent Administrator by personal delivery or by mail, in the pre -addressed envelope to the Rent Administrator provided with the notice by the specified deadline; and (5) That the proposed special rent adjustment shall not be effective unless consented to by at least fifty-one percent (51%) of the residents of the regulated spaces based on the results of the confidential ballot election.

Mobilehome Park Administrative Rules, Resolution No. 20254.4456 Page 30

b. The Confidential Ballot, in the form approved by the City and agreed upon between the park owner representatives and park resident representatives at the meet and confer; and
c. Envelopes pre -addressed to the Rent Administrator (one envelope per space) as previously provided by the park owner representatives to the resident representatives in accordance with Subdivision (G)(2) of this section; and d. The agreed -upon meet and confer results; and
e. Proof of service, on the City -approved form.

3. Effective Date of Service on Park Residents. For purposes of determining the 15- day deadline for residents to file their confidential ballots with the Rent Administrator, service of the notice and confidential ballot form under Section 4.0006(G)(2) shall be deemed effective on the date of personal delivery to a resident or, if mailed, upon deposit in the U.S. Mail, to a resident.

The park resident representatives shall serve all notices, envelopes pre -addressed to the Rent Administrator, and confidential ballot forms required by Subparagraph (2) of this Subdivision (G) on all residents of regulated spaces at the same time.

4. Park Resident Representative Service on City. Prior to or concurrently with serving the notice and all required documentation on the residents under Section 4.0006(G)(2), the park resident representatives shall serve the following documents on the Rent Administrator, using the City -approved forms:
a. Complete copies of the notice, confidential ballot form and all other required documentation set forth in Subdivision (G)(2); and b. A list of the full names and addresses of the current occupants of each regulated space in the park; and
c. A declaration or affidavit, on the City -approved form, and signed under penalty of perjury, verifying that the park resident representatives provided the residents of the regulated spaces with all documents and information required by Subdivision (G)(2) of this section.

5. Park Owner Service on City and Park Resident Representatives Following Meet and Confer. Not later than five (5) days following the conclusion of the meet and confer the park owner or his/her representative shall comply with all of the following requirements:
a. The park owner shall file with the City the following documents:
(1) One set of address labels addressed to the current occupants of each regulated space in the park;
(2) A declaration or affidavit, on the City -approved form, and signed under penalty of perjury, verifying that the park owner representatives provided the park residents with all information and documentation required by Section 4.0006 and that true and correct copies of all information and documentation required by Section 4.0006(G) has been posted at the three locations in the park as required by Subdivision (C)(2) of this section.

Mobilehome Park Administrative Rules, Resolution No. 202544136 Page 31

(3) A proof of service on the resident representatives confirming the park owner's compliance with the service requirements of this Subsection 5, on the City —approved form, served by personal delivery or by First Class mail, postage prepaid. b. The park owner shall serve a copy of the proof of service on the resident representatives, on the City -approved form, confirming the park owner's compliance with this Subsection 5, served on the park resident representative by personal delivery or by First Class mail, postage prepaid.

6. Submittal of Confidential Ballots. Within fifteen (15) days of service of the notice and supporting documentation on the residents, the residents shall submit their confidential ballots to the Rent Administrator, indicating whether or not they consent to the proposed rent adjustment.

Each regulated space shall have the right to submit one vote by one Mobilehome Park adult resident on behalf of all residents of that regulated space. Any confidential ballot received by the Rent Administrator after the 15-day deadline shall not be counted. A confidential ballot may be delivered to the Rent Administrator by a representative of a resident (excluding the park owner, park manager or any other representative of the park owner or manager), so long as such ballot is accompanied by a written authorization from the resident designating that person as his/her representative, under penalty of perjury, on the City -approved form.

H. Rent Administrator Review and Decision. Following the fifteen -day deadline, the RA shall approve the special rent adjustment only if the RA finds that (i) at least 51% of the residents of the regulated spaces consented to the special rent adjustment, and (ii) the park owner and residents complied with all meet and confer procedures set forth in subdivisions (B) through (G).

1. The RA shall accept only written confidential ballots by the residents of the regulated spaces on the confidential ballot forms approved by the City.

2. In counting the confidential ballots, if at least fifty-one percent (51%) of the residents of the regulated spaces consent to the proposed special rent adjustment, the proposed special adjustment shall be deemed consented to by the residents of the regulated spaces. If the proposed rent adjustment is not consented to by at least 51% of the residents of the regulated spaces, the proposed special adjustment shall be deemed disapproved by the residents of the regulated spaces.

3. In determining if at least 51% of the residents of the regulated spaces consented to the special rent adjustment, the RA shall count only those confidential ballots filed with the City by the deadline for submittal of ballots. It shall be presumed by the RA that any regulated space not represented by a confidential ballot represents the intent of the residents of that space to disapprove the proposed special rent adjustment. In the event that more than one adult resident of a regulated space submits a confidential ballot to the RA, the RA shall randomly select one ballot from that regulated space by lots as the official confidential ballot for that space.

4. Rent Administrator Decision and Notification. Not later than fifteen (15) days following the deadline for submittal of the confidential ballots to the RA, the RA shall provide written notification to the park owner and park residents of the results of the confidential ballot election. The RA's notification shall include (i) whether or not the RA approved the special rent adjustment; (ii) the number of spaces consenting to the proposed special adjustment, (iii) the Mobilehome Park Administrative Rules, Resolution No. 20254-44456 Page 32

number of spaces indicating disapproval; (iv) the number of spaces where no response was received; (v) if the RA determined that all procedures of this Section were met, the reason(s) for such determination; and (vi) if the RA determined that all procedures of this Section were not met, the reason(s) for such determination. Unless otherwise required by law, the City shall not reveal to the park owner the names or any residents voting for or against the proposed rent adjustment or any resident not submitting a confidential ballot.

I. Park Owner Notice of Rent Increase. The park owner shall notify the residents affected by the Special Rent Adjustment approved by confidential ballot and the RA in accordance with State law. A park owner shall not notice a Special Rent Adjustment approved under this Section prior to approval and notification by the RA pursuant to Subdivision (H)(4) of this Section.

J. Final Decision. The RA's decision approving or denying a special rent adjustment submitted pursuant to YMC Section 15.20.100(E) and this Section shall be final and not subject to any appeal to the Hearing Officer.

K. Subsequent Rent Adjustment Applications.

1. Disapproval by Park Residents or Denial by City. Denial of a special rent adjustment by voluntary meet and confer pursuant to YMC Section 15.20.100(E) and Subdivision (H) of this Section shall not preclude a park owner from applying for a special rent adjustment under YMC Section 15.20.100(A), (B) and/or (C) and Rules 4.0003, 4.0004 and/or 4.0005 of this Chapter. The application shall be processed in accordance with YMC Section 15.20.105 and these Rules.

2. Subsequent Rent Adjustments Following Approval by Residents and RA. a. Annual Adjustment or Special Rent Adjustment. If at least 51% of the residents of the regulated spaces and the RA approves a special rent adjustment based on meet and confer pursuant to YMC Section 15.20.100(E) and Subdivision (H) of this Section, the park owner shall not apply for, demand payment of, or impose an Annual Adjustment under YMC Section

15.20.080, or a special rent adjustment authorized by YMC Section 15.20.100(A) or (B) less than 12 months after imposition of the special rent adjustment approved pursuant to YMC Section

15.20.100(E) and this Section.
b. Capital Improvement Rent Adjustment. In accordance with YMC Section

15.20.085(D), costs of a capital improvement shall not be included in a proposed special rent adjustment submitted to the residents of the regulated spaces under this Section 4.0006, and the RA shall not approve any proposed special rent adjustment that includes or is based upon any capital improvement costs. Rent adjustments based on capital improvements shall be submitted to the RA in accordance with YMC Section 15.20.085 and Chapter 5 of these Rules. c. Rent Adjustment based on Discontinuance or Reduction of a Service or Amenity. The approval or disapproval of a special rent adjustment based on voluntary meet and confer pursuant to YMC Section 15.20.100(E) and this Section, shall not preclude a park owner or park resident from submitting an application for a rent adjustment based on discontinuance or reduction of a service or amenity pursuant to YMC Section 15.20.090 and Chapter 7 of these Rules."
Mobilehome Park Administrative Rules, Resolution No. 20254-4446 Page 33

4.0007 ALLOWABLE RENT ADJUSTMENTS AND APPLICATIONS FOLLOWING MNOI ADJUSTMENTS, FA1121 RETURN OR VOLUNTARY MEET AND

CONFER ADJUSTNIENT(S)
Following approval of an MNOI adjustment, an MNOI adjustment based on a readjusted base year NOI, or a fair return adjustment by the Hearing Officer under YMC Section 15.20.100 and Sections

4.0003, 4.0004 or 4.0005 of these Rules, or a Special Rent Adjustment by voluntary meet and confer under YMC Section 15.20.100(E) and Section 4.0006 of these Rules, a park owner shall not apply for an Annual Adjustment pursuant to YMC 15.20.080(A) and Chapter 3 of these Administrative Rules, until the expiration of at least twelve (12) months following the approval of the special adjustment under Sections 4.0003, 4.0004 or 4.0005 of these Administrative Rules. A park owner may apply for a capital improvement rent adjustment pursuant to YMC Section

15.20.085 and Chapter 5 of these Administrative Rules, at any time following approval of the MNOI adjustment, MNOI adjustment based on a readjusted base year NOI er---fair return adjustment or a special rent adjustment by voluntary meet and confer.

