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City rejects request to increase rents

Original post made on Aug 6, 2018

A request to raise rents at a small apartment complex located at 184 Centre St. was rejected last month by Mountain View housing officials. It was the second recent example of a landlord failing to pass the city's bar for proving that additional rent increases were necessary.

Read the full story here Web Link posted Monday, August 6, 2018, 8:24 AM

Comments (115)

39 people like this
Posted by mvrenter
a resident of Shoreline West
on Aug 6, 2018 at 12:30 pm

Congratulations to the tenants. I how hard it can be to hang in there while other forces determine your housing fate. I hope you can all breath a sigh of relief.


201 people like this
Posted by JustSomeGuyWithNoDogInThisRace
a resident of Rex Manor
on Aug 6, 2018 at 1:04 pm

They really expect a landlord to be OK making just $35K/yr on a $5M investment? This is insane. [Portion removed due to disrespectful comment or offensive language]
ever studied business? Hell, have they studied math? That means the owners would only break even in 140 years! I expect this building will be sold to a developer who'll raze it and build a new high-rent modern condos within the next 3 years. Whom will you force to operate at a loss then, eh, MV?


20 people like this
Posted by SomeOtherGuy
a resident of Sylvan Park
on Aug 6, 2018 at 1:21 pm

@JustSomeGuy You think it is the city's problem that an investor over paid in an over heated market? It isn't. Caveat emptor.


127 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 6, 2018 at 1:34 pm

Howard is a registered user.

There ya go..another example of how this RHC acts, believing that $35K/year profit supports an investment costing $5M. How does the landlord make improvements or meet habitability standards on this building. A roof alone costs 2 years profit!

Landlords, see what your dealing with? The RHC believes that this owner deserves 7/10's of 1% profit on a $5 million dollar risk that he has to manage.

Get out..sell em, bulldoze em..get your money out of there before they drag you for years eating away at any equity you still have. There's plenty of money being made out in the real world in Real estate in cities around you that don't have rent control.
Just pick one with a voting base that won't allow rent control in. 70% homeownership won't allow it in their city.


16 people like this
Posted by David
a resident of Another Mountain View Neighborhood
on Aug 6, 2018 at 1:56 pm

@Howard Investors who bought 2015-2016 should definitely sell and leave town. Sorry, your dreams of making a killing on the backs of old MV residents are dead. Next time build something new and everybody will benefit.


23 people like this
Posted by Mr Bob
a resident of Sylvan Park
on Aug 6, 2018 at 1:58 pm

+1 for those unable afford to buy thanks to all the 'investors' (foreign and domestic) snapping up properties to leech off of the rest of us. In addition to rent control, we should increase the taxes for non resident property owners with more than one home.

As for people defending landlords making 'only' 35k on their investment of 5M - it seems that the figure is before you take into account that " the landlord was allegedly cutting back on maintenance and services. Various expenses, such as travel, office supplies and landlord meals were improperly included in the apartment's expenses" .


176 people like this
Posted by Dan Waylonis
a resident of Jackson Park
on Aug 6, 2018 at 2:15 pm

Dan Waylonis is a registered user.

It's so disappointing to hear that there's a Mountain View Ministry of Housing that decrees what the appropriate rent / profit is for a privately held property.


139 people like this
Posted by Polomom
a resident of Waverly Park
on Aug 6, 2018 at 2:24 pm

Polomom is a registered user.

11 more tenants will be soon homeless, a developer will replace this complex with 40 units. Just another example of how rent control doesn't solve anything.


4 people like this
Posted by Development
a resident of another community
on Aug 6, 2018 at 2:41 pm

The choice is whether or not to spend $10 Million tearing down the old building and replacing it with a larger one, on top of the $5 Million used to buy the land. By tripling the investment and increased property taxes to 3 times the current level,
the new owner can pull in more rent, at the higher levels.

But the issue is that the extra $10 Million probably won't yield an increased ROI, compared to what he's getting now even with the constrained rents.

So no, I don't think it will get torn down.


103 people like this
Posted by JustSomeGuyWithNoDogInThisRace
a resident of Rex Manor
on Aug 6, 2018 at 2:43 pm

@David: and what do you think will happen when they sell? What moron will buy? What moron will get into this over-regulated market as a landlord? One does not get wealthy enough to afford a $5M property by not knowing math! It will be sold to someone who will remove the building and build expensive condos. Tenants will be on the the street. The delusional ones are those who think they can live in an in-demand area for $1k/month.


8 people like this
Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 6, 2018 at 2:45 pm

The Business Man is a registered user.

In response to howard you said:

“There ya go..another example of how this RHC acts, believing that $35K/year profit supports an investment costing $5M. How does the landlord make improvements or meet habitability standards on this building. A roof alone costs 2 years profit!”

The tenants had nothing to do with the “sale” or “investment”. You cannot put that responsibility on them. These two made a decision based on investment sales pitches. The tenants did nothing at all. If you have anyone to blame it ws the real estate agents that might have taken advantage of the investor, and you know that. You said:

“Landlords, see what your dealing with? The RHC believes that this owner deserves 7/10's of 1% profit on a $5 million dollar risk that he has to manage.”

NO, the process simply deals with “Operating” balances, The “investor” is solely responsible for their decisions and cannot expect anyone else to “subsidize” their investment. You also know that is true. You said:

“Get out..sell em, bulldoze em..get your money out of there before they drag you for years eating away at any equity you still have. There's plenty of money being made out in the real world in Real estate in cities around you that don't have rent control.”

Again, this is a pure example of “real estate” sales taking advantage of buyers that had no understanding of the “inflated” price they were induced to invest in. You know that too. You said:

“Just pick one with a voting base that won't allow rent control in. 70% homeownership won't allow it in their city.”

It will not matter if the “real estate” industry constantly induces investor to spend way to much for particular properties.

Caveat emptor


9 people like this
Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 6, 2018 at 2:46 pm

The Business Man is a registered user.

In response to Polomom you said:

“11 more tenants will be soon homeless, a developer will replace this complex with 40 units. Just another example of how rent control doesn't solve anything.”

IF in fact those are apartments, the tenants will have first right to move into them, and pay the current rents. That is part of the CSFRA because :

Section Section 1705. - Just cause for eviction protections.

(c) First Right of Return. All Tenants whose tenancy is terminated based upon a basis enumerated in Subsections (a)(6)-(9) herein shall have the first right of return to the Rental Unit if that Rental Unit is returned to the market by the Landlord or successor Landlord. Rent for the Rental Unit shall be the Rent lawfully paid by the Tenant at the time the Landlord gave notice of termination based upon Subsections (a)(6)-(9) herein.

Sections a(6)- (9) are:

(6) Necessary and Substantial Repairs Requiring Temporary Vacancy. The Landlord, after having obtained all necessary permits from the City, and having provided written notice to the Tenant pursuant to state law, seeks in good faith to undertake substantial repairs that are necessary to bring the Rental Unit into compliance with applicable codes and laws affecting the health and safety of tenants of the building, provided that:

(A) The repairs necessitate that the Tenant vacate the Rental Unit because the work will render the rental unit uninhabitable for a period of not less than thirty (30) days;

(B) The Landlord gives advance notice to the Tenant of the Tenant's right to elect between:

(i) The right of first refusal to any comparable vacant Rental Unit owned by the Landlord at the same Rent, if such comparable vacant unit exists; or

(ii) The first right of return to reoccupy the unit upon completion of the repairs at the same Rent charged to the Tenant before the Tenant temporarily vacated the Rental Unit. (iii) In the event that the Tenant elects to accept an offer to move to a comparable vacant Rental Unit at the same Rent, the Tenant is not eligible for any Relocation Assistance pursuant to Subsection 1705(b) herein. (C) In the event the Landlord files a Petition for Individual Rent Adjustment within six (6) months following the completion of the work, the Tenant shall be party to such proceeding as if he or she were still in possession, unless the Landlord shall submit with such application a written waiver by the Tenant of his or her right to reoccupy the premises pursuant to this Subsection.

(7) Owner Move-In. The Landlord seeks, after providing written notice to the Tenant pursuant to state law, to recover possession of the Rental Unit in good faith for use and occupancy as a Primary Residence by the Landlord, or the Landlord's spouse, domestic partner, children, parents or grandparents.

(A) As used in this Subsection "Landlord," shall only include a Landlord that is a natural person and has at least a fifty percent (50%) recorded ownership interest in the Property.

(B) No eviction may take place under this Subsection if the same Landlord or enumerated relative already occupies a unit on the Property, or if a vacancy already exists on the Property. At all times a Landlord may request a reasonable accommodation if the Landlord or enumerated relative is Disabled and another unit in Mountain View is necessary to accommodate the person's disability.

(C) Any notice terminating tenancy pursuant to this Subsection shall contain the name, address and relationship to the Landlord of the person intended to occupy the Rental Unit.

(D) The Landlord or enumerated relative must intend in good faith to move into the Rental Unit within sixty (60) days after the Tenant vacates and to occupy the Rental Unit as a Primary Residence for at least thirty-six (36) consecutive months. The Committee may adopt regulations governing the determination of good faith.

(E) If the Landlord or relative specified on the notice terminating tenancy fails to occupy the Rental Unit within sixty (60) days after the Tenant vacates, the Landlord shall:

(i) Offer the Rental Unit to the Tenant who vacated it at the same Rent in effect when the Tenant vacated; and

(ii) Pay to said Tenant all reasonable expenses incurred in moving to and from the Rental Unit.”

(F) A Landlord may not evict a Tenant pursuant to this Subsection if the Tenant (1) has resided in the Rental Unit for at least five (5) years and is either at least sixty-two (62) years old or Disabled; or (2) is certified as being terminally ill by the Tenant's treating physician. Notwithstanding the above, a Landlord may evict a Tenant who qualifies for the exemption herein if the Landlord or enumerated relative who will occupy the Rental Unit also meets the criteria for this exemption and no other units are available.

(8) Withdrawal of the Unit Permanently from Rental Market. The Landlord seeks in good faith to recover possession to withdraw all Rental Units of an entire Property from the rental market. The Landlord first must have filed the requisite documents with the Committee initiating the procedure for withdrawing Rental Units from rent or lease under Government Code Section 7060 et. seq. and all regulations passed by the Committee, with the intention of completing the withdrawal process and going out of the rental business. Tenants shall be entitled to a minimum of 120-day notice or one (1) year in the case Tenants are defined as senior or Disabled under Government Code Section 12955.3. Notice times may be increased by regulations if state law allows for additional time.

(9) Demolition. The Landlord, having obtained all necessary permits from the City, and having provided written notice to the Tenant pursuant to state law, seeks in good faith to recover possession of the Rental Unit to remove the Rental Unit permanently from rental housing use through demolition.


191 people like this
Posted by Alex M
a resident of Willowgate
on Aug 6, 2018 at 3:01 pm

If I were a landlord making only $35K profit on a $5M investment without being able to increase rents, I sure as hell would cut back on maintenance and services... cut them back to the bone.

This is what rent control does, folks. It creates slums.

The illogic and short-sightedness of the Mountain View Housing officials is astounding.


23 people like this
Posted by RoxieK
a resident of Slater
on Aug 6, 2018 at 3:03 pm

Rent control as described in the businessman's post does not lend itself to the improvement of rent controlled properties. The most logical course of action would be to replace the 11 crappy old apartments with a bunch of nice new condos. Give someone a chance at homeownership.


1 person likes this
Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 6, 2018 at 3:20 pm

The Business Man is a registered user.

In response to Development you said:

“The choice is whether or not to spend $10 Million tearing down the old building and replacing it with a larger one, on top of the $5 Million used to buy the land. By tripling the investment and increased property taxes to 3 times the current level, the new owner can pull in more rent, at the higher levels.”

Yes you are correct, there is a possible means to “rehabilitate” the property. But just understand that it will require the right of first return. But you also need to understand another factor. The building site is significantly small the apartments are arranged in a U with 2 floors and the average size of the units is 700 sq feet. It does not have a significant area maybe only 1.5 acre. The local area has only 2 story buildings at the highest. You said:

“But the issue is that the extra $10 Million probably won't yield an increased ROI, compared to what he's getting now even with the constrained rents.”

This is an accurate observation. It is a very bad situation here. The “investors “ were in effect “induced” into paying way to high a price for the property. Also, the “investor did not do any research regarding that the City of Mountain View acknowledged the housing crisis in 2015, and in January before the purchase, the Mayor did state that rents were being considered to “freeze” the rents. Most importantly, what did the “tenants” do to put the “investors” in that situation? Simply NOTHING. Why should the “tenants” be forced to bear that cost? You said:

“So no, I don't think it will get torn down.”

That is up in the air, it depends on so many variables even I can’t even fully understand the picture.


123 people like this
Posted by Longview
a resident of another community
on Aug 6, 2018 at 3:31 pm

Longview is a registered user.

At smaller apartment complexes, it is harder to predict turnover of apartments. But at larger apartment complexes, you can count on some % of apartments becoming vacant and being re-rented every year. Then the landlord charges the new tenant market rate. Will that unit be at the high or low end of market rate? That depends on the landlord maintaining the unit and the grounds. The landlord has an ongoing incentive to maintain his site, in order to attract higher rents from new tenants.


70 people like this
Posted by mike rose
a resident of another community
on Aug 6, 2018 at 3:41 pm

mike rose is a registered user.


I think this notorious hearing officer violated the precedent law as she did in a previous case in which TBM was involved.
The Vega vs the City of west Hollywood case clearly established that the landlord MUST be allowed to adjust the base rent to the comparable market rents.
I think these were determined in MV to be the HUD rent levels for Santa Clara County as of the base rent year.
$1,050 base rent seems to be disproportionally low.
This case should be appealed to the full Board.
Again, these Vega adjustments of base rent have nothing to do with net operating income adjustments, or physical condition of the property as long as they are comparable to similar units.


9 people like this
Posted by Fact check...
a resident of Rex Manor
on Aug 6, 2018 at 3:48 pm

Fact check... is a registered user.

So much landlord tears over nothing...

@Howard gave out this piece of FUD (Fear, uncertainty, doubt):

> How does the landlord make improvements or meet habitability standards on this building. A roof alone costs 2 years profit!

Section 1710 (a) (Petition for Upward Adjustment—Fair Rate of Return) (2) (C) :

"The cost of planned or completed capital improvements to the Rental Unit (as distinguished from ordinary repair, replacement, and maintenance), but only where such capital improvements are necessary to bring the Property into compliance or maintain compliance with applicable local codes affecting health and safety, and where such capital improvement costs are properly amortized over the life of the improvements;"

That roof and any other capital improvements necessary to keep units habitable are covered.

@Alex M had this pearl of wisdom:

> I sure as hell would cut back on maintenance and services... cut them back to the bone.
> This is what rent control does, folks. It creates slums.

