April 12, 2023
City of San Rafael
City Reaches Lawsuit Settlement with Owner of RV Park of San Rafael
The City of San Rafael has reached a settlement with the owner of the RV Park of San Rafael (the Park) of the lawsuit City of San Rafael v. Chessen, et al (Marin Superior Court Case No. CIV 2104219). The lawsuit was brought by the City in December 2021 to enforce its Mobilehome Rent Stabilization Ordinance (MRSO). In July 2022, the City won a motion for preliminary injunction, “showing a reasonable probability it will prevail on the merits of its claim that the Park is a mobilehome park governed by the MRSO.” Trial was scheduled in May 2023.
While the City is confident in its legal position, the City’s likely best outcome at a trial was, in the City’s judgment, less advantageous to the existing residents at the Park than the settlement that the City was able to negotiate with the Park owner. Unfortunately, regardless of the MRSO, approximately 10% of the Park’s residents have left since the lawsuit was filed, one-third of the Park’s residents were in the process of being evicted or their tenancies terminated, and the Park had issued a notice to all residents that it would close. Although not at issue in the lawsuit, the Park’s owner has various rights under state law, including the right to evict residents under certain statutory conditions, the right to require the removal of recreational vehicle structures at the end of a tenancy, and the right to close or seek permission to change the use of the Park. These realities and the cost and uncertainty of continued litigation justified reaching a compromise.
The settlement provides significant benefits for existing residents at the Park and promotes the City’s interest in affordable housing, while acknowledging the Park owner’s options for use of the land. Key terms of the settlement are as follows.
- Rents for current residents at the Park will remain subject to the limits set by the MRSO for as long as the residents live at the Park. Thus, the rents current residents pay will not increase except as allowed under the MRSO.
- The Park is required to refund to the residents the challenged $100 per month rent increase residents paid from November 2021 through June 2022.
- The Park will withdraw the pending notices of termination of resident tenancies.
- Current residents who are required to fix existing violations of park rules or state regulations concerning their homes will be granted an additional, new 30 days to cure those violations.
- The Park’s owner will not seek to close or change the use of the Park before January 1, 2033, with the sole exception that the Park owner may seek permission from the State and City to reclassify the Park as an RV park so long as the above benefits to current residents are maintained.
In exchange, the City has agreed to interpret the definition of mobilehome in the MRSO literally. By its terms, that definition does not include recreational vehicles. The practical effect of this is that rents for future residents of the Park will not be subject to rent control.
This settlement has no effect on the Park’s classification under state law. The MRSO does not regulate rules or conditions at mobilehome parks (other than rent) or when and how a tenancy can be terminated. Those are generally issues of contract and state law that arise between the residents and the owner of the park. The settlement does not resolve whether the Park is a mobilehome park or recreational vehicle park for purposes of state law or the classification of any homes under state law. The settlement does not attempt to determine or waive the rights of particular residents.
City Attorney Rob Epstein commented on the settlement: “The City has devoted significant resources to protect and defend the approximately 45 Park residents in multiple lawsuits filed by the Park owner as long ago as 2001 and again in federal court during the past year. We are pleased to have achieved a resolution that maintains affordability for the existing Park residents with an agreement that includes terms that are better than what the Court could order even if the City were to have prevailed at trial.”