AN ACT Relating to mobile home rent control; amending RCW 59.20.070; adding a new chapter to Title 59 RCW; adding a new section to chapter 34.12 RCW; providing an expiration date; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that an economic emergency exists with respect to mobile home park tenancies and that this emergency threatens the welfare of large numbers of mobile home park tenants throughout the state.

The legislature further finds that this crisis, unabated, will cause many mobile home tenants to either sell their mobile homes at a great loss or abandon their mobile homes due to inability to pay the rent being charged and an inability to sell their mobile homes on the open market at a price which would return their investment. This dilemma is particularly common among elderly, low-income mobile home owner-tenants, who comprise a high percentage of mobile home park residents.

The legislature further finds that due to a variety of factors unique to mobile home living and the mobile home park industry, the market forces are not currently operating to regulate mobile home park rents. Therefore, temporary legislative intervention is required to avoid serious economic hardships for large numbers of mobile home tenants.

The legislature further finds that mobile home parks are a valuable housing resource in this state that not only have provided a major source of low-cost housing, but inherently provide a network of security, social, and practical services to citizens who would otherwise become dependent on various public and private resources.

Therefore, it is the intent of this chapter to provide short-term emergency stabilization and control of the rise of mobile home park rents so that long-term solutions may be developed.

NEW SECTION. Sec. 2. This act shall be known as the "rent control act of 1988."

NEW SECTION. Sec. 3. (1) "Consumer price index" means the index published periodically by the United States department of commerce, bureau of labor statistics, further designated as "all urban consumers," limited to the residential rent item;

(2) "Landlord" means the owner of a mobile home park and includes the agents of a landlord;

(3) "Mobile home lot" means a portion of a mobile home park designated as the location of one mobile home and its accessory buildings, and intended for the exclusive use as a primary residence by the occupants of that mobile home;

(4) "Mobile home park" means any real property which is rented or held out for rent to others for the placement of two or more mobile homes for the primary purpose of production of income, except where such real property is rented or held out for rent for seasonal recreational purpose only and is not intended for year-round occupancy;

(5) "Tenant association" means a formal organization of tenants in a mobile home park, with duly elected officers, adopted bylaws or other charter, open to all tenants in the park;

(6) "Tenant" means any person, except a transient, who rents a mobile home lot; and "transient" means a person who rents a mobile home lot for a period of less than one month for purposes other than as a primary residence.

NEW SECTION. Sec. 4. The rent reserved by a landlord for a mobile home lot may be increased annually as provided in chapter 59.20 RCW no more than an amount equal to the increase during the preceding twelve months of the residential rent item of the consumer price index.

NEW SECTION. Sec. 5. A rent control appeals board consisting of five members is hereby established for each county in the state. This board shall be appointed by the legislative authority for each county within three months of the effective date of this section. If the legislative authority of a county fails to appoint the members of the rent control appeals board within the time provided, they shall be appointed as soon as practicable by the governor. The members of each county board shall choose their own chairperson. Members shall serve without compensation. Local legislative authorities or the governor in making the appointments provided for in this section shall attempt to appoint a balance of representatives of tenants' interests and landlords' interests, and shall also attempt to appoint members with relevant professional training, including but not limited to accounting, legal, and property management. Appointments shall be for the duration of this chapter as provided in section 13 of this act.

NEW SECTION. Sec. 6. The county rent control appeals boards established by section 5 of this act shall promptly entertain appeals filed under this chapter. Each local board may establish its own rules of procedure, consistent with chapters 34.04 and 34.12 RCW.

An aggrieved party may appeal a decision of a local board to the superior court for the county in which the local board rendering the decision is situated. Such appeal must be filed within thirty days of the issuance of the decision of the local board. The decision of a local board may only be reversed by a court if there is no substantial evidence to support the decision, the decision is in violation of a statute, ordinance, or constitutional provision, or the decision is arbitrary and capricious.

Rent control appeals boards shall have the power to compel the production of relevant books and records of parties to an appeal. Such orders shall be by subpoena, enforceable under the contempt power of the superior court for the county wherein the board is located. The board shall also have the authority to dismiss an appeal based on the appellant's failure to produce requested books and records as ordered by the board. Such dismissal shall be appealable to a superior court as other decisions of the board.

NEW SECTION. Sec. 7. (1) It is the purpose of the appeal provisions of this chapter to provide for individual adjustments in rents that will compensate for landlords' increase in operating expenses in instances in which annual rent increases as otherwise permitted by this chapter will not permit the maintenance of landlords' net operating income.

(2) It shall be presumed that the rents charged in the base period yielded a fair net operating income. The base period shall be January 1, 1987, through December 31, 1987.

(3) In the case of mobile home lots which were not in existence on January 1, 1987, or which were first rented subsequent to that date, fair net operating income shall be determined by the local appeals board on a basis consistent with the provisions of this chapter after due consideration of any special factors which an interested party may plead and prove.

