Tri County Apartment Assn. v. City of Mountain View

• Decision Date: 10 December 1987
• Docket Number: No. H002346,H002346
• Citation: 242 Cal.Rptr. 438,196 Cal.App.3d 1283
• Court: California Court of Appeals Court of Appeals
• Parties: TRI COUNTY APARTMENT ASSOCIATION, etc., et al., Plaintiffs and Respondents, v. CITY OF MOUNTAIN VIEW, et al., Defendants and Appellants.

Page 438

242 Cal.Rptr. 438

196 Cal.App.3d 1283

TRI COUNTY APARTMENT ASSOCIATION, etc., et al., Plaintiffs and Respondents, v. CITY OF MOUNTAIN VIEW, et al., Defendants and Appellants.

No. H002346.

Court of Appeal, Sixth District, California.

Dec. 10, 1987.

Review Denied March 17, 1988.

Robert J. Logan, Law Offices of Robert J. Logan, San Jose, Peter D. Bulens, City Atty., Mountain View, for defendants and appellants.

Herman J. Mager and Stephen J. Vonderach, Law Offices of Herman J. Mager, Inc., San Jose, for plaintiffs and respondents.

STONE, Associate Justice. ^*

In this case of first impression, we must decide whether a municipal ordinance restricting the effective date of proposed rental increases is a valid rent control measure or a prohibited trespass into landlord-tenant areas preempted by state law. Our task is to affix a label, with appropriate judicial consequences, to a Mountain View enactment formally identified as a "notification process for rental increases." Should the measure be classified as permissible control of residential rent increases (the position advocated by the city) or as an usurpation of the notification provisions set forth in Civil Code section 827 (the position advocated by a landowners' association)?

With full awareness that California cities are free to adopt various forms of rent control under broad constitutional tolerance (see Birkenfeld v. City of Berkeley (1976) 17 Cal.3d 129, 142, 130 Cal.Rptr. 465, 550 P.2d 1001; Carson Mobilehome Park Owners' Assn. v. City of Carson (1983) 35 Cal.3d 184, 191, 197 Cal.Rptr. 284, 672 P.2d 1297; Fisher v. City of Berkeley (1984) 37 Cal.3d 644, 681, 209 Cal.Rptr. 682, 693 P.2d 261, affd. Fisher v. Berkeley (1986) 475 U.S. 260, 271-174, 106 S.Ct. 1045, 1052-1053, 89 L.Ed.2d 206, 216-217; Santa Monica Pines, Ltd. v. Rent Control Board (1984) 35 Cal.3d 858, 868, 201 Cal.Rptr. 593, 679 P.2d 27; Nash v. City of Santa Monica (1984) 37 Cal.3d 97, 207 Cal.Rptr. 285, 688 P.2d 894 [superseded by Govt.Code, § 7060.7]; Pennell v. City of San Jose (1986) 42 Cal.3d 365, 371, 228 Cal.Rptr. 726, 721 P.2d 1111, hearing granted (1987) 480 U.S. 905, 107 S.Ct. 1346, 94 L.Ed.2d 517), we have concluded that the Mountain View ordinance impermissibly conflicts with a statutory scheme which occupies the field of notice between landlords and tenants. The ordinance, therefore, is invalid.

THE PROCEDURAL FRAMEWORK

Through an amended complaint filed in Santa Clara County Superior Court on February 13, 1986, the Tri County Apartment Association and two individual landlords, as plaintiffs, sought declaratory and injunctive relief from the City of Mountain View and its city attorney, as defendants. (The substance of the complaint will be discussed below.) In response, defendants filed a demurrer and, alternatively, a motion for judgment on the pleadings. Plaintiffs responded with their own motion for judgment on the pleadings, even though defendants had not yet answered the complaint.

At a hearing on the various requests for relief, the court expressed its concern about ruling for plaintiffs in the absence of defendants' answer. But counsel for both parties, to expedite the appellate process, stipulated that they waived procedural objections to the court's decision. The court then ruled in favor of plaintiffs on the theory that the disputed ordinance directly conflicted with state law. Following the entry of judgment declaring the ordinance unconstitutional and permanently enjoining its enforcement, defendants filed a timely notice of appeal.

The issue is properly before us. (See Palos Verdes Shores Mobile Estates, Ltd. v. City of Los Angeles (1983) 142 Cal.App.3d 362, 368, 190 Cal.Rptr. 866 ["Since the determination of the facial validity of an ordinance presents an issue of law, it is appropriate that the issue be settled on an appeal from an order granting a preliminary injunction enjoining the ordinance's enforcement"].)

