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HomeMy WebLinkAbout1987-08-31 RRC Minutes • MINUTES PALM DESERT RENT REVIEW COMMISSION MEETING MONDAY, AUGUST 31, 1987 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * I. CALL TO ORDER Chairman Jonathan called the meeting to order at 4:00 p.m. II. PLEDGE OF ALLEGIANCE - Commissioner Randall White III. ROLL CALL Present: Commissioner Michael Isbell Commissioner Wanda Tucker Commissioner Joyce Wade-Maltais Commissioner Randall White Chairman Sabby Jonathan Also Present: Doug Phillips, Deputy City Attorney Jeff Patterson, Contract Attorney Mary P. Frazier, Deputy City Clerk/Secretary IV. APPROVAL OF MINUTES A. MINUTES of the Rent Review Commission Meetings of August 4, 1986. Rec: Approve as presented with the recommendation of Michael Isbell, an original member of the Commission. Commissioner Isbell recommended that these Minutes be approved inasmuch as he was the only remaining member of the original Rent Review Commission present at that meeting. Commissioner Tucker moved to approve the Minutes of August 4, 1986, based upon the recommendation of Commissioner Isbell. Motion was seconded by Isbell and carried by unanimous vote of the Commission. B. MINUTES of the Rent Review Commission Meeting of August 17, 1987. Rec: Approve as presented. Commissioner White moved to approve the Minutes of August 17, 1987, as presented. Motion was seconded by Wade-Maltais. MINUTES PALM DESERT RENT REVIEW COMMISSION MEETING AUGUST 31, 1987 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Commissioner Tucker noted that the motion at the bottom of page 7 of the Minutes showed that she had "amended her motion" when it should actually say "amended her second". Commissioner White amended his motion to include the correction noted by Tucker. Commissioner Wade-Maltais amended her second. Motion carried by a 4-0-1 vote, with Commissioner Isbell ABSTAINING inasmuch as he was not able to attend that meeting. V. CONTINUED BUSINESS A. STAFF REPORT on Decision by 4th District Court of Appeal Relative to Portola Palms Mobile Home Park. Mr. Patterson verified that each Commissioner had received a copy of the August 25th letter from Mr. Larry Horwitz of Hart, King & Coldren, who represented the owner of Portola Palms in the lawsuit. He explained that he and Mr. Horwitz had discussed the elements of the case which needed to be decided by the Commission and that Mr. Horwitz understood that their negotiations were not binding on the Commission. He said the August 25th letter outlined the agreements reached between the two attorneys and were in accordance with the decision by the Court of Appeal (on file and of record in the City Clerk's office) . He said the practice in some cities was to prepare an order showing Commission action, whereas in Palm Desert, Commission action had always been shown in the Minutes. However, he said he did not have a problem in using an order and attaching a copy to the Minutes. He said they had agreed that the period of retroactive application would be 26 months. Mr. Patterson stated that one of the elements agreed upon had not been included in the Order. That item was that "existing tenants of Portola Palms will only be billed for such retroactive amounts and interest to the extent each tenant was responsible for rent at Portola Palms during the period of retroactive application of the rent increase." Mr. Horwitz stated he had intentionally left this item out of the Order and would discuss it later during this meeting. Mr. Patterson stated that although Mr. Horwitz indicated in his letter that the retroactive amounts would be paid over a 12-month period, this agreement had also not been included in the Order. He said it was because the park owner felt inclusion in the Order might create some difficulty if he had to go to court to collect from homeowners who were not paying the retroactive amount. Mr. Phillips explained that the park owner was concerned with being able to collect the retroactive amounts and having to wait for the entire 12-month period to pass before going to court. He said he would like to see the 12- month payback provision in the Order and felt one way to mitigate the owner's concern was to put in some type of acceleration clause so that it is understood if a tenant responsible for the retroactive amount failed to pay 2 MINUTES PALM DESERT RENT REVIEW COMMISSION MEETING AUGUST 31, 1987 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * one of the installments, the owner would not have to wait until the end of the 12-month period to collect his money. Commissioner Wade-Maltais asked how they should explain the increase if asked by a homeowner. Mr. Phillips responded that it should be explained in this manner: "The current increase is $12.68 per space per month. In addition to that amount, your rent will be increased to pay for your fair share of the arrearage, and if you were there during the entire 26 months, your fair share would be $30.53 per month for the 12-month period. The total will be approximately $43.00 per month." Upon question by Commissioner White, Mr. Patterson explained that the period of retroactive application being 26 months was settled upon in exchange for the owner's agreement to spread out payment of the retroactive amount over a period of 12 months. Upon question by Commissioner Wade-Maltais, Mr. Phillips clarified that in this case, it was specifically ordered reimbursement of costs incurred by the park owner in connection with this appeal. Upon question by