§ 540-2.1204. Requirements.

(a)

Criteria. Costs of capital improvements may be approved where the following criteria are met:

(1)

The capital improvements were completed or are to be completed on or after September 20, 1994;

(2)

The park owner has not yet increased the rent or rents to reflect the cost of the work;

(3)

The park owner has not been or will not be compensated for the work by insurance proceeds;

(4)

The park owner seeks a rent increase pursuant to Section 540-2.408 of this chapter no later than twenty-four months after the work has been completed;

(5)

The costs are capital improvements as opposed to routine repair;

(6)

The costs of the capital improvement are not associated with the purchase or installation of meters or other similar devices used for the separate billing of utilities;

(7)

The individual mobilehome owner's pro rata share of the capital improvement costs, or the cumulative capital improvement costs assessed if one or more capital improvement rent increases have been imposed and are still being charged, will not exceed five percent of the then-existing base rent;

(8)

The capital improvement is not coin-operated nor one for which a "use fee" or other charge is imposed on affected mobilehome owners for their use.

(b)

Cost Allocation. The cost of capital improvements shall be allocated on a pro-rata basis to affected mobilehome owners.

(c)

Declaration Re: Tax Treatment of Capital Improvement. At the time the park owner notices a capital improvement rent increase, the park owner shall submit to the rent review officer a declaration under penalty of perjury stating that the park owner has, or will, treat the capital improvement as a capital improvement for federal income tax purposes. Once each year during the amortization period for the capital improvement the rent review officer may request the park owner to provide an updated declaration stating under penalty of perjury that the park owner treated the capital improvement as a capital improvement or federal income tax purposes on the park owner's most recent tax return. In the event the park owner does not provide the rent review officer with such a declaration within sixty days of the rent review officer's request, the rent review officer may appoint a hearing officer to conduct hearings in order to recalculate the amount of the capital improvement rent increase. The hearing and recalculation shall proceed on the presumption that the park owner received a tax deduction for all of the previously nonamortized portion of the capital improvement expenditure during the year immediately following the last year for which the park owner submitted a declaration stating that he was amortizing the capital improvement in accordance with federal law. The sole purpose of the hearing shall be to adjust the amount of the capital improvement rent increase to disallow any excess income the park owner may receive by expensing all of the previously nonamortized portion of the capital improvement in the year immediately following the park owner's most recent declaration on the subject, rather than continuing to amortize the capital improvement. The park owner shall not be required to submit such a declaration and no such recalculation shall occur if federal law has been changed so that the capital improvement may no longer be amortized, or if the park is sold, in which case the new owner shall not be able to amortize any capital improvement expenditure made by the previous owner.

(Ord. 95-31, § 2).