Ord 1477 - AN URGENCY ORDINANCE OF THE TOWN OF LOS GATOS ESTABLISHING A RENTAL DISPUTE MEDIATION ANDORDINANCE NO. 1477
AN URGENCY
ORDINANCE OF THE TOWN OF LOS GATOS ESTABLISHING
A RENTAL DISPUTE MEDIATION AND
ARBITRATION PROCESS BY ADDING CHAPTER 24
TO THE LOS GATOS TOWN CODE
The Town Council Of The Town Of Los Gatos ORDAINS:
SECTION 1.
Chapter 24 is added to the Los Gatos Town Code to read as
follows:
Chapter 24
Rent Disputes
PART 1. GENERAL PROVISIONS
24.10.010 Title
This ordinance shall be known as the Los Gatos
Rental Dispute Mediation and Arbitration Ordinance.
24.10.015 Declaration Of Policy And Purposes
The Council finds and declares that there is a
growing shortage of and increasing demand for housing in
the Town of Los Gatos. This circumstance, coupled with
increasing inflation, the rising costs of developing new
housing, and other factors, has put substantial upward
pressure on residential rents.
This ordinance is necessary in order to protect
the health, safety and welfare of the citizens of Los Gatos
-1-
by meeting the needs created by the aforesaid housing
shortage, including, but not limited to, prevention of
excessive and unreasonable rent increases, and the as-
surance to landlords of a fair and reasonable return on
the value of their property.
24.10.020 Severabilitv.
If any provision or clause of this Chapter or the
application thereof to any person is held to be invalid,
such invalidity shall not affect the other provisions or
applications of this Chapter which can be given effect
without the invalid provision or application, and to this
end, the provisions of this Chapter are declared to be
severable.
24.10.025 Termination.
This ordinance will expire two years from its
effective date.
PART 2. DEFINITIONS
24.20.010 General
Unless the context otherwise requires, the
definitions set forth in this Part govern the construction
of the Chapter.
24.20.015 Rental Unit.
A rental unit is any building or part of a
building which is used for residence, or land which is
used for a mobile -home space, and which is rented to a
tenant as a dwelling place, except:
(1) Rental units, located in a building
-2-
containing five or fewer dwelling units;
(2) A room in an owner - occupied dwelling
where under the lease provisions the tenant does not have
the substantially exclusive use of a kitchen.
(3) A single house, condominium unit or
planned development (Business and Professions Code Section
11003.0) unit.
(4) A hotel room or similar accommodation
ordinarily let for occupancy by the same tenant for periods
of less than 15 days.
(5) A hospital room, skilled nursing facility
or similar accommodation where the main factor in the
rental relationship is the personal care given to the
tenant.
(6) A dwelling owned, operated or managed
by a government agency or which is exempted by State or
Federal law from rent regulation.
24.20.020 Land.
Land is real property in the technical sense.
The meaning of the word includes but is not limited to
buildings, parking spaces, and mobile -home spaces.
24.20.025 Lease.
A lease is an agreement -- written, oral, implied
in fact, or implied in law -- in which a landowner, for
compensation, conveys the right to possess land to someone
else for a period of time or from period to period.
24.20.030 Tenant.
A tenant is a lessee, who occupies land under a
-3-
lease. Sublessees are tenants.
24.20.035 Housing Services
Housing services are those services provided and
associated with the use or occupancy of a rental unit,
including but not limited to, repairs, replacement, main-
tenance, painting, light, heat, water, elevator service,
laundry facilities and privileges, janitorial service,
refuse removal, furnishings, telephone, parking, and any
other benefits, privileges or facilities.
24.20.040 Rent_
Rent is the consideration, including any bonus,
benefit or gratuity, demanded or received by a landlord
for or in connection with the use or occupancy of a rental
unit, or the assignment of a lease for such a unit, including
housing services or subletting.
24.20.045 Rent Increase
A rent increase is any additional rent demanded
of or paid by a tenant for a rental unit, including any
reduction in housing services without a corresponding
reduction in the monies demanded or paid for rent.
