Santa Monica Pines, Ltd. v. Rent Control Board

• Citation: 679 P.2d 27,35 Cal.3d 858,201 Cal.Rptr. 593
• Court: United States State Supreme Court (California)
• Decision Date: 20 April 1984
• Parties: , 679 P.2d 27 SANTA MONICA PINES, LTD., et al., Plaintiffs and Appellants, v. RENT CONTROL BOARD OF the CITY OF SANTA MONICA et al., Defendants and Respondents. L.A. 31615, 31616.

Page 593

201 Cal.Rptr. 593

35 Cal.3d 858, 679 P.2d 27

SANTA MONICA PINES, LTD., et al., Plaintiffs and Appellants, v. RENT CONTROL BOARD OF the CITY OF SANTA MONICA et al., Defendants and Respondents.

L.A. 31615, 31616.

Supreme Court of California.

April 20, 1984.

Rehearing Denied June 21, 1984.

Royal M. Sorensen and Burke, Williams & Sorensen, Los Angeles, for plaintiffs and appellants.

Paul, Hastings, Janofsky & Walker, William B. Campbell, Peter K. Rosen, Boren, Elperin, Howard & Sloan, William Elperin, Tamila C. Jensen, Los Angeles, Rhodes, Maloney, Hart, Mullen & Jakle, Christopher M. Harding, Mark Garrett, Santa Monica, J. Charlton Wentz, San Diego, Latham & Watkins, Stephen L. Jones, Alex M. Johnson, Los Angeles, William A. Kerr, Peter A. Umoff, Santa Monica, Lowell R. Wedemeyer, Davis, Richard Tanzer, Tanzer, Rosato, Samuels & Weisz, Beverly Hills, Rosario Perry, Santa Monica and Peter L. Colt, Los Angeles, as amici curiae on behalf of plaintiffs and appellants.

Robert M. Myers, City Atty., Stephen S. Stark, Asst. City Atty., Karl M. Manheim and Susan L. Carroll, Deputy City Attys., Michael Heumann, Santa Monica, Mary Ann Yurkonis, Arnold Milton Paul, Jana Zimmer, Los Angeles, and Joel Martin Levy, Santa Monica, for defendants and respondents.

Ira Reiner, City Atty., Gary R. Netzer and Claudia McGee Henry, Asst. City Attys., Sharon L. Siedorf, Deputy City Atty., Los Angeles, George Agnost, City Atty., Burk E. Delventhal, Alice Suet Yee Barkley San Francisco, and Thomas J. Owen, Deputy City Attys., Natalie E. West, City Atty., Berkeley and Penny Nakatsu, Berkeley, as amici curiae on behalf of defendants and respondents.

REYNOSO, Justice.

Appellants, the owners and prospective owner of a 42-unit apartment building in the City of Santa Monica, ¹ appeal from a judgment upholding the city's denial of their claim of a vested right to remove the apartments from the rental housing market by converting the apartments to condominiums, without obtaining a permit for such removal under Santa Monica's rent control law. Appellants rest their claim on the city's approval of a tentative subdivision map for the conversion prior to the adoption of the rent control charter amendment, and their alleged subsequent expenditure of considerable sums to effect the conversion.

We agree with the rent control board's and the trial court's conclusion that the amount of money actually spent by appellants in reliance on the tentative map approval--only about $1,700 was expended between the date the map was approved and the date the rent control law was adopted--was inadequate to predicate a vested right to complete the conversion free of rent control. Thus, we need not decide whether the vested right doctrine generally applies to condominium conversions. Appellants' additional contention that the removal permit requirement conflicts with, and is accordingly preempted by, the state Subdivision Map Act is rebutted by language included in several provisions of the act. Those provisions explicitly disclaim any intention on the part of the Legislature to limit by implication local power to regulate condominium conversion.

We conclude that the judgment should be affirmed.

I

The calendar of events influences our result. That calendar follows.

On January 15, 1979, the Santa Monica Planning Commission approved appellants' previously submitted tentative subdivision map. On February 27, 1979, appellants filed an application with the State Department of Real Estate for a final subdivision report. (Bus. & Prof.Code, §§ 11010, 11018.) On March 26, 1979, the final subdivision map was submitted to the Los Angeles County Engineers for a determination of its consistency with the tentative map, prior to consideration by the city council.

On April 10, 1979, article XVIII, an initiative rent control scheme, was adopted by the voters of Santa Monica as an amendment to the city's charter. Contained in the charter amendment is the provision challenged by appellants, section 1803, subdivision (t), which requires a landlord to obtain a permit from the rent control board before "remov[ing] a controlled rental unit from the rental housing market by demolition, conversion, or other means...." ² (Emphasis added.)

On May 11, 1979, fulfilling a condition attached to the tentative map approval, appellants paid a $42,000 conversion tax to the city. (See The Pines v. City of Santa Monica (1981) 29 Cal.3d 656, 175 Cal.Rptr. 336, 630 P.2d 521.)