CHAPTER 5. ADJUSTMENTS BASED ON CAPITAL IMPROVEMENTS

5.0001. DEFINITIONS
A. Capital Improvements. A capital improvement is defined by the YMC to mean the installation of new improvements and facilities and/or the replacement or reconstruction of existing improvements and facilities which consist of more than ordinary maintenance or repairs, have a useful life of at least five (5) years and have been consented to by fifty-one percent (51%) of the spaces in the mobilehome park or are necessary for the health and safety of the park, its residents or its neighbors. A capital improvement shall be established under the standard applicable under the law at the time the application is filed. Nothing in this Chapter shall prohibit a park owner from performing a capital improvement if the park owner chooses not to apply for a rent adjustment under the provisions of the YMC or this Chapter.

B. Ordinary maintenance and repairs. Ordinary maintenance and repairs include costs associated with the restoration of real property or personal property to a sound state, or which merely keep such property in operating condition over the probable useful life for which it was acquired, or which otherwise result from the normal maintenance and upkeep of the property.

Ordinary maintenance and repairs are not capital improvements.

5.0002. APPLICATION FEES
The Application fee for a Capital Improvement Application shall be $1,750.00 per application, which shall be paid prior to the application being declared complete. Notwithstanding any other provision of these Rules to the contrary, no Capital Improvement Application shall be deemed complete if the applicant fails to pay the required application fee.

5.0003. CALCULATION OF ALLOWABLE INCREASES
Straight-line depreciation based on the useful/amortizable life of an improvement shall be used to calculate the allowable capital improvement rent increase for the improvement.

Useful/amortizable life shall mean, that period of time during which a particular improvement will, in the opinion of professionals (such as architects, engineers, contractors, and accountants), remain functional with only ordinary maintenance and/or repairs. The RA shall evaluate the useful/amortizable life of an improvement for which a capital improvement rent increase is sought.

Mobilehome Park Administrative Rules, Resolution No. 20254-44-36 Page 34 Commented [1027]: Item No. SW - Clarifying language

To apply straight-line depreciation in calculating the allowable rent increase, the RA shall divide the total cost of the improvement by its usefuUamortizable life and then divide the result of that calculation by twelve and then by the number of spaces in the park.

For example, the allowable capital improvement rent increase for a street replacement costing $10,000 and having a usefuUamortizable life of ten (10) years is calculated as follows:
$ 10,000.00
10 years
$ 1,000.00
12 months
— $ 1,000.00 annual amortization
- $ 83.33 monthly amortization cost
$ 83.33 = $ 2.78 monthly rent increase per space for 10 years 30 spaces

5.0004. AMORTIZATION
A. Capital Improvements shall be amortized in accordance with the following schedule; or, if not itemized therein, in accordance with any useful life table utilized by the Internal Revenue Service, unless there is substantial evidence that a different amortization period is more appropriate.

Improvement
Amortization
Period
In Years
Air Conditioners
7 Appliances (other than those listed)
7 Cabinets
7 Carpentry
10 Carpeting
7 Dishwasher
7 Doors
10 Dryer
7 Electrical Wiring
15 Elevator
20 Fan
7 Fencing and Walls
Block Walls
15 Wood
7 Fire Alarm System
7 Fire Escape
15 Floor Covering (linoleum or vinyl)
7 Flooring
7 Furniture
7 Mobilehome Park Administrative Rules, Resolution No. 20254-.4436

Improvement
Amortization
Period
In Years
Garbage Disposal
7 Gates
15 Gutters
15 Heating
10 Insulation
10 Landscaping
15 Locks
7 Paving (asphalt, cement or micro -surfacing; but excluding patch -work or pothole repairs or slurry seal)
15 Plastering
10 Plumbing
Fixtures
10 Pipes
15 Pumps
7 Refrigerator
7 Roofing
10 Security Entry Telephone Intercom
7 Smoke Detector
7 Stove
7 Stucco
10 Structural Walls (complete replacement; excluding wall patches or repairs to holes or cracks)
10 Washing Machine
7 Water Heater
7 Window Coverings
7 Windows
15 B. In general, a capital improvement should not be amortized over a period which would yield a monthly per space increase over ten percent (10%). In such a case, a longer amortization period may be appropriate. The percent increase represented by a particular capital improvement rent increase shall be calculated by dividing the proposed capital improvement rent increase by the amount of the existing base rent.

Thus, in the case of the above street replacement example, the percent increase is calculated as follows:
$ 2.78 (proposed capital improvement rent increase) = 2.1%(increase) $130.00 (existing base rent)

5.0005. COST OF THE CAPITAL IMPROVEMENT
The applicant may provide documentary evidence of the actual cost incurred for the capital improvement. The cost thereof may include the interest expense incurred on money borrowed to pay for the capital improvement or a part thereof. In the event that the applicant used his/her own funds to pay for the improvement, interest at the rate equal to the prime rate, plus 2 % percent as of Mobilehome Park Administrative Rules, Resolution No. 20254-4444 Page 36

the date of the application, computed over a reasonable amount of time may be included as a part of the capital improvement cost. In determining the reasonable amount of time over which interest may be allowed, the RA may be guided by the current practices of state and federally chartered banks and/or savings and loan associations as to the length of time for repayment of improvement loans, provided, however, that the time may not exceed the amortization period determined by the RA and used in calculating the allowable capital improvement rent increase.

5.0006. IMPROVEMENTS NECESSARY FOR HEALTH AND SAFETY
Examples of capital improvements necessary for health and safety under YMC Section

15.20.085(A)(I) include, but are not limited to the following, and shall be established under the standard applicable under the law at the time the application is filed:

A. Replacement of plumbing, electrical, water and sewer lines necessary to conform to City and State ordinances, statutes, codes and regulations and maintain habitability standards and;
B. Replacement of roads, which have become dangerous and are necessary for ingress, egress and safe vehicular and pedestrian movement within a park.

C. Replacement of an amenity such as a swimming pool is not a capital improvement necessary for health and safety, but such an amenity must be shut down if it becomes unsafe, dangerous or fails to conform to health and safety regulations.

5.0007. EMERGENCY CAPITAL IMPROVEMENTS
A. Definition. As used in this Section 5.0007, "capital improvements" means work that constitutes the installation of new improvements and facilities and/or the replacement or reconstruction of existing improvements and facilities which consist of more than ordinary maintenance and repairs, and have a useful life of at least five (5) years.

B. Required Findings. Emergency capital improvements pursuant to YMC Section

15.20.085(B) means capital improvements necessary because of damage to or destruction of any improvement, facility, or building or any part thereof in a park where such damage or destruction resulted from or was caused by fire, earthquake or other natural elements; the damage or destruction is not covered by insurance or other third party sources; and which meet all of the following conditions as determined by the City:

1. The emergency resulted from either:
a. An earthquake, fire, storm or other weather condition or other natural element; or the sudden and unexpected damage to, or destruction or failure of the park's sewer, water or other utility system where such utility system was properly and adequately maintained by the park owner and met all applicable health and safety code requirements prior to the occurrence of the damage, destruction or failure of the utility system; or b. The natural element or damage, destruction or failure occurred without any reasonable warning to the park owner such that the park owner did not have any reasonable opportunity to protect the property in advance or which was of such severity that the park owner could not protect the property irrespective of any advance warning.

2. It was necessary for the park owner to immediately perform the work in order to prevent an imminent threat to the health and safety of the park, its residents or neighbors, without Mobilehome Park Administrative Rules, Resolution No. 20254.4436 Page 37

first holding a resident meeting and Capital Improvement Election pursuant to the timing requirements set forth in YMC Section 15.20.085(A)(1).

3. All necessary governmental permits and approvals were obtained by the park owner prior to performance of the emergency capital improvements.

4. All necessary governmental approvals and sign -offs were obtained by the park owner upon completion of the emergency capital improvements.

5. The emergency capital improvements were commenced within two weeks of the occurrence of the event causing the imminent threat to the public health and safety.

6. The application for a rent adjustment based on emergency capital improvements was submitted to the City in accordance with the following deadlines:
a. Within (i) one month of completion of the emergency capital improvements, or (ii) within four months from the occurrence of the emergency, whichever occurs later; and
b. Not more than six months from the date of occurrence of the emergency.

The City may excuse the park owner from compliance with this six-month deadline only if the park owner presents evidence demonstrating by clear and convincing evidence that the six-month deadline is unreasonable under the circumstances due to factors outside the park owner's control and that the park owner exercised reasonable diligence to file the application within that six-month period.

7. The park owner submits all information and documentation necessary for the City to make the determination that emergency capital improvements were warranted and that a capital improvement rent adjustment is otherwise justified under YMC Section 15.20.085(B) and this Chapter.