24.20.050 Voluntary Vacancy
A voluntary vacancy occurs when a rental unit is
vacated by a tenant for reasons other than eviction.
24.20.055 Mediator /Arb Hearing Officer
Mediator shall mean a person designated by the
Manager who is trained to conciliate rental disputes under
this Chapter. Arbitrator shall mean the party appointed to
arbitrate such disputes under the Rules of the American
-4-
Arbitration Association.
Mediators and Arbitrators.
Hearing Officer includes both
PART 3. REGULATORY PROVISIONS
24.30.010 Reasonabl Rent Increases.
No landlord shall increase the rent of any tenant
in an amount which is unreasonable. The factors to be con-
sidered in determining whether a rent increase is reasonable
are set forth in Part 7 hereof.
24.30.020 Retaliatory Evictions
Possession of a rental unit shall not be recovered
by a landlord from a tenant who is not otherwise in default
as to the terms of occupancy of said unit if either:
(1) The landlord's predominant reason
for seeking to recover possession of such rental unit is
retaliation against the tenant for exercising his or her
rights pursuant to this ordinance; or,
(2) The predominant motive of the landlord
in seeking to recover possession of such rental unit is to
evade the purposes of this ordinance.
When an eviction occurs within 180 days of
the tenant's exercise or reasonable attempt to exercise
rights provided by this ordinance, if the tenant shows that
the landlord knew at the time of eviction of the tenant's
conduct in relation to this ordinance, the eviction is
presumed to be retaliatory. This presumption applies in
judicial proceedings and is one which affects the burden
of producing evidence.
-5-
PART 4. RESOLUTION OF DISPUTES
24.40.010 Town Service
When either party to a landlord /tenant trans-
action has a dispute with the other concerning rent,
housing services or proposed eviction, he may seek the
services of the Town by filing a written petition for
conciliation with the City Clerk; provided, that in the
case of rent disputes, 25% of the units affected must join
in the petition. No petition may be filed later than 30
days after the rental increase takes effect; provided,
that petitions dealing with rent increases effective on
or after July 1, 1980, and prior to the effective date of
this ordinance may be made within 30 days after the ef-
fective date of this ordinance.
24.40.015 Conciliation
The Town, acting through mediators designated
by the Manager, will provide conciliation service to parties
engaged in landlord /tenant disputes. Conciliation in this
sense is limited intervention in the dispute, using letters
and telephone and personal conversation to attempt to
explain to each party the position of the other and to urge
rational agreement.
24.40.020 Mediation
When conciliation has been requested and 15
'o'
days have passed without resolution of the dispute, either
party may request mediation by applying therefor on a form
provided by the Mediator.
24.40.025 Response To Mediation Requests
When mediation has been properly requested, the
Mediator shall notify both the landlord and the tenant, in
writing, setting a date or dates for mediation conference,
specifying what documents each party is to bring and sending
each party a copy of the Rent Disputes Ordinance.
24.40.030 Subpoenas
The Mediator may, on his own initiative or at the
request of a party, issue subpoenas including subpoenas duces
tecum. For the purposes of the Rent Disputes Ordinance, the
Town Council's authority to issue subpoenas is delegated to
the Mediator, reserving to the Council full authority to
issue subpoenas for the same or other purposes.
24.40.035 Conduct Of Mediation
The parties shall cooperate with the Mediator,
stating their position on all issues, conferring with the
Mediator and each other, and providing at the Mediator's
request information and corroboration of their assertions
of fact. If the parties agree, the Mediator shall reduce
their agreement to writing and the parties shall sign it.
24.40.040 Right To Arbitration
When mediation has been properly requested and
does not result in an agreement within 28 days after the
request, either party may demand arbitration by applying
-7-
therefor on a form provided by the Mediator. An agreement
to arbitrate in the manner provided herein is deemed to
be a part of every lease. The Mediator may also initiate
arbitration if he concludes that mediation. is not feasible.
24.40.045 Time Limit
A demand for arbitration*is ineffective unless
it is delivered to the Mediator within 35 days after the
request for mediation.
24.40.050 Arbitration.
When a party properly demands arbitration, the
dispute shall be arbitrated under the Rules of the American
Arbitration Association, and judgment may be entered on
any award made.
