Ord 2202 - Ameding Article VIII of Chapter 14 Rental Dispute Mediation and ArbitrationORDINANCE 2202
ORDINANCE OF THE TOWN OF LOS GATOS
AMENDING ARTICLE VIII OF CHAPTER 14 OF THE TOWN OF LOS GATOS
TOWN CODE, THE RENTAL DISPUTE MEDIATION AND ARBITRATION
ORDINANCE
THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES HEREBY ORDAIN:
SECTION I
Section 14.80.315 of the Town of Los Gatos Town Code is amended to read:
See. 14.80.315. Other factors of reasonableness.
(a) Increases deemed reasonable. Subject to the terms of section 14.80.305, a rent increase is
reasonable if the arbitrator determines the following:
(1) The rent increase consists of no more than five (5) percent of existing monthly
rent plus the pass - through of all or some of the amounts of one (1) or more of the
following:
a. The fee imposed under section 14.80.245;
b. Costs of capital improvements, averaged on a per -unit basis and amortized
over a period of not less than sixty (60) months;
C. Increased costs of maintenance and operation; or
d. Documented costs of rehabilitation; averaged on a per -unit basis and
amortized over a period of not less than thirty -six (36) months;
(2) The cost figures are established to the reasonable satisfaction of the arbitrator.
(3) Each of the costs proposed for pass - through to tenants bears a reasonable
relationship to the purpose for which such cost was incurred and the value of the
real property to which it is applied.
(b) When costs of debt service deemed to be reasonable. Subject to the terms of section
14.80.305, the arbitrator shall deem as reasonable and allowable to be passed through to
tenants the costs of debt service where the arbitrator finds the debt is a secured, arms -
length transaction when both of the following conditions have been met:
(1) In the case of increased costs of debt service by new or existing owners, the
increase shall be limited to eighty (80) percent of the increased costs of debt
service arising from that proportion of the aggregate amount of debt not
exceeding seventy (70) percent of the value of the property as established by a
lender's appraisal or appraisal by some other person or entity in an arm's- length
relationship to the landlord at the time the appraisal is performed. No notice of an
increase based on this subsection shall be effective until such an appraisal has
been obtained. Appraisals utilized for debt service pass - through calculations shall
have been performed within twelve (12) months of the rent increase request.
(2) The arbitrator finds that the factors to be considered regarding proposed rent
increases set forth in subsection (c), below, have also been met.
(c) Additional standards applicable to rent increases when the increase exceeds the base
annual increase. When the amount of any rent increase or portion thereof exceeds the
standards in section 14.80.310, the arbitrator shall determine what is reasonable under the
circumstances taking into account any of the following factors on which the arbitrator has
received evidence and on which the arbitrator may base a decision to accept or deny all or
part of a proposed rent increase:
(1) In the case of increased costs of debt service due to a sale or refinancing of the
rental units or the building or property of which the units are a part within twelve
(12) months of the increase the arbitrator shall consider evidence presented to
him/her by either party on any of the factors contained in this part (1) and in parts
(2) through (6) of this subsection (c). The arbitrator's consideration shall be
limited to "evidence." As used in this subsection, "evidence" shall mean
"substantial evidence" as used in reference to section 1094.5 of the Code of Civil
Procedure in determining whether an administrative decision constitutes an abuse
of discretion:
a. The arms - length nature of the transaction,
b. The landlord's rate of return on the investment,
C. The frequency of past resale or refinances, and
d. The extent to which prior rental increases have made provisions for
appreciation of asset value.
(2) The rental history of the unit or the complex of which it is a part, including:
a. The presence or absence of past increases,
b. The frequency of past rent increases,
C. The occupancy rate of the complex in comparison to comparable units in
the same general area.
(3) The physical condition of the rental unit or complex of which it is a part,
including the quantity and quality of maintenance and repairs performed during
the last twelve (12) months.
(4) Any increases or reductions of housing services since the last rental increase
before the effective date of this article.
(5) Other financial information which the landlord is willing to provide.
(6) Existing market value of rents for units similarly situated.
SECTION II
This Ordinance was introduced at a regular meeting of the Town Council of the Town of Los
Gatos on September 6, 2011, and adopted by the following vote as an Ordinance of the Town of
Los Gatos at a regular meeting of the Town Council of the Town of Los Gatos on September 19,
2
2011. This Ordinance takes effect 30 days after the date it is adopted.
Within 15 days after this Ordinance is adopted, the Town Clerk shall cause it to be published
once in a newspaper of general circulation published and circulated in the Town.
CK�II1�Cy I1�t T�i:1l7.y l
AYES: Diane McNutt, Barbara Spector, Mayor Joe Pirzynski
NAYS:
ABSENT:
ABSTAIN: Steven Leonardis, Steve Rice
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
J*tk��-
CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA