Vacancy Control

DEFINITION

The model provides that rent cannot be increased at the time of a change in occupancy. Most often this would involve an in-place transfer of the mobilehome when it is sold. This type of protection is called "vacancy control.”

FOCUS OF LITIGATION

The issue of "vacancy control" has been a focal point of much litigation.  This is different from the issue of whether rent control itself is constitutional (which has already been decided, as mentioned). At the risk of becoming somewhat technical, it is important to understand where this issue fits into the overall rent control scheme, since the adoption of vacancy control is a crucial element for most homeowners to obtain.

MOBILE HOME RESIDENCY LAW IMPACTS

Under the Mobile Home Residency Law (MRL), a tenancy may not be terminated except for several specified reasons constituting good cause. In addition, a park owner is compelled to accept as a new tenant a buyer who purchases a mobilehome from an existing tenant unless the new tenant does not have the financial ability to pay rent or, based on past tenancies, has demonstrated he or she will not comply with the park rules and regulations. 

PARK OWNER ARGUMENT

Park owners have used the combined effect of these state law provisions and local rent control to establish a novel unconstitutional taking argument. This is an issue known as "vacancy control," which prevents a park owner from raising rents when a rental space is vacated and a new tenant takes possession.  In other words, the new tenant/buyer steps into the shoes of the previous tenant/seller and receives the benefit of the same rental restrictions. Park owners have argued that this gives the tenants the ability to "monetize" this right by selling their on-site mobilehomes for a higher price (they call it a “premium”). Consequently, they allege a transfer of the value of the underlying land from the landlord to the tenant has occurred which constitutes an unconstitutional taking.

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