24.40.055 Costs
If arbitration is demanded and the Arbitrator
determines that his award is not substantially more
beneficial to the party demanding arbitration than a
resolution proposed by the trained Mediator, the party
demanding arbitration shall be liable to the other party
for the latter's costs of arbitration, including attorney's
fees, not to exceed $100.00.
PART 5. ENFORCEMENT
24.50.010 Retroactive Application
This ordinance shall apply to all rent increases
effective on or after July 1, 1980, and to all landlord/
tenant disputes arising after July 1, 1980. The Council
finch that this provision is necessary in order to avoid
having landlords make exorbitant rent increases
-8-
pending the final adoption of this ordinance.
(1) No landlord shall be required to refund
any rent hereunder. However, the Mediator may establish a
reasonable rent at a decreased level, which shall be ef-
fective for 12 months from the date of the Mediator's decision.
24.50.015 Stay
Invocation by a tenant of conciliation under this
ordinance shall stay the rent increase or eviction complained
of, and any court proceedings based thereon, pending resolu-
tion of the dispute. However, the tenant shall pay whatever
rent increase is determined to be reasonable hereunder
retroactive to the date the original increase proposed by
the landlord would have been effective.
24.50.020 Civil Penal.tieq Fir Violatir)n_
A finding by a Mediator of a violation of
this ordinance by a landlord shall be a complete defense to
unlawful detainer proceedings by a landlord against a tenant
not otherwise in default under his lease, and to any action
to recover rents in excess of those found reasonable.
24.50.025 Non - Waiver.
Any waiver or purported waiver by a tenant of
rights granted under this - Chapter prior to the time when
such rights may be exercised shall be void as contrary to
public policy.
24.50.030 Standing To Enforce
The Town of Los Gatos may enforce this ordinance
by bringing a civil action.
PART 6. FEES
24.60.010 Regulatory' Pee
For the sole purpose of reimbursing the Town for
the costs of administering this ordinance, there is hereby
imposed on each rental unit subject to the provisions of
this Chapter a regulatory fee of $12 per year which shall
be paid annually at the time at which the landlord's business
license fee is due. The City Manager shall report to the
Council in time for budget hearings each year his or her
recommendation as to the amount of such fee necessary to
recover such costs.
PART 7. STANDARDS OF REASONABLENESS
24.70.010 Standards Of Reasonableness To Be
Applied To Rent Increases.
Mediators and Arbitrators resolving disputes under
the Los Gatos Rent Disputes Ordinance shall determine whether
rent increases are reasonable under all circumstances, taking
into consideration that the purpose of the ordinance is to
permit landlords a fair and reasonable return on the value
of their property, while at the same time protecting tenants
from arbitrary, capricious or unreasonable rent increases.
The determination of reasonableness shall be made with
reference to the following standards, unless the Mediator
or Arbitrator determines that the overall standard of
-10-
reasonableness requires other standards to be applied in
a given case.
24.70.015 Increases In Excess Of 70% Of The
Increases In The Consumer Price Index
(1) Definitions
(a) Base Date.
Base date is the most recent of:
(i) The date a rental dwelling was first
occupied as a rental dwelling.
(ii) The date of reletting after a
voluntary vacancy.
(iii) The date title to a rental dwelling
vests in a new landlord as a result of change of ownership.
(b) Base Rent
The base rent is the amount of rent charged
on the base date.
(c) CPT.
CPI is the Consumer Price Index -- All Urban
Consumers For The San Francisco- Oakland Area. The most
recent CPI is the bi- monthly figure most recently available
from the Bureau of Labor Statistics. The 70% CPI ceiling
is an amount arrived at by adjusting the base rent to
reflect 70% of the change in the CPI since the base date.
The formula is:
CPI (most recent)) = 70% CPI ceiling
base rent (0.3 +0.7'Cp ase ate
Ordinary mathematic procedure is followed. Processes within
man
parentheses are performed first, then in sequence, division,
multiplication, addition, then the base rent is multiplied
by the result. For example:
300(0.3 +0.7.