C. Application and Hearing Procedures. An application for approval of a rent adjustment based on emergency capital improvements shall be submitted to the RA and processed in accordance with the requirements of YMC Section 15.20.085(A)(2). Appeals to the Hearing Officer shall be processed in accordance with YMC Section 15.20.085(E), 15.20.105 and

15.20.110 and Chapter 1 of these Rules.

D. Burden of Proof.

1. In any application submitted for approval of a rent adjustment based on emergency capital improvements, the park owner shall bear the burden of proof by competent evidence, to demonstrate that all of the requirements of YMC Section 15.20.085(B) and this Chapter are met.

2. In determining whether the park owner met his/her burden of proof that the immediate performance of the work was necessary because of an imminent threat to the health and safety of the park, its residents or neighbors, the City shall consider all relevant evidence, including but not limited to, the following:
a. The ability of the park owner holding a resident meeting and Capital Improvement Ballot Election at the park, or at a location within reasonable distance of the park for the park residents to attend and participate in the resident meeting and election, in accordance with the requirements of YMC Section 15.20.085(A)(1), prior to carrying out the emergency capital improvements.
b. The nature of the threat to the public health or safety caused by the damage or destruction, including but not limited to contamination of the water supply to the residents, Mobilehome Park Administrative Rules, Resolution No. 20254-4456 Page 38

unsafe electrical or gas conditions, walls or buildings in danger of imminent collapse, blocking or destruction of access roads, rights -of -way or other areas accessible to or needed by the residents for the conduct of their normal lives or by park management to carry out park operations, or blocking or destruction of other areas, buildings or facilities within the park necessary to park management for park operations.
c. The ability of park management to shut off, screen, or wall or block off the damaged or destroyed property or turn off electricity or other utilities to protect the park, its residents, or neighbors from any imminent health or safety threat, and without impairing the ability of residents to live in their homes with enough visibility to carry out normal activities, and depending on the season, to heat or cool their homes.
d. The importance or necessity of the damaged or destroyed property to the normal lives of the residents and whether such property is necessary for the health or safety of the residents. Common area facilities such as pools, tennis courts, and other recreational amenities or areas, or any portion thereof, shall not be eligible for emergency capital improvements unless the damage or destruction caused an imminent threat to the physical health or safety of the park, its residents or neighbors.
e. The issuance of any order or citation by any governmental agency ordering the performance of emergency capital improvements in order to provide for the immediate replacement or rehabilitation of the property damaged or destroyed as the direct result of an emergency event described in Subsections (B)(1) and (B)(2) of this Section 5.0007. Enactment or amendment of a statute, ordinance or regulation requiring modifications to or implementation of equipment, systems or structures to facilities, buildings, or structures within parks shall not fall within this subsection.
f The length of time between the date of the occurrence of event causing the damage or destruction to the property or improvement and the date of commencement of the improvements.
g. The dates when the park owner applied for and received permits or approvals from other governmental agencies to commence the work. h. The date of actual commencement of the work.
i. The extent or complexity of the work needed to replace or rehabilitate the damage or destruction.
j. The date of completion of the work.
k. The reason(s) for any delay in seeking governmental permits or approvals, commencing or finishing the work.

1. If the park owner did not commence construction of the emergency capital improvements within two weeks of the emergency event resulting in the need for the emergency capital improvements, as required by Subsection (B)(5) of this Section 5.0007, all information and documentation to establish an exception to the two -week commencement period in accordance with YMC Section 15.20.085(B)(1)(c) and Subsection (B)(5) of this Section 5.0007. m. Photographs, notices to park resident representatives, park residents, the City and any other information and documentation relevant to the determination whether performance of the work resulted from an emergency as defined above and was necessary in order to prevent an imminent threat to the health and safety of the park, its residents or neighbors.

Mobilehome Park Administrative Rules, Resolution No. 20254-4456 Page 39

n. All documentation and other evidence submitted by the park owner to establish supporting the costs of the emergency capital improvements. o. All documentation and other evidence submitted by the park owner to justifying the proposed claimed interest rate and amortization period to support the claimed capital improvement rent adjustment.
p. If the park owner did not submit the emergency capital improvement rent adjustment application to the City within the time deadline required by Subsection (B)(6) of this Section 5.0007, all reasons and supporting evidence provided by the park owner to justify the delay in submitting the application.
q. Any other information and documentation relevant to the issue whether the performance of the work was an emergency necessary to be carried out without a resident meeting and Capital Improvement Ballot Election in order to prevent an imminent threat to the health and safety of the park, its residents and/or its neighbors.

E. Subsequent Capital Improvement Rent Adjustment Application Following Denial of Emergency Capital Improvement Rent Adjustment Application.

1. If the City denied an emergency capital improvement rent adjustment application under YMC Section 15.20.085(B) and Section 5.0007 of this Chapter, the City shall not approve a subsequent capital improvement application under YMC Section 15.20.085(A)(1) based on some or all of those same costs, unless the City is able to make all of the following findings. a. The City denied the prior emergency capital improvement rent adjustment application because either (i) the park owner failed to comply with the time deadlines under YMC Section 15.20.085(B)(1)(c) or 15.20.085(B)(1)(d) and Section 5.0007(B)(5) or (6) and (2) of this Chapter, or (ii) the park owner failed to establish that the work was an emergency capital improvement as defined in YMC Section 15.20.020 and Section 15.20.085(A) and 5.0007(A) and (B) (1) and (2) of this Chapter, and
b. The work constitutes a capital improvement as defined in Section 5.0007(A) of this Chapter; and
c. The park owner conducted a resident meeting and Capital Improvement Ballot Election either (i) within three months of the denial of the emergency capital improvement application by the City or (ii) within twelve (12) months of completion of the capital improvements, whichever occurs later; and
d. Either: (i) at least fifty-one percent (51%) of the residents approved the capital improvements, or (ii) the capital improvements were necessary for the health and safety of the park, its residents or its neighbors; and
e. The subsequent capital improvement rent adjustment application otherwise complies with all other requirements of YMC Section 15.20.085(A) and this Chapter.

2. Prior finding binding. If the City denied the prior emergency capital improvement rent adjustment application because the City determined that the work failed to qualify as a capital improvement (as defined in Subsection (A) of this Section 5.0007), the City's prior finding shall be binding in the City's consideration of any subsequent capital improvement rent adjustment application under YMC Section 15.20.085(A) containing costs for that same work, and no subsequent capital improvement rent adjustment application containing those same costs shall be approved by the City
Mobilehome Park Administrative Rules, Resolution No. 20254-4446 Page 40

5.0008. SPECIAL RENT ADJUSTMENT APPLICATION
A. MNOI Rent Adjustment Application under Section 4.0003 or Section 4.0004. If the City denied a park owner's application for a capital improvement application under YMC Section 15.20.085(A) or an emergency capital improvement rent adjustment under YMC Section

15.20.085(B), and the park owner includes some or all of those same costs in a subsequent special rent adjustment application submitted under YMC Section 15.20.100(A) or (B) and Section 4.0003 (MNOI rent adjustment) or Section 4.0004 (Readjusted Base Year NOI) of these Rules, those costs shall be removed and excluded from the base year or current year operating expenses in determining whether the park owner qualifies for the special rent adjustment. In considering such a separate capital improvement application, all of the following provisions shall apply:

1. The capital improvement costs shall be processed by the City as a separate capital improvement application and be heard concurrently with the hearing on the special rent adjustment application.

2. The City shall not approve a capital improvement rent adjustment based on those costs unless the City finds that all of the following conditions have been met:
a. The park owner conducted a resident meeting and Capital Improvement Ballot Election in accordance with the time deadlines under Section 5.0007(E)(1)(c) of this Chapter; and
b. Either (i) at least fifty-one percent (51%) of the residents approved the work; or (ii) the work separately qualifies as capital improvements necessary for health and safety reasons under YMC Section 15.20.085(A)(1) and Section 5.0006 of this Chapter; and c. The claimed costs qualify as a capital improvement as defined in Section 5,0007(A) of this Chapter; and
d. The claimed costs meet all other application requirements of YMC Section

15.20.085(A)(1) and (2).

3. If the City is unable to make all of the findings required by Subsection (2), the City shall not approve a capital improvement rent adjustment for those expenses. In no event shall the costs of any such alleged capital improvements be included in determining a special rent adjustment under Section 4.0003 (MNOI rent adjustment) or Section 4.0004 (Readjustment to base year NOI) of these Rules.

B. Fair Return Rent Adjustment Application under Section 4.0005. If the City denied a park owner's application for a capital improvement application under YMC Section

15.20.085(A) or an emergency capital improvement rent adjustment under YMC Section

15.20.085(B), and if the park owner includes any or all of those costs in a special rent adjustment application for a fair return under YMC Section 15.20.100(C) and Section 4.0005 of these Rules, all of the following provisions shall apply:

1. Prior Denial of Capital Improvement or Emergency Capital Improvement Rent Adjustment Application.
a. If the City denied the park owner's prior application for a capital improvement rent adjustment or an emergency capital improvement rent adjustment because the work failed to qualify as a capital improvement (as defined in Subsection (A) of Section 5.0007 of this Chapter), the City shall exclude those costs from consideration of the park owner's fair return rent adjustment application under YMC Section 15.20.100(C) and Section 4.0005 of these Rules.

