Item 27 Staff Report Rent Dispute Resolution ProgramMEETING DATE: 4-20-98
ITEM NO.
COUNCIL AGENDA REPORT
DATE: April 14, 1998
TO: MAYOR AND TO - • UNCI
FROM: TOWN MANAGER
SUBJECT:
RENT DISPUTE RESOLUTION PROGRAM
A. INTRODUCE ORDINANCE AMENDING THE LOS GATOS TOWN CODE ARTICLE
VIII, RENTAL AND OTHER TENANT/LANDLORD DISPUTES (SECTIONS
14.80.045 - 14.80.315)
B. ADOPT RESOLUTION ADOPTING REVISED RENTAL DISPUTE RESOLUTION
REGULATIONS AND RESCINDING RESOLUTION 1989-210
RECOMMENDATION:
A. Introduce Ordinance.
1. Direct the Town Clerk to read the title.
2. Waive the reading.
3. Introduce the Ordinance amending the Los Gatos Town Code Article VIII, Rental and Other
Tenant/Landlord Disputes (Sections 14.80.045 - 14.80.315); and, instruct the Town Clerk to publish
a summary no more than five (5) days prior to adoption.
B. Adopt the draft Resolution adopting revised Rental Dispute Resolution Regulations and Rescinding Resolution
1989-210.
BACKGROUND:
The Rent Dispute Resolution Program was established to implement Town Code Sections 14.80 and 14.85 Rental and
Other Landlord/Tenant Disputes. Its purpose is to resolve disagreements between tenants and property owners and to
prevent excessive rent increases while assuring property owners a fair and reasonable return on investment. The
Ordinance and accompanying Regulations provide the framework for the Town's Rent Dispute Resolution Program. The
Rent Advisory Committee has spent the last year considering Ordinance policy changes and revising the Regulations.
The Program provides general information and referral services and information about the Town's ordinance and
regulations. In addition, when a tenant or landlord has a dispute with the other party concerning rent, housing services
or proposed eviction, the party may file a written petition for conciliation with the Town's agent. The petition begins
a three tiered dispute resolution process: conciliation, mediation, and arbitration. In most years, 10-20 petitions are filed
and most are resolved through conciliation or mediation. During the last two years, as a result of the tight housing
market and sharp rent increases, approximately 30 petitions have been submitted annually. Most are still resolved before
they reach the arbitration phase.
PREPARED BY: Regina A. Falkne
Community Sery irector
RAF:kv
CSD34:A\cnclrptiii.rpt
Reviewed by:/AttoFinance',Planning Revised: 4/14/98 11:54 am
Reformatted: 10/23/95
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: RENT DISPUTE RESOLUTION PROGRAM
April 15, 1998
DISCUSSION:
The Rent Advisory Committee (RAC) recommends that the attached draft Ordinance and Regulations be considered for
approval.
The drafted Ordinance revisions:
• allow increases of up to 10% after a 24 month period with no rent increases;
• allow pass -through of increased debt service resulting from an owner's refinancing or other increased mortgage
debt; and,
• make administrative changes to assure consistency with the Regulations.
The draft Regulations have been rewritten to be brief, clear, and eliminate redundancies; it incorporates Ordinance
clarifications and administrative corrections.
ENVIRONMENTAL ASSESSMENTS:
This is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT:
The recommended ordinance amendments have no impact on the Rental Mediation Program,
ATTACHMENT:
1. Town Code Section 14.80.010, et seq.
2. Draft Ordinance Amending Los Gatos Town Code Article VIII, Rental and Other Tenant/Landlord Disputes
Sections 14.80.045 - 14.80.315.
3. Draft Resolution.
DISTRIBUTION:
1. Rental Advisory Committee
2. Patricia Draper, Information and Referral Service
3. Kathy Thibodeaux, Tri County Apartment Association
ARTICLE VIII. RENTAL AND OTHER LANDLORD/TENANT DISPUTES
DIVISION 1. GENERALLY
Sec. 14.80.010. Title.
Attachment 1
This article shall be cited as the Town's Rental Dispute
Mediation and Arbitration Ordinance.
(Code 1968, § 24.10.010)
Sec. 14.80.015. Declaration of policy and purposes.
(a) The Council finds and declares that there is a growing
shortage of and increasing demand for housing in the Town. This
circumstance, coupled with increasing inflation, the rising costs
of developing new housing, and other factors, has put substantial
upward pressure on residential rents.
(b) This article is necessary in order to protect the
health, safety and welfare of the citizens of the Town by meeting
the needs created by the housing shortage, including, but not
limited to, prevention of excessive and unreasonable rent
increases, and the assurance to landlords of a fair and
reasonable return on the value of their property.
(Code 1968, § 24.10.015)
Sec. 14.80.020. Definitions.
The following words, terms and phrases, when used in this
article, shall have the meanings ascribed to them in this
section, except where the context clearly indicates a different
meaning:
Agent. An individual or organization, or government,
designated by the Town Council to administer the ordinance.
Arbitrator. A person designated by the manager or the
manager's designated representative who is trained to hear
disputes under this article and the regulations adopted pursuant
thereto and render a decision.
Duplex. A building or group of buildings on the same
premises, containing not more nor less than two (2) dwellings.
Housing services. Those services provided and associated
with the use of occupancy of a rental unit, including but not
limited to, repairs, replacement, maintenance, painting, light,
heat, water, elevator service, laundry facilities and privileges,
janitorial service, refuse removal, furnishings, telephone,
parking, and any other benefits, privileges or facilities.
Land. Real property in the technical sense. The meaning of
the word includes, but is not limited to, buildings and parking
spaces.
Lease/rental agreement. 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.
Mediator. A person designated by the manager or the
manager's designated representative who is trained to conciliate
rental disputes under this article.
Rent. 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.
Rental unit. Any building or part of a building which is
used for residence, or any mobile home owned by a mobile home
park owner, and which is rented to a tenant as a dwelling place,
except:
(1) A rental unit located in a building or group of
buildings on the same premises containing only one
dwelling unit;
(2) A room in an owner -occupied dwelling where under the
lease provisions the tenant does not have the
substantially exclusive use of the kitchen;
(3) A single house, condominium unit, or planned
development (Business & Professions Code § 11003) unit;
(4) A hotel room or similar accommodation ordinarily let
for occupancy by the same tenant for periods of less
than thirty (30) 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;
(7) Mobile homes located in mobile home parks and not owned
by the mobile home park owner.
Rent increase. Any additional rent due or paid by a tenant
for a rental unit, including any reduction in housing services
without a corresponding reduction in the moneys demanded or paid
by rent.
Tenant. A lessee who occupies land under a lease or
sublease.
Voluntary vacancy. A voluntary vacancy occurs when a rental
unit is vacated by a tenant for reasons other than eviction.
(Code 1968, §§ 24.20.015--24.20.055; Ord. No. 1917, § II, 10-19-
92; Ord. No. 1972, § I, 3-21-94; Ord. No. 2029, § I, 4-21-97)
Cross reference(s)--Definitions and rules of construction
generally, § 1.10.015.
Sec. 14.80.025. Regulations.
The Town Council may adopt regulations to assist in
implementing this article.
(Code 1968, § 24.10.025)
Sec. 14.80.030. Reasonable rent increases.
No landlord shall increase the rent of any tenant in an
amount which is unreasonable. The factors to be considered in
determining whether a rent increase is reasonable are set forth
in division 4 of this article.
(Code 1968, § 24.30.010)
Sec. 14.80.035. Retaliatory evictions.
(a) 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 such 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 the tenant's rights
pursuant to this article; or
(2) The predominant motive of the landlord in seeking to
recover possession of such rental unit is to evade the
purposes of this article.
(b) When an eviction occurs within one hundred eighty (180)
days of the tenant's exercise or reasonable attempt to exercise
rights provided by this article, if the tenant shows that the
landlord knew at the time of eviction of the tenant's conduct in
relation to this article, the eviction is presumed to be
retaliatory. This presumption applies in judicial proceedings and
is one which affects the burden of producing evidence.
