Rebates and a Rent Freeze

DISTINGUISHING "ROLLBACKS" FROM "REBATES"

Rent “rollbacks,” which restrict future rents to a prior, lower amount, should not be confused with "rent rebates," which require the park owner to pay back rent money already collected. 

Rebates are harder to justify and defend, since the park owner will argue that he spent money on park improvements in reliance upon the rent collected. Unless the rents were so unreasonably high to begin with that the rebate itself does not appear to be unreasonable, so that the park owner should have contemplated that a rebate was possible, the practice of rent rebates is not favored. 

Once again, very specific findings are necessary if a rebate is to be used.

PROSPECTIVE RENT FREEZE

One way to achieve the effects of a rent rollback without actually lowering rents is by use of a prospective rent freeze. This type of provision would freeze higher rents at a given level until the median rent for the remainder of a given park, city, or county has caught up. 

The City of Hayward instituted such a provision in 1992, which was designed to provide relief for those residents who purchased their homes during the time when the city's vacancy control protections were suspended due to a Federal Court case which was later overruled.

Source: The GSMOL Mobilehome Rent Stabilization Ordinance Handbook, Second Edition: Guidelines for Drafting and Enacting a Mobilehome Rent Stabilization Ordinance.

Prepared by: Bruce Stanton, Esq., Corporate Counsel

Image courtesy of Stuart Miles at freedigitalphotos.net