Mobilehome Park Administrative Rules, Resolution No. 20254-4446 Page 4l

The City's prior finding that the work failed to qualify as a capital improvement shall be binding upon the City in any such subsequent fair return rent adjustment application under YMC Section

15.20.100(C) and Section 4.0005 of these Rules.
b. If the City denied the park owner's prior application for an emergency capital improvement rent adjustment under YMC Section I5.20.085(B) because the park owner failed to comply with the timing requirements set forth in YMC Section 15.20.085(B)(1)(c) or

15.20.085(B)(1)(d) and Section 5.0007(B)(5) or (6) of this Chapter, the City may consider those costs in a subsequent fair return rent adjustment application only if the work qualifies as a capital improvement as defined in Section 5.0007(A).
c. The failure of the park owner to conduct a resident meeting or Capital Improvement Ballot Election, or to obtain at least 51% consent to the work shall not bar consideration of those costs in determining whether the park owner is entitled to a fair return rent adjustment under YMC Section 15.20.100(C) and Section 4.0005 of these Rules so long as all other requirements of this Subsection (B) of this Section 5.0008 are met.

2. No prior capital improvement or emergency capital improvement rent adjustment application. If the park owner includes the costs of alleged capital improvements in a fair retum rent adjustment application under YMC Section 15.20.100(C) and Section 4.0005 of these Rules, but did not previously file a capital improvement or emergency capital improvement rent adjustment application with the City based on the same work, the City may consider those costs along with other relevant factors to determine if the park owner is entitled to a fair return rent adjustment, only if the City finds that the work qualifies as a capital improvement, as defined in Section 5.0007(A) of this Chapter.

C. Exclusions. Except as otherwise provided in Subsections (A) and (B) of this Section 5.0008, costs incurred in performing any alleged capital improvements shall not be included in any special rent adjustment application under YMC Section 15.20.100 and Sections

4.0003, 4.0004 or 4.0005 of these Rules.

5.0009. IMPROVEMENTS UNNECESSARILY DEFERRED
In reviewing and acting upon a capital improvement rent adjustment application under YMC Section 15.20.085(A) or (B), the RA, or the Hearing Officer on any appeal, shall consider whether the costs of the capital improvement, in whole or in part, could have been minimized or avoided by the park owner through prudent and ongoing repair and maintenance activities. To the extent that the need for or extent of the claimed capital improvement was exacerbated through unnecessarily deferred, negligent or otherwise improper repair and maintenance or other acts or omissions of the park owner, said costs shall be disregarded in determining the amount of any capital improvement rent adjustment otherwise determined to be appropriate, but shall not be grounds to deny a capital improvement rent adjustment if all other requirements of YMC Section

15.20.085(A) or (B) and this Chapter are met, as determined in the discretion of the RA or the Hearing Officer (on appeal). The RA or Hearing Officer, on any appeal, may further condition the approval of any capital improvement rent adjustment application in order to ensure that future ongoing repair and maintenance activities will be taken by the park owner to minimize or avoid the need for replacement or reconstruction of said capital improvement in the future. Such conditions include, but are expressly not limited to, a condition providing that should the capital improvement not last the duration of the amortization period, the park owner may not pass on all or a portion of the cost of any replacement or reconstruction of the same capital improvement to the park residents.

Mobilehome Park Administrative Rules, Resolution No. 20254446 Page 42

5.0010. CERTIFICATION OF CAPITAL IMPROVEMENTS
A. If a park owner intends to apply for a capital improvement rent adjustment for expenses incurred in carrying out street improvements or flatwork improvements (e.g., sidewalks, driveways, patios), the application shall include a certification signed by a registered or licensed civil engineer verifying the following:

1. That the work was carried out under the supervision of a licensed or certified engineer to make sure that the capital improvements were properly constructed in accordance with the proposal, contract or bid;

2. That the improvement meets the standards required by the City of Yucaipa AC Pavement Specifications or other engineering standards to ensure adequacy of access and parking throughout the area of the improvement in accordance with the requirements of Title 25 of the California Code of Regulations;

3. That the improvement complies with all grading and drainage requirements of Title 25 including but not limited to the urban storm water runoff management requirements of the applicable MS-4 permit issued by the California State Regional Water Quality Control Board;

4. To the extent that the area of improvement qualifies as a place of public accommodation under the Americans with Disabilities Act (42 U.S.C. § 12101 et seq.) (ADA), that the improvement complies with all applicable accessibility requirements of the ADA, including but expressly not limited to parking;

5. That the improvement will maintain the existing circulation and access for fire, life safety, service vehicles and trash trucks; and

6. That the improvement will be inspected and tested upon completion to ensure compliance with the required standards as indicated in item 2 above.

B. The application for a capital improvement rent adjustment shall not be deemed complete by the rent administrator under YMC §§ 15.20.085(A)(2) and 15.20.105 unless the application contains this certification. In the event that the applicant fails or refuses to submit the certification, the application shall be processed in accordance with YMC §§15.20.085(A)(2) and

15.20.105, and the rent administrator or Hearing Officer may consider the failure or refusal to submit the certification in determining whether the applicant (or appellant) met his or her burden of proof that he or she is entitled to a capital improvement rent adjustment.

5.0011. APPLICABILITY OF THESE ADMINISTRATIVE RULES. (Renumbered

5.0010 as 5.0011)
These Administrative Rules shall apply to all Capital Improvements performed after the adoption of the Rent Stabilization Ordinance. A capital improvement increase may be granted if it was completed between April 1, 1988 and the adoption of the moratorium on rent increases by Ordinance No. 36 on June 6, 1990, provided that:

A. No rent increase has been charged based upon or including the cost of the capital improvement; and
B. The improvement meets the definition of capital improvements set forth in YMC Section 15.20.020.

Mobilehome Park Administrative Rules, Resolution No. 20254-4456 Page 43

CHAPTER 6. TEMPORARY RENT ADJUSTMENT FOR SPECIAL RENT ADJUSTMENT

APPLICATION AND HEARING COSTS INCURRED BEFORE THE

HEARING OFFICER

6.0001. SCOPE
A park owner may request a temporary rent adjustment for application and hearing costs incurred by the Park Owner in connection with a successful special rent adjustment application submitted under Sections 1520.085 or15.20.100 of the Ordinance, and Chapter 4 of these Rules, subject to the following requirements.

6.0002. ELIGIBILITY AND BURDEN OF PROOF
A. A Park Owner may recover the reasonable cost of professional services actually incurred in presenting the owner's application to the Hearing Officer, through a temporary rent adjustment, if the park owner successfully obtains approval of a special rent adjustment under Sections 15.2t .085 or 15.20.100 of the Ordinance pursuant to a final decision of the Hearing Officer.

B. The park owner shall bear the burden of proof to demonstrate, by substantial evidence, that he/she is entitled to a temporary rent adjustment under this Chapter, including that he/she is the prevailing party on the special rent adjustment application, the amount of the costs incurred in the Hearing Officer proceedings, that he/she actually incurred such costs, the reasonableness of the costs, that the claimed costs bear a reasonable relationship to the special rent adjustment awarded by the Hearing Officer pursuant to YMC Sections 15.20.085 or 15.20.100 based on the factors set forth in Section 6.0004(B) of these Rules, and the amount of the proposed temporary rent adjustment.

6.0003. DEFINITIONS
As used in this Chapter, the following terms shall have the following meanings:

A. "Fees, costs and other expenses" means hourly rates, lump sum charges based on specific tasks or projects, and duplication costs. "Fees, costs and other expenses" shall exclude all of the following: costs to recover documents from storage, costs to compile documents from computer records or other electronic records, development of software programs, and costs to print information or documents from a computer or other electronic device.

B. "Final Decision" means either (i) a final decision issued by the RA on a rent adjustment application based on capital improvement when no timely appeal is filed, or (ii) a final decision issued by the Hearing Officer when a timely appeal from the RA's decision on the application is filed, or (iii) a final decision issued by the Hearing Officer on a special rent adjustment application.

C. "Prevailing Party" means a park owner who obtains approval of a special rent adjustment pursuant to a final decision of the City.

D. "Professional Services" means:

1. Legal, accounting, financial, appraisal, bookkeeping, property management, or engineering services actually incurred by the Park Owner in presenting his/her successful special rent adjustment application to the Hearing Officer; except that legal expenses shall not include any legal expenses included as an operating expense for the Current Year under Section 4.0003(D) of these Rules; and
l Commented [K728]: item No. SX - Clarifying language
Commented [1029]: Item No. 8X - Clarifying language
Mobilehome Park Administrative Rules, Resolution No. 20254-4446 Page 44

2. Legal expenses must be performed by an attorney duly licensed to practice before the courts of the State of California, and any certified paralegal working under the supervision of any such attorney; and shall exclude costs for secretarial or other clerical services or expenses.