Section 1710 (b) Petition for Downward Adjustment and (c) Petition for Downward Adjustment — Failure to Maintain Habitable Premises

Have your answer:

> Petition for Downward Adjustment — Decrease in Housing Services or Maintenance. A decrease in Housing Services or maintenance, or deterioration of the Rental Unit beyond ordinary wear and tear, without a corresponding reduction in Rent, is considered an increase in Rent. A Tenant may file a Petition to adjust the Rent downward based on a loss in rental value attributable to a decrease in Housing Services or maintenance or deterioration of the Rental Unit. The Petition must specify the circumstances allege to constitute a decrease in Housing Services or maintenance, and demonstrate that the Landlord was provided with reasonable notice and an opportunity to correct in like manner to Petitions filed pursuant to Subsection 1710(b)(2) herein.

The landlord is welcome to follow your advice. In turn the tenants can then petition for the rent to be LOWER.

Landlords just focused on running their business. The long-term appreciation potential of real estate in the Bay Area is still good.

If they are looking for that quick flip.. well sorry!


145 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 6, 2018 at 3:52 pm

Howard is a registered user.

Anyway you slice it, the owners of this property cannot continue business under these conditions. The RHC owes them a "fair rate of return" regardless of whether the landlord paid 2 Million or 10 million for that property under the CSFRA.

The RHC is not following the law and is in violation of the CSFRA and I believe not afraid of a lawsuit because they have free lawyers that will run to their side and burn out any litigant paying a lawyer.

Landlords, watch what's happening here closely and you will realize that this is no place for profit anymore. They're not going to allow it and if you have it, they want it!

They will hold you back year after year until your profits are half of what you could have made elsewhere while your utilities and operating costs increase.


87 people like this
Posted by mike rose
a resident of another community
on Aug 6, 2018 at 3:52 pm

mike rose is a registered user.

Another Cal Supreme court case supporting this landlord, Stardust Mobile Estates vs.
City of San Buenaventura:

".....The court did rule for the property owner in one key area, though. Stardust sought a "Vega" adjustment to its base year rent because, when the ordinance took effect in 1981, rents were below market rate. Under Vega v. City of West Hollywood, (1990) 223 Cal.App.3d 1342, a property owner may seek a base year rent adjustment if the rent at the time was not reflective of general market conditions. Stardust contended that rents were artificially low in 1981 because the then-park owner was trying to assist elderly tenants. The rent board ruled that it could grant a Vega adjustment only if there were unique circumstances, and that none existed here. But the court said that the "peculiar circumstances" in the Vega decision referred to West Hollywood's ordinance. Ventura's ordinance "contains no ‘unique' or ‘peculiar' circumstances requirement," the court found.

Thus, the court found the rent board's decision "arbitrary and unreasonable." Even the city's consultant had found that a Vega adjustment was warranted, only not as much as the property owner requested, the court noted. The court returned the issue of a base year adjustment to the city...."


8 people like this
Posted by Fact check...
a resident of Rex Manor
on Aug 6, 2018 at 3:56 pm

Fact check... is a registered user.

@Howard --

> Landlords, watch what's happening here closely and you will realize that this is no place for profit anymore. They're not going to allow it and if you have it, they want it!

You say that like it is a bad thing.

For years, landlords have been saying that very same thing to tenants. "If the tenants had money, they (the landlords) want it!"

So, so many landlord tears. Some how I suspect most landlords will continue to do just fine. After all what business has a guaranteed "Fair Return" locked into the law?


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Posted by Fact check...
a resident of Rex Manor
on Aug 6, 2018 at 3:58 pm

Fact check... is a registered user.

@mike rose

This landlord was not making a Vega petition (no mention in the article) Maybe the landlord could try again - after they straighten out their accounting.


96 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 6, 2018 at 4:02 pm

Howard is a registered user.

Fact check,
Did you read what you posted?

"Section 1710 (a) (Petition for Upward Adjustment—Fair Rate of Return) (2) (C) :

"The cost of planned or completed capital improvements to the Rental Unit (as distinguished from ordinary repair, replacement, and maintenance)

In other words, "you're outa luck landlord, if you need to replace your roof because its old so don't come cryin to us to increase your rents to pay for it"


7 people like this
Posted by mike rose
a resident of another community
on Aug 6, 2018 at 4:03 pm

mike rose is a registered user.

Fact check,
It would be hard to imagine any other lawful basis that this petition.


4 people like this
Posted by Fact check...
a resident of Rex Manor
on Aug 6, 2018 at 4:09 pm

Fact check... is a registered user.

@ Howard

Well we will just have to wait for that first new roof.

I also have a spouse who is a CPA. She will be happy to show the sections in the tax code that allow for lots of real estate expenses to be deducted on the taxes. Deductions that are not available to regular homeowners.

And if the landlord really want out super bad - there is the juicy 1031 exchange available + what ever goodies Trump added to the tax code.


2 people like this
Posted by Fact check...
a resident of Rex Manor
on Aug 6, 2018 at 4:11 pm

Fact check... is a registered user.

@mike rose

> It would be hard to imagine any other lawful basis that this petition.

The result of the hearing is that the petition was not "lawful" so our imagination does not have to be limited.


2 people like this
Posted by ResidentSince1982
a resident of another community
on Aug 6, 2018 at 4:13 pm

ResidentSince1982 is a registered user.

If the petition was solely based on not charging area market rate (HUD) rents, then why would the expenses even come into it?

The HUD rates don't vary depending on the landlord's expenses.

The issue is the greedy landlord tried to go way over the minimum rents found in the market, and used really bad accounting to justify alleged expenses that weren't really even there.


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 6, 2018 at 4:20 pm

The Business Man is a registered user.

[Post removed at poster's request]


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 6, 2018 at 4:29 pm

The Business Man is a registered user.

In response to Howard you said:

“Anyway you slice it, the owners of this property cannot continue business under these conditions. The RHC owes them a "fair rate of return" regardless of whether the landlord paid 2 Million or 10 million for that property under the CSFRA. “

But the RHC legally does not have to “insure” a profit where such poor judgement is concerned. It is called contributory negligence. In the issues of equity in courts or legal proceedings this means:

“Contributory negligence in common law jurisdictions is generally a defense to a claim based on negligence, an action in tort. This principle is relevant to the determination of liability and is applicable when plaintiffs/claimants have, THROUGH THEIR OWN NEGLIGENCE, CONTRIBUTED TO THE HARM THEY SUFFERED.[1] In some jurisdictions it may be applied by the court in a tort matter irrespective of whether it was pleaded as a defense.[2]

THE CONTRIBUTORY NEGLIGENCE DEFENSE CAN POTENTIALLY ELIMINATE THE DEFENDANT'S RESPONSIBILITY TO PAY DAMAGES TO AN INJURED PLAINTIFF. For example, a pedestrian crosses a road negligently and is hit by a driver who was driving negligently. Since the pedestrian has also contributed to the accident, they may be barred from complete and full recovery of damages from the driver (or their insurer) because the accident was less likely to occur if it hadn't been for their failure to keep a proper lookout. ANOTHER EXAMPLE OF CONTRIBUTORY NEGLIGENCE IS WHERE A PLAINTIFF ACTIVELY DISREGARDS WARNINGS OR FAILS TO TAKE REASONABLE STEPS FOR HIS OR HER SAFETY, THEN ASSUMES A CERTAIN LEVEL OF RISK IN A GIVEN ACTIVITY; SUCH AS DIVING IN SHALLOW WATER WITHOUT CHECKING THE DEPTH FIRST.”

The fact is there were clear warnings known to the investors. They contributed to their losses by overpaying for the property in the first place. They cannot hold someone else responsible for that situation. The tenants simply does not bear any liability to the investors under these conditions. You know this. You said:

“The RHC is not following the law and is in violation of the CSFRA and I believe not afraid of a lawsuit because they have free lawyers that will run to their side and burn out any litigant paying a lawyer. “

That is your opinion, but contributory negligence would clearly significantly mitigate any liability for both the City and the tenants. Simply put, if you make a very bad decision without due diligence, you cannot be “protected” because of that mistake. You said:

“Landlords, watch what's happening here closely and you will realize that this is no place for profit anymore. They're not going to allow it and if you have it, they want it! “

That is just an opinion “assuming facts not in evidence” if it can be determined “contributory negligence” was involved. You said:

“They will hold you back year after year until your profits are half of what you could have made elsewhere while your utilities and operating costs increase.”

That is just an opinion “assuming facts not in evidence” if it can be determined “contributory negligence” was involved.


5 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 6, 2018 at 4:48 pm

Howard is a registered user.

The CSFRA does not make decisions based on “Contributory negligence".
That language is nowhere in the CSFRA Businessman.

This is not a determining factor and the RHC has no authority to use that as a determination when deciding "Fair Rate Of Return" under CSFRA. There not a court of law, you know that.


8 people like this
Posted by mike rose
a resident of another community
on Aug 6, 2018 at 4:55 pm

mike rose is a registered user.

TBM,

Again I caught you lying and misinforming readers.

I said:

“ The Vega vs. the City of west Hollywood case clearly established that the landlord MUST be allowed to adjust the base rent to the comparable market rents.”

To which you responded:

"THAT IS YOUR OPINION, so far the case is moved onto appeal."

The truth is, this is not my opinion, this is the court ruling, black and white below, pay particular attention to the word MUST (Vega vs. City of West Hollywood):
"....Nonetheless, a property owner must be permitted, pursuant to the principles discussed in Birkenfeld v. City of Berkeley, supra, 17 Cal.3d 129, 130 Cal.Rptr. 465, 550 P.2d 1001, to start rent calculations with a base date rent similar to other comparable properties...."


7 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 6, 2018 at 5:04 pm

Howard is a registered user.

Businessman,

Here is the fair return standard in the CSFRA:

"Subsection (a)(3) of Section 1710 excludes
from consideration when ensuring a fair rate of return the “costs of debt
servicing (including but not limited to principal, interest, and fees) for any
debt obtained after October 19, 2015” other than debt for qualifying capital
improvements."

So, as long as The loan was obtained before October 19th, 2015 it doesn't matter how much it is.

So, Landlords if you want to refinance your loans now, the RHC has the right to ignore those costs of interest you pay on a new loan as expenses for a fair rate of return adjustment.

WOW, that is huge! Now you can't even refinance your loans on these apartment buildings and expect the RHC to consider them an expense.
Who are these people the voters gave such power to? Mafia?


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 6, 2018 at 5:09 pm

The Business Man is a registered user.

In response to mike rose you said:

“Another Cal Supreme court case supporting this landlord, Stardust Mobile Estates vs. City of San Buenaventura:

The court did rule for the property owner in one key area, though. Stardust sought a "Vega" adjustment to its base year rent because, when the ordinance took effect in 1981, rents were below market rate. Under Vega v. City of West Hollywood, (1990) 223 Cal.App.3d 1342, a property owner may seek a base year rent adjustment if the rent at the time was not reflective of general market conditions. Stardust contended that rents were artificially low in 1981 because the then-park owner was trying to assist elderly tenants. THE RENT BOARD RULED THAT IT COULD GRANT A VEGA ADJUSTMENT ONLY IF THERE WERE UNIQUE CIRCUMSTANCES, AND THAT NONE EXISTED HERE. But the court said that the "peculiar circumstances" in the Vega decision referred to West Hollywood's ordinance. VENTURA'S ORDINANCE "CONTAINS NO ‘UNIQUE' OR ‘PECULIAR' CIRCUMSTANCES REQUIREMENT," THE COURT FOUND.

Thus, the court found the rent board's decision "arbitrary and unreasonable." EVEN THE CITY'S CONSULTANT HAD FOUND THAT A VEGA ADJUSTMENT WAS WARRANTED, ONLY NOT AS MUCH AS THE PROPERTY OWNER REQUESTED, THE COURT NOTED. THE COURT RETURNED THE ISSUE OF A BASE YEAR ADJUSTMENT TO THE CITY. “

But the CSFRA does contain the following language:

Section 1710. - Petitions for individual rent adjustment—bases.

(2) Fair Rate of Return - Factors. In making any upward adjustment to the Rent based upon a Landlord's Petition to ensure a fair rate of return, the Hearing Officer or Committee shall consider relevant factors, including but not limited to, the following:

(G) THE PATTERN OF RECENT RENT INCREASES OR DECREASES IN THE RENTAL UNIT DURING THE OCCUPANCY OF THE CURRENT TENANT. “

This specific language contrasts with the decision you presented because the Charter “CONTAINS ‘UNIQUE' OR ‘PECULIAR' CIRCUMSTANCES REQUIREMENT,". The decision you presented clearly said:

“THE RENT BOARD RULED THAT IT COULD GRANT A VEGA ADJUSTMENT ONLY IF THERE WERE UNIQUE CIRCUMSTANCES, AND THAT NONE EXISTED HERE. But the court said that the "peculiar circumstances" in the Vega decision referred to West Hollywood's ordinance. VENTURA'S ORDINANCE "CONTAINS NO ‘UNIQUE' OR ‘PECULIAR' CIRCUMSTANCES REQUIREMENT," THE COURT FOUND.

Since the City Charter is not a Mobile Home Rent Control, this case is simply not relevent. The Charter states a “Vega” adjustment would be based on “THE PATTERN OF RECENT RENT INCREASES OR DECREASES IN THE RENTAL UNIT DURING THE OCCUPANCY OF THE CURRENT TENANT”. Thus, it is based on the ONLY the CURRENT TENANT, and ONLY THE CURRENT PROPERTY. This simply is the embodiment of the COMPARABLE UNIT principle of Vega.

I only propose that you may have misunderstood the information you presented here.



“Supreme Court Taking Decision Doesn't Aid Mobile Home Park Owners

Jun 6, 2007

CLAIMS OF TAKING AND DUE PROCESS VIOLATION FILED BY A VENTURA MOBILE HOME PARK OWNER WHO WAS DENIED RENT INCREASES HAVE BEEN REJECTED BY THE SECOND DISTRICT COURT OF APPEAL.

THE UNANIMOUS THREE-JUDGE PANEL RULED THAT THE TRIAL COURT CORRECTLY DISMISSED THE TAKING CLAIM AFTER DECIDING THAT RENT INCREASES GRANTED TO THE PARK OWNER FELL WITHIN A "BROAD ZONE OF REASONABLENESS." THE SECOND DISTRICT ALSO RULED THAT PROCEDURAL DECISIONS OF THE TRIAL COURT AND VENTURA'S RENT REVIEW BOARD DID NOT DENY THE LANDLORD DUE PROCESS.

In early 2003, the owner of the 125-space Stardust Mobile Estates submitted an application for rent increases under Ventura's rent control ordinance. Stardust requested increases of $9.95 to $12.19 per month based on inflation and $16,000 worth of driveway repair and replacement expenses. Stardust also sought an increase of either $300 per month because rent control had provided tenants with tens of thousands of dollars in "premiums," or $50.50 because the landlord had not received past increases based on the full rate of inflation. Stardust further sought a $24 increase in the base year rate, which was established in 1981 when the city adopted rent control.

In May 2003, the city's Rent Review Board approved rent increases of $9.23 to $9.70 based on inflation but rejected all other requested rent hikes.

