Ordinance No. 2026-001 (Rent Stabilization)

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the decision regardless of whether a Party seeks judicial review pursuant to Code of Civil Procedure Sections 1094.5 and 1094.6 4-46-130 Fair Return Petition Landlords who believe they are not receiving a constitutionally required Fair Return on their property may submit a Fair Return Rent Increase Petition to the Program Administrator to request an increase in the Maximum Allowable Rent beyond that which is otherwise permitted by this Chapter. A.Standard for approving a Fair Return Petition. 1.The Landlord has the right to obtain a net operating income equal to the base year net operating income adjusted by the percentage change in the CPI since the base year. It shall be presumed that this standard provides a Fair Return. The current year CPI shall be the annual CPI for the calendar year preceding the date the Fair Return Petition is filed. The Hearing Officer shall decide whether the Landlord will receive a Fair Return under this standard. In evaluating whether the Landlord is receiving a Fair Return on their investment, the Hearing Officer may consider other relevant factors without limitation. 2.Nothing in this section shall be interpreted to authorize any lawful Rent increase in any 12-month period for a covered Rental Unit more than the amount authorized by State law, as may be amended. B.Base year net operating income. The base year and current year net operating income shall be determined by subtracting the actual operating expenses for the relevant year from the gross income realized during the relevant year. The Landlord shall provide evidence of gross income, operating expenses, and the determination of net operating income for the base year and current year. All figures and documents shall be certified by the Landlord under penalty of perjury as true and correct and with respect to expenses and income used to determine gross income. When ownership of a Rental Unit subject to this Chapter is sold, the new Landlord is expected to obtain relevant records for determining the Base Year net operating income from the prior Landlord. C.Rebuttal of base year net operating income presumption. Any party to the hearing may present evidence to rebut the presumption of Fair Return based upon the base year net operating income, and the Hearing Officer may adjust said net operating income accordingly if at least one of the following findings is made: 1.The Landlord’s operating expenses in the base year were unusually high or low in comparison to other years. In such instances, adjustment may be made in calculating operating expenses so the base year operating expenses reflect average expenses for the property over a reasonable period of time. The Hearing Officer shall consider the following factors in making this finding: a.Extraordinary amounts were expended for necessary maintenance and repairs; Exhibit A Ordinance No. 2026-001 Page 8