3. Accounting services shall be performed by a Certified Public Accountant, or an accountant working directly under the supervision of a CPA; other financial analyses shall be performed by person(s) with the requisite degree or license in their area of expertise.

E. "Relevant geographical area" means the City of Yucaipa and the County of San Bernardino; provided that, a park owner may submit evidence of factors justifying use of a geographical area in addition to, or in place of the geographical area required by this section, if the park owner may demonstrate that based upon the services provided, a different or broader geographical area is more representative of the reasonable costs incurred by the park owner in connection with the application.

F. "Special Rent Adjustment" means a rent adjustment approved pursuant to Section

15.20.100 of the Ordinance and Chapter 4 of these Rules.

G. "Substantial evidence" means evidence as defined in Section 1.0007(F) of these Rules.

6.0004. PROCEDURES
A. Application Form and Timing. A park owner who intends to seek recovery of the reasonable costs of professional expenses incurred by him/her in presenting his/her application to the Hearing Officer, shall be required to submit his/her request as part of his/her application for a special rent adjustment in accordance with the requirements specified in the City -approved form.

B. Factors to Determine Reasonableness of Fees, Costs and Other Expenses. Any award of fees, costs and other expenses awarded for professional services under this Chapter shall be awarded only if the Park Owner demonstrates by substantial evidence that he/she is the prevailing party, that such fees, costs and other expenses for professional services were reasonably incurred and that said fees, costs and other expenses were reasonable in amount. The Hearing Officer shall consider all relevant factors, including but not limited to, the following:

1. Whether the services were performed by a person possessing a duly issued license or certificate in accordance with applicable state, local or federal requirements, as applicable.

2. The experience of the person who performed the services in connection with the application or appeal.

3. Whether the services and/or resulting costs were unnecessarily duplicative, including but not limited to use of multiple personnel and/or excessive time incurred, given the nature and complexity of the issues, and experience of the professional(s).

4. The rate charged for those professional services in the relevant geographic area.

5. The complexity of the matter.

6. Whether the records provided in support of the claimed costs reflect business practices consistent with the industry standard, such as well -documented records and contemporaneously prepared at the time services were rendered.

7. Whether the records provided reflect work duplicative of work presented in other proceedings and not correlated to specific work performed in the present proceeding.

Mobilehome Park Administrative Rules, Resolution No. 20254-4446 Page 45

8. Whether, and to what extent, the costs incurred reflect unwarranted delay or extended hours intended to maximize the cost rather than complete the tasks in a reasonable period of time.

9. Whether, and to what extent, the party claiming such costs refuses or fails to disclose details of the work performed, and the reasons for such failure or refilsal.

10. The relationship of the result obtained to the expenses, fees, and other costs incurred (that is, whether professional assistance was reasonably related to the result achieved) and consistent with the purposes and intent of the Ordinance and these Rules in relation to any special rent adjustment sought under the Ordinance and these Rules, including but not limited to the amount of the Applicant's requested special rent adjustment and supporting methodologies contained in the Applicant's special rent adjustment application.

In approving any temporary rent adjustment, the Hearing Officer may make adjustments to the Applicant's claimed expenses based upon its findings with respect to the factors set forth in this Subsection (B) and all other provisions of this Chapter." C. Documentation Required. A Park Owner who seeks a temporary rent adjustment for recovery of fees, costs and other expenses for professional services pursuant to this Chapter shall be required to submit the following information and documentation with his/her request for a temporary rent adjustment:

1. The retainer agreement or other contract reflecting the hourly rate or other charge, the scope or assignment of work to be performed, the specific tasks to be performed, by the professional, and the person(s) who assigned or determined the specific tasks to be performed by the professional.

2. Documentation reflecting actual hours incurred and specific tasks performed, with sufficient detail for the Hearing Officer to determine whether the factors set forth in the Ordinance and this Chapter have been met by the park owner seeking recovery of costs.

3. A declaration or affidavit signed under penalty of perjury by the person performing each professional service, confirming his/her performance of the services, the relevance of the tasks to the application or appeal at issue, and the reasonableness of the claimed costs and all other factors as required by the City -approved form.

4. A declaration or affidavit signed under penalty of perjury by the park owner or designated representative, certifying that such party has paid, or is obligated to pay, for such costs incurred by the professional on his/her behalf in connection with the hearing on the special rent adjustment application.

5. Any additional information or documentation required by the RA and/or the Hearing Officer that is reasonably necessary to assist the City in determining whether an application should be granted.

D. Application Processing, An application for a temporary rent adjustment to recover fees, costs and other expenses for professional services shall be processed in accordance with and subject to the procedures set forth in YMC Section 15.10.116 and Chapter 4 of these Rules.

E. Hearing Officer Award to Successful Park Owner: Final Decision.

1. At the conclusion of the hearing on a special rent adjustment application, if the park owner is the prevailing party on such application, the Hearing Officer shall also have the authority to deny, approve, or approve a modified temporary rent adjustment to the park owner in accordance Mobilehome Park Administrative Rules, Resolution No. 20254-4456 Page 46

with this Chapter 6. The Hearing Officer's final decision shall be included in the written decision on the underlying special rent adjustment application, and shall include:
(a) findings pursuant to Section 15.20.116 of the Ordinance and Administrative Rule §6.0004(B); and
(b) if the application is granted, (i) the amount of the temporary rent adjustment and the reasons therefore; (ii) the amortization period; (iii) the expiration date for the temporary rent adjustment, (iv) the right of each resident to pay the temporary rent adjustment in a lump sum; (v) a provision prohibiting park management from demanding, collecting or retaining any temporary rent adjustment after its expiration date; and (vi) a provision prohibiting park management from including the temporary rent adjustment in the base rent for purposes of future permissive, capital improvement and special rent adjustments; or
(c) if the application is denied, the basis for denial of any such temporary rent adj ustment.

2. In determining the amount of a temporary rent adjustment, the Hearing Officer shall calculate the amount owed if any resident chooses to pay the temporary rent adjustment in one lump sum rather than over a five-year period, without the payment of any interest; and the Hearing Officer shall also calculate the amount owed as a temporary rent adjustment over a five-year period, including interest at the rate of seven percent (7%) per year, compounded monthly. Any resident may pay the temporary rent adjustment in one lump sum so long as such resident pays the lump sum in full no later than thirty (30) days following the final decision by the Hearing Officer.

Upon payment in full of the temporary rent adjustment, the resident shall be deemed to have fully paid such adjustment, and the temporary rent adjustment shall not be included on any statement issued to the resident thereafter.

3. The Hearing Officer's decision on any temporary rent adjustment to recover hearing costs shall be final.

CHAPTER 7. RENT ADJUSTMENT BASED ON DISCONTINUANCE OR REDUCTION OF

A SERVICE OR AMENITY

7.0001. PURPOSE AND SCOPE
A. The purpose of this Chapter is to establish a procedure for park owners and residents to submit applications for a rent decrease due to the substantial reduction or elimination of services or amenities provided to the residents under the following circumstances:

1. The cost of the service or amenity is included in the space rent and either:
(a) Reduction in Service or Amenity. The park owner reduced (or proposes to reduce) a service or amenity to a level substantially below the level provided to the residents since the most recent rent adjustment approved under the Ordinance (or since the last rent increased imposed on a space previously exempt from the Ordinance under a long-term rental agreement entered into under Civil Code Section 798.17); or
(b) Discontinuance of Service or Amenity. The park owner discontinued (or proposes to discontinue) a service or amenity in its entirety to the park residents since the most recent rent adjustment approved under the Ordinance (or since the last rent increase imposed on a space previously exempt from the Ordinance under a long-term rental agreement entered into under Civil Code Section 798.17); and
Mobilehome Park Administrative Rules, Resolution No. 20254-4456 Page 47

2. The reduction or discontinuance in the service or amenity will result in a substantial cost saving to the park owner; and

3. The park owner fails to demonstrate that the rent decrease will preclude the park owner from earning a fair return on the park.

B. In determining if the cost of the service or amenity is included in the space rent under Subsection (A), whether such service or amenity is listed in the park's initial or annual registration statement may be considered but shall not be the sole or conclusive factor in determining if the service or amenity is included in the space rent.

C. Applications for a decrease in rent based on the discontinuance or reduction of a service or amenity may be filed by the park owner or a park resident.

D. Eligible Services or Amenities.

1. The types of services or amenities that this Chapter applies to include but are not limited to the following: vehicle and/or RV parking; storage facilities, areas or services; laundry room or facilities; security gates, fences or services; landscaping, grounds keeping or other janitorial or maintenance services; on -site or off -site management; clubhouse, pool, spa or other recreational facility or amenity; heating; air-conditioning; hot and/or cold water, provided that, the discontinuance of hot water in any facility, building or area shall not constitute a reduction or discontinuance of a service for which a rent decrease may be granted if hot water is not required by applicable law, so long as water service itself is provided; and painting (if painting for exterior common areas or facilities is not done at least once every seven years, or if painting for interior common areas of facilities is not done at least once every four years unless the park owner can show that painting was not necessary because it is still in good condition).