STARDUST THEN FILED A LAWSUIT CHALLENGING THE RENT BOARD'S DECISIONS, AND CONTENDING THAT THE BOARD HAD VIOLATED THE PARK OWNER'S DUE PROCESS RIGHTS AND CAUSED A TAKING OF PRIVATE PROPERTY. Ventura County Superior Court Judge Henry Walsh ruled against the property owners but directed the city to increase rents based on the park owner's driveway maintenance expense.

Ever since rent control became common during the 1970s, property owners have claimed that limited rent increases posed an unconstitutional taking. Property owners generally have not gotten far in court, but there was a brief period earlier this decade when they appeared to gain. IN 2004, THE NINTH U.S. CIRCUIT COURT OF APPEALS RULED THE CITY OF COTATI'S MOBILE HOME RENT CONTROL LAW WAS UNCONSTITUTIONAL BECAUSE THE POSSIBILITY EXISTED THAT TENANTS MIGHT RECEIVE WHAT AMOUNTED TO A TRANSFER OF EQUITY WHEN SELLING THEIR UNITS IN A RENT-CONTROLLED PARK. FOR THIS REASON, THE COURT FOUND THAT THE ORDINANCE DID NOT "SUBSTANTIALLY ADVANCE" THE GOAL OF PROVIDING AFFORDABLE HOUSING. (Cashman v. City of Cotati, 374 F3d 887; see CP&DR Insight, October 2004; CP&DR Legal Digest, September 2004).

The Ninth Circuit's ruling in Cashman threw into doubt most mobile home rent control laws in California. However, less than a year later, THE U.S. SUPREME COURT RULED IN LINGLE V. CHEVRON U.S.A., INC., (2005) 544 U.S. 528, THAT THE "SUBSTANTIALLY ADVANCES" TEST DOES NOT APPLY WHEN A COURT IS DETERMINING WHETHER A REGULATION EFFECTS A TAKING (SEE CP&DR, JULY 2005). THE LINGLE DECISION APPEARED TO CLOSE THE LEGAL DOOR THAT THE PROPERTY OWNERS HAD KICKED OPEN; JUDGE WALSH CITED LINGLE IN RULING AGAINST STARDUST MOBILE ESTATES.

On appeal, Stardust argued that Lingle did not affect its taking claim, which it said was based on Penn Central Transp. Co. v. New York City, (1978) 438, U.S. 104. A Penn Central claim requires a court to consider the economic impact of a regulation on the property owner, the regulation's impact on "distinct, investment-backed expectations," and the character of the government action. Stardust argued that it was entitled to a trial on the Penn Central claim, which Judge Walsh had dismissed.

THE SECOND DISTRICT FOUND THAT STARDUST'S CLAIM WAS BASED IN PART ON THE SUBSTANTIALLY ADVANCES TEST, AND THAT THE LOWER COURT HANDLED THINGS CORRECTLY.

"[T]he trial court concluded that substantial evidence supported the rent board's decision except for its ruling on driveway expenses, and the court remanded the case to the rent board which granted Stardust compensation — a rent increase that included the driveway expense, plus interest on those expenses," Justice Paul Coffee wrote for the court. "[T]he court necessarily considered the factors that our state Supreme Court indicates must be considered in evaluating Penn Central taking claims. THE COURT CONCLUDED THAT STARDUST HAD NO TAKING CLAIM AND CORRECTLY DECIDED THAT THE RENT INCREASE GRANTED TO STARDUST PROVIDED IT WITH A RETURN THAT FELL WITHIN THE REQUISITE ‘BROAD ZONE OF REASONABLENESS.' HAVING DONE SO, THE COURT PROPERLY DISMISSED THE TAKING CLAIM."

The appellate court also rejected Stardust's contention that it was denied due process because it could not cross-examine witnesses during a Rent Review Board hearing or discover additional evidence at the trial court level.


it was NOT the Cal Supreme Court but the State Court of Appeals and it said this(Web Link):

“Court of Appeal, Second District, Division 6, California.

STARDUST MOBILE ESTATES, Plaintiff and Appellant, v. CITY OF SAN BUENAVENTURA et al., Defendants and Respondents.

No. B186454.

Decided: February 22, 2007

Hart, King & Coldren, Robert S. Coldren, C. William Dahlin, Mark D. Alpert, Santa Ana, for Plaintiff and Appellant. Robert G. Boehm, City Attorney, Jim Neuerburg, Assistant City Attorney;  Endeman, Lincoln, Turek & Heater LLP, Henry E. Heater, Donald R. Lincoln, Linda B. Reich for Defendants and Respondents.

 Stardust Mobile Estates, LLC (Stardust) APPEALS FROM AN ORDER AND JUDGMENT SUBSTANTIALLY DENYING ITS PETITION FOR WRIT OF MANDATE CONCERNING THE APPLICATION OF THE CITY OF SAN BUENAVENTURA (CITY) MOBILE HOME RENT CONTROL ORDINANCE BY THE CITY RENT REVIEW BOARD (RENT BOARD).1  Stardust asserts that the trial court erred by (1) upholding the Rent Board's use of a formula with a partial inflation index to determine the allowable rental increase;  (2) upholding the Rent Board's denial of a base year rental adjustment;  (3) dismissing Stardust's claims that the application of the rent control ordinance violated its constitutional right to be compensated for the taking of its property;  and (4) denying Stardust procedural due process.   WITH RESPECT TO THE DENIAL OF A BASE YEAR RENTAL ADJUSTMENT, WE REMAND THIS CASE TO THE TRIAL COURT TO DETERMINE WHETHER THE RENT BOARD SHOULD RECONSIDER THE REQUESTED BASE YEAR RENTAL ADJUSTMENT AFTER PROVIDING STARDUST THE OPPORTUNITY TO MAKE AN OFFER OF PROOF.   IN ALL OTHER RESPECTS, WE AFFIRM THE JUDGMENT.

Also (Web Link) :


The court did rule for the property owner in one key area, though. Stardust sought a "Vega" adjustment to its base year rent because, when the ordinance took effect in 1981, rents were below market rate. Under Vega v. City of West Hollywood, (1990) 223 Cal.App.3d 1342, A PROPERTY OWNER MAY SEEK A BASE YEAR RENT ADJUSTMENT IF THE RENT AT THE TIME WAS NOT REFLECTIVE OF GENERAL MARKET CONDITIONS. Stardust contended that rents were artificially low in 1981 because the then-park owner was trying to assist elderly tenants. The rent board ruled that it could grant a Vega adjustment only if there were unique circumstances, and that none existed here. BUT THE COURT SAID THAT THE "PECULIAR CIRCUMSTANCES" IN THE VEGA DECISION REFERRED TO WEST HOLLYWOOD'S ORDINANCE. VENTURA'S ORDINANCE "CONTAINS NO ‘UNIQUE' OR ‘PECULIAR' CIRCUMSTANCES REQUIREMENT," THE COURT FOUND.

Thus, the court found the rent board's decision "arbitrary and unreasonable." Even the city's consultant had found that a Vega adjustment was warranted, only not as much as the property owner requested, the court noted. The court returned the issue of a base year adjustment to the city. “


Like this comment
Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 6, 2018 at 5:20 pm

The Business Man is a registered user.

In response to howard you said:

“Businessman,

Here is the fair return standard in the CSFRA:

"Subsection (a)(3) of Section 1710 excludes from consideration when ensuring a fair rate of return the “costs of debt servicing (including but not limited to principal, interest, and fees) for any debt obtained after October 19, 2015” other than debt for qualifying capital improvements."

So, as long as the loan was obtained before October 19th, 2015 it doesn't matter how much it is.”

But the Mortgage you are discussing was signed February 7, 2016 in this case. Maybe you should have checked on that before you assumed it was older. So in fact the Charter prohibits the Mortgage as a factor regarding Vega. You said:

“So, Landlords if you want to refinance your loans now, the RHC has the right to ignore those costs of interest you pay on a new loan as expenses for a fair rate of return adjustment.”

Yes that is correct, so any refinancing will cut off any “debt servicing” to be considered in a petition. Also that means if a mortgage was designed to not carry the entire debt to completion, those mortgages will eventually be discounted. For example if a mortgage was signed October 10th, 2015, but it is a nontraditional mortgage that will be refinanced after 3 years, then that mortgage will be cut off consideration? It turns out that this property has a non-traditional mortgage that will be revised after 7 years. You said:

“WOW, that is huge! Now you can't even refinance your loans on these apartment buildings and expect the RHC to consider them an expense. “

Yes that is true. You said:

“Who are these people the voters gave such power to? Mafia?”

NO this is the political process in action. Everyone knew about this when they voted. You cannot equate this political action to the Mafia. The only way would be to concede that the same occurred when Costa Hawkins and Ellis acts were conceived as well.


188 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 6, 2018 at 5:24 pm

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[Post removed due to disrespectful comment or offensive language]


2 people like this
Posted by Take it offline!
a resident of Sylvan Park
on Aug 6, 2018 at 5:27 pm

Take it offline! is a registered user.

@Mike Rose, Fact Check, Businessman - Take it offline! Meet for coffee and spare us all.

Hope Costa Hawkins is repealed, then developers will stop razing affordable housing to build luxury apartments exempt from rent control. Web Link


15 people like this
Posted by mike rose
a resident of another community
on Aug 6, 2018 at 5:32 pm

mike rose is a registered user.

TBM,
Check out the case Concord Communities vs. City of Concord.
There the "unique and peculiar circumstances" requirement is discussed.
This is to long to cite in its entirety, but the "unique and peculiar" circumstances in my opinion match pretty close your landlord's situation.
It is a case of a new landlord who purchased the property and could not raise rents because of rent freeze enacted right after the purchase ( in case of your landlord a rent rollback). The previous owners kept their rents low.
Court ruled these circumstances as "unique and peculiar".
Here is an excerpt:

".....Communities' timing in its purchase of the Diablo and Adobe parks also cannot be ignored in the context of contributing to "unique or extraordinary circumstances." Communities entered into the purchase agreement for the parks in August of 1993 whereby its down payment was not refundable unless operating expenses were misrepresented by the seller. In November of 1993, Communities noticed a $75 increase at Adobe and a $50 increase at Diablo. In response to the noticed increases, the City Council placed a moratorium on mobilehome rent increases in January of 1994 and enacted permanent rent control in October of 1994 while the rent freeze was still in effect. Thus, Communities never had the opportunity to place rents at a level that "reflected general market conditions" and was forced to accept rents at prices set by the previous owner which were "significantly below rents for mobilehome spaces in the City with comparable amenities." In Apartment Assn. of Greater L.A. v. Santa Monica Rent Control Bd. (1994) 24 Cal.App.4th 1730, 1732-1733, 30 Cal.Rptr.2d 228, the court held that a rent control ordinance was invalid on its face because it failed to allow a landowner who purchased the regulated land after the imposition of rent control to seek a base year adjustment. The court distinguished Vega and Birkenfeld on the ground that both of those cases "depended on the existence of circumstances that prevented the base rent from reflecting market conditions." (Id. at pp. 1736-1737, 30 Cal.Rptr.2d 228.) Therefore, Communities' timing in its purchase of the properties coupled with the previous owner's lack of financial obligations make the circumstances surrounding the significantly low base year rents "unique or extraordinary...."


5 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 6, 2018 at 7:02 pm

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[Post removed due to disrespectful comment or offensive language]


7 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 6, 2018 at 7:29 pm

Howard is a registered user.

[Post removed due to disrespectful comment or offensive language]


1 person likes this
Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 6, 2018 at 7:29 pm

The Business Man is a registered user.

In response to mike rose you said:

“Check out the case Concord Communities vs. City of Concord.”

Concord Communities v. City of Concord (2001)

Annotate this Case

[Nos. A091354, A091361.

First Dist., Div. Four.

Aug. 31, 2001.]

CONCORD COMMUNITIES, L.P., Plaintiff and Appellant, v. CITY OF CONCORD, Defendant and Respondent.

(Superior Court of Contra Costa County, Nos. C97-02154 and C97-02155, Barbara Zuniga, Judge.)

(Opinion by Chiantelli, J., fn. * with Reardon, Acting P. J., and Sepulveda, J., concurring.)

COUNSEL

Law Firm of Spangenberg & Ritson, Law Firm of Spangenberg & Associates, Lark R. Ritson and David Spangenberg for Plaintiff and Appellant.

Craig Labadie, City Attorney, Margaret Kotzebue, Deputy City Attorney; Endeman, Lincoln, Turek & Heater, Donald R. Lincoln and Linda B. Reich for Plaintiff and Respondent. [91 Cal. App. 4th 1410]

OPINION

CHIANTELLI, J.- fn. *

In action No. A091354 plaintiff and appellant Concord Communities, L.P. (Communities), DOING BUSINESS AS DIABLO MOBILE LODGE, appeals from a judgment of the Contra Costa County Superior Court denying Communities' petition for writ of administrative mandamus and dismissing Communities' cause of action for violation of due process against defendant and respondent City of Concord (City). Similarly, in action No. A091361 plaintiff and appellant Communities, doing business as Adobe Mobile Lodge, appeals an identical judgment.

The appeals arise out of the denial by Concord Rent Review Board (Board) of Communities' REQUESTS TO ADJUST THE BASE YEAR RENTS AT ITS MOBILEHOME PARKS DIABLO MOBILE LODGE AND ADOBE MOBILE LODGE. The superior court denied the writ petitions on the ground that the City's administrative decisions were supported by substantial evidence. COMMUNITIES CONTENDS THAT THE BASE YEAR RENTS AT THE ADOBE AND DIABLO PARKS WERE SIGNIFICANTLY BELOW THE RENTS FOR MOBILEHOME SPACES IN THE CITY WITH COMPARABLE AMENITIES, BECAUSE OF UNIQUE OR EXTRAORDINARY CIRCUMSTANCES. We reverse the judgment and remand the matter to the Board for reconsideration.”

Again, this is a Mobile Home park. This is not an apartment. So this case simply cannot apply to apartments. You said:

“There the "unique and peculiar circumstances" requirement is discussed.”

However also if you read:

“WHEN BASE DATE RENTS CAN BE ADJUSTED TO REFLECT PREVAILING RENTS FOR COMPARABLE UNITS, EVERYONE WITHIN THE AMBIT OF THE RENT CONTROL SCHEME PARTICIPATES ON EQUAL FOOTING. (Vega v. City of West Hollywood, supra, 223 Cal.App.3d at p. 1349.) However, when base date rents are significantly below market value due to "unique or extraordinary circumstances," the balance tips and tenants become beneficiaries of a windfall in perpetuity.

While the City's ordinance properly seeks to maintain the same rate of return which property owners experienced prior to the enactment of rent control with adjustments for inflation, a property owner must be permitted to [91 Cal. App. 4th 1420] START RENT CALCULATIONS WITH A BASE DATE RENT SIMILAR TO COMPARABLE PROPERTIES. (Vega v. City of West Hollywood, supra, 223 Cal.App.3d at p. 1352.) We find that the circumstances surrounding Communities' purchase of the Adobe and Diablo parks provide "unique or extraordinary circumstances" with the same vigor as contemplated by Hillcrest and its progeny.