NEW SECTION. Sec. 8. In determining fair net operating income, adjustments shall be made for the following:

(1) Increases or decreases on a dollar-for-dollar basis for the following operating expenses, provided that the amount of each expense shall not be unreasonable in the opinion of the board:

(a) Total payroll expenses;

(b) utilities;

(d) other administrative expenses;

(e) maintenance and repairs, subject to the condition that repairs costing in excess of five thousand dollars shall be prorated over their useful life;

(f) consumable supplies;

(g) insurance;

(h) real property taxes; and

(i) miscellaneous operating expenses;

(2) Capital improvements incurred after January 1, 1986, provided that the capital expense is amortized over the useful life of the capital improvement in accord with some other method deemed reasonable by the board;

(3) Increases or decreases in services, common facilities, or other amenities;

(4) Substantial deterioration of the common areas, common facilities or other amenities, other than as a result of ordinary wear and tear;

(5) Failure of the owner to perform ordinary repair, replacement, and maintenance; and

(6) Such other reasons as the board may determine to be valid based upon the purposes and provisions of this chapter.

NEW SECTION. Sec. 9. The board may determine, consistent with the presumptions set forth in section 7 of this act, pursuant to an appeal by an interested party that the rent charged in the base period yielded more or less than a fair net operating income. An "interested party" for the purposes of this section means a landlord or a tenant association. Factors to be considered in making that determination are:

(1) The fact that capital improvements have been made to the unit which are not reflected in the rent charged during the base period;

(2) Total rent increases for the five-year period prior to the base year were at least ten percent greater than the average of all rental increases for mobile home parks in the county wherein the mobile home park in question is located;

(3) That the landlord has consistently and over a substantial period of time failed to comply with the duties of a landlord as defined by RCW 59.20.130; and

(4) That a significant operating expense was imposed on the mobile home park during the base period, and not reflected in the rent charged during the base period, as a result of action by the state, or any political subdivision thereof. "Significant" for the purposes of this subsection means either an expense which did not exist prior to the base year, or an increase greater than ten percent. Expenses under this subsection include, but are not limited to, local improvement district assessments, utility charges, or real property taxes.

The burden of persuasion and of going forward with the evidence in an appeal under this section shall be with the appellant: PROVIDED, That parties shall have full access to the relevant books and records of other parties for the purpose of preparing their appeal or response.

NEW SECTION. Sec. 10. The board may refuse to grant a rent increase which might otherwise be proper if a landlord is not in substantial compliance with the duties set forth in RCW 59.20.130: PROVIDED, That the board may grant a rent increase conditioned on prior substantial compliance, or on prompt compliance by a specified date, where appropriate.

Sec. 11. Section 7, chapter 279, Laws of 1977 ex. sess. as last amended by section 1, chapter 253, Laws of 1987 and RCW 59.20.070 are each amended to read as follows:

A landlord shall not:

(1) Deny any tenant the right to sell such tenant's mobile home within a park or require the removal of the mobile home from the park because of the sale thereof. Requirements for the transfer of the rental agreement are in RCW 59.20.073;

(2) Restrict the tenant's freedom of choice in purchasing goods or services but may reserve the right to approve or disapprove any exterior structural improvements on a mobile home space: PROVIDED, That door-to-door solicitation in the mobile home park may be restricted in the rental agreement;

(3) Prohibit meetings by tenants of the mobile home park to discuss mobile home living and affairs, conducted at reasonable times and in an orderly manner on the premises, nor penalize any tenant for participation in such activities;

(4) Evict a tenant, terminate a rental agreement, decline to renew a rental agreement, increase rental or other tenant obligations, decrease services, or modify park rules in retaliation for any of the following actions on the part of a tenant taken in good faith:

(a) Filing a complaint with any state, county, or municipal governmental authority relating to any alleged violation by the landlord of an applicable statute, regulation, or ordinance;

(b) Requesting the landlord to comply with the provision of this chapter or other applicable statute, regulation, or ordinance of the state, county, or municipality;

(d) Participation or membership in any homeowners association or group;

(e) Asserting any rights provided in or seeking any enforcement of sections 1 through 10 of this 1988 act until July 1, 1990;

(5) Charge to any tenant a utility fee in excess of actual utility costs or intentionally cause termination or interruption of any tenant's utility services, including water, heat, electricity, or gas, except when an interruption of a reasonable duration is required to make necessary repairs;

(6) Remove or exclude a tenant from the premises unless this chapter is complied with or the exclusion or removal is under an appropriate court order; or

(7) Prevent the entry or require the removal of a mobile home for the sole reason that the mobile home has reached a certain age. Nothing in this subsection shall limit a landlords' right to exclude or expel a mobile home for any other reason provided such action conforms to chapter 59.20 RCW or any other statutory provision.

NEW SECTION. Sec. 12. A new section is added to chapter 34.12 RCW to read as follows:

The chief administrative law judge shall designate one or more administrative law judges to serve as the presiding officer of hearings of appeals filed with county rent control appeal boards established by section 5 of this act. The administrative law judge shall, in addition to presiding at said hearing, review all evidence presented and properly admitted. The hearing shall be conducted in conformance with this chapter.

The administrative law judge shall issue an initial or proposed decision including findings of fact and conclusions of law in each case.

NEW SECTION. Sec. 13. Sections 1 through 10 of this act shall constitute a new chapter in Title 59 RCW.

NEW SECTION. Sec. 14. Sections 1 through 10 and 12 of this act shall expire July 1, 1990.

NEW SECTION. Sec. 15. This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect immediately.