100)
300(0.3 +0.7.1.2)
300(0.3+.84)
300(1.14)
$342 = 70% CPT ceiling
(2) Frequency Of Rent Increases
Rent should ordinarily not be increased at
intervals shorter than one year, except that rent can be
increased when a new base date is established. After a
new base date there can be no further increase until one
year has passed or until there is another new base date.
(3) Presumption Of Unreasonableness.
A rent increase in excess of the 70% CPI ceiling
is presumed to be unreasonable unless the Hearing Officer
determines that other factors render it reasonable.
24.70.0.20 Other Standards Of Reasonableness.
(1) Increases Deemed Reasonable.
Where the amount of the proposed rental increase
consists only of passing through one or more of the following:
(a) the fee imposed under Part 6 hereof, (b) costs of capital
improvements, (c) increased costs of maintenance and
operation, or (d) costs of rehabilitation; plus no more than
50 of the monthly rent, they shall be ordinarily deemed
reasonable, provided that:
-12-
(i) Cost figures have been established to
the reasonable satisfaction of the Hearing Officer.
(ii) The Costs of capital improvements if any
are averaged on a per unit basis and are amortized over a
period of not less than 60 months.
(iii) The costs of rehabilitation if any are
averaged on a per unit basis and are amortized over a period
not less than 36 months.
(iv) Each of the costs proposed to be passed
through to tenants, whether it be costs of capital
improvements, increased costs of operation and maintenance,
or costs of rehabilitation, bears a reasonable relationship
to the purposes for which such costs were incurred and the
value of the real property to which they are applied.
(2) When Costs Of Debt Service Deemed To Be
Reasonable.
Increased costs of debt service shall be deemed
reasonable and allowed by the Hearing Officer where the
aggregate amount of debt from whence they arise constitutes
no more than 70% of the value of the property as established
by a lender's appraisal, and no more than 80% of the cost of
such debt service is being passed through to the tenants.
Where no lender's appraisal is available, the Hearing Officer
may secure such appraisal to be paid for by the landlord as
a cost of maintenance and operation.
(3) Standards Applicable To Rent Increases Which
Exceed The Foregoing
When the amount of any rent increase or portion
- -13-
thereof exceeds any of the foregoing standards under sub-
sections 1 or 2 of this Section, the Hearing Officer shall
determine what is reasonable under the circumstances taking
into account any of the following factors on which he has
received information:
(a) 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 12 months of the increase; (i) the arms - length nature
of the transaction, (ii) the landlord's rate of return on
the investment, (iii) the frequency of past resale or
refinances, and (iv) the extent to which prior rental
increases have made provisions for appreciation of asset
value.
(b) The rental history of the unit or the
complex of which it is a part, including: (i) the presence
or absence of past increases, (ii) the frequency of past
rent increases, (iii) the landlord's response to Proposition
13 savings, and (iv) the occupancy rate of the complex in
comparison to comparable units in the same general area.
(c) 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 12 months.
(d) Any increases or reductions of housing
services since the last rental increase before the effective
date of this ordinance.
-14-
(e) Other financial information which the
landlord is willing to provide.
(f) Existing market value of rents for units
similarly situated.
SECTION 2.
It is necessary for the immediate preservation of
the public peace, health and safety of the citizens of the
Town that this ordinance take effect immediately, because
it appears that there are numerous excessive rent increases
that would otherwise take effect before the effective date
of the ordinance, requiring tenants to pay rents which they
cannot afford with no clear prospect of subsequent relief,
thereby causing such tenants to be evicted for inability
to pay such excessive rents, contrary to the intent of
the ordinance.
Accordingly, this ordinance shall take effect
immediately upon adoption.
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.
This ordinance was introduced at a regular
meeting of the Town Council of the Town of Los Gatos on
September 15, 1980, and adopted by the following vote as
an ordinance of the Town of Los Gatos at a regular meeting
of the Town Council on October 27, 1980.
-15-
AYES: COUNCILMEMBERS Ruth Cannon, Marlyn J.
