San Marcos Owners of Mobile Home Park File New Rent-Control Suit

The owner of the Rancho Vallecitos Mobilehome Park in San Marcos has no use for the city’s rent-control ordinance, so she has taken the city to court--over and over again.

Superior Court in Vista. The state Court of Appeal. The state Supreme Court, which refused to hear the case.

Now, the park’s owners have filed their lawsuit in U.S. District Court in San Diego, arguing that the city’s attempt to control the amount charged for rents is bringing financial windfalls to the park tenants--at the expense of the park owner who has a right to make some money, too.

At issue is whether, when a tenant leaves the park and sells his mobile home to a newcomer, the rents charged of the new tenant can be increased.

For a time, the San Marcos rent-control law said no. When a mobile home coach changed hands, the existing rental lease shifted to the new owner as well, so the new tenant would pay the same rent charged the previous tenant.

Attorney Jim Martin, on behalf of the owners of the 340-space park, one of several in the city, said that was unfair. In other kinds of real estate leases, such as apartments, it’s permissible to increase rents when one tenant moves out and before the next one moves in, he argued.

But the San Marcos rent-control law for mobile home parks prohibited rent increases between tenancies.

Martin argued that, if the rent was competitively low and could not be readjusted between tenancies, the person selling the mobile home could charge relatively more for his coach than it might otherwise be worth because the buyer was capitalizing on already low rent.

And so it was the seller of the mobile home who was benefiting by the low rents because he charged a premium for his coach, at the expense of the park owner who could not adjust the rent upward. In effect, Martin said, the seller was taking profit that the park owner should enjoy.

Martin said the park owners should be allowed to increase the rents of particular mobile home spaces between tenants.

The city agreed to change the law to accommodate that suggestion. Now, the park owner can increase the rent to reflect increases in the Consumer Price Index, or to reflect the rent charged for similar mobile home spaces in San Marcos.

Not good enough, Martin said. Once the space is between tenants, he said, the park owner should be allowed to establish whatever rental charge he thinks the market can bear.

“We should be able to negotiate the rent freely, based on what the market dictates,” he said.

“But they’re not letting us do it. So the rents are below market, and it’s the tenant who is charging a higher price for his mobile home than it’s worth who is benefiting by this,” he said.

City officials said their ordinance is patterned after others that have been deemed legal, and they stand by it.

Martin said his lawsuit is best suited for federal court, and that it was procedurally necessary to file it first in Superior Court.

The lawsuit is similar to one, originating in Escondido, that the U.S. Supreme Court has agreed to review.