On April 23, 2018 the United States Court of Appeals for the Ninth Circuit issued an important Opinion overturning a lower District Court decision which had awarded a large monetary judgment in favor of notorious park owner James Goldstein. Entitled Colony Cove Properties, LLC v. City of Carson, the case involved the City of Carson’s “Mobile Home Space Rent Control Ordinance” (“RSO”), and a 2008 application by Goldstein”s LLC which sought a $342.00 rent increase from each homeowner. The park owner purchased Colony Cove Mobile Estates in 2006, long after the 1979 Carson RSO had been enacted. A majority of the claimed expenses upon which the large rent increase was based were driven by “debt service” costs incurred by the park owner to finance its purchase of the property. Virtually every mobilehome RSO in California disallows such interest expenses, since financing and loan interest can and often are easily manipulated by park owners.
By Bruce Stanton, GSMOL Corporate Counsel