Disposition

We reverse the judgments of the trial court and direct entry of judgments granting Communities' writs of mandate compelling the Board to vacate its decisions and reconsider what a fair return on investment would be. The Board in its discretion may take additional evidence or rely on the existing evidence, consistent with this opinion.

Reardon, Acting P. J., and Sepulveda, J., concurred.”

I do not argue against this decision. But there was due process in the current petition. The landlord DID NOT DEMONSTRATE that base rents requested are WITH A BASE DATE RENT SIMILAR TO COMPARABLE PROPERTIES.

It is the Burden of the landlord to prove that the units were the values you propose. The hearing officer in this case clearly stated that the property was :

a. The Property is old, the Tenants' Units are not newly remodeled, and the level of service and maintenance has decreased since Landlord purchased the Property.

ACCORDING TO THE MAJORITY OF THE EVIDENCE, and declarations of the tenants, THE PROPERTY IS OVER 60 YEARS OLD, AND TENANTS' UNITS LACK AMENITIES SUCH AS AIR CONDITIONING, CENTRAL HEATING, DISHWASHERS. See, Exhibit E, Tenants' Declarations.

Subject Tenants -- according to their testimony, AND PHOTOGRAPHS PROVIDED BY LANDLORD -­reside in units that have not been remodeled since they moved in, AND WHICH CONTAIN WORN CARPETS, AGING WALL-UNIT HEATERS WHICH DO NOT HEAT MOST OF THE APARTMENT AND NO AIR CONDITIONING.

Tenants testify that since the heaters do not provide effective heating in most of the Affected Units, THEY ARE FORCED TO SUPPLEMENT WITH SPACE HEATERS IN THE COLD MONTHS. The Tenants also testify that the Units on the upper floor are SWELTERING IN THE HOT MONTHS.

EACH OF THE TENANTS TESTIFIES THAT THE PRIOR OWNER TOOK PRIDE IN THE LANDSCAPING AND GROUNDS AND THAT THE BUILDING AND GARDENS WERE VERY WELL CARED FOR. THE PRIOR OWNER WOULD DELIVER NEW HEATER FILTERS TO TENANTS EVERY YEAR AND SHE HERSELF OFTEN TENDED TO THE GARDENS HERSELF. Tenants further testify that Landlord has hired a "mow and blow" gardener, who does not tend to the planting with expertise and that the gardens are overgrown and unkempt - to the point of blocking ingress and egress on the side of the building. Furthermore, Tenants assert that Landlord removed decorative stones at the front of the property and replaced them with bushes which they feel was less attractive and an unnecessary expense. THE PHOTOGRAPHS SUBMITTED BY LANDLORD SUPPORT THE TENANTS' ASSERTIONS. See, Exhibit D.
A PREPONDERANCE OF THE EVIDENCE SUPPORTS A REBUTTAL TO ANY PRESUMPTION OF A VEGA ADJUSTMENT TO THE NET OPERATING INCOME FOR THE BASE YEAR. THE MARKET CONDITIONS OF THE PROPERTY SHOW THAT THE RENTS AS CHARGED ADEQUATELY REFLECT THE CONDITION OF THE PROPERTY AND THAT SUCH AN INCREASE IS "UNNECESSARY FOR THE LANDLORD TO RECEIVE A FAIR RETURN ON INVESTMENT FOR THE PROPERTY." See, The Act at Regulation 6(G)(3)(d).) As a result of all of these factors, Landlord's request for a Vega adjustment for these units is hereby denied.”

So far you have not demonstrated any evidence that would establish that the Hearing Officer did NOT use adequate evidence in the decision being made. All you seem to do is bring up cases that have no applicability to apartments given they are cases involving mobile homes. You said:

“It is a case of a new landlord who purchased the property and could not raise rents because of rent freeze enacted right after the purchase ( in case of your landlord a rent rollback). The previous owners kept their rents low.”

Again, if the new landlord could show by the preponderance of EVIDENCE that the prior landlord was in fact NOT MAKING A FAIR RETURN, I would agree with you. But that was not achieved. In fact the tenant’s representatives had a statement by the prior landlord demonstrating a fair rate of return. And that a “fair” rate of return can be “disappointing” to those who were sold that they would get more ROI. But again the real estate agent either never told the investors that rent control was possible, or simply expected the investor to do their due diligence. Again, these investors are responsible for their own “contributory negligence” and there is no PROOF that they acted with due diligence. So it can be argued that the decision simply applied the standard properly.

I know you will never concede that conclusion.


4 people like this
Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 6, 2018 at 7:32 pm

The Business Man is a registered user.

In response to howard you said:

“Businessman,

So far, 175 likes in 1 hour.

Step back from the keyboard!

It's time to release the keyboard!”

AS I pointed out, the likes are not reliable, they are hackable, so you and your friends re-like the same comment over and over again.

I simply don’t care about it, and the public should also treat it as trivial and unreliable as it is.


6 people like this
Posted by LOL
a resident of Old Mountain View
on Aug 6, 2018 at 7:35 pm

LOL is a registered user.

At least Howard gave up his line that "I don't mock anyone." Care to revise?


9 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 6, 2018 at 7:40 pm

Howard is a registered user.

This is not mocking but a community service.


5 people like this
Posted by mike rose
a resident of another community
on Aug 6, 2018 at 7:57 pm

mike rose is a registered user.

TBM,

Thanks for providing the excerpt from the hearing officer decision. This is an eye opener:

A PREPONDERANCE OF THE EVIDENCE SUPPORTS A REBUTTAL TO ANY PRESUMPTION OF A VEGA ADJUSTMENT TO THE NET OPERATING INCOME FOR THE BASE YEAR. THE MARKET CONDITIONS OF THE PROPERTY SHOW THAT THE RENTS AS CHARGED ADEQUATELY REFLECT THE CONDITION OF THE PROPERTY AND THAT SUCH AN INCREASE IS "UNNECESSARY FOR THE LANDLORD TO RECEIVE A FAIR RETURN ON INVESTMENT FOR THE PROPERTY." See, The Act at Regulation 6(G)(3)(d).) As a result of all of these factors, Landlord's request for a Vega adjustment for these units is hereby denied.”

Vega adjustment is NOT an adjustment to NOI. It is solely an adjustment to base rent amount (I cited it so many times) so every landlord has approximately the same start at the inception of the rent control scheme.
I think your landlord has an excellent chance of winning on appeal, and this women should be fired in a hurry, she clearly does not get the law.


5 people like this
Posted by mike rose
a resident of another community
on Aug 6, 2018 at 8:32 pm

mike rose is a registered user.

From the tenants testimony as provided by TBM:

"...Subject Tenants -- according to their testimony, AND PHOTOGRAPHS PROVIDED BY LANDLORD -­reside in units that have not been remodeled since they moved in, AND WHICH CONTAIN WORN CARPETS, AGING WALL-UNIT HEATERS WHICH DO NOT HEAT MOST OF THE APARTMENT AND NO AIR CONDITIONING ...."

And then:

"....THE PRIOR OWNER WOULD DELIVER NEW HEATER FILTERS TO TENANTS EVERY YEAR...."

Do wall heaters have filters ?, I thought only forced air central heaters do.


6 people like this
Posted by LOL
a resident of Old Mountain View
on Aug 6, 2018 at 8:44 pm

LOL is a registered user.

Thank you, Howard, for making it clear to everyone what kind of person you are. (Cue rant from Howard).


Like this comment
Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 6, 2018 at 8:58 pm

The Business Man is a registered user.

In response to mike rose you said:

“Vega adjustment is NOT an adjustment to NOI. It is solely an adjustment to base rent amount (I cited it so many times) so every landlord has approximately the same start at the inception of the rent control scheme.”

So you claim you are an expert? I never have. Are you a judge or an attorney? You still haven’t addressed that your cases are all involving “Mobile Homes” and not Apartments. You said:

“I think your landlord has an excellent chance of winning on appeal, and this women should be fired in a hurry, she clearly does not get the law.”

Before you cliam that you should understand here background found here (Web Link)

And here education is here :

“Education

Jil earned her J.D. from the Santa Clara University School of Law in 1986 and her B.A., magna cum laude, in Political Science and Pre-Law from Albright College in 1983.

Seminar and Teaching Activities

Jil provides sexual harassment prevention and investigation training (AB1825), and frequently conducts seminars and lectures for clients, human resources professionals, attorneys, and professional organizations. Her past topics include harassment and discrimination prevention, investigation and liability; hiring and firing; effective record keeping; wage and hour compliance; and effective performance evaluations. She lectures to groups of business owners on litigation prevention techniques and related topics.

In 2012 and 2013, Jil was a presenter with the California State Bar Alternative Dispute Resolution Committee’s MCLE program, “The Good, The Bad, and The Ugly,” concerning mediation techniques, and is on this year’s Alternative Dispute Resolution lecture panel.

Bar Association and Community Activities

Jil was the 2009 President of the Santa Clara County Bar Association, presiding over its Executive Committee and Board of Trustees, and was a trustee for attorneys in the City of Santa Clara from 2010 through 2012. Jil is immediate past Chair of the Santa Clara County Bar Association’s Strategic Planning Committee, past chair (and current member) of the Alternative Dispute Resolution Executive Committee, and Fee Arbitration Executive Committee. Jil also sits on the Board of Trustees for the Santa Clara County Bar Association’s Women Lawyers Section Executive Committee.

Jil is a Trustee of the Santa Clara University School of Law’s Alumni Association.

Jil has served as Treasurer and President-Elect of the Santa Clara County Bar Association, and is a long-standing member of its Employment Law and Business Litigation Sections, and Civil Practice Committee. Jil is a member of its Women Lawyers Executive Committee.

Jil serves as a member of the California Judicial Council’s Rules Committee and Temporary Judges’ Working Group. She is a founding member of the Assisted Settlement Conference Pilot Program for the United States District Court for the Northern District of California. Jil is current appointee on the California State Bar’s Alternative Dispute Resolution Executive Committee, and is one of its regular lecturers.”

I would try not to make claims involving someone you apparently have not even done any research on. Also bear in mind :

“Civil Litigation Experience

Jil represents clients in a broad array of civil litigation matters. Her extensive experience INCLUDES TRIALS, mediations, and ARBITRATIONS IN THE FOLLOWING AREAS: employment, REAL ESTATE, trade secrets, contract claims, unfair competition, intellectual property disputes, internet-related disputes, fraud/breach of fiduciary duty claims, and trust/estate disputes.

And:

“Dispute Resolution/Referee Experience

Jil is fully committed to resolving cases, regardless of their size and complexity. This commitment is based on the philosophy that a litigant generally will achieve a more favorable and economical outcome of a dispute through settlement, as opposed to costly and seemingly endless litigation. Jil has over 20 years of experience in alternative dispute resolution (ADR) processes, including mediation, arbitration, special master, discovery referee, and evaluative neutral work.

Since approximately 1994, Jil has acted as a private arbitrator/mediator in employment and business, real estate, intellectual property, and general civil litigation matters.

Jil also acts as referee in discovery and other disputes, and serves as a public arbitrator/mediator for the Santa Clara County Superior Court’s Alternative Dispute Resolution Panel.

She serves as an arbitrator for the Santa Clara County Bar Association’s Fee Arbitration program. She also volunteers as a settlement judge pro tempore for the Santa Clara County Superior Court’s Mandatory Settlement Conference Program, and as a judge pro tempore for the Santa Clara County Small Claims Court.

Her clients include businesses and individuals in the following industries: manufacturing, semiconductor, electronics, retail, consumer products, insurance, real estate, mortgage brokerage and finance, consumer credit, restaurant and food services, wine and viticulture, accounting, high technology, construction, architectural, medical, retail, nonprofit, and music.

Jil has litigated scores of matters before California Superior Courts, California Courts of Appeal, Federal Courts, the American Arbitration Association, JAMS/Endispute, and private arbitrators/mediators.

While Jil counsels her clients to take steps to avoid litigation wherever possible, she works with clients to ascertain their objectives, and execute the right approach to their litigation goals. Sometimes clients require aggressive litigation. In other cases, mediation or litigation prevention is the correct action. Jil understands that her clients’ time and resources are best spent growing their businesses; as a result, Jil explores all viable options with clients. Jil’s 27 years of litigation experience allow her to ascertain the situation, formulate legal solutions in a practical and efficient manner, and craft favorable resolutions.”

Again you should not make any statements regarding your “Authority” over this person unless you have an equal professional and legal background. That’s all.


6 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 6, 2018 at 8:58 pm

Howard is a registered user.

Mike,

They want their cake and eat it too. This is what all landlords are going to face here.

What I think is funny about this decision is:

"ACCORDING TO THE MAJORITY OF THE EVIDENCE, and declarations of the tenants, THE PROPERTY IS OVER 60 YEARS OLD, AND TENANTS' UNITS LACK AMENITIES SUCH AS AIR CONDITIONING, CENTRAL HEATING, DISHWASHERS."

"Subject Tenants -- according to their testimony, AND PHOTOGRAPHS PROVIDED BY LANDLORD -­reside in units that have not been remodeled since they moved in, AND WHICH CONTAIN WORN CARPETS, AGING WALL-UNIT HEATERS WHICH DO NOT HEAT MOST OF THE APARTMENT AND NO AIR CONDITIONING."

THE MARKET CONDITIONS OF THE PROPERTY SHOW THAT THE RENTS AS CHARGED ADEQUATELY REFLECT THE CONDITION OF THE PROPERTY AND THAT SUCH AN INCREASE IS "UNNECESSARY FOR THE LANDLORD TO RECEIVE A FAIR RETURN ON INVESTMENT FOR THE PROPERTY."

So are they saying he's a slumlord? He just bought the property and then they took away any rent increases going back to October 2015 while the garbage and water bills increased by 10% and then denied him any increases over $1050/month on his units..This is almost comical because it's so ass backwards and so blatantly wrong.

So now what, don't give him increases so he can improve the property? Oh that's smart!

The city has CONDEMNED THIS PROPERTY and is disallowing any repairs of it???
What are you people doing here? You want affordable housing but your going to choke the landlord so he has no money to make improvements. Your going to be moving now because you left the landlord with no options but to sell to developer.
STUPID PEOPLE.

There is your view of what rent control does to communities!







1 person likes this
Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 6, 2018 at 9:11 pm

The Business Man is a registered user.

In response to Howard you siad:

“They want their cake and eat it too. This is what all landlords are going to face here.”

And you don’t want the same? Both are guilty. You said:

“So are they saying he's a slumlord? He just bought the property and then they took away any rent increases going back to October 2015 while the garbage and water bills increased by 10% and then denied him any increases over $1050/month on his units..This is almost comical because it's so ass backwards and so blatantly wrong.”

You are making statements with no basis. The landlord was not ever called a “slumlord”. You assume that $1050/mo is on all units, that is not wise. Many of the units have a wide spread of rates. You said:

“So now what, don't give him increases so he can improve the property? Oh that's smart!”