Chairman Jonathan, Mr. Phillips clarified that a new tenant moving into the park would only be responsible for the $12.68 per month increase, not any retroactive amount. Chairman Jonathan invited testimony from the audience. MR. LARRY HORWITZ, Hart, King & Coldren, spoke as the representative for the park owner. He reviewed his letter dated August 25th, expressing his client's concern with the ability to collect the retroactive amounts due. He said he did not think the Commission should be involved in figuring the specific rent increases for each individual space and that it was something the park owner should have to do. He added that if a tenant was unhappy with a calculation, it should be brought to the attention of the park owner or the Commission through the hearing process. Upon question by Mr. Phillips, Mr. Horwitz responded that he did not have a problem in adding the acceleration clause to the Order as long as the net result did not delay formal notification of the rent increase, which he said the park owner would be delivering the following day. Mr. Phillips asked Mr. Horwitz what would happen if a current homeowner was in possession of the space for only 13 months of the 26-month retroactive period and stated he understood that homeowner would only be responsible for the 13 months he or she was in possession. Mr. Horwitz agreed. Mr. White asked how the 26-month period was determined. Mr. Phillips stated that if you took the position that the rent increase should go into effect 30 days after the filing of the petition for hardship rent increase with 3 MINUTES PALM DESERT RENT REVIEW COMMISSION MEETING AUGUST 31, 1987 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * the Rent Review Commission, you would come up with 28 months for the retroactive period. However, the increase should be effective on the same day the original increase went into effect, which would be 24 months. The compromise was for 26 months. Mr. Horwitz agreed that this was basically the way it was calculated; however, he said that there were certain issues that his client had elected not to pursue in order to expedite the increase. MR. WILBUR VALLEY stated the homeowners were concerned with the compromise and felt funds had been compromised which could have been used by people in a needy position. He said they also disagreed with having to pay interest on the amount of the retroactive rent increase. Mr. Patterson explained that if the compromise had not been reached, the homeowners could have had to pay as high as $16.91 per space per month instead of $12.68. He stated that he had the interests of the homeowners in mind when he was negotiating with the park owner's representative. Chairman Jonathan declared the public testimony portion of the hearing closed. Upon question by Commissioner White, Mr. Patterson clarified that if someone moved into the park during the middle of the retroactive period, that period would owe less in the way of rental arrearage and a lesser interest amount on that arrearage. Chairman Jonathan stated he saw no problem with any of the recommendations from Mr. Patterson. Commissioner Wade-Maltais stated she felt both the homeowners' and park owner's concerns had been protected as much as could be. Commissioner Tucker asked if the Order was to be amended per Mr. Phillips' requests. Mr. Phillips stated the Order would be amended by adding two paragraphs relating to payment of the arrearage over a 12-month period and billing existing tenants only for the amount of time they were responsible for rent during the retroactive period. He said there would also be an acceleration clause added stating that "if a tenant fails to pay the retroactive amount the tenant is responsible to pay as the installment becomes due, then the full amount of due and unpaid retroactive rent plus interest shall become immediately due and payable." Commissioner Tucker moved to approve the Order as amended by Mr. Phillips. Motion was seconded by Isbell. Chairman Jonathan stated for the record that he felt it was a matter of interpretation in analyzing the $25.00 increase and that he disagreed with the judge's interpretation. However, since the judge saw it differently, 4 MINUTES PALM DESERT RENT REVIEW COMMISSION MEETING AUGUST 31, 1987 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * the Commission must comply with the Court Order. He said his vote in favor of the motion would be on that basis. Commissioner White agreed and felt the Appellate Court had mistaken the intent of the drafters of the Rent Control Ordinance. He recommended that the City Attorney's office look into amending the statutes to more clearly reflect the original intent. Commission Tucker amended her motion to include the recommendation as outlined by Commissioner White. Commissioner Isbell amended his second. Commissioner Isbell stated he had reviewed all of the notes and papers of that original decision and found it not in error at all. He said he would also vote in favor but only because the Court of Appeal did not see eye-to-eye with the Commission. He said he felt the Commission had made a good decision initially. He added that his yes vote would be under protest. Chairman Jonathan called for the vote. Motion carried by unanimous vote of the Commission, with Commissioner Isbell voting yes under protest. VI. ORAL COMMUNICATIONS None V. ADJOURNMENT With no further business to be discussed at this time, Chairman Jonathan adjourned the meeting at 5:07 p.m. RESPECTFULLY SUBMITTED, MARY P. FlEA IER, SECRE RY 5