(Code 1968, § 24.30.020)
Sec. 14.80.040. Notice of conciliation rights.
(a) No notice of rent increase shall be valid unless the
landlord does the following:
(1) Serves, with the notice of proposed increase, written
notice advising the affected tenants of their right to
petition for conciliation under section 14.80.205, and
giving the current telephone number of the agency
administering the ordinance for the Town; and
(2) Provides in writing, to any tenant requesting in
writing, the apartment numbers of all tenants receiving
increase notices for the same month as the tenant
making the request.
(b) A reissued notice to correct the notification
requirement shall not exceed the amount of the previous rent
increase notice.
(Code 1968, § 24.30.030)
Sec. 14.80.045. Applicability to duplexes.
The provisions of this article shall apply to duplexes only
as follows:
(a) Tenants and landlords of duplexes are entitled to the
resolution services provided in division 3 (sections
14.80.205 and 14.80.210) below; and
(b) A regulatory fee shall be imposed on each rental unit
pursuant to that division.
(c) Duplexes shall not be eligible for mediation or
arbitration services.
(Ord. No. 1972, § II, 3-21-94)
Secs. 14.80.050--14.80.100. Reserved.
DIVISION 2. ADMINISTRATION AND ENFORCEMENT*
*Cross reference(s)--Administration generally, Ch. 2.
Sec. 14.80.105. Retroactive application.
(a) This article shall apply to all rent increases effective
on or after July 1, 1980, and to all landlord/tenant disputes
arising after July 1, 1980.
(b) No landlord shall be required to refund any rent under
this article; however, the mediation agreement or arbitration
award may establish a reasonable rent at a decreased level, which
may be effective for up to twelve (12) months from the date of
the agreement or award.
(Code 1968, § 24.50.010; Ord. No. 2029, § II, 4-21-97)
Sec. 14.80.110. Stay.
Invocation by a tenant or landlord of conciliation under
this article shall stay the rent increase complained of, pending
resolution of the dispute; provided, that if staff and a mediator
determine, based on written findings, that a petition is not
covered by the intent and purpose of this article, the stay shall
terminate as of the date of the findings. In the case of stay,
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.
(Code 1968, § 24.50.015; Ord. No. 2029, § III, 4-21-97)
Sec. 14.80.115. Defense; unlawful detained action.
A finding by a mediator of a violation of this article by a
landlord shall be a complete defense to unlawful detained
proceedings by a landlord against a tenant not otherwise in
default under the lease, and to any action to recover rents in
excess of those found reasonable.
(Code 1968, § 24.50.020)
Sec. 14.80.120. Nonwaiver.
Any waiver or purported waiver by a tenant of rights granted
under this article prior to the time when such rights may be
exercised shall be void as contrary to public policy.
(Code 1968, § 24.50.025)
Sec. 14.80.125. Standing to enforce.
The Town may enforce this article by bringing a civil
action.
(Code 1968, § 24.50.030)
Secs. 14.80.130--14.80.200. Reserved.
DIVISION 3. RESOLUTION
Sec. 14.80.205. Town service.
When either party to a landlord/tenant transaction has a
dispute with the other concerning rent, housing services or
proposed eviction, the party may seek the services of the Town by
filing a written petition for conciliation with the Town or its
agent; provided, that in the case of rent disputes, twenty-five
(25) percent of the units affected must join in the petition. In
all other cases an individual may submit a petition. Petitions
must be filed within thirty (30) days after the rental increase
takes effect.
(Code 1968, § 24.40.010; Ord. No. 2029, § IV, 4-21-97)
Sec. 14.80.210. Conciliation.
The Town or its agent 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.
(Code 1968, § 24.40.015)
Sec. 14.80.215. Mediation.
When a dispute has not been resolved through conciliation,
either party may request mediation by applying therefor on a form
provided by the Town's agent.
(Code 1968, § 24.40.020; Ord. No. 2029, § V, 4-21-97)
Sec. 14.80.220. Subpoenas.
The mediator may, on the mediator's own initiative or at the
request of a party, issue subpoenas including subpoenas duces
tecum. For the purposes of this article, 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.
(Code 1968, § 24.40.030)
Sec. 14.80.225. 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.
(Code 1968, § 24.40.035)
Sec. 14.80.230. Right to arbitration.
When mediation does not result in an agreement either party
may demand arbitration by applying therefor on a form provided by
the Town's Agent. The mediator may also initiate arbitration if
the mediator concludes that mediation is not feasible.
(Code 1968, § 24.40.040; Ord. No. 2029, § VI, 4-21-97)
Sec. 14.80.235. Time limit.
A demand for arbitration is effective only if it is received
by the Town or its agent within twenty (20) ady5 aftei tl1e date
of LhC last mediation held wliicli left mediation is5Lres
unzesolved. as prescribed by the Regulations adopted pursuant to
Section 14.80.025.
(Code 1968, § 24.40.045; Ord. No. 2029, § VII, 4-21-97)
Sec. 14.80.240. Arbitration.
When a party properly demands arbitration, the dispute shall
be heard or received under the regulations adopted pursuant to
section 14.80.025.
(Code 1968, § 24.40.050; Ord. No. 2029, § VIII, 4-21-97)
Sec. 14.80.245. Regulatory fees.
(a) For the sole purpose of reimbursing the Town for the
costs of administering this article, there is hereby imposed on
each rental unit, subject to the provisions of this article, a
regulatory fee in such amount as the Council may establish by
resolution from time to time. The regulatory fee for a rental
unit in a duplex shall not exceed fifty (50) percent of the fee
charged to other rental units subject to this article. No later
than June 1 of each year, the manager will report to the Council
on the amount of regulatory fees necessary to recover the costs
of the Town in administering the article.
(b) The regulatory fee shall be due at the same time that
the landlord's business license fee is due. Except, in the case
of duplexes, the regulatory fee is due July 1. A landlord who
fails to pay the fee within thirty (30) days after the Town mails
its bill to the landlord shall pay a twenty-five (25) percent
penalty, plus an additional twenty-five (25) percent penalty for
each thirty (30) days thereafter that the bill remains unpaid.
Until such time as the bill including penalties is paid, the
landlord of a rental unit shall not be entitled to any rent
increase.
(Code 1968, § 24.60.010; Ord. No. 1972, § III, 3-21-94)
Secs. 14.80.250--14.80.300. Reserved.
DIVISION 4. STANDARDS OF REASONABLENESS
Sec. 14.80.305. General standards.
The purpose of this article 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
arbitrator determines that the overall standard of reasonableness
requires other standards to be applied in a given case.
(Code 1968, § 24.70.010; Ord. No. 2029, § IX, 4-21-97)
Sec. 14.80.310. Specific standards.
(a) Exemptions. The first rent increase after the following
events shall be exempt from this article:
(1) Construction of a new unit.
(2) A voluntary vacancy.
(3) Eviction of a tenant by a court for nonpayment or other
violation of a written rental agreement.
(4) If the last increase was initiated no less than two (2)
years before the current increase and the current
increase is 10% or less;
(b) Frequency of rent increases. Rent shall not be increased
more frequently than annually, except that it may be increased:
(1) When the fee imposed under section 14.80.245 is paid,
it may be passed through at the rate of no more than
one -twelfth of the fee per month.
(2) At any time, with the written consent of all affected
tenants, which shall be sought through conciliation or
mediation.
(c) Amount of annual increase. Annual rent increases shall
not exceed the seventy (70) percent CPI ceiling or five (5)
percent, whichever is greater, unless the hearing officer
determines that other factors render a larger increase
reasonable. CPI is the Consumer Price Index, All Urban Consumers
for the San Francisco -Oakland Area. The most recent CPI is the
bimonthly figure most recently available from the Bureau of Labor
Statistics. The seventy (70) percent CPI ceiling is an amount
arrived at by adjusting the current rent to reflect seventy (70)
percent of the most recent annual average change in the CPI.