On May 24, 1979, the Santa Monica engineers certified that the final map substantially conformed to the tentative map and that appellants had complied with "all provisions of local subdivision ordinances of the City of Santa Monica applicable at the time of approval of the tentative map...." (See Gov.Code, §§ 66473, 66474.1.)

On June 26, the city council approved the final subdivision map, which was ultimately recorded on January 11, 1980.

On June 29, 1979, the city adopted ordinance No. 1127, in order to clarify and implement the rent control charter amendment. On the same day, appellants sought from the rent control board a vested right exemption from the removal permit requirement, pursuant to the provisions of the ordinance. ³

The actual expenditures, like the calendar of events, are important. Appellants reported expenditures of $1,709 ($384 to the Department of Real Estate, $825 to the City of Los Angeles for "plan check fees," and $500 to the City of Santa Monica for engineering fees) between January 15 (the date of approval of the tentative map) and April 10, 1979 (the date of adoption of the rent control law). Thereafter, they spent another $55,515.59 ($2,543 to an engineering firm, $42,000 to the City of Santa Monica for the conversion tax, $5,250 to the city for subdivision map fees, and $5,722.59 to another engineering firm). On July 19, 1979, the rent control board heard and denied appellants' application for exemption.

Appellants subsequently petitioned the Superior Court of Los Angeles County for a writ of mandate pursuant to Code of Civil Procedure sections 1085 and 1094.5. (L.A.Super.Ct. No. WEC-062153.) The superior court upheld the rent control board's decision, denying the requested writ. Judgment was entered on March 4, 1980, along with requested findings of fact and conclusions of law. Appellants filed a notice of appeal on May 12, 1980.

On May 15, 1980, appellants commenced a separate action for declaratory relief, again asserting their claim of a vested right to complete the conversion of the apartments without being subject to the rent control law. (L.A.Super.Ct. No. C-322806.) On April 21, 1981, the second superior court issued an interlocutory judgment of abatement on the ground of another action pending. Appellants also appealed this ruling.

The above-mentioned appeals have been consolidated.

II

Appellants' primary contention is that they acquired a vested right to complete the condominium conversion project, free of rent control, by allegedly expending over $40,000 following a tentative subdivision map approval of the project. The entire project was estimated to have a total cost of approximately $60,000. As will appear, this contention must be rejected because only about $1,700, an "insubstantial" amount in this context, was actually expended in reliance on the map approval.

Appellants acknowledge that the law of vested rights in California was recently and definitively enunciated by this court in Avco Community Developers, Inc. v. South Coast Regional Com. (1976) 17 Cal.3d, 785, 132 Cal.Rptr. 386, 553 P.2d 546. ⁴ We held that acquisition of a vested right to construct a building required: (1) a building permit, and (2) substantial expenditures in reliance on the building permit. They argue that where, as here, the potential condominium converter seeks only to subdivide a previously constructed building, and, consequently no building permit is required (compare Hazon-Iny Development, Inc. v. City of Santa Monica (1982) 128 Cal.App.3d 1, 179 Cal.Rptr. 860), the "final" government permit needed as the foundation of a vested right is the tentative subdivision map.

Appellants rely heavily on Youngblood v. Board of Supervisors (1978) 22 Cal.3d 644, 150 Cal.Rptr. 242, 586 P.2d 556, in which we held that under the state Subdivision Map Act a county lacked discretion whether to approve a final subdivision map if the application showed the development substantially conformed to the tentative map and its attendant conditions. We explained that, under the act, "the date when the tentative map comes before the governing body for approval is the crucial date when that body should decide whether to permit the proposed subdivision. Once the tentative map is approved, the developer often must expend substantial sums to comply with the conditions attached to that approval. These expenditures will result in the construction of improvements consistent with the proposed subdivision, but often inconsistent with alternative uses of the land. Consequently it is only fair to the developer and to the public interest to require the governing body to render its discretionary decision whether and upon what conditions to approve the proposed subdivision when it acts on the tentative map. Approval of the final map thus becomes a ministerial act once the appropriate officials certify that it is in substantial compliance with the previously approved tentative map. (Great Western Sav. & Loan Assn. v. City of Los Angeles, supra, 31 Cal.App.3d 403, 411, 414, 107 Cal.Rptr. 359; Longtin, Cal.Land Use Regulations, [1977] op. cit. supra, at p. 600.)" (Id., at pp. 655-656, 107 Cal.Rptr. 359) Appellants urge that recognition of the tentative map approval as the "final" required approval thus comports with the equitable estoppel rationale of the vested-rights rule. (See Raley v. California Tahoe Regional Planning Agency (1977) 68 Cal.App.3d 965, 974-978, 137 Cal.Rptr. 699; Spindler Realty Corp. v....