THE FACTS ¹

The Mountain View City Council, in 1984, formed an ad hoc committee to investigate landlord-tenant relationships in that municipality, whose residents had twice defeated rent control measures in local elections. Instructed not to consider rent control per se, the committee recommended an ordinance to alleviate problems purportedly created by Civil Code section 827 (Section 827), which allows landlords to increase rents for month to month tenants on not less than 30 days' notice. ² By a 4-3 vote on November 19, 1985, the city council adopted the committee's recommendation as Municipal Ordinance No. 27.85 (the Ordinance), ³ to become effective on January 11, 1986, with the following title: "AN

ORDINANCE ADDING ARTICLE III TO CHAPTER 21 OF THE MOUNTAIN VIEW CITY CODE, ALL RELATING TO THE NOTIFICATION PROCESS FOR RENTAL INCREASES." (Emphasis added.)

The preamble recites that Mountain View had more than 60 percent multi-family dwellings and 63 percent rental units, with low vacancy rates. Rental increases frequently created immediate burdens on a tenant either to find a way to pay the increased rent or to find another, less expensive unit immediately, although available substitute housing was often difficult to obtain. The short notice period made it difficult for tenants to adjust to the increase and caused significant community disruption.

As a result, the city council ordained a procedure for "NOTIFICATION OF RENTAL INCREASES," the most significant part of which says that: "In any residential rental tenancy of a dwelling unit from month to month or longer, the landlord shall be required to give the tenant at least sixty (60) days' written notification of any rental increase prior to such increase going into effect."

The difference between Section 827 and the Ordinance is the minimum notification period, 30 days versus 60 days, which a landlord must observe before increasing a monthly tenant's rent.

If a landlord failed to obey the Ordinance, an aggrieved tenant could use that failure as a defense in an unlawful detainer action. The landlord's conduct also amounted to an infraction, punishable by a fine of not more than $300 for three or more violations within one year.

Before the city began to enforce the Ordinance, plaintiffs filed the present litigation, alleging the enactment's unconstitutionality because of state preemption.

PLAINTIFFS' CONTENTIONS

From the plaintiffs' perspective, the Ordinance encroaches on an area fully occupied by general law under Section 827, i.e., "the limited field of notice required when a landlord proposes to change the terms of the letting." Plaintiffs concede that under prevailing case law authority, "if the City of Mountain View chose to enact rent control measures and did so properly and according to law, their [i.e., the landlords'] ability to prevent such an enactment would be limited to lobbying efforts before the people and City Council and by campaign against enactment of such measures at the ballot box." Yet the present issue, say plaintiffs, is different from rent control; the issue is limited to a landlord's right to change the lease terms on statutorily authorized notice, which Section 827 governs. "Were this Court to now hold Ordinance 27.85 as being a valid rent control measure, not only would ten years of decisional case law be undermined, but utter chaos would result in the rental housing industry." To the plaintiffs, the only question is: "In the absence of a valid rent control ordinance, can a local government invade an area pre-empted by the state legislature?"

DEFENDANTS' CONTENTIONS

The defendants ask a different question, i.e., "As a valid rent control measure, is Mountain View Ordinance No. 27.85 preempted by Civil Code § 827?" The city's arguments against preemption fall into several categories which contend that the statute and the Ordinance are compatible but, if not, that the Ordinance deals with a proper subject of local control:

1. Presumption of Validity. The landowners' interpretation of the Ordinance is that it improperly affects the terms of certain tenancies by changing the statutory notice provisions; the city's interpretation is that the notice provision is a proper method of temporarily stabilizing rents. Under these circumstances, the Ordinance should be considered valid. "Even if there are two reasonable interpretations, the one which supports the constitutionality should be upheld."

2. Motive. Although the city council instructed its committee not to consider rent control, that circumstance may not benefit plaintiffs because (a) directions given to a committee two years before the Ordinance was passed do not establish the council's motive or intent; and (b) motive or intent on the council members' part is irrelevant. The official legislative intent was expressed in the recitals set forth in the Ordinance.

3. Permissiveness. If the Ordinance is deemed to be a notice requirement, it is still not preempted. "The language of Civil Code § 827 is permissive. Supplemental local regulation is permissible." The Ordinance and Section 827 use the term "notice" for significantly different purposes. "The Ordinance and Civil Code § 827 are actually complementary. Respondents simply have to give two notices, or combine both in one which fulfills the requirements of the Ordinance, as well as Civil Code § 827. The 60 day notice gives the warning and commences the rent stabilization period, the 30 day notice effectuates the change in those leases of month-to-month, to which both the Ordinance and Civil Code apply." Except for month to month tenancies, the Ordinance and Section 827 affect different tenancies.

4. Rent Control as a Subject of Local Regulation. Since the Ordinance limited a landlord's right to increase rent for a given period, it was a rent control measure properly subject to local regulation. "Setting a ceiling on the amount of rent that can be charged for a limited period of time, is by any definition, rent control." The subject has not...