(Code 1968, § 24.70.015; Ord. No. 1803, § I, 11-20-89)
Sec. 14.80.315. Other factors of reasonableness.
(a) Increases deemed reasonable. A rent increase is
reasonable if the hearing officer determines the following:
(1) The rent increase consists of no more than five percent
(50) 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) 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 hearing officer.
(3) Each of the costs proposed for passthrough 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. The
hearing officer shall deem as reasonable and allowable to be
passed through to tenants the costs of debt service where the
hearing officer finds the debt is a secured, arms -length
transaction in the following instances:
(1) In the case of increased costs of debt service by new
or existing owners, 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
2
property as established by a lender's appraisal. 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.
e case of increased L,LJSL uservice aance
0 costs oL Ue
beLv1oe generated by the amount rel. vesL
(c) Standards applicable to rent increases which exceed the
foregoing. When the amount of any rent increase or portion
thereof exceeds any of the foregoing standards under subsection
(a) or (b) of this section, the hearing officer shall determine
what is reasonable under the circumstances taking into account
any of the following factors on which the hearing officer has
received information:
(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;
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 landlord's response to Proposition 13 savings,
and
d. 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.
(Code 1968, § 24.70.020; Ord. No. 2029, § X, 4-21-97)
c:\kimstuff\14.80ame.wpd
Attachment 2
ORDINANCE
ORDINANCE AMENDING THE LOS GATOS TOWN CODE
ARTICLE VIII, RENTAL AND OTHER TENANT/LANDLORD
DISPUTES (SECTIONS 14.80.045, 14.80.010, & 14.80.315)
THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES HEREBY ORDAIN:
SECTION I
Section 14.80.045. Applicability to duplexes.
The provisions of this article shall apply to duplexes only as follows:
(a) Tenants and landlords of duplexes are entitled to the resolution services
provided in division 3 (sections 14.80.205 and 14.80.210) below; and
(b) A regulatory fee shall be imposed on each rental unit pursuant to that
division.
(c) Duplexes shall not be eligible for mediation or arbitration services.
(Ord. No. 1972, § II, 3-21-94)
SECTION II
Section 14.80.235 of the Town Code is amended to read as follows:
Section 14.80.235. Time Limits.
A demand for arbitration is effective only if it is received by the Town or its agent within
twenty (20 days after the date of the last mediation hell which left mediation issucs
uesolved- as prescribed by the Regulations adopted pursuant to Section 14.80.025
SECTION III
Section 14.80.310 of the Town code is amended to read as follows:
Section 14.80.310. Specific Standards.
(a) Exemptions
4. If the last increase was initiated no less than two (2) years before the current
increase and the current increase is 10% or less;
SECTION IV
Section 14.80.315 of the Town code is amended to read as follows:
Section 14.80.315. Other factors of Reasonableness.
(b) When costs of debt service deemed to be reasonable. The hearing officer shall
deem as reasonable and allowable to be passed through to tenants the costs of debt service
where the hearing officer finds the debt is a secured, arms -length transaction in the following
instances:
(1)
In the case of increased costs of debt service by new or existing owners, 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.
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.
(2) In the case ef ittereased east ef debt service wee by an existing owner,
shall be limited to eests ef debt serviee gerierateel by the amount reinvested
in the property, including liquidation of existing dcbt; or
SECTION IV
This ordinance was introduced at a regular meeting of the Town Council of the Town of
Los Gatos on 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
. This ordinance takes effect thirty (30) days after it is adopted.
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
March 26, 1998
csd28A\viii-2.ord
RESOLUTION 1998 - 48
RESOLUTION OF THE TOWN COUNCIL
OF THE TOWN OF LOS GATOS ADOPTING
REVISED RENTAL DISPUTE RESOLUTION REGULATIONS
AND RESCINDING RESOLUTION 1989-210
THE TOWN COUNCIL OF THE TOWN OF LOS GATOS RESOLVES AS
FOLLOWS:
Adopts the revised Rental Dispute Resolution Regulations attached hereto as Exhibit
A and rescinds resolution 1989-210 to be effective upon the effective date of the Ordinance
amending the Los Gatos Town Code Article VIII, Rental and Other Tenant/Landlord Disputes
(Sections 14.80.045 - 14.80.315) introduced on April 20th, 1998.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town
of Los Gatos, California, held on the 20th day of April, 1998, by the following vote:
COUNCIL MEMBERS:
AYES: Randy Attaway, Joanne Benjamin, Steven Blanton, Jan Hutchins
Mayor Linda Lubeck
NAYES: None
ABSENT: None
ABSTAIN: None
SIGNED: /s/ Linda Lubeck
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
/s/ Marian V. Cosgrove
CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
csd08: A:\Resos\cs042098.03
Exhibit A
Rental Dispute
Resolution Regulations
LGREG0398 March 26, 1998
TABLE OF CONTENTS
INTRODUCTION
1. RENT INCREASE LIMITS 4
A. Frequency of Rent Increases 4
B. Amount of Annual Increase 4
1. Increased Costs of Debt Service 4
2. Increased Costs of Operations and Maintenance 5
3. Service Reductions 6
4. Economic, Financial and other Factors 8
5. Guidelines Pertaining to Rent Increases other than Base
Rent Increases 8
C. Notice of Rent Increase and Petitions 9
1. Rent Increase Notices 9
2. Filing a Petition 9
II. THE CONCILIATION PHASE 10
III. HEARING PROCESS AND DECISION MAKING 10
A. Confidentiality 10
B. Burden of Proof 10
C. Conduct of Mediations and Arbitrations 10
D. Decisions and Agreements 11
E. Failure to Appear and Rescheduling 11
IV. THE MEDIATION PHASE 12
A. Introduction 12
B. Presentation by the Parties 12
C. Private Sessions 12
D. Voluntary Agreement 12
E. Closing Session 12
LGREG0398 March 26, 1998 2
f
F. Additional Documentation 12
G. Hearing Summary 12
H. Timing and Impasse Reports 13
V. THE ARBITRATION PHASE 13
A. Purpose of an Arbitration Hearing 13
B. Conduct of Arbitration Hearing on Referral from Mediation 13
C. Conduct of Arbitration Hearings on Claims of violation of a
Voluntary Agreement 14
D. Timing and Contents of Award 14
VI. HEARING OFFICERS 15
A. Selection Hearings 15
B. The Program Administrator 15
C. Assignment to Cases 15
D. Disqualification from Cases 15
E. Review of Hearing Officer's Performance 16
VII. MISDEMEANORS AND ENFORCEMENT 16
A. The Ordinance Provides that it is a Misdemeanor 16
B. Investigation 16
C. Additional Civil Rights 16
VIII. APPEAL OF ADMINISTRATIVE ACTION 16
IX. DEFINITIONS 16
LGREG0398 March 26, 1998 3
LOS GATOS RENTAL DISPUTE RESOLUTION REGULATIONS
INTRODUCTION
Rental units in complexes of three or more units on the same parcel of land shall be covered by Chapter 14.80 of
the Los Gatos Town Code after July 1980. If one or more of the units is owner -occupied, the remaining units
shall be subject to Chapter 14.80. When rental units are annexed into the Town of Los Gatos, rent increases prior
to the annexation are not subject to review, but do establish a twelve-month or two year period for future
increases. For example, if rent is increased in July and the property is annexed in August, the rent may not be
increased until the following July
1. RENT INCREASE LIMITS
A. FREQUENCY OF RENT INCREASES
1. Rent may not ordinarily be increased more frequently than annually except:
a. To pass through the annual regulatory fee at no more than 1/12th per month;
b. With the written consent of all affected tenants;
c. At the time of a voluntary vacancy of an apartment unit; or,
d. At the time of a court -ordered eviction for violation of a rental agreement.