Rasmussen, Peter W. Siemens, and
Thomas J. Ferrito
NOES: COUNCILMEMBERS Non
ABSTAIN: COUNCILMEMBERS Brent W. Ventura
ABSENT: COUNCILMEMBERS None
SIGNED:
ofaa s J. 1 0
Mayor of Y.Re own of Los Gatos
ATTEST:
Rosb Aldag
Clerk of the Town of L`s Gatos
-16-
}
f
ORDINANCE NO. 1477 Al
ORDINANCE OF THE TOWN OF LOS GATOS ESTABLISHING
A RENTAL DISPUTE MEDIATION AND
ARBITRATION PROCESS BY ADDING CHAPTER 24
TO THE LOS GATOS TOWN CODE
The Town Council Of The Town Of Los Gatos ORDAINS:
SECTION 1.
Chapter 24 is added to the Los Gatos Town Code to read as
follows:
Chapter 24
Rent Disputes
PART 1. GENERAL PROVISIONS
24.10.010 Title.
F
This ordinance shall be known as the Los Gatos
Rental Dispute Mediation and Arbitration Ordinance.
24.10.015 Declaration Of Policy And Purposes
The Council finds and declares that there is a
growing shortage of and increasing demand for housing in
the Town of Los Gatos. This circumstance, coupled with
increasing inflation, the rising costs of developing new
housing, and other factors, has put substantial upward
pressure on residential rents.
This ordinance is necessary in order to protect
the health, safety and welfare of the citizens of Los Gatos
-1-
by meeting the needs created by the aforesaid housing
shortage, including, but not limited to, prevention of
excessive and unreasonable rent increases, and the as-
surance to landlords of a fair and reasonable return on
the value of their property.
24.10.020 Severability
If any provision or clause of this Chapter or the
application thereof to any person is held to be invalid,
such invalidity shall not affect the other provisions or
applications of this Chapter which can be given effect
without the invalid provision or application, and to this
end, the provisions of this Chapter are declared to be
severable.
24.10.025 Terminatio
This ordinance will expire two years from its
effective date.
PART 2. DEFINITIONS
24.20.010 General.
Unless the context otherwise requires, the
definitions set forth in this Part govern the construction
of the Chapter.
24.20.015 Rental Unit.
A rental unit is any building or part of a
building which is used for residence, or land which is
used for a mobile -home space, and which is rented to a
tenant as a dwelling place, except:
(1) Rental units, located in a building
IWAS
containing five or fewer dwelling units;
(2) A room in an owner- occupied dwelling
where under the lease provisions the tenant does not have
the substantially exclusive use of a kitchen.
(3) A single house, condominium unit or
planned development (Business and Professions Code Section
11003.0) unit.
(4) A hotel room or similar accommodation
ordinarily let for occupancy by the same tenant for periods
of less than 15 days.
(5) A hospital room, skilled nursing facility
or similar accommodation where the main factor in the
rental relationship is the personal care given to the
tenant.
(6) A dwelling owned, operated or managed
by a government agency or which is exempted by State or
Federal law from rent regulation.
�n 1)0 n1) n
Land is real property in the technical sense.
The meaning of the word includes but is not limited to
buildings, parking spaces, and mobile -home spaces.
7n ') n n11c T - - _ -
A lease is an agreement -- written, oral, implied
in fact, or implied in law -- in which a landowner, for
compensation, conveys the right to possess land to someone
else for a period of time or from period to period.
') n 'n non — - - -
A tenant is a lessee, who occupies land under a
-3-
lease. Sublessees are tenants.
24.20.035 Housinq Services.
Housing services are those services provided and
associated with the use or occupancy of a rental unit,
including but not limited to, repairs, replacement, main-
tenance, painting, light, heat, water, elevator service,
laundry facilities and privileges, janitorial service,
refuse removal, furnishings, telephone, parking, and any
other benefits, privileges or facilities.
24.20.040 Rent.
Rent is the consideration, including any bonus,
benefit or gratuity, demanded or received by a landlord
for or in connection with the use or occupancy of a rental
unit, or the assignment of a lease for such a unit, including
housing services or subletting.