In order to justify increased rents, the “improvements” must be done FIRST. Why should anyone get money for work not done yet? What was the last sentence3 paragraphs back? You said:

“The city has CONDEMNED THIS PROPERTY and is disallowing any repairs of it???”

NO it is NOT condemned. But what the hearing officer did was use her expertise to establish what the “REAL” value of the REAL ESTATE is, NOT THE INFLATED ONE THAT GOT THE INVESTOR IN SUCH A MESS. There is no force used to “disallow” repairs. You know that. The landlord simply has to demonstrate by evidence that he will perform said repairs, or perform them and that is proof. You said:

“What are you people doing here? You want affordable housing but your going to choke the landlord so he has no money to make improvements. Your going to be moving now because you left the landlord with no options but to sell to developer. “

If the landlord can provide sufficient evidence or prove their effective management then the petition system will provide tools. But your approach is just give use what we want or we will retaliate. You cannot claim you haven’t demonstrated that intent.


3 people like this
Posted by mike rose
a resident of another community
on Aug 6, 2018 at 9:16 pm

mike rose is a registered user.

Howard,
This decision should be used by opponents of Prop.10 during the campain as a practical example what the fair rate of return is, according to the tenants.
The proponents always balantly claim that landlords are "constitutionally guaranteed fair rate of return". $35,000 a year for a $5,000,000 investment?
That works out to be 0.7% return. Government insured CD's offer at least 4 times as much even with today's low interest rates.
And then you add on top headache tenants like TBM and it is totally not worth it.
Is this a message to potential developers in California?, because if it is it needs to be amplified, so everyone voting on the CH repeal can hear it.


4 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 6, 2018 at 9:24 pm

Howard is a registered user.

Businessman,

Once again you put the horse before the cart analogy.

But I think it's more of a coyote with the rocket attached to his back jumping off the cliff chasing the roadrunner scenario.


4 people like this
Posted by Waldo
a resident of Waverly Park
on Aug 6, 2018 at 9:56 pm

Waldo is a registered user.

Thankfully, I have a scroll wheel on my mouse, and can rapidly skip over The Business Man's comments.


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 6, 2018 at 9:57 pm

The Business Man is a registered user.

In response to mike rose you said:

“This decision should be used by opponents of Prop.10 during the campain as a practical example what the fair rate of return is, according to the tenants.”

Not according to tenants, according to evidence and rule of law you said:

“The proponents always balantly claim that landlords are "constitutionally guaranteed fair rate of return". $35,000 a year for a $5,000,000 investment? “

Why did these two buy this building when there was no reasonable evidence that the property was worth that much. Again “contributory negligence”. They chose to act, the tenants had nothing to so with it. Since when should tenants “deserve” to be penalized for the poor judgement of these two? You said:

“That works out to be 0.7% return. Government insured CD's offer at least 4 times as much even with today's low interest rates.”

That is correct, if they negotiated the property to be what it really was, they would have got it for half the price. Thus half the taxes and half the mortgage. Thus they would have significantly improved ROI. Whose responsibility is this? You said:

“And then you add on top headache tenants like TBM and it is totally not worth it.”

I was not alone, the petition was looking to raise 6 apartment rents. I simply express my opinion, my right to do so. I seek out representation so that I do not get abused by my landlord. You said:

“Is this a message to potential developers in California?, because if it is it needs to be amplified, so everyone voting on the CH repeal can hear it.”

Just understand the market correction coming regarding stocks found on Goldcore (Web Link) and Motley Fool (Web Link_

And the real estate correction found on TheBalance.com (Web Link) and Marketwatch (Web Link)

In response to Howard you said:

“Once again you put the horse before the cart analogy. “

Really, you want us to pay for future amenities for the next tenant and not get any benefit? Just who has them backwards? Simply put, NO we get improvements, then we pay better rents. You said:

“But I think it's more of a coyote with the rocket attached to his back jumping off the cliff chasing the roadrunner scenario.”

Really? I thought you promoted ethical business practices. So making improvements BEFORE you get paid IS ETHICAL.


4 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 6, 2018 at 10:02 pm

Howard is a registered user.

The city Condemned this property, plain and simple. Now you all figure out where to live?


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Posted by mvrenter
a resident of Shoreline West
on Aug 6, 2018 at 10:04 pm

mvrenter is a registered user.

Ok, 2 things:
Busi and Howie agree on (or won't disagree with) one thing: If you invest x million in a property that will not make you a satisfactory profit at current rents, while a hearty new rent control amendment is on the ballot, in a town with a majority of residents renting, you're investing badly and you're likely fail to make that hoped for profit. And possibly have to sell it at a loss to someone who can find a way to make a satisfactory profit given the circumstances (rent control).

And the second thing: the only entity benefiting in this scenario is the seller. The new owners are unhappy, the current tenants have just been through hell, new tenants better have their facts before signing a lease or they're going to be REALLY unhappy, and the relationship between the parties is probably irreconcilable. Blame the seller, blame the realtor, call the owners greedy or foolish, but the tenants have done nothing wrong.


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Posted by Howard
a resident of Old Mountain View
on Aug 6, 2018 at 10:32 pm

Howard is a registered user.

mvrenter,

This is not about who is wrong it is about the economic environment of rent control that is wrong.

The tenants did nothing wrong and from my perspective the landlords did nothing wrong. It's about economics of the real estate market in California or especially in the Bay Area.

Businessman is right about the inflated prices but you just can't bring things to a screeching halt on one side of the equation, rents.

This is going to cause a real mess for both tenants and landlords.
What should be done is a graduation of controls that bring prices and rents back inline so nobody gets destroyed.

The tenants need housing and the landlords need tenants. The region needs residential units built to accommodate the workforce that has become more than migrant as it was in past years and needs it built under economic conditions that reward both tenant and investor.

this is simple but your politicians see this as a 0 sun game which is going to have devastating consequences for all.

I've done this for 50 years and have seen all markets and last year I ran for the door, getting all my money out of Mountain View because of how this was being run politically.
You have very pissed off people in your city and it is all or nothing.
You have to change if you want prosperity for all.
Take that message to your city counsel if you want better for your city.




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Posted by mvrenter
a resident of Shoreline West
on Aug 6, 2018 at 10:54 pm

mvrenter is a registered user.

Thank you Howard, that was a very reasonable response. After the last few, I was worried that you'd started round the bend. :-)
But, I guess my point, for this case is the timing means everything. Regardless of what you think of rent control buying that property at that price should have been mathematically untenable. If the only thing that has happened is normal business as usual (not new renovation, or uninsured calamity), and the brand new owners cannot make a satisfactory profit without rent increases that they never should have counted on, then that was a bad investment. Neither you nor the city can conclude that huge increases on the tenants to ensure the new owners profit is appropriate. These owners gambled on being able to game the system when they bought it.


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Posted by Howard
a resident of Old Mountain View
on Aug 6, 2018 at 11:11 pm

Howard is a registered user.

I understand that and would never myself had paid what they did for that property.

When I sold, I got the highest price per square foot in Mountain View per county records before the market tanked. The guy that bought my property brought 19 million in cash from China and he bought my property and another one. I was fortunate but knew what was coming down for Mountain View from experience.

Those days are over for Mountain View landlords and now many of these landlords are going to be financially restricted and that will affect the properties by less improvements, amenities and services. Some will not be able to make it causing more tear downs, less units available and drive available rentals to higher rents.
This is the cost to the tenant of rent control.


2 people like this
Posted by mvrenter
a resident of Shoreline West
on Aug 7, 2018 at 12:26 am

mvrenter is a registered user.

And yet, earlier you literally said that the RHC owes them a fair rate of return. And you now acknowledge that it was a bad deal at that time at that price, that you wouldn't have made that investment. So why demonize the RHC, and advocate that this was an unfair decision. Is it not unjust to force tenants to pay so that the new owners can earn a guaranteed profit that any reasonable investor would not count on? I don't think that you are really arguing that case, are you?


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Posted by Howard
a resident of Old Mountain View
on Aug 7, 2018 at 5:52 am

Howard is a registered user.

At the time they bought this property there was no RHC or rent control itself and their decision was based on investing in non-rent controlled business climate.

I didn't say it was a bad deal, but I wouldn't have paid what they paid for it as I said because I look for higher profits.

I do believe the RHC has made a bad decision and condemned this property unjustly and in violation of the CSFRA. I think it is clear that they are not offering this owner a "Fair Rate of return" under their "Fair Rate Standard" as specified in the CSFRA. Here is what it says:

"A Landlord’s fair rate of return on investment for a property containing a Covered
Rental Unit for the Petition Year is the “Adjusted Net Operating Income.” For
purposes of this Section (B), the Adjusted Net Operating Income shall equal the
Net Operating Income for the Base Year, adjusted by the percentage increase or
decrease in the Consumer Price Index between the Base Year and the Petition Year.
If the Landlord’s actual Net Operating Income for a property in the Petition Year is less than the Adjusted Net Operating Income, then the Landlord shall be entitled
to an Upward Adjustment of Rents for that property sufficient to provide a Net
Operating Income equal to the Adjusted Net Operating Income."

Also, under the CSFRA

"For purposes of Chapter 6, the following definitions apply; all other capitalized
terms are defined by the Act:
1. Base Year. The Base Year is calendar year 2015."

The owners didn't own this property in 2015 and it was purchased in 2016 for $5M.

So, who's net operating income are they using for this calculation when determining $35k/year net operating income is sufficient to operate this building?
The previous owners who probably paid $1.5 million back in 1995 and owned it in 2015 probably had net operating income of $100k or more because the much lower property taxes and much lower loan.

It's clear, the city condemned this property and I think the bigger question is WHY???

Something stinks here.


2 people like this
Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 7, 2018 at 6:08 am

The Business Man is a registered user.

In response to Howard you said:

“This is not about who is wrong it is about the economic environment of rent control that is wrong.”

But what other option is there? When you have what clearly are investors that expect their investments to be “guaranteed” a profit when they made such a poor judgment. You said:

“The tenants did nothing wrong and from my perspective the landlords did nothing wrong. It's about economics of the real estate market in California or especially in the Bay Area. “

Again, when the landlords made a bad business decision, they ARE the accountable persons. NO ONE FORCED THEM TO MAKE THIS DECISION. You said:

“Businessman is right about the inflated prices but you just can't bring things to a screeching halt on one side of the equation, rents.”

Howard, if you are ever going to market correct, there is always going to be a trigger. If there is no trigger, the market will just compound the problem until some other force kicks in. This is the inevitable process. It is “screeching” to a halt because of this. You said:

“This is going to cause a real mess for both tenants and landlords.”

That is correct, but you admit that rent control is NOT the sole problem. Thus you cannot expect the public to put the blame of these investors losses soley on the “rent control”. You said:

“What should be done is a graduation of controls that bring prices and rents back inline so nobody gets destroyed.”

I hate to say this but here was about 2 years of time for that kind of solution to have been made prior to the election of 2016. The fact was that the landlords of Mountain View, convinced by the CAA, simply said they would not negotiate anything. That door was never closed. The Citizens of Mountain View in effect made CSFRA VERY STRONG in order to motivate negotiations. But that did not happen. So the landlords have a part of the responsibility for the mess. This appears to be a trend that is spreading. You said:

“The tenants need housing and the landlords need tenants. The region needs residential units built to accommodate the workforce that has become more than migrant as it was in past years and needs it built under economic conditions that reward both tenant and investor.”

For 20+ years the industry has been given the best legal framework for their investments by banning rent control. But what did not happen again is the proportional development of all levels of housing. I say again, you cannot put all of the blame for that on “government”. A market correction will for as long and as deep it will be, cause the rewards to be small until equilibrium can be restored. You know that. You said:

“this is simple but your politicians see this as a 0 sun game which is going to have devastating consequences for all.”

Actually, I partially agree, the real problem is that the outpacing of residential development versus other development is causing the 0 sum problem, and yes it is devastating. You said:

“I've done this for 50 years and have seen all markets and last year I ran for the door, getting all my money out of Mountain View because of how this was being run politically. “

That is your choice, but in that vein, you are not participating in anything constructive either. You’re simply saying that it’s our mess and you got what you wanted out of it. So you leave. You said:

“You have very pissed off people in your city and it is all or nothing.”

That goes both ways, the landlords had the chance to “negotiate” an amicable arrangement for 2 years. They simply told the City also it was “ALL OR NOTHING”. You said:

“You have to change if you want prosperity for all.”

Please explain that to yourself and your peers as well. They had ample opportunity to prevent CSFRA by negotiation. They refused to negotiate. You said:

“Take that message to your city counsel if you want better for your city.”

Take this message to your peers, you cannot simply pass off the costs of bad judgment to any government or tenants. Work on a solution of the problem because if you don’t the public does have the options that occurred here in Mountain View. Landlords “contributory negligence” in failing to adjust or come up with any solutions other than give us what we demand is not going to work.


8 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 7, 2018 at 6:29 am

Howard is a registered user.

I have a theory on why the RHC would condemn this property.

If you look at 184 Centre Street on google maps it appears this property is not big enough to redevelop unless it is joined with 178 Centre Street which is the Lone Oaks Apartments. Lone Oaks Apartments has the same problem because its under an acre and shares the driveway with 184 Centre.

Find out who owns the Lone Oaks Apartments, who would love to gobble up 184 Centre Street for a cheap price and you might find the answer to why the RHC condemned this property. I think there might be some kind of connection with this property and the RHC board.

If Lone Oaks Apartments could buy it cheap, they would make a fortune on redeveloping both lots into 30 row houses at a price of 1.6 million each = $48 million in sales.
BIG money!!!


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 7, 2018 at 6:39 am

The Business Man is a registered user.

In response to Howard you said:

“I have a theory on why the RHC would condemn this property.”

You are making a false statement here. The property is NOT CONDEMNED. That would entail forced evacuation of the building. THAT IS NOT HAPPENING. You said:

“If you look at 184 Centre Street on google maps it appears this property is not big enough to redevelop unless it is joined with 178 Centre Street which is the Lone Oaks Apartments. Lone Oaks Apartments has the same problem because its under an acre and shares the driveway with 184 Centre.”

That is true. The investors knew this before purchasing it. You said:

“Find out who owns the Lone Oaks Apartments, who would love to gobble up 184 Centre Street for a cheap price and you might find the answer to why the RHC condemned this property. I think there might be some kind of connection with this property and the RHC board.”

Now that is a wild idea. You are saying that the City of Mountain View is conspiring against the investors of 184 Centre Street. On what basis is this coming from. And again this building is not CONDEMNED. You said:

“If Lone Oaks Apartments could buy it cheap, they would make a fortune on redeveloping both lots into 30 row houses at a price of 1.6 million each = $48 million in sales.”

I have not seen any interest in that idea yet. But you also never acknowledged the question, are you a part of the problem or a part of the solution? I do not think you could get 30 row houses in the space, they would need to be less than 700 sq feet in size.