2. Consequences: Hearing Officers shall consider evidence establishing that there has been
more than one increase within a twelve (12) month period. When it is found that there
has been more than one increase, the second and subsequent increases must be disallowed in
their entirety, regardless of the amount or percentage. Rent is presumed to have been
increased when a tenant moves in unless the landlord can document that it was not increased.
Other increases within twelve (12) months after the tenant moved in may be disallowed.
B. AMOUNT OF ANNUAL INCREASE
The annual rent increases shall not exceed the 70 percent of the Consumer Price Index (CPI) ceiling
or five percent, whichever is greater, unless the tenants agree or the Arbitrator determines that other
factors render a larger increase to be reasonable. The Town or its agent shall compute the average
annual percent of change as set forth in Section 14.80.310 (c) of the Rental Mediation Ordinance.
Increases in excess of 70 percent CPI ceiling or five percent, whichever is greater, are subject to review
if the affected tenants file a petition with the Town's Agent. (EXEMPTION: If the last rent increase was
initiated no less than two (2) years before the current increase and the current increase is 10% or
less.) An increase may be subject to review because the dollar amount has been raised, or services
reduced, or both. The following cost categories may be considered in the review process.
1. INCREASED COSTS OF DEBT SERVICE for new or existing owners shall be deemed reasonable
and allowed by the Arbitrator when:
a. If the loan to value ratio does not exceed 70 percent of the appraised value of the
property, 80 percent of the increase in debt services is allowable and may be passed
through to tenants.
LGREG0398 March 26, 1998 4
b. If the loan to value ratio exceeds 70 percent, the annual amount of the increased
costs of debt service which shall be found allowable and may be passed through
to tenants is 80 percent of the sum calculated by multiplying the new debt service
by 70 percent divided by the loan to value ratio less the prior debt service. A
computation example follows:
INCREASED DEBT SERVICE EXAMPLE
Facts
New Debt Service per Annum 110,000
Prior Debt Service per Annum 80.000
Increased Costs of Debt Service 30,000
Aggregate Debt from which Debt Service arises 750,000
Appraised Value of the Property 1,000,000
Loan to Value Ratio (LTVR) .75
Calculation
Pass Through = .8 [((New Debt Service x [. 7-LTVR]) - Prior Debt Service)]
Pass Through = .8 [(110, 000 x [. 7-.75]) - 80, 000)]
Pass Through = .8 [(110, 000 x . 9333) - 80, 000)]
Pass Through = .8 (102,663 - 80,000)
Pass Through = .8 (22,663)
Pass Through = 18,130.34 (Per Annum)
Individual Pass Through = (18,130.40 - 12) - # of units or square feet
2. INCREASED COSTS OF OPERATIONS AND MAINTENANCE. - This cost method compares
costs for the most recent twelve months and the prior twelve months. The landlord has the
option to present increased costs of operations and maintenance (O&M), capital
improvements, and rehabilitation costs; plus 70% of CPI or five percent whichever is greater
of the monthly rent.
a. Capital Improvements - The cost of capital improvements must be averaged on a per
unit or square foot basis and amortized over a period of at least 60 months.
b. Rehabilitation - The costs of rehabilitation must be averaged on a per unit or square
foot basis and amortized over a period of at least 36 months.
•
LGREG0398 March 26, 1998 5
Capital Improvements _ . 60 months
Rehabilitation - . 36 months
O&M+CI+RI
Monthly Increase _ (# Units or proportion of Square Ft.)
MUI + 5% or 70% CPI of units prior rent
[New O&M Costs (last 12 months) - Old O&M Costs (prior 12 months)] _ 12 months
= Operating and Maintenance Increase (O&M)
= Capital Improvement Increase (CI)
= Rehabilitation Increase (RI)
= Monthly Increase
= Monthly Unit Increase (MUI)
= Total Allowable Rent Increase
*********************************************
3. SERVICE REDUCTIONS - A service reduction occurs when the landlord has
breached her/his obligation to furnish to the tenant the Basic Service Level and the
tenant's usability of the premises is thereby measurably reduced.
a. Basic Service Level - The landlord is required to furnish to the tenant a basic
level of housing services, herein called the "Basic Service Level" and
established by:
i. California Civil Code Section 1941.1 and 1941.2 and other applicable
codes and statutes;
ii. The landlord's implied Warranty of Habitability;
iii. Express or implied agreement between landlord and tenant;
iv. The nature and quality of original construction of improvements,
fixtures, and equipment;
v. The age of the improvement, fixture, and equipment;
vi. The condition of the improvements, fixture, and equipment at the beginning
of the term of tenancy;
vii. The landlord's policies of operation and maintenance, repair and
replacement communicated to the tenant at the beginning of the applicable
term of tenancy.
b. Allegations of Service Reductions - Each allegation of a service reduction shall be
made in a separate writing, signed by the tenant claiming it, and filed with the
Town, its agent or the Hearing Officer during or prior to the first hearing. The
burden of proof of each service reduction is on the person alleging the reduction.
Each allegation of a service reduction shall state:
i. The prior housing service level provided by the landlord;
ii. The specific changes from the prior service level comprising the alleged
reduction in service;
iii. The date the service reduction was first noticed by the tenant;
LGREG0398 March 26, 1998 6
iv. The date the tenant gave notice to the landlord requesting correction of
the alleged service reduction, and whether the request was oral or in writing;
v. When and how the landlord responded to the tenant's notice;
vi. Whether the condition was improved or corrected and if so, when and how;
vii. The status of the condition as of the date the allegation is signed by the
tenant; and
viii. The extent to which the landlord and/or the tenant was responsible for the
condition generating the service reduction.
c. Determining Value of Unreasonable Service Reductions - When it is found that a
service reduction has occurred which is unreasonable under the circumstances, the
monetary value to be assigned to the service reduction is to be determined. The
percentage reduction in usability of the rental unit and common areas caused by the
service reduction, commencing with the accrual date shall consider the following
factors:
i. The amount of time the occupant is exposed to the condition;
ii The degree of discomfort the condition imposes;
iii. The extent to which such a condition causes tenants to find the premises
uninhabitable and leave.
The Hearing Officer shall apply the percentage reduction to the monthly rent, divide
by 30, and multiply the resulting sum by the number of days commencing from the
date to the date of restoration of the service level.
d. Housing Code Violations - Violations of the Los Gatos Housing Code or of Section
1941.1 and 1941.2 of the State Civil Code shall be considered and may reasonably
condition, disallow, or reduce a rent increase based on severity. An inspection report
of the Los Gatos Building Official shall be deemed presumptive, but not conclusive,
proof of the matters recited therein.
e. Findings - In making any determination that an alleged service reduction exists or
not, is reasonable or unreasonable under the circumstances, or has a particular
monetary value, or that a Housing Code violation exists or not, or has a particular
monetary value, in any summary report or arbitration award, the Hearing Officer
shall make and include a specific finding of the facts upon which the determination
is based.
f. Consequences of a Service Reduction Unreasonable Under the Circumstances
i. If the value of the service reduction is determined to effect the
reasonableness of a pending rent increase, the value of the service
reduction shall be applied as a credit against the rent increase unless it is a
permanent reduction in service in which case it will result in a rent
reduction.
ii. When the proceeding does not involve determination of reasonableness of a
LGREG0398 March 26, 1998 7
pending rent increase, the value of the service reduction shall be applied as
a credit against the tenant's obligation to pay current rent unless it is a
permanent reduction in service in which case it will result in a rent
reduction.
4. ECONOMIC, FINANCIAL AND OTHER FACTORS - The Hearing Officer will consider
additional relevant factors presented by either party. These factors may include the following:
a. Market Value: The current market value of rental units similarly situated, which are
not owned or controlled by the landlord.
b. Rental History: The amount and frequency of past increases, and the occupancy
rate in comparison to comparable properties in the same general area.
c Physical Condition: The physical condition of the unit, including maintenance and
repair during the last twelve (12) months.
d Services: Any increase or reduction in services since the last rent increase.
e. Vacancy and Bad Debt Losses: The degree to which vacancy and bad debt losses
are not offset by retention of deposits, court judgments or increases to new tenants.
f. Other Financial Information: Other financial information that the landlord is willing
to provide.