2. The failure to include any service or amenity in this list shall not in any manner preclude a park owner from submitting an application to decrease rents for any reason.

3. Minor (De Minimis) Conditions. In some cases, the reduction or discontinuance of certain services or amenities may have only a minimal impact on park residents, do not violate any applicable health and safety laws or regulations, do not affect the use and enjoyment of the premises, and may exist despite regular maintenance of services or amenities. Such conditions are considered to be minor or de minimis in nature, and shall not provide the basis for a rent decrease under YMC Section 15.20.090 or Chapter 7 of these Rules. a. Schedule "A" to this Chapter contains a schedule of conditions that generally do not constitute the discontinuance of or reduction in a service or amenity. However, this schedule is not intended to be exclusive, and is not determinative in all cases and under all circumstances. There may be circumstances where a condition, although included on Schedule A, will nevertheless be found to constitute a reduction or discontinuance of required service or amenity that may provide the basis for a rent decrease under YMC Section 15.20.090 and this Chapter.
b. In determining whether a condition is de minimis, the City may consider the passage of time during which a disputed service was not provided, and during which no complaint was filed by any resident alleging failure to maintain such disputed service, as evidencing that such service condition is de minimis, and does not constitute a failure to maintain a required service. Any such passage of time shall be measured without reference to any changes in park ownership or the occupants of the subject mobilehome space.

Mobilehome Park Administrative Rules, Resolution No, 20254-4456 Page 48

4. Services Required by Law. Services or amenities required to be provided by federal or state laws or regulations, such as the Mobilehome Residency Law, State Housing Laws, shall not be treated as de minimis under YMC Section 15.20.090 or this Chapter.

7.0002. BURDEN OF PROOF
A. The applicant shall have the burden of proof to demonstrate, by substantial evidence, that a service or amenity was discontinued or reduced, that the reduction or discontinuance of a service or amenity resulted in a substantial cost savings to the park owner, and the proportionate amount of such cost savings that must be passed on to the affected mobilehome park spaces as a rent decrease.

B. If the park owner contends that a proposed rent decrease will preclude the park owner from earning a fair retum, the park owner shall bear the burden of proof and the burden of producing evidence to establish on this issue, regardless of who submitted the application for a rent decrease to the City.

C. Failure of an applicant to submit a complete application may be considered by the Hearing Officer in determining whether the applicant met his/her burden of proof to demonstrate that he/she is entitled to a rent decrease under this Chapter, and/or the amount of such rent decrease.

7.0003. DEFINITIONS
As used in this Chapter, the following terms shall have the following meanings:

A. "Rent decrease" means an adjustment reducing rents pursuant to Section 15.20.090 of the Ordinance and this Chapter.

B. "Substantial evidence" means evidence as defined in Section 1.0007(D) of these Rules.

7.0004. GENERAL APPLICATION REQUIREMENTS
The following requirements shall apply to all applications for a rent decrease based on the discontinuance or reduction of a service or amenity filed by a park owner or park resident under Section 15.20.090 of the Ordinance:

A. Format. The applicant shall submit one copy of the application, all supporting information and documentation, and the filing fee, along with a copy of the application in electronic format (jpeg or pdf format). The application and all supporting information and documentation shall be submitted in accordance with the City -approved forms.

B. Filing Fee. Concurrently with filing the application, the applicant shall pay a filing fee of $1,750.00. The filing fee may be periodically updated by Resolution of the City Council.

No application shall be deemed complete or set for hearing unless the applicant has paid the required filing fee.

C. Service and Posting. The application shall be served and posted by the applicant in accordance with Section 1.0004 of these Rules. Proof of service and posting shall be filed with the application.

D. Declaration. The application shall be accompanied by a declaration or affidavit signed under penalty of perjury, in accordance with the City -approved forms, certifying that a copy of the application was posted and served in accordance with the Ordinance and these Rules; and that all information and documentation contained in the application is true and correct.

Mobilehome Park Administrative Rules, Resolution No. 20254-4436 Page 49

E. Resident Meeting. Prior to submittal of an application for a rent decrease under this Chapter, the park resident or park owner may request a resident meeting to discuss the proposed application. Documentation of the meeting should be maintained, including sign -in sheets, notice of meeting, materials handed out at the meeting, and a record of any vote or other action taken at the meeting, and any such documentation should be filed with the application. The City strongly encourages park residents to hold a meeting with the park owner to facilitate and streamline the application and hearing process and clarify the issues, but failure to hold the resident meeting shall not preclude the granting of an application under this Chapter.

F. Reduction in Service or Amenity. In considering an application for a rent decrease based on the reduction in a service or amenity, only substantial reductions in services or availability of an amenity that will result in significant cost savings to the park owner can be the basis of a rent decrease under this Chapter.

G. Evidence. A proposed rent decrease must be supported by competent written or oral evidence. Mere speculation shall not be sufficient to support a rent decrease under this Chapter.

7.0005. PARK RESIDENT APPLICATION FOR RENT DECREASE
In addition to the requirements set forth in Section 7.0004, the following provisions shall apply to all applications submitted by park residents (or park resident representative) for a rent decrease under YMC Section 15.20.090 and this Chapter.

A. Resident Request for Restoration of Service or Amenity. A resident who intends to file a rent decrease application shall, at least thirty (30) days but not more than sixty (60) days prior to filing the application, serve on the park owner and manager a notice of intent to file an application for a rent decrease and request for restoration of services or amenity. Service may be accomplished by personal delivery upon the park owner and park manager, or by deposit in the U.S. Mail, first-class delivery, postage prepaid. The notice of intent shall be accompanied by proofs of service on the park owner and manager, and a declaration under penalty of perjury certifying that the notice has been served in accordance with the Ordinance and these Rules and that the information contained in the notice of intent is true and correct. The notice of intent and supporting documents shall be in accordance with the City -approved forms. If the park owner fails to restore the service or amenity to the prior condition or level within thirty (30) days of service of the notice of intent on the park owner and manager, the resident or resident representative(s) may file an application for a rent decrease in accordance with this Chapter.

B. Application contents. An application for a rent decrease filed by a park resident based on the discontinuance or reduction of a service or amenity under YMC Section 15.20.090(B) shall contain all of the following information and documentation in addition to the requirements of Section 7.0004 and Subsection (A) of this Section 7.0005.

1. Applicant information. The complete name, address and telephone number of the applicant, and each person joining in the application; and if the applicant is a representative of a park resident(s), the representative capacity of the applicant (including but not limited to the name(s) of the person(s) upon whose behalf the application is submitted), and written documentation of the applicant's authority to submit the application on behalf of that park resident(s).

Mobilehome Park Administrative Rules, Resolution No. 20254-44-56 Page 50

2. Request for restoration of services. A copy of the request for restoration of services, served and posted by the applicant in accordance with Subsection (A) of this Section 7.0005, and any response received from the park owner or manager in response to the request.

3. Resident meeting. Documentation establishing any resident meeting held with the residents and park owner prior to submittal of the application.

4. Prior rent decrease. If as of the time of filing the application, the park owner has already decreased the rent due to the discontinuance of or reduction in the service or amenity, all of the following information must be provided: the amount of the rent decrease; the date of notice of the rent decrease; the effective date of the rent decrease; the explanation given by the park owner for the rent decrease; any documents or other information provided by the park owner to support the rent decrease; and why the applicant contends the amount of the rent decrease is insufficient.

5. Discontinuance of service or amenity. An application for a rent decrease based on discontinuance of a service or amenity filed by a park resident shall contain all of the following additional information and documentation:
a. A detailed explanation of the service or amenity discontinued. Examples include removal of all on -site laundry machines, elimination of all on -site manager services or maintenance services, or the closing of the pool, clubhouse or on -site manager's office. De minimis conditions shall not be included.
b. Photographs of the before and after -condition (where feasible). c. The date that the service or amenity was initially provided. d. The date the service or amenity was discontinued.
e. Whether the park owner agrees that the service or amenity was discontinued.
f. The reason(s), if any, provided by the park owner to the resident(s) for the discontinuance of the service or amenity.
g. The amount of the rent decrease requested by the applicant, and the methodology used by the applicant to determine the amount of the rent decrease. h. The cost savings to the park owner resulting from the discontinuance of the service or amenity, and the methodology used by the applicant to determine the cost savings. i. Whether the park owner agrees with the amount of the rent decrease requested by the applicant.
j. Any impact on resident health and safety as a result of the discontinuance of the service or amenity.

