FEDERAL CASE LAW FAVORS VACANCY

DECONTROL RULING FOR MOBILE HOME PARK

By Christopher J. Hanlon, Esq., a NJ Landlord/Tenant Attorney

          The Ninth Circuit Court of Appeals (the second highest court in the land), filed its decision in Cashman v. City of Cotati, 2004 WL. 1575238. 

          This is a landmark decision for rent controlled manufactured home land lease communities.  It follows the rationale used by the same court from its 1997 decision in Richardson v. City and County of Honolulu, which struck down rent control on condominiums located on leased land in the referenced jurisdiction (Honolulu).

          Up until this recent July 2004 decision, the Richardson rationale had not been successfully applied to manufactured home land lease communities in a reported decision.  Therefore, the Cashman case adds significant published precedent to support the argument that rent control in manufactured home land lease communities, without vacancy decontrol is unconstitutional.

          The Court’s rationale is explained in the following section of the Opinion:

"Like mobile home parks, condominiums ordinarily involve dual ownership - that is, the land underneath the condominium is owned by someone other than the condominium owner

* * *

There is a separate ownership of the mobile home coaches and the underlying land, controlled rent, and the ability of incumbent tenants to sell their mobile homes subject to this controlled rent.  This creates the possibility of a premium, which undermines the City’s interest in creating or maintaining affordable housing.  Accordingly...(the landlords) are entitled to summary judgment on their facial claim unless the City presents sufficient evidence of external factors that will prevent the existence of a premium altogether."

          As the Association representatives have previously made clear in this publication, some rent control ordinances do not allow for vacancy decontrol.  They may be unconstitutional.  Where this situation has existed for quite some time, the landlords will have to wrestle with statute of limitations issues.  However, where vacancy decontrol has recently been repealed (which has occurred in one New Jersey municipality), this reported decision will add support to the property owner’s claim and it should aid property owners who are rent controlled and who have vacancy decontrol in their attempts to maintain vacancy decontrol.

          Should you have the need for legal counsel in this area, please contact chanlon@hnlawfirm.com or 732-863-9900 Ext. 108.

3499 Route 9 North, Suite 1F, Freehold, NJ | Toll Free: (888) 800-7442 | (732) 863-9900

© Copyright 2010. All rights reserved.

New Jersey Landlord Tenant Lawyer | NJ Landlord Tenant Law | Landlord Tenant Law in New Jersey | Monmouth County