5. GUIDELINES PERTAINING TO ALL RENT INCREASES OTHER THAN BASE RENT
INCREASES.
a. Each of the costs must bear a reasonable relationship to the purpose for which they
were incurred and the value of the real property.
b. Costs are "out of pocket" which have been incurred or obligated.
c. If a rent increase is cost justified and neither service reduction nor Housing Code
violations are present, that rent increase may be deemed reasonable.
d. The cost categories presented at Arbitration must be the same as at Mediation. The
Arbitrator has the discretion to require cost information from categories not initially
presented by the landlord, if that information is necessary to resolve issues such as
service reductions.
e. Operations and maintenance costs are for the most recently available consecutive
two twelve month periods ending no more than 60 days prior to the rent increase
date.
f. Undocumented projections or estimates of future costs may not be accepted for use
in cost analyses.
g. Debt service, capital improvements, and rehabilitation costs must be incurred in the
past twelve months as evidenced by payment or contract establishing a legal
obligation and evidence that the terms of the contract are or have been met.
The twelve-month period for each of these costs may be different from the period
used for operation and maintenance, and must begin earlier than the effective date
of the increase, e.g., contract on 7/80, performed work 7/80-6/81, increase 8/80,
LGREG0398 March 26, 1998 8
work must have begun by the time the rent increase is due.
h. If, however, increases in debt service or repayment of capital improvements or
rehabilitation costs are, or have been deferred so as to become effective at a future
date in excess of a twelve (12) month period, then those costs may be applied as
they become effective.
i. If costs are equal to or greater than the petitioning tenants' rent increase, that
increase is cost justified.
C. NOTICE OF RENT INCREASE AND PETITIONS
1. RENT INCREASE NOTICES - When a landlord issues a notice of rent increase he/she
must provide the tenants notice of their full right to use the Rental Dispute Resolution
Process. The notice must include the address and telephone number of the Rental Dispute
Resolution Program. This must be included conspicuously in the rent increase notice or
done separately at the same time and manner as the rent increase notice. The recommended
wording is:
You have the right to use the Rental Dispute Resolution Process. To be eligible a petition must be
received by the Town or its agent within 30 days after the increase goes into effect.
For further information contact:
(Agency)
(Address)
(City, State, Zip)
(Phone and Fax)
2. FILING A PETITION - To initiate the dispute resolution process, Tenants or Landlords
must complete and file a written Petition for Conciliation with the Town's Agent. Petition
forms may be obtained from the Town's Agent and must be filled in completely.
a. Rent Increase Petitions - Twenty-five percent of the units affected by the rent
increase must join in the petition.
No petition may be filed later than 30 days after the rent increase takes effect.
However, a petition may be filed within six (6) months of a rent increase if the
notice is not in compliance with these Regulations.
b. Deferral of Amount of Increase Over 70 Percent CPI - When a tenant files an
eligible petition, the amount of the increase over 70 percent CPI or five percent,
whichever is greater, is stayed, pending a resolution of the dispute. The tenant is
obligated to
pay only the old rent plus 70 percent of the Consumer Price Index or five percent,
whichever is greater, until the petition is resolved and the rent level established.
6
c. Consolidation of Petitions - Whenever possible, petitions from rental units owned,
operated, and managed as a single housing complex shall be consolidated into one
case by the program staff.
LGREG0398 March 26, 1998 9
II. THE CONCILIATION PHASE
The filing of a petition authorizes the Town's Agent to contact any of the parties to the dispute
to conciliate the issues. The purpose of conciliation is to resolve tenant/landlord disputes
through limited intervention. Conciliation does not involve a face to face meeting but is a
limited negotiation through telephone or mail contacts by a Housing Counselor to explain to each
party the position of the other and to attempt resolution of the dispute. Information and clarification
of tenant landlord law and the Los Gatos Ordinance may be involved. The Town's Agent is
designated as the Counselor. Either party may request mediation by notifying the Town or its agent
21 days after the petition was received by the Town or its agent and the dispute has not been resolved.
Mediation must be requested within 30 days of Town's/Agent's receipt of the petition.
Ill. HEARING PROCESS AND DECISION MAKING GUIDELINES
A. CONFIDENTIALITY
The identity of the parties and the factual data of the case are confidential. Any one of the parties to a
hearing has the right to request to see and to copy information supplied by the other parties. This
information may also be reviewed and used by the Town for program operations, administration,
audit and evaluation. While the parties and the Town have access to this information, it is not public
information.
B. BURDEN OF PROOF
1. The landlord shall have the burden of proof for establishing the reasonableness of a rent
increase.
2. The tenants shall have the burden of proof for the existence of service reductions and
Housing Code violations.
3. The burden of proof shall be satisfied by demonstrating that the fact to be proven is more
probable than some other fact.
4. The burden of proof shall be met by using only evidence which has a tendency in reason to
prove or disprove a disputed fact of consequence in determining the Basic Service Level.
5. Proof shall be received only for service reductions alleged in a claim filed with the Town,
its agent, or the Hearing Officer during or prior to the first hearing.
6. Proof of a service reduction shall be received only for that period of time the premises have
been owned by the landlord against whom the claim is filed.
C. CONDUCT OF MEDIATIONS AND ARBI 1'RATIONS
1. The Hearing Officer may change the order, delete or add items to the following list in order
to conduct the Hearing in a timely and orderly manner. The Hearing Officer may adopt
rules to encourage a timely and business -like hearing.
2. All parties to the petition and his/her counsel may attend the hearing and offer evidence and
testimony.
LGREG0398 March 26, 1998 10
a. Examples of those who may attend Hearings include: owners, property managers,
agents, attorneys, tenants, witnesses, paralegals, and designated representatives.
The Hearing Officer may limit the participation of attendees other than parties to the
dispute.
b. Examples of those who generally may not attend Hearings include tenants not
covered by the petition, owners of other properties, members of the public. These
persons may attend if all parties agree.
3. Review and Response to Evidence and Testimony - Each party must have the opportunity to
review all evidence and testimony introduced at the Hearing and to make a response. The
Hearing Officer has the discretion to allow written responses to be submitted. Hearing
Officers have the discretion and must consider allowing reasonable recesses to review any
new information or documentation.
4. Record of Hearings - Hearing Officers will cause to have a written record of all parties
attending either Mediation or Arbitration Hearings and a listing of evidence presented.
Mediation sessions shall not be taped. The Arbitrator will tape record all sessions and turn
the tape and all evidence into the Town's Agent with the Arbitration Award. Any record is
available to both parties for review. All tape recorders will be placed as designated by the
Arbitrator. Tapes will be available for review for a period of twelve months at the
appropriate Town office. Any and all duplication costs will be borne by the requesting
party.
5. Participation of the Hearing Officer - The Hearing Officer shall, at all times in the conduct
of the hearings and in otherwise performing his/her duties, act neutrally and impartially.
The Hearing Officer shall not solicit, invite, or encourage new complaints from the landlord
or tenants. This does not preclude clarification of each party's rights under the ordinance.
Hearing Officers are encouraged to suggest compromises to disputes raised at the hearing.
6. Relief from Default - The Hearing Officer may relieve any party from their failure to
adequately state their claim prior to or during the first meeting upon a reasonable showing
of fraud, error, or inadvertence. The Hearing Officer may grant to the opposing party
additional time to respond to any claim, addition to, or revision of, a claim filed pursuant to
the relief granted.
D. DECISIONS AND AGREEMENTS
1. Eligible Petitions - The voluntary agreement or arbitration award shall apply to a tenant/s
who have filed an eligible petition or have been included in a landlord petition.
