Residents from Fountain Valley Estates addressed the City Council last night and submitted a petition signed by 113 residents asking the council to impose rent control after a series of increases by new owner, an affiliate of Kort and Scott Financial Group.
The mobile-home park, built in 1965, holds 193 spaces and was purchased last year for $33,375,000 after being owned by the Olander family for more than 50 years.
Residents allege the new owners are taking advantage of homeowners who were denied lease renewals, then assessed the maximum allowable rent increase plus assessments to cover half of a supplemental property tax bill.
"You have to give us a chance to save our homes," said resident Dana Miranda as she addressed the council. "They're pushing us out of our homes."
Miranda helped organize a community meeting attended by more than 100 residents who signed the petition asking the council to impose rent control last week.
Don Knight, a 15-year resident who recently sold his home, said residents had seen annual rent increases of $50 to $60 a year, but the previous owner stopped renewing leases in the last couple of years and residents saw increases of approximately $150.
With the new owners, an additional rent increase of more than $100 plus the supplemental tax assessment fee of nearly $100 was also imposed in the recent months, he said.
Lorraine Diana, a 76-year-old retired resident was paying $912 in 2010, but after increases will begin paying $1,311.81 in October, she said.
In a letter to residents, the new owners said they would offer a credit for half of the supplemental-tax fee of about $50 per tenant for the time being.
Calls made to Kort and Scott Financial Group and Sierra Management, the company managing Fountain Valley Estates, were not returned.
"When Bob Olander sold (Fountain Valley Estates) there was a huge supplement tax bill," said Councilman Larry Crandall in an interview. "Is (rent increase) a problem? Yes. Is it legal? Yeah. It's a dilemma for everyone involved."
Crandall excused himself from the public-comments portion of the Tuesday because he owns two homes in the mobile-home park occupied by his two daughters and their families.
"I know (residents) want rent control but I know my colleagues on the council aren't going to touch this," Crandall said.
A city has the authority to impose residential rent control but must have proper factual basis to impose it such as market imbalance or rapidly increasing rent, said City Attorney Alan Burns.
Rent control in mobile homes is also a fairly litigious issue for the state, Burns said.
Former Fountain Valley Estates owner Robert Olander and Fred Nyquist were sued for unfair rent increases and agreed to a settlement of $2.49 million to more than 100 residents in 1990, according to media reports.
"We can't go around and regulate everybody's rent," said Mayor John Collins in a separate interview. "They have a signed document, a contract that allows them to increase rent."
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