6. Reduction in Service or Amenity. An application for a rent decrease based on the reduction of a service or amenity filed by a park resident shall contain all of the following additional information and documentation:
a. A detailed explanation of the facts demonstrating the reduction in the service or amenity provided. Relevant evidence includes but is not limited to a detailed description of the service or amenity provided prior to the reduction in the service or amenity, and a detailed description of the level of service or amenity provided as of the date of the application. Only substantial reductions in services or availability of an amenity that will result in significant cost Mobilehome Park Administrative Rules, Resolution No. 20254-4436 Page 51

savings to the park owner can be the basis of a rent decrease under this section. De minimis conditions shall not be included.
(1) Examples include a substantial reduction in the number of months a pool is open or heated; a substantial reduction in the number of days on which the clubhouse is open and available to residents or a substantial decrease in the number of hours the clubhouse is open each day.
(2) The written explanation shall include an explanation of the level of service or amenity provided in the park as of each of the following dates: (i) date of commencement of the tenancy of the applicant and any other affected residents in the park; (ii) dates during which the prior level of the service or amenity was provided to the tenant and other affected residents prior to the reduction in the level of the service or amenity; (iii) level of the service or amenity provided during each of the last five years up to and including the date of the reduction of the service or amenity; and (iv) current level of service provided. b. Photographs of the before and after -condition (where feasible). c. The date that the service or amenity was initially reduced. If reductions occurred over a period of time, the dates of such reductions. d. Whether the park owner agrees that the service or amenity has been reduced. e. The reason(s), if any, provided by the park owner to the resident(s) for reducing the service or amenity.
f. Any impact on resident health and safety as a result of the reduction of the service or amenity.
g.

The cost savings to the park owner resulting from the reduction of the service or amenity, and the methodology used by the applicant to determine the cost savings. h. The amount of the rent decrease requested, and the methodology used by the applicant to calculate the rent decrease due to the reduction of the service or amenity. i. Whether the park owner agrees with the amount of the rent decrease requested by the applicant.

7. Park owner notification. Any documents issued by the park owner to the applicant or other residents prior to the date of the application, explaining or describing the services or amenities provided by the park owner to the residents, any changes or reductions in such services or amenities and the dates of such changes or reductions.

8. Governmental citations or orders. Any notices, orders or findings issued by any other state, federal or local agency confirming or addressing the alleged reduction or discontinuance of the service or amenity, or any finding that a service or amenity is inadequate or does not comply with the law.

9. Any additional information or documentation required by the RA and/or the Hearing Officer that is reasonably necessary to assist the City in determining whether an application should be granted.

C. Park Owner Response to Park Resident Application for Rent Decrease. Within twenty (20) days of service of the application on the park owner by the RA, the park owner may file a response to the resident's application in accordance with this section.

Mobilehome Park Administrative Rules, Resolution No. 20254-4456 Page 52

1. Service and posting. The park owner's response shall be served on the park residents and park resident representatives in accordance with Section 1.0004 of these Rules, and filed with the City in accordance with YMC Sections 15.20.090(B) and 15.20.100(E).

2. Content of Response. The response shall contain all of the following information, and supporting documentation, in addition to any other information or documentation required by the Ordinance and these Rules:
a. Whether the park owner agrees that the service or amenity has been reduced or discontinued.
b. If the park owner denies that the service or amenity has been reduced or discontinued, all facts and documents supporting the park owner's contentions. c. If the park owner agrees that the services or amenities were reduced or discontinued for a period of time, but have been restored to their previous level(s), the park owner shall include information and documentation demonstrating (i) the date(s) when the service or amenity was reduced or discontinued; (ii) the reason(s) why the service or amenity was reduced or discontinued; (iii) the date(s) that the service or amenity was restored to its prior level; (iv) that the service or amenity has been restored to the prior level, when it was so restored, and whether the residents have been so notified.
d. Whether the park owner agrees with the amount of the rent decrease proposed by the application.
e. If the park owner disagrees with the amount of the proposed rent decrease, the facts and documents supporting the park owner's contentions. f. If the park owner contends that any rent reduction requested by the residents will prevent the park owner from earning a fair return, the park owner shall include the factual basis for his/her position and all supporting information and documentation, including but not limited to the information and documentation required by Section 7.0005 of these Rules.

3. Proof of Service and Posting. The response shall include the proof of service and posting and declaration under penalty of perjury required by Sections 1.0004 of these Rules.

4. Declaration. A declaration or affidavit signed under penalty of perjury by the person filing the response, certifying that a copy of the response was served on the applicant and the applicant's designated representative, if any; and posted in the park in accordance with these Rules, and that all information contained in the response is true and correct, in accordance with the City -approved forms.

7.0006. PARK OWNER APPLICATION FOR A RENT DECREASE
In addition to the requirements set forth in Section 7.0004, the following provisions shall apply to all park owner applications for a rent decrease.

A. Park Owner Notice of Intent to File Application. A park owner who intends to file a rent decrease application shall, at least thirty (30) days but not more than sixty (60) days prior to filing the application, notify the affected park residents, and the park resident representative(s), in writing of the service or amenity that the park owner will discontinue or reduce and the basis therefor, and the amount of rent by which the park owner intends to reduce the rent. Service may be accomplished by personal delivery upon the residents, or by deposit in the U.S. Mail, first-class delivery, postage prepaid. A copy of the notice shall also be posted in each of the following three locations: the park office, the clubhouse and one other location mutually accessible to the park Mobilehome Park Administrative Rules, Resolution No. 20254-4446 Page 53

residents and owner. The notice shall be accompanied by proofs of service of the notice on residents and a declaration signed by the park owner or park owner representative under penalty of perjury, certifying that the notice has been served and posted in accordance with the requirements of this Chapter and the Ordinance, and that the information contained in the notice of intent is true and correct. The notice and accompanying documents shall be in accordance with the City -approved forms.

B. Application contents. An application by the park owner for a decrease in rent based on the discontinuance or reduction of a service or amenity under YMC Section 15.20.090 shall contain all of the following information and supporting documentation in addition to the requirements of Section 7.0004 and Subsection (A) of this Section 7.0006.

1. Applicant Information. The complete name, address and telephone number of the park owner, and if the applicant is a representative of the park owner, the representative capacity of the applicant (including but not limited to the name(s) of the park owner upon whose behalf the application is submitted), and written documentation of the applicant's authority to submit the application on behalf of that park owner.

2. Notice of Intent. A copy of the notice of intent to file application served on the residents and posted in accordance with Section 7.0004 of this Chapter, and the response(s) of the residents, if any, to the notice of intent.

3. Resident Meeting. Documentation establishing any resident meeting held with the residents and park owner prior to submittal of the application.

4. Prior Rent Decrease. If, as of the time of filing the application, the park owner has already decreased the rent based on the proposed discontinuance of or reduction in the service or amenity, all of the following information: the amount of the rent decrease, the date of notice of the rent decrease, the effective date of the rent decrease, the explanation given by the park owner to the residents for the rent decrease, and any documents or other information already provided by the park owner to the residents to explain the rent decrease.

5. Discontinuance of Service or Amenity. An application for a rent decrease based on the proposed discontinuance of a service or amenity filed by a park owner shall contain all of the following additional information and supporting documentation:
a. A detailed explanation of the service or amenity proposed to be discontinued. Examples include removal of all on -site laundry machines, elimination of all on - site manager services or maintenance services, or the closing of the pool, clubhouse or on -site manager's office. De minimis conditions shall not be included. b. The date that the service or amenity was initially provided. c. The date the park owner proposes to discontinue the service or amenity. d. The reason(s) for the proposed discontinuance of the service or amenity. e. The amount of the rent decrease requested by the applicant, and the methodology used by the applicant to calculate the rent decrease. f. The cost savings to the applicant that will result from the proposed discontinuance of the service or amenity, and the methodology used by the applicant to determine the cost savings.
g.

Whether the park residents agree with the amount of the proposed rent decrease requested by the applicant.

Mobilehome Park Administrative Rules, Resolution No. 20254-4456 Page 54

h. Any impact on resident health and safety that would occur as a result of the discontinuance of the service or amenity.

6. Reduction in Service or Amenity. An application for a rent decrease based on the proposed reduction of a service or amenity filed by a park owner shall contain all of the following additional information and documentation:
a. A detailed explanation of the proposed reduction in the service or amenity.

Relevant evidence includes but is not limited to a description of the type of service or amenity, a detailed description of the level of the service or amenity or service currently provided, and the level of service or amenity proposed to be provided. Only substantial reductions in services or availability of an amenity that will result in significant cost savings to the park owner can be the basis of a rent decrease under this section. De minimis conditions shall not be included. (1) Examples include a substantial reduction in the number of months a pool is open or heated; a substantial reduction in the number days on which the clubhouse is open and available to residents or a substantial decrease in the number of hours the clubhouse is open each day.
(2) The written explanation shall include an explanation of the level of service or amenity provided in the park as of each of the following dates: (i) dates of commencement of the tenancy of the affected residents in the park; (ii) dates during which the level of the service or amenity was previously reduced, if any; (iii) dates during which the level of the service or amenity was restored to the prior level(s); (iv) current level of the service or amenity provided as of the date of the application; and (v) level of service proposed to be provided after the reduction in the level of the service or amenity.
b.

Photographs of the before and after -condition (where feasible). c. The reason(s) for the proposed reduction in the level of service or amenity to be provided.
d. The reason(s), if any, provided by the park owner to the resident(s) for the proposed reduction in the level of the service or amenity. e. Any impact on resident health and safety as a result of the reduction of the service or amenity.
f. The cost savings to the park owner resulting from the proposed reduction of the service or amenity, and the methodology used by the applicant to determine the cost savings. g. The amount of the rent decrease requested, and the methodology used by the applicant to calculate the rent decrease due to the reduction of the service or amenity. h. Whether the park residents agree with the amount of the rent decrease requested by the applicant.