2. Effective Date - Unless otherwise set by the Hearing Officer, determinations, awards, and
voluntary agreement shall be effective as of the effective date of the increase originally
proposed by the landlord and shall extend for twelve (12) calendar months.
E. FAILURE TO APPEAR AND RESCHEDULING
1. No appearance by the Landlord or his/her Representative - When the landlord or his/her
LGREG0398 March 26, 1998 11
representative does not appear at the Hearing, the rent increase will be determined to be
unreasonable.
2. No Appearance by Tenants - When the tenant/s or their representative does not appear at
the Hearing, the rent increase will be determined to be reasonable.
3. Voluntary Agreements - When a tenant fails to appear or be represented at a Mediation
Hearing where a voluntary agreement is concluded with the remaining tenants, the petition
of the tenant who failed to appear will be considered to have withdrawn.
4. Arbitrator's Determination - When a tenant fails to appear or be represented at a Hearing
that results in a written determination, that determination will be considered to have withdrawn.
5. Rescheduling - Rescheduling of Hearings causes a delay in the resolution of the dispute and
inconveniences the parties. However, a rescheduling is sometimes appropriate.
a. Request by Landlord or Tenant - A Hearing may be rescheduled one-time at the
request of a landlord or a tenant for reasonable cause, when the request is made at
least five (5) days before the scheduled Hearing date.
b. Request by one of the Parties - A Hearing may be rescheduled when one of the
parties was unable to attend due to reasons beyond her/his control and the request
is made within 24 hours after the scheduled Hearing date.
IV. 1'HE MEDIATION PHASE - The purpose of the Mediation Hearing is to give the parties an
opportunity to resolve the dispute voluntarily.
A. INTRODUCTION - The Mediator will introduce him/herself, identify all attendees, circulate a sign -in
sheet, request any proxies to be turned in or representatives to be identified, and briefly explain the
hearing process.
B. PRESENTATION BY THE PARTIES - The parties will be given full opportunity to present evidence
and testimony. Comments must be clear, concise, and relevant. When one party has made its
presentation the other party will be given an opportunity to make its presentation.
C. PRIVATE SESSIONS - Following the initial presentations, the Mediator may at his/her discretion meet
privately (caucus) with each side to attempt to work out a voluntary agreement. The agreement is
confidential and shall only be shared with the specific consent of the all participants.
D. VOLUNTARY AGREEMENT - If the parties arrive at an agreement, the Mediator will summarize
the resolution on an agreement form and witness all signatures. Voluntary agreements must specify
the agreed upon rent and may include any other items the parties agreed upon.
E. CLOSING SESSION - The Mediator will meet with both parties to sign a voluntary agreement or to
provide an opportunity to present additional evidence or testimony.
F. ADDITIONAL DOCUMENTATION - If additional documentation is requested, the Mediator may
recess the Hearing at his/her discretion, for no longer than ten days, for the purpose of receiving this
documentation.
G. HEARING SUMMARY - If a voluntary agreement is not possible the Mediator will prepare an impasse
report.
LGREG0398 March 26, 1998 12
H. TIMING AND CONTENTS OF IMPASSE REPORTS -
1 . The Mediator shall submit an impasse report to the Town's agent within five days of the
hearing. If the Mediator has requested additional documentation, the report is due five days
after the continued hearing.
2. Contents - The report will include the following:
a. Identification of the parties; all attendees and any proxies received.
b. Statement of all evidence presented such as the costs, service reductions and/or
Housing Code violations presented; and any relevant economic, financial, or legal
factors.
V. THE ARBITRATION PHASE
A. PURPOSE OF AN ARBITRATION HEARING - An arbitration hearing is held to make a final
determination concerning rental housing disputes when a mediated agreement has not been achieved
or has been broken.
B. CONDUCT OF ARBITRATION HEARING ON REFERRAL FROM MEDIATION - When a
voluntary agreement is not reached at a mediation hearing and one of the parties or the mediator
requests arbitration the following procedures will be followed:
1. Introduction - The Arbitrator will introduce him/herself, identify the parties, circulate a sign -
in sheet, request any proxies to be turned in or representatives to identify themselves, and will
briefly explain the hearing process.
2. The parties will be responsible for bringing all pertinent written documents and evidence to
the initial hearing. The parties will be given full opportunity to present evidence and
testimony. When one party has made its presentation, the remaining party will be given an
opportunity to make its presentation.
3. Response to Evidence and Testimony - The parties will be given reasonable opportunities to
respond to the new documentation and issues. The Arbitrator has the discretion to recess
the hearing or to allow the submission of written statements.
4. Request for Additional Information - The Arbitrator may request the submission of additional
documentation or other information within ten days. When this request is made, the hearing
is recessed until the submission for the administrative purpose of receiving the additional
information. In the event that the requested information is not provided or is incomplete, the
Arbitrator may proceed to the making of the award.
5. Evidence - Evidence submitted will be retained by the Arbitrator for use in making the award
and will be provided to the Town's Agent along with the tape/s and the arbitration award.
The Arbitrator will be the judge of the relevancy of the evidence. Conformity to legal rules
of evidence is not necessary. A list of this evidence (exhibits) will be prepared and made a
part of the record.
6. Testimony - The Arbitrator will judge whether or not testimony is material and relevant. A list
of the names and addresses of any witness will be kept and made a part of the record.
7. Voluntary Agreement - An arbitrator may recess the hearing for the purpose of allowing the
LGREG0398 March 26, 1998 13
D.
parties to negotiate a voluntary agreement to resolve the dispute. At the request of the
parties, an Arbitrator may also assist them in coming to and preparing a written voluntary
agreement.
C. CONDUCT OF ARBITRATION HEARINGS ON CLAIMS OF VIOLATION OF A VOLUNTARY
AGREEMENT - Voluntary agreement forms contain a section making violation of the agreement
subject to arbitration under these regulations and Title 9 (commencing with Section 1280), Part 3 of
the California Code of Civil Procedure. Hearings for this purpose are similar to those described in
the previous section (V.A. 1-7). The State Code sets additional procedures. Those involved in these
hearings should read this section of the State Code. (Other differences are caused by the nature of
these hearings.) This section covers these differences.
1. Before appealing for Arbitration, a letter must be sent asking that the agreement be followed.
This letter should point out where it is not being followed; for example, "fix the stove" or
"remove the wrecked car".
2. Appeals may be made to the Town's Agent by either party. Appeals must be in writing and
must include a copy of the letter described above.
3. Clarification of Issues - After the introduction, the Arbitrator will ask the party who filed the
appeal to state the issue. For example, "John Doe signed an agreement that he would fix
the stove/remove a wrecked car by June 15. He hasn't done that".
4. Verification - The Arbitrator will determine if the agreement has been violated.
5. Remedies - If the agreement has been violated, the Arbitrator will issue an award which
compensates for the violation. The Arbitrator may require that the agreement be kept ("John
Doe has to fix the stove/move the car"), that the rent be increased or decreased, or other just
and equitable remedies.
6. Processing - A copy of the appeal will be sent to both parties with a notice of the arbitration
hearing.
7. Authority of Arbitrator - The decision of the Arbitrator is final and legally binding. An
Arbitrator has the authority to allow or disallow any rent increase or portion thereof and may
reasonably condition his/her award in any manner necessary to meet the purposes of the
Ordinance.
TIMING AND CONTENTS OF AWARD
1. The arbitration award shall be issued within 10 days of the close of the hearing. The
allowance of time to submit additional information or written statements is a recess of the
hearing and the award is due 10 days after this deadline.
2. The arbitration award must identify the parties and make a clear statement of:
a. Whether or not the proposed increase is reasonable;
b. If a portion is reasonable, the dollar amount;
c. Any conditions which are placed on the award;
d. An attached summary of cost calculation;
e. A rent schedule for any rents to be paid by or refunded to each tenant based on the
LGREG0398 March 26, 1998 14
award and rents paid by the tenants since the time of the rent increase.