24.20.045 Rent Increase.
A rent increase is any additional rent demanded
of or paid by a tenant for a rental unit, including any
reduction in housing services without a corresponding
reduction 'in the monies demanded or paid for rent.
24.20.050 Voluntary Vacancy
A voluntary vacancy occurs when a rental unit is
vacated by a tenant for reasons other than eviction.
24.20. Mediator /Arbitrator Hearinq Officer.
Mediator shall mean a person designated by the
Manager who is trained to conciliate rental disputes under
this Chapter. Arbitrator shall mean the party appointed to
arbitrate such disputes under the Rules of the American
-4-
Arbitration Association. Hearing Officer includes both
Mediators and Arbitrators.
PART 3. REGULATORY PROVISIONS
24.30.010 Reasonab Rent Increases.
No landlord shall increase the rent of any tenant
in an amount which is unreasonable. The factors to be con-
sidered in determining whether a rent increase is reasonable
are set forth in Part 7 hereof.
24.30. Retaliatory Evictions.
Possession of a rental unit shall not be recovered
by a landlord from a tenant who is not otherwise in default
as to the terms of occupancy of said unit if either:
(1) The landlord's predominant reason
for seeking to recover possession of such rental unit is
retaliation against the tenant for exercising his or her
rights pursuant to this ordinance; or,
(2) The predominant motive of the landlord
in seeking to recover possession of such rental unit is to
evade the purposes of this ordinance.
When an eviction occurs within 180 days of
the tenant's exercise or reasonable attempt to exercise .
rights provided by this ordinance, if the tenant shows that
the landlord knew at the time of eviction of the tenant's
conduct in relation to this ordinance, the eviction is
presumed to be retaliatory. This presumption applies in
judicial proceedings and is one which affects the burden
of producing evidence.
-5-
PART 4. RESOLUTION OF DISPUTES
24.40.010 Town Service.
When either party to a landlord /tenant trans-
action has a dispute with the other concerning rent,
housing services or proposed eviction, he may seek - the
services of the Town by filing a written petition for
conciliation with the City Clerk; provided, that in the
case of rent disputes, 250 of the units affected must join
in the petition. No petition may be filed later than 30
days after the rental increase takes effect; provided,
that petitions for rent increases which occurred on or
after July 1, 1980, and prior to the effective date of
this ordinance may be made within 30 days after the effective
date of this ordinance.
24.40.015 Conciliation
The Town, acting through mediators designated
by the Manager, will provide conciliation service to parties
engaged in landlord /tenant disputes. Conciliation in this
sense is limited intervention in the dispute, using letters
and telephone and personal conversation to attempt to
explain to each party the position of the other and to urge
rational agreement.
24.40.020 Mediation
When conciliation has been requested and 15
days have passed without resolution of the dispute, either
party may request mediation by applying therefor on a form
provided by the Mediator.
24.40.025 Response To Mediation Requests.
When mediation has been properly requested, the
Mediator shall notify both the landlord and the tenant, in
writing, setting a date or dates for mediation conference,
specifying what documents each party is to bring and sending
each party a copy of the Rent Disputes Ordinance.
24.40.030 Subpoenas
The Mediator may, on his own initiative or at the
request of a party, issue subpoenas including subpoenas duces
tecum. For the purposes of the Rent Disputes Ordinance, the
Town Council's authority to issue subpoenas is delegated to
the Mediator, reserving to the Council full authority to
issue subpoenas for the same or other purposes.
24.40.035 Conduct Of Mediation.
The parties shall cooperate with the Mediator,
stating their position on all issues, conferring with the
Mediator and each other, and.providing at the Mediator's
request information and corroboration of their assertions
of fact. If the parties agree, the Mediator shall reduce
their agreement to writing and the parties shall sign it.
24.40.040 Riqht To Arbitration.
When mediation has been properly requested and
does not result in an agreement within 28 days after the
request, either party may demand arbitration by applying
-7-
therefor on a form provided by the Mediator. An agreement
to arbitrate in the manner provided herein is deemed to
be a part of every lease. The Mediator may also initiate
arbitration if he concludes that mediation is not feasible.
.24.40.045 Time Limit.
