SANTA MONICA PROPERTIES v. SANTA MONICA RENT CONTROL BD.
203 Cal.App.4th 739 (2012)
137 Cal. Rptr. 3d 802
SANTA MONICA PROPERTIES, Plaintiff and Appellant,
v.
SANTA MONICA RENT CONTROL BOARD, Defendant and Respondent.
No. B227868.
Court of Appeals of California, Second District, Division Eight.
February 16, 2012.
Law Offices of David R. Akin and David R. Akin for Plaintiff and Appellant.
BIGELOW, P. J.—
After taking more than a year to issue a final decision, the Santa Monica Rent Control Board (RCB) decreased two tenants' rents because their landlord, Santa Monica Properties (SMP), lowered the temperature on a hot tub during workday hours, heating it only during evening hours, and altered a sauna's timer knob so that the sauna heated for one-half hour at a turn instead of the previous one hour. SMP filed a petition for writ of administrative mandate challenging the rent decrease decision. In the same pleading, SMP sought a petition for writ of traditional mandate to compel RCB to adopt regulations establishing administrative remedies to be applied in the event RCB fails, as it did here, to issue a final decision in a rent adjustment proceeding within 120 days as required by the Santa Monica City Charter, article XVIII, section 1800 et seq., Rent Control Charter Amendment, hereafter the rent control law (RCL).1 The trial court entered judgment for RCB. We reverse the judgment as to SMP's petition for writ of administrative mandate, and remand the cause to the trial court with directions to enter judgment in favor of SMP. We affirm the judgment as to SMP's petition for writ of traditional mandate. FACTSThe Rent Decrease Proceeding
SMP owns a 32-unit apartment building that is subject to RCB's jurisdiction pursuant to the RCL. Under section 1805(a) and (b), RCB is empowered to make general adjustments, annually or upon a noticed public hearing, of the "rent ceiling"—the "maximum allowable rent which a landlord may charge on any controlled rental unit." (§ 1801(k).) Under section 1805(c), RCB may, upon a tenant's petition, decrease the "maximum rent of individual controlled rental units."2 On January 31, 2008, a tenant in SMP's apartment building, R. Liza Salvatore, filed a "Petition for Rent Decrease" with RCB. (No. D-4392.) The petition alleged that a decrease in her monthly rent (then $1,214.25 for a two-bedroom, two-bathroom, 1,200-square-foot unit) was justified because SMP had reduced housing services by changing the hours that the property's Jacuzzi was heated, from 9:00 a.m. to 9:00 p.m., down to 5:00 p.m. to 9:00 p.m.; and by installing a sauna timer that "reduced greatly" the length of time
that the sauna would stay heated "from 1 hr to 25 min."3 On March 10, 2008, another tenant, Roberta Rosskam, also filed a "Petition for Rent Decrease." (No. D-4396.) The petition alleged that a decrease in her monthly rent (then $1,440.33 for a two-bedroom, two-bathroom, 1,300-square-foot unit) was justified because SMP had reduced housing services by changing the hours that the property's Jacuzzi was heated, from 9:00 a.m. to 9:00 p.m., down to 5:00 p.m. to 9:00 p.m., and by installing a sauna timer that "reduced significantly" the length of time that the sauna would stay heated "from 1 hr to 25 min."4 In late March 2008, RCB consolidated the rent decrease petitions. "[O]n several occasions" prior to the hearing on the petitions, a hearing investigator employed by RCB went to SMP to inspect the operation of the hot tub and sauna.
1. All section references are to the RCL.
2. Section 1805(e) prescribes factors which RCB "shall" consider in making individual and general adjustments to the rent ceiling. Section 1805(e) is discussed more fully below in addressing SMP's arguments on appeal.
3. Salvatore's petition also alleged a number of maintenance-related conditions justifying a rent reduction. Those matters were resolved or are outside the issues in the current appeal. For example, RCB did not order a rent decrease based upon a complaint that SMP turned off the gas to a decorative fireplace; RCB concluded that, under an order issued by California's Public Utilities Commission, and a judgment in a previous superior court action, SMP had acted properly in stopping delivery of gas for use in decorative fireplaces such as the one in Salvatore's unit.
4. As did Salvatore's petition, Rosskam's petition also alleged several maintenance-related conditions justifying a rent decrease. As noted, those matters are not at issue in the current appeal.
5. Section 1805(d)(11) provides: "The decision of the hearing examiner shall be the final decision of [RCB] in the event of no appeal to [RCB]. [In the event an appeal is filed, the] decision of the hearing examiner shall not be stayed pending appeal; however, in the event [RCB] on appeal reverses or modifies the decision of the hearing examiner, the landlord, in the case of an upward adjustment in rent, or the tenant, in the case of a downward adjustment of rent, shall be ordered to make retroactive payments to restore the parties to the position they would have occupied had the hearing examiner's decision been the same as that of [RCB]."
6. The current language in section 1805(e) is different from the language in the section at the time of Sterling. (Sterling, supra, 168 Cal.App.3d at p. 184.) The current version of section 1805(e) provides that, in making individual and general adjustments of the rent ceiling, RCB shall consider the purposes of the RCL "and the requirements of law." (Italics added.) The current "requirements of law" language was not in section 1805(e) at the time of Sterling. As we have noted, the requirements of law governing rent control ordinances include a fair return to landlords on their property.
7. Section 1801(d) defines "housing service" very broadly to include "any ... benefit, privilege or facility connected with the use or occupancy of any rental unit."
8. All references to regulations are to those regulations promulgated by RCB in accord with its express powers under the RCL.
9. Section 1805(c) also authorizes a landlord to petition for a rent increase. Our interpretation of section 1805(e) would apply with equal force in the context of a proceeding on a petition for a rent increase. In other words, if a landlord wants a rent increase, the landlord cannot merely point to an increase in services.
10. The decision actually states a $48 reduction as to Salvatore, but $3 was later disallowed by the RCB on administrative appeal.
11. The facilities made unusable to the tenants included a "recreation room, a sauna, a spa, a laundry, security gates, ... an outdoor garden area, [and] a well-maintained mail room, lobby, and stairwell." (Ocean Park, supra, 114 Cal.App.4th at p. 1069.)
12. The RCB hearing examiner did not hold a hearing within 60 days of the filing of the petitions for rent decreases. (Reg. 4007.) The RCB hearing examiner did not render his decision within 65 days of the filing of the petitions for rent decreases. (Reg. 4019.) RCB did not render the final decision on appeal within 120 days of the filing of the petitions for rent decreases. (§ 1805(d)(12); reg. 4024.)