VI. HEARING OFFICERS
A. SELECTION CRITERIA - Hearing Officers are those individuals who, having met the following
established criteria, have executed a contract with the Town or its Agent. Officers are also those
program staff designated as Hearing Officers for specific purposes.
Hearing Officers must meet all of the following criteria.
1. Have received fourteen (14) hours formal training in mediation and seven (7) hours formal
training on landlord/tenant law and economics of the rental industry.
2. Have observed two mediations or hearings similar to those of this program.
3. Shall not own or rent property covered by the ordinance.
4. May not be an employee or an officer of groups or organizations which have or are viewed
by significant numbers of tenants or landlords as having taken advocacy positions in
landlord tenant matters.
B. THE PROGRAM ADMINISTRATOR is designated as a Hearing Officer for the purpose of:
1. Conciliation of cases;
2. Consolidation of cases;
3. Scheduling of hearings;
4. Acceptance of documentation and written statements;
5. Acceptance of requests for arbitration.
C. ASSIGNMENTS TO CASES
1. Mediation Cases - Mediators shall be assigned by program staff equitably and fairly, with
due regard for the Mediator's availability and experience.
2. Arbitration Cases - A selection list shall be sent to both parties that will contain at least three
names of Arbitrators who meet one of the following qualifications:
a. Appointment to the American Arbitration Association's Panel of Arbitrators;
Completion of a Juris Doctor or equivalent degree from a School of Law with proof of
a course in arbitration; or
b. Completion of six mediations, observation of one arbitration, and documentation of
formal arbitration training.
All tenants as a group may eliminate one name and all owners representatives as a group
may eliminate one name. .Tenants are responsible for determining a spokesperson to
represent them as a group.
D. DISQUALIFICATION FROM CASES - A Hearing Officer shall disqualify themselves from hearing a
•
case and can be disqualified by program staff at the request of one of the parties if:
1. The Hearing Officer knows or has reason to know he/she has a financial interest affected by the
determination or award.
2. The Hearing Officer is related to one of the parties or their representatives to the third
LGREGO398 March 26, 1998 15
degree.
3. The Hearing Officer has been retained or employed by one of the parties within the past two
years, has given advice to one of the parties relative to the issues involved in the hearing.
4. It appears probable that the Hearing Officer by reason of bias or prejudice cannot provide a fair
and impartial hearing.
5. The Hearing Officer is a party to the hearing.
A Hearing Officer is not disqualified from hearing a case where one or more of the parties have
appeared before him/her in an earlier hearing. The parties may waive their right to the
disqualification of a Hearing Officer by a written statement accepting his/her service.
E. REVIEW OF HEARING OFFICER'S PERFORMANCE - The program staff will periodically review the
performance of Hearing Officers and will inform the Town of the execution and termination of
Hearing Officer's contracts.
VII. MISDEMEANORS AND ENFORCEMENT
A. THE ORDINANCE PROVIDES THAT IT IS A MISDEMEANOR:
1. For a landlord to evict tenants in retaliation for tenants organizing or exercising rights granted
by the Ordinance.
2. For a landlord to evict a tenant when the landlord's dominant motive is to evade the
purposes of the Ordinances.
3. For a landlord to demand, accept, receive, or retain any rent in excess of the maximum rent
allowed by a mediation agreement or an arbitration award.
B. INVESTIGATION - Program staff will receive and investigate complaints of alleged misdemeanor
violations. When complaints are received of an alleged violation which has not yet occurred or is in the
process of occurring, it is the policy of this program to prevent it, when possible, by informational
contacts with the landlord. In the event that the investigation shows that a violation has or is in the
process of occurring and that it is not possible to prevent, a request will be made to the Town Attorney
for review and prosecution. Either party can pursue civil action after the conclusion of Town Rental
Mediation procedures.
C. ADDITIONAL CIVIL RIGHTS - Tenants have additional civil rights not covered by this chapter. Either
party can pursue civil action after the conclusion of Town Rental Dispute Resolution Procedures.
VIII. APPEAL OF ADMINISTRATIVE ACTION
Administrative actions by program staff may be appealed to the Director of Community Services.
Individuals also have the right to present information and recommendations on the implementation of these
regulations
to the Rent Advisory Committee.
IX. DEFINITIONS
Anniversary Date: Twelve (12) months from the last rent increase.
Award: The written decision of an Arbitrator.
Base Rent Increase: 5% or 70% of the CPI, whichever is greater.
Capital Improvements: Improvements which materially add to the value of the property, appreciably
LGREG0398 March 26, 1998 16
prolong its useful life, or adapt it to new uses. Capital Improvements are improvements for which the useful
life is likely to be five years or more.
Committee: The Los Gatos Rent Advisory Committee appointed by the Town Council.
CPI - Consumer Price Index., CPI is the Consumer Price Index - All Urban Consumers for the San Francisco
Oakland area. The figure is released monthly from the Bureau of Labor Statistics.
Cost of Debt Service: The periodic payment or payments due under any security or financing device which
is applicable to the rental unit, or the building, or complex, or other real property of which it is a part,
including any fees, commissions, or other charges incurred in obtaining such financing which are required to
be amortized for a period exceeding sixty (60) months pursuant to the Internal Revenue Code and the
regulations issued pursuant thereto.
Cost of Operation and Maintenance: Expenses, exclusive of original costs of debt service, costs of
rehabilitation, and costs of capital improvements, incurred in the operation and management of the rental
unit and the building or complex of buildings of which it is a part together with common areas, including
but not limited to: real estate taxes, business taxes and fees (including fees payable by landlords under this
Chapter), insurance, sewer service charges, utilities, janitorial service, professional property management
fees, increased interest costs of variable interest rate mortgages over the base interest incurred, pool
maintenance, exterior building and grounds maintenance, supplies, equipment, refuse removal, elevator
service, and security services or systems.
Costs of Rehabilitation: Any rehabilitation or repair work costs done on or in a rental unit or common area
of the housing complex containing the rental unit and which work was done in order to comply with an
order issued by the Los Gatos Building Department, or the Santa Clara County Fire Department, or to repair
damage resulting from fire, earthquake, or other natural disaster.
Counsel: An attorney or other advisor.
Day. A calendar day.
Determination: A summary report by a mediator or a written decision by an arbitrator.
Fact Finding., The action of an Arbitrator in establishing that certain facts, such as costs or service
reductions, exist.
Hearing: A meeting of the parties in a dispute with either a Mediator or an Arbitrator to resolve the issues.
Hearing Officer: A person designated by the Town Manager or the Town's Agent who mediates or arbitrates
rental disputes pursuant to the provisions of this Chapter.
Hearing Counselor: A person designated by the Town Manager or its agent who counsels parties with
regard to housing disputes and conciliates, as necessary.
Housing Services: Those services provided and associated with the use or occupancy of a rental unit,
including but not limited to repairs, replacement, maintenance, painting, light, heat, water, elevator service,
laundry facilities and privileges, janitorial service, refuse removal, furnishings, telephone, parking, and any
other benefits, privileges, or facilities.
Landlord: An owner, lessor, or sublessor, who receives or is entitled to receive rent for the use and
occupancy of any rental unit or portion thereof, and the agent, representative, or successor of any of the
foregoing.
LGREG0398 March 26, 1998 17
Party: A landlord or tenant(s) who is involved in the hearing process.
Petition; A petition for conciliation.
Program Staff: The staff of the Los Gatos Rent Mediation Program assigned to implement the Rental
Dispute Mediation and Arbitration Ordinance.
Rent: 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.
Rent Increase: Any additional rent due 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.
Rental Unit: Any building or part of a building which is used for residence and which is rented to a tenant as
a dwelling place, except:
• Rental units, located in a building or group of buildings on the same premises, containing two or fewer
dwelling units.