A demand for arbitration is ineffective unless
it is delivered to the Mediator within 35 days after the
request for mediation.
24.40.050 Arbitration.
When a party properly demands arbitration, the
dispute shall be arbitrated under the Rules of the American
Arbitration Association, and judgment may be entered on
any award made.
24.40.055 Costs.
If arbitration is demanded and the Arbitrator
determines that his award is not substantially more
beneficial to the party demanding arbitration than a
resolution proposed by the trained Mediator, the party
demanding arbitration shall be liable to the other party
for the latter''s costs of arbitration, including attorney's
fees, not to exceed $100.00.
PART 5. ENFORCEMENT
24.50.010 Retroactive Application.
This ordinance shall apply to all rent increases
or rental disputes notice of which was served after July -1,
1980. The Council finds that this provision is necessary in
order to avoid having landlords make exorbitant rent increases
-8-
pending the final adoption of this ordinance.
(1) No landlord shall be required to refund
any rent hereunder. However, the Mediator may establish a
reasonable rent at a decreased level, which shall be ef-
fective for 12 months from the date of the Mediator's decision.
24.50.015 Stay
Invocation by a tenant of conciliation under this
ordinance shall stay the rent increase or eviction complained
of, and any court proceedings based thereon; pending resolu-
tion of the dispute. However, the tenant shall pay whatever
rent increase is determined to be reasonable hereunder
retroactive to the date the original increase proposed by
the landlord would have been effective.
24.50.020 Civil Penalti For Violation.
A finding by a Mediator of a violation of
this ordinance by a landlord shall be a complete defense to
unlawful detainer proceedings by a landlord against a tenant
not otherwise in default under his lease, and to any action
to recover rents in excess of those found reasonable.
24.50.025 Non - Waiver.
Any waiver or purported waiver by a tenant of
rights granted under this - Chapter prior to the time when
such rights may be exercised shall be void as contrary to
public policy.
ME
24.50.030 Standing To Enforce.
The Town of Los Gatos may enforce this ordinance
by bringing a civil action.
PART 6. FEES
24.60.010 Regulatory Fee
For the sole purpose of reimbursing the Town for
the costs of administering this ordinance, there is hereby
imposed on each rental unit subject to the provisions of
this Chapter a regulatory fee of $12 per year which shall
be paid annually at the time at which the landlord's business
license fee is due. The City Manager shall report to the
Council in time for budget hearings each year his or her
recommendation as to the amount of such fee necessary to
recover such costs.
PART 7. STANDARDS OF REASONABLENESS
24.70.010 Standards Of Reasonableness To Be
Applied To Rent Increases.
Mediators and Arbitrators resolving disputes under
the Los Gatos Rent Disputes Ordinance shall determine whether
rent increases are reasonable under all circumstances, taking
into consideration that the purpose of the ordinance is to
permit landlords a fair and reasonable return on the value
of their property, while at the same time protecting tenants
from arbitrary, capricious or unreasonable rent increases.
The determination of reasonableness shall be made with .
reference to the following standards, unless the Mediator
or Arbitrator determines that the overall standard of
-10-
reasonableness requires other standards to be'applied in
a given case,
24.70.015 Increases In Excess Of 70% Of The
Increases In The Consumer Price Index
(1) Definitions
(a) Base Da te.
Base date is the most recent of:
(i) July 1, 1980.
(ii) The date a rental dwelling was first
occupied as a rental dwelling.
(iii) The date of reletting after a
voluntary vacancy.
(iv) The date title to a rental dwelling
vests in a new landlord as a result of change of ownership.
(b) Base Rent
The base rent is the amount of rent charged
on the base date.
(c) CPI
CPT is the Consumer Price Index -- All Urban
Consumers For The San Francisco- Oakland Area. The most
recent CPT is the bi- monthly figure most recently available
from the Bureau of Labor Statistics. The 70% CPT
ceiling is an amount arrived at by adjusting the base rent
to reflect 700 of the change in the CPI since the base date.