2 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 7, 2018 at 7:13 am

Howard is a registered user.

Really Businessman?

Then can you answer why the RHC believes 35K/year in profit or a return of 7/10ths of 1% will support the risk, management and maintenance and replacement costs of all of the items needed in this $5 Million property?

The RHC condemned this property! This is foolish and so are you for believing this is right. The RHC should know better what their doing and I think they do.
And Somethings up here with someone on that board.

If I was the owners of this apartment building.. I would check this out and see who Lone Oaks Apartments owners are friends with and if their "chummy" with the city.


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 7, 2018 at 7:48 am

The Business Man is a registered user.

In response to Howard you said:

“Then can you answer why the RHC believes 35K/year in profit or a return of 7/10ths of 1% will support the risk, management and maintenance and replacement costs of all of the items needed in this $5 Million property? “

YOU ALREADY CONCEEDED THAT THIS PROPERTY WAS NOT WORTH $5 MILLION. The investor made a huge mistake and you know it. You said:

“The RHC condemned this property! This is foolish and so are you for believing this is right. The RHC should know better what their doing and I think they do.”

To condemn a property it means to (Web Link) :

“Condemnation occurs when a local, state, or federal government SEIZES PRIVATE PROPERTY AND COMPENSATES THE OWNER. The power of the government to do this is called eminent domain, which essentially means the government takes private property for public use. The property owner is entitled to just compensation for the property during condemnation, BUT HE DOES NOT HAVE TO GIVE HIS APPROVAL OF THE SALE.

The Condemnation Process

The condemnation process may vary slightly depending on the situation, but in general:

Once the government has decided to take the property and has come up with a reasonable appraisal of how much the property is worth, or fair market value, it will offer the property owner a pro tanto award (a partial payment made by the government as compensation for the land being seized).

If the owner does not wish to sell, the government files the appropriate court action to exercise the right of eminent domain.

A hearing will be scheduled where the government has to show that the monetary offer is reasonable and the property is indeed being taken for public use.

During the hearing, the property owner is allowed to respond to the claims made.

If either side is unhappy with the decision, they have the right to appeal.”

Simply put, you are not using the right terminology here. That’s all.

“And Somethings up here with someone on that board.”

The Board did not hear the appeal yet. It was decided by an experience Court Judge. I already posted the Hearing Officers Legal Background. So you cannot claim this yet at all. You said:

“If I was the owners of this apartment building.. I would check this out and see who Lone Oaks Apartments owners are friends with and if their "chummy" with the city.”

I cannot argue with this, it should be checked. But I think your grasping at straws. The other owner has no intention to purchase the property. The fact was the new landlords had a plan that fell apart because of their own “contributory negligence”. I feel it may be that the majority of the landlords subject to CSFRA has done the same. But I have no proof.


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Posted by Fact check...
a resident of Rex Manor
on Aug 7, 2018 at 9:11 am

Fact check... is a registered user.

@Howard, et al. --

Debt is excluded from the fair-rate-of-returns calculations because:

1. It is very easy for a landlord to create debt that is artificial. 2 shell corporations: 1 as the nominal "landlord/owner" the other as the entity ("bank") that loans the money to the first. Both shell corporations are controlled by the true landlord. The "bank" creates a high interest loan that the "landlord" shell corporation has to pay. Using this method it is possible for the "interest rates" to be whatever rate is needed to raise rents.

2. Debt adds no real value to the property

3. Debt is optional.

The owners of this property made a financial bet that didn't pay off the way they were expecting. This is no different than if they bought stock paying dividends on margin and the stock dropped in value and then the dividend was cut.

Being a landlord is like any other investment, some times the value of the investment goes down in investment.


10 people like this
Posted by lan
a resident of Another Mountain View Neighborhood
on Aug 7, 2018 at 10:48 am

lan is a registered user.

In my wonderful rent controlled building, the new owner is doing a number of things to be cost effective. Big items such as bad plumbing get bandaid fixes. When apartments turn over, minimal work is done to clean them up and make them rentable to the next tenant. And the biggest and most effective tactic --- don't have any onsite management, pay a management company to collect the rent and to show and rent vacant units to apparently just about anyone, with all their noise, animals, and general inconsiderations. Since this new ownership, I have had the worst neighbors in my history as a renter in spite of repeated legitimate complaints.

Here's the thing - - this bad management affects all the tenants, those paying lower rents and those paying market rate. The degradation of my complex is mostly due to bad tenants and severe lack of oversight. Eventually my building will look like a dump, but that's because of chronic irresponsible renters having gone unchecked.


5 people like this
Posted by Polomom
a resident of Waverly Park
on Aug 7, 2018 at 11:37 am

Polomom is a registered user.

@Fact Check Except in the stock market you can determine your own destiny, bad choice-bad return. In Mountain View landlords provide housing, the little housing there is for everybody wanting to come here. What is the City doing to encourage this? Puts rent control and a RHC in place to make it unattractive and impossible for landlords to hang onto those older units which provide housing for the less affluent.
Landlords in MV are no longer in charge of their investment. If Council goes for more office buildings on current down town lots, the situation will get worse.
Condo conversions (remove rentals from the rental pool) are the way to go for investors, but I wouldn't be surprised, if that would get vetoed by council.


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 7, 2018 at 12:05 pm

The Business Man is a registered user.

In response to Polomom you said:

“@Fact Check Except in the stock market you can determine your own destiny, bad choice-bad return. In Mountain View landlords provide housing, the little housing there is for everybody wanting to come here. What is the City doing to encourage this? Puts rent control and a RHC in place to make it unattractive and impossible for landlords to hang onto those older units which provide housing for the less affluent.”

Just understand, the City didn’t create rent control, the Citizens did through a Charter Amendment Ballot Imitative. Also, as of now any apartment younger than 1995 is NOT rent controlled at this time. So what should the City do when the Apartment Industry has not put forth any proposal except for the highest priced apartment units. That is NOT the responsibility of the City. So your comment apeears incorrect. You said:

“Landlords in MV are no longer in charge of their investment. If Council goes for more office buildings on current down town lots, the situation will get worse.”

At least for now, that is not true. Of course the Citizens of California might expand rent control via Poprostition 10. And the Citizens might succeed in getting another Charter Amendment initiative passed to expand CSFRA. NOW is the time for this industry to reform on its own, otherwise the public will take whatever legitimate steps from here on. You said:

“Condo conversions (remove rentals from the rental pool) are the way to go for investors, but I wouldn't be surprised, if that would get vetoed by council.”

Just understand, if you only want a hammer and a screwdriver in your toolbox. You can break up something, pull a nail, or hammer a nail with the hammer. You can pry apart something, chisel a substance or screw or unscrew a screw with the screwdriver. That is the problem with those that claim we should only build homes or condos regarding housing. The real word simply needs ample housing resources of all kinds.

If the market investors constrain options to only what they prefer, then you are giving good cause for any kind of market intervention. That’s just an observation.


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Posted by clearthinker
a resident of Another Mountain View Neighborhood
on Aug 7, 2018 at 3:42 pm

clearthinker is a registered user.

Businessman,
please note this is not your personal blog and when people write their opinions it is not so that you can weigh in on them. Your cutting and pasting of long diatribes is discouraging to a healthy discourse that might take place otherwise.


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Posted by Fact check...
a resident of Rex Manor
on Aug 7, 2018 at 8:04 pm

Fact check... is a registered user.

@clearthinker --

> please note this is not your personal blog

... nor is it yours... Are you a moderator?

If not, then your desires are your desires. As for me, I rather like the TBM posts.

If you are a moderator, then perhaps you and TBM could have a conversation privately.


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Posted by Fact check...
a resident of Rex Manor
on Aug 7, 2018 at 8:10 pm

Fact check... is a registered user.

@lan

> Eventually my building will look like a dump, but that's because of chronic irresponsible renters having gone unchecked.

If this is the case, then you have a legitimate grievance to petition for lower rent.

> I have had the worst neighbors in my history as a renter in spite of repeated legitimate complaints.

CSFRA *allows* evictions for being a nuisance tenant - i.e. not following terms of the lease.

> those paying lower rents and those paying market rate.

All tenants paid market rates when they started their tenancy. The only thing controlled is the rate of rent increases on existing tenants.


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Posted by Fact check...
a resident of Rex Manor
on Aug 7, 2018 at 8:20 pm

Fact check... is a registered user.

@Polomom

> @Fact Check Except in the stock market you can determine your own destiny, bad choice-bad return.

In the stock market, I can't stop management decisions. In the stock market, a stock maybe suddenly subject to increased regulation: for example, insurance, banks, payday loans, etc. As an investor, I have to examine what I should expect as a return from that stock.

As a shareholder, I cannot go and complain that my investment has less growth potential because of that regulation.

> Landlords in MV are no longer in charge of their investment.

Sure they are! A landlord always has the option to sell their property. The property may have a current market value less than what they paid. But this is the same as in the stock market. It is part of the investment risk. Any investment may decline in value.

As a landlord, the income stream may be reduced. This is no different than owning a stock that has its dividend trimmed.


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Posted by Howard
a resident of Old Mountain View
on Aug 8, 2018 at 5:33 am

Howard is a registered user.

Are Fact check and Businessman related??
I'm going out to buy a high speed motorized scroller mouse for my computer!

By the way Businessman, I never said this property was a "bad investment".

Here is my quote, "I wouldn't have paid what they paid for it as I said because I look for higher profits."
There is a big difference between the two and your trying to use that as a "they should have known rent control would destroy them so they deserve it" moment.

The fact is, when they bought this property the market rents were much higher than what the actual rents were at that building so this was a benefit for buying this building.

The second point is that there wasn't any rent control in Mountain View at the time of purchase which would hinder them from raising rents to market rates.

This wasn't a bad deal considering the multi-residential market at that time. Remember, investors that are purchasing with 1031 exchanges have 45 days to identify the property and must buy within a certain price range and finance a certain amount to qualify for these exchanges or pay hefty taxes of hundreds of thousands of dollars.

This limits your options to very few properties that qualify for the exchange and this may have been the only one for these investors that qualified in Mountain View.

I'm on my second 1031 exchange this year right now and must identify all my purchase property by August 30th (45 days from close of escrow on my sold property)
and must purchase $2,350,000.00 with loans in the amount of $1,202,500.00 to qualify on my deal. If I fail to do so.. I owe $690,00.00 in taxes.
So far I have identified 2 of the 3 properties and am in contract with them.

My first exchange this year was for $9,250,000.00 which I completed and saved me $2,775,000.00 in Capital gains taxes and depreciation recapture that I would have had to pay.

See so these deals have to fit and this is probably why they bought this property to qualify and avoid the taxes..


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 8, 2018 at 6:02 am

The Business Man is a registered user.

In response to howard you said:

“By the way Businessman, I never said this property was a "bad investment".

Here is my quote, "I WOULDN'T HAVE PAID WHAT THEY PAID FOR IT AS I SAID BECAUSE I LOOK FOR HIGHER PROFITS." “

What you said was:

“I UNDERSTAND THAT AND WOULD NEVER MYSELF HAD PAID WHAT THEY DID FOR THAT PROPERTY.”

I respect your understanding that the investment price was too high. You are trying to rewrite your own words. Why? They were accurate. You said:

“There is a big difference between the two and your trying to use that as a "they should have known rent control would destroy them so they deserve it" moment.”

Again, there was plenty if information out there for the investor to make the right decision. This is not exploitation, this is business. You said:

“The fact is, when they bought this property the market rents were much higher than what the actual rents were at that building so this was a benefit for buying this building. “

But you are comparing completely different kinds of properties again. They should not have based any decision on an “average” of the entire city, which they did. They should have had someone do a comparative analysis regarding comparative properties. In fact they produced their data to us regarding their “expectations” of rent and it did simply was a “Citywide” assumption. As pointed out by the decision here, this property is nowhere close to the “average” level of housing in Mountain View. You know that. You said:

“The second point is that there wasn't any rent control in Mountain View at the time of purchase which would hinder them from raising rents to market rates.”

I have already pointed out the flaw in that idea above. You said:

“This wasn't a bad deal considering the multi-residential market at that time. Remember, investors that are purchasing with 1031 exchanges have 45 days to identify the property and must buy within a certain price range and finance a certain amount to qualify for these exchanges or pay hefty taxes of hundreds of thousands of dollars.”

Even so, that still doesn’t negate what was discussed above. The “average” rents assumed were not comparable to this property. Thus it simply doesn’t matter. As far as 1031 exchanges, those are loopholes in taxes (Web Link) , no one is entitled to be protected from trying to use a loophole that potentially causes even more losses to the investor. You know that. You said:

“This limits your options to very few properties that qualify for the exchange and this may have been the only one for these investors that qualified in Mountain View.”

Well, that doesn’t mean they were “forced” to purchase the property at that price. They could simply not bought it based on the fact that at that price, it would have been extremely difficult to make a profit even without rent control. You always have the choice to say NO. They simply got convinced by a good sales pitch to overpay for it. You said:

“I'm on my second 1031 exchange this year right now and must identify all my purchase property by August 30th (45 days from close of escrow on my sold property)”

There is no evidence this was a 1031 exchange. This is their “first” apartment purchase. They have not “exchanged” any other property from what I know. Again, you are not FORCED to take any actions, you chose to invest trying to use this tax loophole. You said:

“and must purchase $2,350,000.00 with loans in the amount of $1,202,500.00 to qualify on my deal. If I fail to do so.. I owe $690,00.00 in taxes.

So far I have identified 2 of the 3 properties and am in contract with them.

My first exchange this year was for $9,250,000.00 which I completed and saved me $2,775,000.00 in Capital gains taxes and depreciation recapture that I would have had to pay.

See so these deals have to fit and this is probably why they bought this property to qualify and avoid the taxes..”

Again, this does not appear to be a 1031 exchange situation. You choose to purchase property in this manner to take advantage of a tax loophole. That is your right, but it does not mean you’re forced to do anything. The investor are responsible for their actions.


2 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 8, 2018 at 10:30 am

Howard is a registered user.

Well, one thing for sure is it will be the last property they buy in Mountain View like me and sooooo many others. Just glad I went over the wall early enough!

Why would any future investor invest a nickle in this socialist economy run by the ministers, and commissars of the RHC?


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 8, 2018 at 10:48 am

The Business Man is a registered user.

In response to Howard you said:

“Well, one thing for sure is it will be the last property they buy in Mountain View like me and sooooo many others. Just glad I went over the wall early enough!”

So, when you are made aware that you know that when the landlords chose to buy this property, it was a mistake, you resort to say “I got my mine”. WOW. You said:

“Why would any future investor invest a nickle in this socialist economy run by the ministers, and commissars of the RHC?”

All I can say regarding this is OMG.


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Posted by Howard
a resident of Old Mountain View
on Aug 8, 2018 at 11:51 am

Howard is a registered user.

Businessman,

"So, when you are made aware that you know that when the landlords chose to buy this property, it was a mistake, you resort to say “I got my mine”."

No, I didn't say that.