• A room in an owner -occupied dwelling where under the lease provisions the tenant does not have
substantially exclusive use of a kitchen.
• A single house, condominium or planned development (Business and Professions Code Section
11003.0) unit.
• A hotel room or similar accommodation ordinarily let for occupancy by the same tenant for periods of
less than 15 days.
• 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.
• A dwelling owned, operated and managed by a government agency or which is exempted by State or
Federal law from rent regulation.
Tenant: A person or persons entitled by written or oral agreement or by sufferance to occupy a rental unit to
the exclusion of others.
Tenancy at Sufferance: When a tenant comes into possession of a premises lawfully but holds over either
after the expiration of a lease or after the expiration date of a notice to vacate
Vacancy: Untenanted. A rental unit is vacant when there are no tenants living there. To be vacant, the unit
must be untenanted; if a roommate moves, there is no vacancy, unless the landlord and the tenants have a
prior written agreement that this does create a vacancy. If a tenant moves after receiving a 30-Day Notice
from the landlord, it is not voluntary. If the increase is after the eviction of a tenant by a court for non-
payment, chronically late payment, or other material violation of a written rental agreement -it is considered
a voluntary vacancy.
Voluntary Agreement: An agreement entered into by mediating parties defining elements of resolution
disp� te.,
Warranty of Habitability: A landlord's minimum obligations under California Code include that:
•
There are no leaks when it rains, and no broken doors or windows;
The plumbing and/or gas facilities must be functional, including provisions of hot and cold water,
and a working sewer or septic tank connection;
LGREG0398 March 26, 1998 18
• The heater must be functional and be safe;
• The lights and wiring must be functional and be safe;
• Floors, stairways and railings have to be in good repair;
• When it is rented, the unit must be clean, with no piles of trash or garbage and no rats, mice,
roaches, or other pests;
• The landlord must provide enough cans or bins with covers for the garbage;
• There must be one working phone jack; and,
• A working smoke alarm at the time of rental.
a
LGREG0398 March 26, 1998 19
DEPTMENT:
AGENDA ITEM:
INTERNAL TRACKING
esv
.97
/64S
RESO/ORD NUMBER: .??1Y z/$
DATE
,
LIST IN BOOK
ON DISC OR SHARE. FORM SENT TO DEPT.
PUBLISH IF REQUIRED - Date of Publication
_------
,---
ORDINANCES ONLY
WHEN SIGNATURE AND /s/ COPY (1 EACH) returned,
LIST ON SIGNATURE TRACKING & SEND TO MAYOR
MAIL TO DISTRIBUTION LIST
NO.of COPIES:
PROOF OF MAILING PREPARED
SIGN BY CLERK/SEAL
ENTER INTO ECM ORDINANCE/RESOLUTION FILE
FILE IN VAULT
CODIFICATION IF ORDINANCE
clk:dt6:lother\ordres2
ORIGINATING DEPT:
COUNCIL AGENDA DATE:
COUNCIL AGENDA ITEM:
SUBJECT:
Number:
Date of Adopt:
OFF _CE OF THE TOWN CLERK
ORDINANCES & RESOLUTIONS
csvv v
a�•B
RESOLUTION
1 f 1 " r
4.o. !�
PUBLICATION REOUIRED=
COUNCIL ACTION:
AYES:
NAYS:
ABSENT:
ABSTAIN:
COUNCIL MEMBERS NAMES:
Number:
Date of Intro:
Date of Adopt:
ZONE CHANGE:
Randy Attaway, Joanne Benjamin, Steven Blanton, Jan Hutchins,
Mayor(or Chairman) LINDA LUBECK
ORDINANCE
ORDINANCES and RESOLUTIONS MUST BE RETURNED TO TOWN CLERK
BY WEDNESDAY AT 12 NOON.
ORDINANCES MUST BE READY FOR IMMEDIATE PUBLICATION
TC:07:RESO-ORD
Town Council Minutes April 20, 1998
Redevelopment Agency Los Gatos, California
HEARINGS CONTINUED
HERNANDEZ AVE 55/DESIGNATE LANDMARK HISTORIC PRESERVATION OVERLAY/CONT.
Motion by Mrs. Benjamin, seconded by Mr. Blanton, to close the public hearing. Carried
unanimously.
Motion by Mr. Hutchins, seconded by Mr. Attaway, that Council uphold the Planning
Commission's decision to initiate proceedings to designate the site as a Landmark Historic
Preservation Overlay Zone with the understanding that the appellant will have ample opportunity
to present his case before a designation is actually enacted. Carried unanimously.
SIGN REPLACEMENT CENTRAL BUSINESS DISTRICT/RESOLUTION 1998-47 (10.47)
Rick Tharp and Patrick Keller, 50 University Ave., presented plan for signage downtown. The
crown logo for downtown signage to be discussed and refined during further discussion. Mr.
Tharp presented some desi ' ns for consideration. The posts for the signs should be considered
for beautification also.
Council comments: New street name signs to go throughout the town so you can readily identify
Los Gatos by its signs; Consider pipes other than galvanized; Each Historic District could have
its own identification on the crown element; The incorporated date, the cats and :Gem of the
Foothills" can be considered as elements of the design. Mr. Tharp should return with figures
on the cost of other than galvanized pipe and submit an estimate along with sign company
estimates.
Motion by Mr. Hutchins, seconded by Mrs. Benjamin, that Council adopt Resolution 1998-47
entitled, RESOLUTION OF THE TOWN OF LOS GATOS ADOPTING THE CENTRAL
BUSINESS DISTRICT SIGN REPLACEMENT PROGRAM FOR SIGNS LOCATED IN THE
RIGHT-OF-WAY, with additional consideration concerning poles and crown logo. Carried
unanimously.
RENT DISPUTE RESOLUTION PROGRAM/RESOLUTION 1998-48 (27.19)
RENTAL AND OTHER TENANT -LANDLORD DISPUTES/ORDINANCE INTRODUCTION
The Town Clerk read the Title of the Proposed Ordinance.
Motion by Mr. Blanton, seconded by Mrs. Benjamin, to waive the reading of the Proposed
Ordinance.
Motion by Mr. Blanton, seconded by Mrs. Benjamin, that Council introduce Proposed Ordinance
entitled, ORDINANCE OF THE TOWN OF LOS GATOS AMENDING THE LOS GATOS
TOWN CODE ARTICLE VIII, RENTAL AND OTHER TENANT/LANDLORD DISPUTES
(SECTIONS 14.80.045. 14.80.010 & 14.80.315). Carried unanimously.
Motion by Mr. Attaway, seconded by Mr. Blanton,that Council adopt Resolution 1998-48
entitled, RESOLUTION OF THE TOWN OF LOS GATOS ADOPTING REVISED RENTAL
DISPUTE RESOLUTION REGULATIONS AND RESCINDING RESOLUTION 1989-210.
Carried unanimously.
TC:D10:MM042098
9
Attachment 3
RESOLUTION
RESOLUTION OF THE TOWN COUNCIL
OF THE TOWN OF LOS GATOS ADOPTING
REVISED RENTAL DISPUTE RESOLUTION REGULATIONS
AND RESCINDING RESOLUTION 1989-210
THE TOWN COUNCIL OF THE TOWN OF LOS GATOS RESOLVES AS
FOLLOWS:
Adopts the revised Rental Dispute Resolution Regulations attached hereto as Exhibit
A and rescinds resolution 1989-210 to be effective upon the effective date of the Ordinance
amending the Los Gatos Town Code Article VIII, Rental and Other Tenant/Landlord Disputes
(Sections 14.80.045 - 14.80.315) introduced on April 20th, 1998.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town
of Los Gatos, California, held on the 20th day of April, 1998, by the following vote:
COUNCIL MEMBERS:
AYES:
NAYES:
ABSENT:
ABSTAIN:
SIGNED:
ATTEST:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
csd08:A:\Resos\cs042098.03