The formula is:
base rent(0.3 +0.7• (most recent ) = 70% CPI ceiling
CPI (base date)
Ordinary mathematic procedure is followed. Processes within
-11-
parentheses are performed first, then in sequence, division,
multiplication, addition, then the base rent is multiplied
by the result. For example:
300 + 0 . 7 ' 100)
300(0.3 +0.7.1.2)
300(0.3 +.84)
300(l.14)
$342 = 70% CPI ceiling
(2) Frequency Of Rent Increases
Rent should ordinarily not be increased at
intervals shorter than one year, except that rent can be
increased when a new base date is established. After a
new base date there can be no further increase until one
year has passed or until there is another new base date.
(3) Presumption Of Unreasonableness.
A rent increase in excess of the 70% CPI ceiling
is presumed to be unreasonable unless the Hearing Officer
determines that other factors render it reasonable.
24.70.020 Other Standards Of Reasonableness.
(1) Increases Deemed Reasonable.
Where the amount of the proposed rental increase
consists only of passing through one or more of the following:
(a) the fee imposed under Part 6 hereof, (b) costs of capital
improvements, (c) increased costs of maintenance and
operation, or (d) costs of rehabilitation; plus no more than
5% of the monthly rent, they shall be ordinarily deemed
reasonable, provided that:
WVM
(i) Cost figures have been established to
the reasonable satisfaction of the Hearing Officer.
(ii) The Costs of capital improvements if any
are averaged on a per unit basis and are amortized over a
period of not less than 60 months.
(iii) The costs of rehabilitation if any are
averaged on a per unit basis and are amortized over a period
not less than 36 months.
(iv) Each of the costs proposed to be passed
through to tenants, whether it be costs of capital
improvements, increased costs of operation and maintenance,
or costs of rehabilitation, bears a reasonable relationship
to the purposes for which such costs were incurred and the
value of the real property to which they are applied.
(2) When Costs Of Debt Service Deemed To Be
Increased costs of debt service shall be deemed
reasonable and allowed by the Hearing Officer where the
aggregate amount of debt from whence they arise constitutes
no more than 700 of the value of the property as established
by a lender's appraisal, and no more than 800 of the cost of
such debt service is being passed through to the tenants.
Where no lender's appraisal is available, the Hearing Officer
may secure such appraisal to be paid for by the landlord as
a cost of maintenance and operation.
(3) Standards Applicable To Rent Increases Which
Exceed The Foregoing
When the amount of any rent increase or portion
-13-
thereof exceeds any of the foregoing standards under sub-
sections 1 or 2 of this Section, the Hearing Officer shall
determine what is reasonable under the circumstances taking
into account any of the following factors on which he has
received information:
(a) 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 12 months of the increase; (i) the arms - length nature
of the transaction, (ii) the landlord's rate of return on
the investment, (iii) the frequency of past resale or
refinances, and (iv) the extent to which prior rental
increases have made provisions for appreciation of asset
value.
(b) The rental history of the unit or the
complex of which it is a part, including: (i) the presence
or absence of past increases, (ii) the frequency of past
rent increases, (iii) the landlord's response to Proposition
13 savings, and (iv) the occupancy rate of the complex in
comparison to comparable units in the same general area.
(c) 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 12 months.
(d) Any increases or reductions of housing,
services since the last rental increase before the effective
date of this ordinance.
-14-
(e) Other financial information which the land-
lord is willing to provide.
(f) Existing market value of rents for units
similarly situated.
SECTION 2.
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 news-
paper of general circulation published and circulated in the
Town.
This ordinance was introduced at a regular meeting of
the
Town
Council
of
the
Town of Los Gatos
on September 15 ,
1980
and
adopted
by
the
following vote as
an ordinance of the
Town of Los Gatos at a regular meeting of the Town Council on
October 6 , 1980 .
AYES: COUNCIL MEMBERS Ruth Cannon, MarLyn J. Rasmussen,
Peter W. Siemens, and Thomas J. Ferrito
NOES: COUNCIL MEMBERS None
ABSTAIN: COUNCIL MEMBERS Brent N. Ventura
ABSENT: COUNCIL MEMBERS None
SIGNED:
yor of the Wr_ of Los Gatos
ATTEST:
Deputy Clerk of the Town of Los Gatos
-15-