One of my favorite sayings from a great President, Ronald Reagan is, "Now there ya go again" when referring to Jimmy Carter's false statements.

So, Businessman, Now there ya go again.
I never said "it was a mistake" and "I got mine."


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 8, 2018 at 12:04 pm

The Business Man is a registered user.

In response to Howard you said:

“Businessman,

"So, when you are made aware that you know that when the landlords chose to buy this property, it was a mistake, you resort to say “I got my mine”."

No, I didn't say that.”

You said:

“I UNDERSTAND THAT AND WOULD NEVER MYSELF HAD PAID WHAT THEY DID FOR THAT PROPERTY.”

That is your words, if you wouldn’t buy the property, then why should anyone else do it? So the proves you said they made a mistake. You also said:

“Well, one thing for sure is it will be the last property they buy in Mountain View like me and sooooo many others. JUST GLAD I WENT OVER THE WALL EARLY ENOUGH!”

And amongst so many other posts, you claim that you “SOLD” your properties “When the market is at its peak”. That means you personally benefited what you could when you did. So that can be reasonably shrunk down to the phrase “I got mine”. I just greatly concentrated what could take 10 sentences to one. It was a reasonable observation. That’s all.

Thus I did establish grounds that you did in fact say “it was a mistake" and "I got mine.”


1 person likes this
Posted by Howard
a resident of Old Mountain View
on Aug 8, 2018 at 12:37 pm

Howard is a registered user.

Businessman,

Now there ya go again. Come on, really..“it was a mistake" and "I got mine.”

The fact that I have great intuition and experience in the real estate market and rental market here in the Bay Area and am very successful doesn't qualify me to claim someone else made a mistake when I don't know their situation. I mentioned the tax consequences above as an example why people buy something.

All I have said is I wouldn't have bought it because it doesn't fit into my portfolio of properties. I Buy "A" class properties in million dollar neighborhoods dealing with $250,000/year+ tenants and won't deal with the problems associated with older high maintenance properties and lower income tenants.

Now I do still own about $25,000,000 in "B" class properties in the bay area but am phasing out of them as opportunities arise like getting out of Mountain View before Rent control and the RHC destroyed my investment.

What others do is what is right for them at the time they do it but not necessarily right later. That's business!


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 8, 2018 at 1:04 pm

The Business Man is a registered user.

In response to Howard you said:

“The fact that I have great intuition and experience in the real estate market and rental market here in the Bay Area and am very successful doesn't qualify me to claim someone else made a mistake when I don't know their situation. I mentioned the tax consequences above as an example why people buy something.”

Anyone in a really competitive market would view their “peers” as “adversaries” Any normal market a person in competition with you, you would want to demonstrate your expertise, and make an example of their poor performance. In fact you are doing so by stating the following:

“All I have said is I wouldn't have bought it because it doesn't fit into my portfolio of properties. I Buy "A" class properties in million dollar neighborhoods dealing with $250,000/year+ tenants and won't deal with the problems associated with older high maintenance properties and lower income tenants.

Now I do still own about $25,000,000 in "B" class properties in the bay area but am phasing out of them as opportunities arise like getting out of Mountain View before Rent control and the RHC destroyed my investment.”

So, that simply means you ARE an expert in this market. Doesn’t it? All I do is use your own words that you stated to substantiate my observations. When you said:

““I UNDERSTAND THAT AND WOULD NEVER MYSELF HAD PAID WHAT THEY DID FOR THAT PROPERTY.”

When you publically state things like this here, you invite the public to rely on your observations. You said:

“What others do is what is right for them at the time they do it but not necessarily right later. That's business!”

That sounds like your establishing cooperation amongst competitors aren’t you? Any cooperation of “competitors” in any market simply is grounds for “anti-competitive” business practices. Are you sure you are in competition, or in fact working as a team?


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Posted by Howard
a resident of Old Mountain View
on Aug 8, 2018 at 1:21 pm

Howard is a registered user.

Businessman,

O.k., you got me and right about it!
As Rodney Dangerfield said in Back to school, "About what I have no idea".


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Posted by mvrenter
a resident of Shoreline West
on Aug 8, 2018 at 1:23 pm

mvrenter is a registered user.

I believe what's happening here is he won't comment on that specific aspect of THIS CASE, (i.e. agree) because even though it's a unique situation, (buying at an inflated, nonsustainable price, submitting improper evidence, getting denied,) it's in his interest to seem as unrelentingly anti-rent-control as possible. If you repeat it often enough, people will believe you.

Howard, what if they bought it after the measure was voted in? Then what? At what point is it unreasonable to actually expect (not just want or wish for) someone who isn't benefiting from the investment gains to underwrite the losses?


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Posted by Howard
a resident of Old Mountain View
on Aug 8, 2018 at 1:43 pm

Howard is a registered user.

mvrenter,

Now that is a different situation entirely looking at the current facts.
It is clear that this owner wants those rental increases and expected them.
If they purchased this property after knowing the property was under rent control, then I believe this was a "mistake" to purchase this property.
There ya go, Businessman..you got me to say the M word!


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 8, 2018 at 2:41 pm

The Business Man is a registered user.

In response to Howard you said:

“Now that is a different situation entirely looking at the current facts.

It is clear that this owner wants those rental increases and expected them.

If they purchased this property after knowing the property was under rent control, then I believe this was a "mistake" to purchase this property.

There ya go, Businessman..you got me to say the M word!”

I just remind you the “rent-control” forecast was made starting in January 2016, BEFORE THE PURCHASE OF THE PROPERTY. Found here:

The Mountain View Voice, January 8,2016, Mayor Showalter takes the gavel Stating:

“Mayor Showalter takes the gavel

New mayor's priorities: housing, housing and housing

LAST YEAR, AS A GROUNDSWELL OF TENANTS URGED THE CITY TO DO SOMETHING TO CURB RISING RENTS, SHOWALTER WAS ONE OF THE FEW COUNCIL MEMBERS WHO WANTED TO TAKE IMMEDIATE ACTION TO FREEZE RENTS WHILE A FORMAL RENT-CONTROL PROGRAM COULD BE STUDIED. SHE STILL BELIEVES SUCH A "COOLING-OFF PERIOD" WOULD HAVE PROVIDED THE TIME AND FLEXIBILITY NEEDED FOR THOUGHTFUL POLICIES.”

In effect, there was a CLEAR WARNING that rent control was considered as actions by the City of Mountain View an entire month before the purchase of the property. If the investor did their due diligence they would have known it. Granted it was not IN EFFECT before purchase, but clearly there was a warning shot across the bow.

And again, the error of purchasing a property from a real estate agent based on “future market value” is in itself simply bad judgement. The property real market value today can be argued to be worth about 50% of the selling price. The real estate agents did a great job in convincing these investors into buying the property on a “future” value. Does this make sense?


3 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 8, 2018 at 3:00 pm

Howard is a registered user.

The rent control warning is like the prediction that real estate is worth about 50% of the selling price prediction.

Personally, I didn't think rent control would get passed myself in Mountain View at that time because it is such a radical approach that has been proven to hurt the rental market.
I think real estate will go through cycles of increased and decreased valuation but will continue to climb in the Bay Area over the long run unless there is some kind of catastrophic disaster.

I even have plans for that disaster if it occurs by diversification of assets. As an example, I have enough in gold to live well off of if necessary.


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 8, 2018 at 3:25 pm

The Business Man is a registered user.

In response to Howard you said:

“The rent control warning is like the prediction that real estate is worth about 50% of the selling price prediction. “

But aren’t you the one that said you don’t do business where 60% of the residences live in apartments in the City/Town. Surely with the other news articles in the MV Voice about the complaints, and that the ballot initiative process was always an option as well, there was a CLEAR WARNING. And you know it. You said:

“Personally, I didn't think rent control would get passed myself in Mountain View at that time because it is such a radical approach that has been proven to hurt the rental market. “

Again, you know that in Cities with 60% voters rent apartments, this is not an IDLE threat to the business. Why are you now claiming you didn’t have that information? And why couldn’t anyone in that time also know that? You haven’t in effect excused anyone for not knowing what was going on here in Mountain View.

You and you’re peers in effect were well aware that is was a REALISTIC possibility, if not worse. I remember a CAA poll done, which was never published. IT was probably because the polls indicated Measure V was going to be adopted.


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Posted by Howard
a resident of Old Mountain View
on Aug 8, 2018 at 3:42 pm

Howard is a registered user.

Rent control didn't look likely at that time in fact Mountain View made an ordinance in 2015 which landlords had to follow.

On December 8, 2015, the City of Mountain View adopted a Right to Lease ordinance (Ordinance No. 10.15). The stated purpose is to offer stability and minimize displacement of tenants.

Surely you must know this. (One of your lines)


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 8, 2018 at 3:59 pm

The Business Man is a registered user.

In response to Howard you said:

“Rent control didn't look likely at that time in fact Mountain View made an ordinance in 2015 which landlords had to follow.

On December 8, 2015, the City of Mountain View adopted a Right to Lease ordinance (Ordinance No. 10.15). The stated purpose is to offer stability and minimize displacement of tenants.”

That “Ordinance” didn’t address stability and displacement at all if you read this:

“Summary of Law

Notice of Ordinance

Landlords are required to provide all tenants with a written notice summarizing their rights under the ordinance.

Landlords are required to give written notice of the ordinance to applicants with the lease application.

The notice must be in writing and may be provided electronically if the application and/or lease are processed electronically.

A copy of the required text in English, Spanish, Chinese and Russian is available at Web Link. The text must be in at least 14 point font.”

So what did this do for “stability and displacement”? Did it address the rent increases of Mountain View? No it didn’t. So it was always an open situation. It goes on to say:

“Requires a Written Offer of Available 6 Month Lease Term and One Year Lease Term

For new tenants after January 7, 2016, the landlord must provide the tenant with a written offer for (1) a six month lease term and (2) a one year lease term.

The tenant has the option of choosing a written lease and its minimum term (six months or one year).

The landlord and the tenant can agree to a mutually acceptable term that is different from the six month and one year term options.

Rental rates for tenants under a written term lease must be identified and may not exceed the month to month rental rate.”

So what did this do for “stability and displacement”? Did it address the rent increases of Mountain View? No it didn’t. So it was always an open situation. It goes on to say:

“Acceptance or Rejection of Written Offer MUST be in writing

The signing of a lease which has minimum terms of six months or one year is considered a written acceptance of the offer.

Rejection of the offer for six month and one year terms must also be in writing. Parties may then enter into a mutually acceptable agreement, oral or written, for a term of less than one year.

Renewal of Lease

When the lease term ends, the landlord and the tenant will decide whether or not to renew the lease. A landlord is not required to continue the tenancy, but if the tenancy will continue (i.e. neither landlord nor tenant give notice of termination of tenancy), the process above must again be followed.

Leases with a term of one year must be offered annually.

Leases with a term of six months must be offered semiannually.

Leases with a term longer than one year must be renewable at expiration of each lease period for a minimum of one year.

Landlord must offer annually a written lease with minimum terms of six months and one year to a tenant who rejected an initial offer of a lease with a term of at least one year but who has rented from landlord for at least one year.

To the extent not precluded by 1950.5 and 1950.6, the Landlord must not require a tenant renewing a lease to provide an additional security deposit or pay an application screening fee.”

So what did this do for “stability and displacement”? Did it address the rent increases of Mountain View? No it didn’t. So it was always an open situation.

The fact is you are just not addressing the fact that Mountain View was a target for getting rent control since 2015. That ordinance was not intended to address the increase of rents. Rent increases would still be arbitrary under the authority of the landlord and would simply be made after the state required notice. You aren’t making any sense bringing this up.


3 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 8, 2018 at 4:45 pm

Howard is a registered user.

That is your opinion but it was a law to address the concerns of tenants and landlords.

Nobody at that time felt rent control was a reasonable alternative except the tenants who own the votes. This new socialist millennial generation needs a lesson in history so I guess you'll get on.

You guys got it and will now deal with the consequences of your actions. I just didn't want to be on that ship when it goes down.


3 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 8, 2018 at 4:58 pm

Howard is a registered user.

Businessman,

We have 2 different beliefs about what's right for landlords.
Yours is I should work hard, invest 10's of millions and make $50,000/year.

Mine is I should double my money every 10 years and be worth $100 million in 10 years earning 6-8 million in income and have another 7-10 million in appreciation.

We will never agree but I am sure glad I'm not letting you or Mountain View decide my fate!


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 8, 2018 at 4:59 pm

The Business Man is a registered user.

In response to Howard you said:

“That is your opinion but it was a law to address the concerns of tenants and landlords.”

But what does that have to do with rent control? You said:

“Nobody at that time felt rent control was a reasonable alternative except the tenants who own the votes. This new socialist millennial generation needs a lesson in history so I guess you'll get on.”

You’re going to have to prove that “NOBODY” with the exception of tenants supported rent control. But the fact was that Measure V would not have passed without even homeowners voted for it. If you looked at the voting results map, there is proof that homeowners supported it too. Found here (Web Link) You said:

“You guys got it and will now deal with the consequences of your actions. I just didn't want to be on that ship when it goes down.”

All I can say is WOW.


6 people like this
Posted by omvmyr
a resident of Old Mountain View
on Aug 8, 2018 at 5:22 pm

omvmyr is a registered user.

“One of the sad signs of our times is that we have demonized those who produce, subsidized those who refuse to produce, and canonized those who complain.” Dr. Thomas Sowell

Sad days for Mountain View ahead. Even Berkely has a plan if Prop 10 is passed. Berkely plans to exempt newer properties from rent control for 20 years. They finally understand nothing brings private building to a halt like rent control.


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 8, 2018 at 5:50 pm

The Business Man is a registered user.

In response to omvmyr you said:

““One of the sad signs of our times is that we have demonized those who produce, subsidized those who refuse to produce, and canonized those who complain.” Dr. Thomas Sowell.”

Dr. Thomas Sowell is known to be adverse to anti-discrimination laws, he specifically states(Web Link_) :

“Rich or poor, most people agree that wealth disparities exist. Thomas Sowell discusses the origins and impacts of those wealth disparities in his new book, Discrimination and Disparities in this episode of Uncommon Knowledge.

Sowell explains his issues with the relatively new legal standard of “disparate impact” and how it disregards the American legal principle of “burden of proof.” Sowell and Robinson discuss how economic outcomes vary greatly across individuals and groups and that concepts like “disparate impact” fail to take into account these variations.

THEY CHAT ABOUT THE IMPACT OF NUCLEAR FAMILIES ON THE IQS OF INDIVIDUALS, as studies have not only shown that children raised by two parents tend to have higher levels of intelligence but ALSO THAT FIRST-BORN AND SINGLE CHILDREN HAVE EVEN HIGHER INTELLIGENCE LEVELS THAN THOSE OF YOUNGER SIBLINGS, indicating that THE TIME AND ATTENTION GIVEN BY PARENTS TO THEIR CHILDREN GREATLY IMPACTS THE CHILD’S FUTURE MORE THAN FACTORS LIKE RACE, ENVIRONMENT, OR GENETICS. Sowell talks about his book in which he wrote extensively about National Merit Scholarship finalists who more often than not were the first-born or only child in a family.