7. Park resident notification. Any documents issued or provided to the residents prior to the date of the application, which such documents set out or explain the services or amenities provided by the park owner to the residents during the period covered by the prior rent increase(s), any changes or reductions in such services or amenities and the dates of such changes or reductions.

8. Governmental citations or orders. Any notices, orders or findings issued by any other state, federal or local agency confirming or addressing the alleged reduction or Mobilehotne Park Administrative Rules, Resolution No. 20254-4454 Page 55

discontinuance of the service or amenity, or any finding that a service or amenity is inadequate or does not comply with the law.

9. Any additional information or documentation required by the RA and/or the Hearing Officer that is reasonably necessary to assist the City in determining whether the application should be granted.

C. Park Resident Response to Park Owner Application. Within twenty (20) days of service or a copy of the notice of the application on the park residents by the RA (or within twenty (20) days of service of the application on the park resident representative by the RA), the park residents (or park resident representative) may file a response to the park owner's application in accordance with this section.

1. Service and posting. The park resident's response (or response of the resident representative) shall be served on the park owner and park owner's designated representative, if any, in accordance with Section 1.0004 of these Rules, and filed with the City in accordance with YMC Sections 15.20.090(B) and 15.20.100(E).

2. Content of Response. The response shall contain all of the following information, and supporting documentation, in addition to any other information or documentation required by the Ordinance and these Rules:
a. Whether the park resident(s) agrees with the amount of the rent decrease requested in the application.
b. If the park resident(s) disagree with the amount of the proposed rent decrease, all of the facts and documents supporting their contentions. c. If the park resident(s) contend that other services or amenities were reduced or discontinued, the facts and documents supporting their contentions. d. If the park resident(s) contend that the service or amenity cannot be discontinued or reduced because such service or amenity is required by other laws or to maintain health and safety and/or habitability standards, the response shall specify the laws or regulations requiring that such service or amenity be maintained at their prior level and the specific health or safety reasons that such service or amenity must be maintained, and all supporting documentation. e. Any other information and documentation supporting the park resident's response to the park owner's application and relevant to the issues for determination under YMC Section 15.20.090(A) and this Chapter.

3. Proof of Service and Posting. The response shall include the proof of service and posting and declaration under penalty of perjury required by Section 1.0004 of these Rules.

4. Declaration. A declaration or affidavit signed under penalty of perjury by the person filing the response, certifying that a copy of the response was served on the applicant and the applicant's designated representative, if any; and posted in the park in accordance with these Rules, and that all information contained in the response is true and correct, in accordance with the City -approved forms.

7.0007. RENT ADMINISTRATOR REVIEW
A. Application Processing. Upon receipt of the application, the RA shall review the application and determine whether it is complete, in accordance with YMC Section 15.20.105 and Section 4.0002 of these Rules.

Mobilehane Park Administrative Rules, Resolution No. 20254-4436 Page 56

B. Utility Services. if a park owner provides utility services to a mobilehome space discontinues or eliminates such service by separate metering or other lawful means of transferring responsibility for payment from the park owner to the resident(s) of such space, the prospective rent decrease resulting from such transfer shall be determined in accordance with Civil Code Section 798.41, or any successor statute. As used in this Subsection (B) the term "utilities services" means natural gas or liquid propane gas, electricity, water, cable television, garbage or refuse service, and sewer service, or as Civil Code Section 798.41 may be amended from time to time.

C. Repairs. For purposes of evaluating an application under this Chapter, the park owner's removal of a service or amenity to have it repaired shall not be grounds for a rent decrease so long as the park owner returns the service or amenity in good working order within a reasonable period of time.

7.0008. PROCEEDINGS
A. Hearing. The hearing shall be conducted in accordance with Chapter 1 of these Rules.

B. Hearing Officer Decision. At the conclusion of the hearing on an application to reduce rent under this Chapter, the Hearing Officer shall have the authority to approve, approve a modified rent decrease, or deny a rent decrease to the applicant. The Hearing Officer's decision shall be issued in writing and shall contain findings of fact in support of the decision. The Hearing Officer's decision shall include the amount of the monthly decrease in rent for each space, and the commencement date of the rent decrease.

C. Final Decision. The Hearing Officer's decision on any rent decrease in rent shall be final.

7.0009. CHAPTER 7 — SCHEDULE A - DE MINIMIS CONDITIONS
(reference: Section 7.0001(D)(3)(a) of Chapter 7)
Minimal changes (also known as "de minimis conditions") do not qualify for a rent decrease under YMC Section 15.20.090 or this Chapter. The following list provides examples of de minimis conditions.

1. Air Conditioning: Failure to provide air-conditioning in non -enclosed public areas, such as hallways, stairwells, and other similar areas.

2. Appliances. Clubhouse and other Common Area: Chips on appliances, counter tops, fixtures or tile surfaces; color -matching of appliances, fixtures or tiles.

3. Building Entrance Door: Removal of canopy over door; changes in door -locking devices, where security or access is not otherwise compromised.

4. Carpeting: Change in color or quality under certain circumstances; isolated stains on otherwise clean carpets; frayed areas which do not create a tripping hazard.

5. Cracks: Sidewalk cracks which do not create a tripping hazard; cracks in walls and ceilings that do not constitute any health or safety hazard, provided there is no water leak; street cracks which do not create any traffic hazard and which otherwise comply with the law where such streets are otherwise regularly maintained.

6. Decorative Amenities: Modification (e.g., fountain replaced with rock garden); removal of some or all for aesthetic reasons.

Mobilehome Park Administrative Rules, Resolution No. 20254-44-e Page 57

7. Doors: Lack of alignment, provided the condition does not prevent proper closing or locking of entrance doors or closing of interior doors.

8. Floors: Failure to provide furnishing, refinishing or waxing; discrete areas in need of cleaning or dusting, where there is evidence that janitorial services are being regularly provided and most areas are clean (See also Janitorial Services, Subsection 12).

9. Parking: Any condition that does not interfere with the use of the parking lot (if any) or an assigned parking space (e.g., peeling paint where there is no water leak).

10. Graffiti: Minor graffiti inside the building; any graffiti outside the building where the owner submits an "affidavit of on -going maintenance" indicating a reasonable time period when the specific condition will be next addressed.

11. Landscaping: Modification; failure to maintain a particular aspect of landscaping where the grounds are generally maintained.

12. Janitorial Services: Failure to clean or dust discrete areas, where there is evidence that janitorial services are being regularly provided because most areas are, in fact, clean.

13. Lighting in Common Areas or Other Public Areas: Missing light bulbs or fixtures where the lighting is otherwise adequate.

14. Common Area Decorative Items: Discontinuance of flowers (fresh -cut or artificial); modification of furniture; removal of some furnishings (determined on a case -by -case basis); removal of decorative mirrors; reduction in space where reasonable access and use remain (determined on a case -by -case basis); elimination of public area door mat; removal or replacement of window coverings.

15. Mail distribution: Removal of door-to-door or other methods of internal mail distribution where other forms of distribution (e.g., U.S. mail) are maintained.

16. Masonry: Minor deterioration; failure to repair or replace exterior bricks or other masonry where there is no interior leakage or other danger to health or safety;

17. Painting: Change in color in common areas when otherwise not in violation of any other applicable law or regulation; replacement of wallpaper or stenciling with paint in the common areas; isolated or minor areas where paint or plaster is peeling, or other similarly minor areas requiring repainting, provided there are no active water leaks; any painting condition in any area that is not part of the common area or not usually meant for or used by the park residents; failure to repaint if less than seven years (exterior common area buildings or facilities) or less than four years (interior common area buildings or facilities).

18. Recreational Facilities: Modifications to pool, shuffleboard court(s), clubhouse, such as reasonable substitution of equipment, combination of areas, or reduction in the number of items of certain equipment where overall facilities are maintained.

19. Sinks: Failure to provide or maintain in recreational facilities, laundry room areas or clubhouse.

20. Storage Space: Removal or reduction of, unless storage space service is provided for in a specific provision of a lease or other rental agreement), or unless the owner has provided formal storage boxes or bins to the residents within three years of the filing of a resident's complaint alleging an elimination or a reduction in storage space service.

21. Maintenance Staff: Decrease in the number of maintenance staff, provided that there is no decrease in janitorial, landscaping, grounds keeping or other maintenance services.

Mobilehome Park Administrative Rules, Resolution No. 20254-445a Page 58

22. Management: Decrease in the number of staff, other than security, provided there is no decrease in management services (elimination of on -site management office may be considered a reduction or discontinuance of a service upon a case -by -case basis).

23. Windows: Sealed, vented, other than in areas used by residents (e.g., laundry rooms); cracked fire -rated windows; peeling paint or other non -hazardous conditions of exterior window frames.

Mobilehome Park Administrative Rules, Resolution No. 20254-44-56 Page 59