El Dorado Palm Springs Ltd v. City of Palm Springs

In El Dorado Palm Springs Ltd. v. City of Palm Springs (2002) 96 Cal.App.4th 1153, the owner of a mobilehome park applied for a subdivision map to facilitate the conversion of the park to resident-owned condominiums. The city council approved the application, but imposed three conditions: (1) maintenance of rent control for residents until sale of a certain percentage of the lots was completed; (2) determination of the lot sale price by an appraisal firm at the owner's expense; (3) financial assistance to residents for the purchase of lots. (El Dorado, supra, 96 Cal.App.4th at p. 1157.) The owner filed a petition for writ of mandate to compel the city to approve the application without conditions, but the trial court denied the petition. (Ibid.) On appeal, this court reversed, holding that the city council had exceeded its authority under section 66427.5. The Court held that "the City Council, in acting on El Dorado's application for approval of the tentative subdivision map, only had the power to determine if El Dorado had complied with the requirements of former section 66427.5, subd. (d), now subd. (e))" and "therefore had no power to impose the three further mitigating conditions on El Dorado." (El Dorado, supra, at pp. 1163-1164.) The Court further stated that, "although the lack of such authority may be a legislative oversight, and although it might be desirable for the Legislature to broaden the City's authority, it has not done so." (Id. at p. 1165.) The Court held that section 66427.5, former subdivision (d), by its terms, limited the scope of the hearing to the issue of compliance with the section. (El Dorado, supra, 96 Cal.App.4th at p. 1163-1164, 1166.) In amending section 66427.5, the Legislature left the language of former subdivision (d) unchanged but redesignated the first two sentences of former subdivision (d) as new subdivision (e). By failing to amend the language of former subdivision (d), the Legislature apparently agreed with the interpretation of that language in El Dorado that the scope of the local entity's review is to determine compliance with the requirements of the section. The court held that the 1995 amendments strictly limited the power of cities, counties and local agencies to impose conditions during the subdivision map approval process . The City of Palm Springs, purporting to rely on the language in section 66427.4 permitting local authorities to "enact more stringent measures," sought to impose three conditions on a mobilehome park owner seeking conversion: (1) that the sale price for the lots be determined by a specified appraisal firm; (2) that the owner provide financial assistance to residents of the park to facilitate their purchase of lots; and (3) that local rent control provisions continue to apply until a specified number of lots were sold. (96 Cal.App.4th at pp. 1161, fn. 5, 1163.) The court concluded that Palm Springs could not rely on section 66427.4 to justify its imposition of the conditions because, by its terms, that statute applied only when a mobilehome park was converted to uses other than as a mobilehome park. (96 Cal.App.4th at pp. 1161-1162.) Nor, the court held, could Palm Springs rely on section 66427.5--which after 1995 applied to all mobilehome park conversions to resident ownership, whether initiated by the residents or the owner--to support imposition of the proposed conditions. The court concluded that the language of the subdivision limiting the scope of the hearing before the local entity or agency to "the issue of compliance with this section" meant that "the City Council, in acting on the owner's application for approval of the tentative subdivision map, only had the power to determine if the owner had complied with the requirements of section 66427.5." (96 Cal.App.4th at pp. 1163-1164.) Examining the legislative history of the 1995 amendments, the court further concluded that by including this language, the Legislature intended that no entity or agency be permitted to enact more stringent measures pertaining to the conversion of mobilehome parks to residential ownership than those specified in the statute. (96 Cal.App.4th at pp. 1170-1171.) Palm Springs, joined by the residents' homeowners association, argued that owners of mobilehome parks would use section 66427.5 to circumvent local rent control provisions by obtaining a subdivision map for a conversion and thereafter continuing to rent out the spaces, selling no lots or only a few lots. While sympathetic to the city's concerns, the court concluded that the language of section 66427.5 limiting the scope of the hearing "to the issue of compliance with this section" deprived Palm Springs of authority to "impose additional conditions to prevent sham or fraudulent transactions at the time it approves the tentative or parcel map." (El Dorado, supra, 96 Cal.App.4th at p. 1165.) Acknowledging the possibility of "legislative oversight" and recognizing that "it might be desirable for the Legislature to broaden the City's authority," the court declared the matter "a legislative issue, not a legal one." (Ibid.) The trial court ruling was reversed and remanded with directions requiring the Palm Springs City Council "to promptly determine the sole issue ... whether the owner's application for approval of a tentative parcel map complied with section 66427.5" and "if so, to approve the application." (96 Cal.App.4th at p. 1182.)