Sowell and Robinson go on to discuss historical instances of discrimination and how those instances affected economic and social issues within families, INCLUDING DISCRIMINATION CREATED BY HOUSING LAWS IN THE BAY AREA. They discuss unemployment rates, violence, the welfare state in regards to African American communities, and more.”

Given his expertise is a “Social Science” he is free to promote theories. But it appears that he wants to find any method to put the blame of discrimination or exploitation on the victim. His quote simply does not deal with issues on a case by case basis. He makes an assumption regarding the guilt of the victims.

He criticizes the concept of “disparate impact” discrimination basically saying only when one intends to discriminate can they be held accountable. Of course liability of discrimination can occur without intentions in the real world. But that kind of discrimination is remedied by less intense procedures. You said:

“Sad days for Mountain View ahead. Even Berkely has a plan if Prop 10 is passed. Berkely plans to exempt newer properties from rent control for 20 years. They finally understand nothing brings private building to a halt like rent control.”

Berkeley has put a ballot measure for a vote regarding that idea found here (Web Link)

So the city hasn’t planned anything. It is on the ballot for the voters to decide. Please be more careful regarding your information?


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Posted by Howard
a resident of Old Mountain View
on Aug 8, 2018 at 6:33 pm

Howard is a registered user.

So, Businessman,

Do you have a problem with the idea of a landlord making $10 million/year?


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 8, 2018 at 7:34 pm

The Business Man is a registered user.

In response to Howard you said:

“Do you have a problem with the idea of a landlord making $10 million/year?”

It depends.


2 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 8, 2018 at 7:43 pm

Howard is a registered user.

Businessman,

Could you explain on what that would be and please don't make me pull teeth here?


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 8, 2018 at 9:05 pm

The Business Man is a registered user.

In response to Howard you said:

“Could you explain on what that would be and please don't make me pull teeth here?”

As a graduate of San Jose State University College of Business with a B.S. in Business Administration Human Resources Management, I cannot answer that question regarding compensation analysis without at least 40 hours of work, and I would expect to be compensated since that require significant research individual to the profession and the circumstances.

A little history here, First this property was on the market for more than a year. The initial price asked for was $6M. Given that it sold for $5M, tends to indicate that the price was not based on any “Market Analytics” but simply using formulas to reflect the numbers the client was willing to accept. Second, this landlord went to court twice to try to get out of the purchase of the building. The case numbers are 2015-1-CV-288597 for Other Real Estate and 16CV291570 for Breach of Contract. Both cases were lost.

Say for example the property was purchased for $2.5 M instead then the mortgage could have been from (Web Link) $14,200/month and the taxes would be $1,655/month. Divide that by 11 units and the unit cost would be $1,444 per month. The current costs are $28,400/month and the taxes would be $3,340/month. Divide that by 11 units and the unit cost would be $2,888 per month.

It would appear that if the investor simply demanded that the purchase was going to be for $2.5M. the investor would have done the right thing. The investor appears to not have compared the property value for this building to others of “comparable units”. I would actually argue that this building is almost unique to Mountain View, so comparing would have been difficult. But it was necessary to choose wisely whether to purchase this building. It would also appear that on its face, this property could never provide a profit until all units would rent for at least $3,000./mth just to earn $13,200.

In order to rent for that much you need to provide the following for a one bedroom apartment at The Shadows Apartments, 750 N Shoreline Blvd, Mountain View, CA 94043, shadowsapartments.com (Web Link) :

Unit Features: Air conditioning, Ceiling fan, Dishwasher, Fireplace, Garbage disposal, Hardwood flooring, Heating: Gas, High-speed internet ready, Microwave oven, Patio/balcony, Refrigerator

And

Building Amenities: 24 Hour Maintenance, Assigned parking., Barbeque. Bicycle storage, Club house, Fitness center, Game room, Hot tub, Lawn, Night patrol, Online maintenance portal, Online rent payments, Onsite management, Playground, Sauna, Shared laundry, Storage available, Swimming pool, Volleyball court,

184 Centre Street has:

Unit Features: Garbage disposal, Heating: Gas, Patio/balcony, Refrigerator

And

Building Amenities: Garden, Assigned parking, Bicycle storage, Shared laundry, Storage available (3” by 12” by 6”)

So please explain to us how wise it was to purchase this property? Please explain to us the fact that the purchase price alone makes it impossible to rent the units at a comparable rent price? Given the requirement estimation shows that the building meets only 20% of the amenities of the price provided by a competitor at that price?


6 people like this
Posted by mike rose
a resident of another community
on Aug 8, 2018 at 9:05 pm

mike rose is a registered user.

Howard,
Is your plan to tire the businessman?
His posts are getting shorter and shorter.
The last one set the record, it was only 3 lines long!!!!!!
I think you did it.


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Posted by Howard
a resident of Old Mountain View
on Aug 8, 2018 at 9:58 pm

Howard is a registered user.

Businessman,

“Do you have a problem with the idea of a landlord making $10 million/year?”

"It depends."

"Could you explain on what that would be and please don't make me pull teeth here?"

Fill in answer here...>


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Posted by Howard
a resident of Old Mountain View
on Aug 8, 2018 at 10:57 pm

Howard is a registered user.

Once again, Businessman

Fill in answer here....>>>>>
V
V
V
V
V
V
V


4 people like this
Posted by LOL
a resident of Old Mountain View
on Aug 8, 2018 at 10:58 pm

LOL is a registered user.

Hey mike, if you're going to cry about people bullying you, you shouldn't try to bully others. Or is it only bad when people do it to you?


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 9, 2018 at 7:31 am

The Business Man is a registered user.

In response to Howard you said:

“Could you explain on what that would be and please don't make me pull teeth here?”

First, the question is off topic. As a graduate of San Jose State University College of Business with a B.S. in Business Administration Human Resources Management, I cannot answer that question regarding compensation analysis without at least 40 hours of work, and I would expect to be compensated since that require significant research individual to the profession and the circumstances.

A little history here, First this property was on the market for more than a year. The initial price asked for was $6M. Given that it sold for $5M, tends to indicate that the price was not based on any “Market Analytics” but simply using formulas to reflect the numbers the client was willing to accept. Second, this landlord went to court twice to try to get out of the purchase of the building. The case numbers are 2015-1-CV-288597 for Other Real Estate and 16CV291570 for Breach of Contract. Both cases were lost.

Say for example the property was purchased for $2.5 M instead then the mortgage could have been from (Web Link) $14,200/month and the taxes would be $1,655/month. Divide that by 11 units and the unit cost would be $1,444 per month. The current costs are $28,400/month and the taxes would be $3,340/month. Divide that by 11 units and the unit cost would be $2,888 per month.

It would appear that if the investor simply demanded that the purchase was going to be for $2.5M. the investor would have done the right thing. The investor appears to not have compared the property value for this building to others of “comparable units”. I would actually argue that this building is almost unique to Mountain View, so comparing would have been difficult. But it was necessary to choose wisely whether to purchase this building. It would also appear that on its face, this property could never provide a profit until all units would rent for at least $3,000./mth just to earn $13,200.

In order to rent for that much you need to provide the following for a one bedroom apartment at The Shadows Apartments, 750 N Shoreline Blvd, Mountain View, CA 94043, shadowsapartments.com (Web Link) :

Unit Features: Air conditioning, Ceiling fan, Dishwasher, Fireplace, Garbage disposal, Hardwood flooring, Heating: Gas, High-speed internet ready, Microwave oven, Patio/balcony, Refrigerator

And

Building Amenities: 24 Hour Maintenance, Assigned parking., Barbeque. Bicycle storage, Club house, Fitness center, Game room, Hot tub, Lawn, Night patrol, Online maintenance portal, Online rent payments, Onsite management, Playground, Sauna, Shared laundry, Storage available, Swimming pool, Volleyball court,

184 Centre Street has:

Unit Features: Garbage disposal, Heating: Gas, Patio/balcony, Refrigerator

And

Building Amenities: Garden, Assigned parking, Bicycle storage, Shared laundry, Storage available (3” by 12” by 6”)

So please explain to us how wise it was to purchase this property? Please explain to us the fact that the purchase price alone makes it impossible to rent the units at a comparable rent price? Given the requirement estimation shows that the building meets only 20% of the amenities of the price provided by a competitor at that price?


3 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 9, 2018 at 6:44 pm

Howard is a registered user.

Businessman,

I have asked you a simple question and you have not answered which speaks volumes to whomever is reading this post!

The fact is you do not want landlords to succeed in business and your movement is in effect a movement of lost cause in a Trump economy.

Landlords, this is your market, move your money and join us making great profits under the capitalist Country that we are outside Mountain View.


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 9, 2018 at 7:04 pm

The Business Man is a registered user.

In response to Howard you said:

“I have asked you a simple question and you have not answered which speaks volumes to whomever is reading this post!”

First, the question is off topic. As a graduate of San Jose State University College of Business with a B.S. in Business Administration Human Resources Management, I cannot answer that question regarding compensation analysis without at least 40 hours of work, and I would expect to be compensated since that require significant research individual to the profession and the circumstances. You said:

“The fact is you do not want landlords to succeed in business and your movement is in effect a movement of lost cause in a Trump economy. “

I gave you my answer. You just don’t like the fact that I understand how complicated this situation is. Do you have anything constructive on topic to contribute, please? You said:

“Landlords, this is your market, move your money and join us making great profits under the capitalist Country that we are outside Mountain View.”

Howard, the market does not belong to anyone. That speaks volumes that there is no negotiating anything with individuals like yourself. If you cannot win and the other loses in the process, it simply is not acceptable to you.


3 people like this
Posted by Howard
a resident of Old Mountain View
on Aug 9, 2018 at 7:15 pm

Howard is a registered user.

Landlords, move your money.
Business man is a man that is angry at your profits and is representative of the voters in Mountain View.


2 people like this
Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 9, 2018 at 7:36 pm

The Business Man is a registered user.

In response to Howard you said:

“Landlords, move your money.

Business man is a man that is angry at your profits and is representative of the voters in Mountain View.”

Just understand you are trying to say that one must perform the kind of work that would earn $5,000/hour based on a 2000 hour year. That level itself makes it difficult to find scientific methods to ascertain the work actions that can substantiate it. It only sounds to me like a lofty goal.

But there are so many things that can impact on this. I never said one cannot or should not earn that much. But the Apartment industry has significant issues that can restrain that kind of earnings. This can be the rationale for the real estate bubble that is starting to burst.

You refuse to answer my questions all the time. I asked you questions you don’t want anyone to see.


7 people like this
Posted by The Truth
a resident of North Whisman
on Aug 13, 2018 at 12:38 am

The Truth is a registered user.

“The Business Man” filed a frivolous lawsuit against this landlord seeking “triple damages”. He has no credibility in this matter as he has proven that he is no better than the landlords he criticizes and antagonizes. He is basically a wannabe landlord, financial circumstance and talent stand in his way.


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 13, 2018 at 10:15 am

The Business Man is a registered user.

In response to Mike Rose you said:

“The Business Man” filed a frivolous lawsuit against this landlord seeking “triple damages”.”

In a nutshell, after the case dismissal of the CAA challenge of the CSFRA inm April,2017, a letter of demand for refund of overpaid rent was issued April,2017. Not refund was provided, after 100 days a Small Claims case was filed in August, 2017. The case was illegally delayed, there is a record of it. After being at a hearing the RHC finally resolved to require refunds in September, 2017. But the fact that the demand was not complied with within 30 days of the demand, still left a legal question regarding the “treble damages”. The cost of filing and service was already paid, so there was no reason not to argue it. There was no record of a determination of it being “frivolous”. I simply state, you must provide proof that it was. You said:

“He has no credibility in this matter as he has proven that he is no better than the landlords he criticizes and antagonizes.”

I do not need credibility, my attorneys provided the evidence and response necessary to prove by the preponderance of evidence that the landlord was not able to establish grounds for a rent increase. The evidence was there. You said:

“He is basically a wannabe landlord, financial circumstance and talent stand in his way.”

No way do I want to be a landlord. It is not in my “skill set”. Do you have anything constructive to discuss?


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Posted by mvrenter
a resident of Shoreline West
on Aug 13, 2018 at 10:18 am

mvrenter is a registered user.

@the truth, Please elaborate! That does sound very interesting, can you provide all the details you have? Cite the case if possible, because we'd love to follow this case too! Is it a group suit or can each resident sue individually?


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Posted by mvrenter
a resident of Shoreline West
on Aug 13, 2018 at 10:39 am

mvrenter is a registered user.

Thanks for the details. That's not frivolous at all. Hope it resolves quickly, and you get the money.


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Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 13, 2018 at 11:08 am

The Business Man is a registered user.

mwrenter,

He was not held liable. He paid my refund in late September. I forgot to say this. But the fact was he had 30 days after my demand letter to refund the money, and he didn't. That is why I filed the lawsuit. Here is the case number 17SC070550.

He got lucky that he paid before the trial. That's all.


2 people like this
Posted by mike rose
a resident of another community
on Aug 13, 2018 at 5:33 pm

mike rose is a registered user.

TBM,
On what basis did you assume that I am the same person as The Truth?
Contact the moderator, confirm that I did not made this post, and apologize at once for qouting someone else's words as mine.


4 people like this
Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 13, 2018 at 6:26 pm

The Business Man is a registered user.

In response to mike rose you said:

“On what basis did you assume that I am the same person as The Truth?”

PLEASE accept my most sincere apologies, I am very bad in doing that. I really hope you will accept it. You said:

“Contact the moderator, confirm that I did not made this post, and apologize at once for qouting someone else's words as mine.”

I will do so an ask it be pulled immediately.


Like this comment
Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Aug 13, 2018 at 6:27 pm

The Business Man is a registered user.

In response to The Truth you said:

“The Business Man” filed a frivolous lawsuit against this landlord seeking “triple damages”.”

In a nutshell, after the case dismissal of the CAA challenge of the CSFRA inm April,2017, a letter of demand for refund of overpaid rent was issued April,2017. Not refund was provided, after 100 days a Small Claims case was filed in August, 2017. The case was illegally delayed, there is a record of it. After being at a hearing the RHC finally resolved to require refunds in September, 2017. But the fact that the demand was not complied with within 30 days of the demand, still left a legal question regarding the “treble damages”. The cost of filing and service was already paid, so there was no reason not to argue it. There was no record of a determination of it being “frivolous”. I simply state, you must provide proof that it was. You said:

“He has no credibility in this matter as he has proven that he is no better than the landlords he criticizes and antagonizes.”

I do not need credibility, my attorneys provided the evidence and response necessary to prove by the preponderance of evidence that the landlord was not able to establish grounds for a rent increase. The evidence was there. You said:

“He is basically a wannabe landlord, financial circumstance and talent stand in his way.”

No way do I want to be a landlord. It is not in my “skill set”. Do you have anything constructive to discuss?


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