Title: Cacho v. Boudreau

State: california

Issuer: California Supreme Court

Document:

1 
Filed 1/11/07 
 
 
 
IN THE SUPREME COURT OF CALIFORNIA 
 
 
 
LUIS J. CACHO et al., 
) 
 
 
) 
 
Plaintiffs and Appellants, 
) 
 
 
) 
S133378 
 
v. 
) 
 
 
) 
Ct.App. 4/1 D043396 
LOUIS J. BOUDREAU et al., 
) 
 
 
) 
San Diego County 
 
Defendants and Respondents. ) 
Super. Ct. No. GIS 007670 
___________________________________ ) 
 
The state Mobilehome Residency Law (Civ. Code, § 798 et seq.)1 regulates 
relations between the owners and the residents of mobilehome parks.  Three of its 
provisions are at issue here.  The first provision states:  “A homeowner shall not 
be charged a fee for other than rent, utilities, and incidental reasonable charges for 
services actually rendered.”  (§ 798.31.)  Under the second provision, which 
applies only in parks subject to local rent control laws, a local agency that 
administers a rent control law must allow a park owner to separately charge park 
residents for certain government-imposed fees, assessments, and other charges 
(§ 798.49, subd. (a)), but this provision expressly does not apply to property taxes 
(§ 798.49, subd. (d)(4)).  Under the third provision, which applies when a park 
resident is the prevailing party in a civil action to enforce rights granted by the 
Mobilehome Residency Law, the trial court is vested with discretion to impose on 
                                              
1  
Unless otherwise stated, all further statutory references are to the Civil 
Code. 
 
2 
the park owner a civil penalty not exceeding $2,000 for each “willful violation” of 
that law.  (§ 798.86.) 
We granted review here to address these issues:  Does the state 
Mobilehome Residency Law preempt a local rent control ordinance that allows a 
mobilehome park owner to separately charge park residents for property taxes 
imposed on the land on which the park is situated?  If a park owner, relying on 
such an ordinance and the assurances of local officials charged with administering 
local law, separately charges park residents for property taxes, and the ordinance is 
thereafter held to be preempted, has the owner committed a “willful” violation of 
the Mobilehome Residency Law so as to justify imposition of civil penalties?  If 
so, does the imposition of civil penalties violate the park owner’s constitutional 
right to due process of law? 
We conclude that the state Mobilehome Residency Law does not preempt 
local rent control ordinances insofar as they allow mobilehome park owners to 
separately charge park residents for property taxes imposed on park land.  This 
conclusion renders the other two issues moot, and we do not address them. 
I.  FACTS AND PROCEDURAL BACKGROUND 
Luis J. Cacho and three of his children (Luis A. Cacho, Daniel Cacho, and 
Elizabeth Cacho) own a 129-space mobilehome park known as Don Luis Estates.  
The park is located in the City of Chula Vista (in San Diego County), which has a 
rent control ordinance regulating the space rent that mobilehome park owners like 
the Cachos may charge the residents in their mobilehome parks.  (Chula Vista 
Mun. Code, tit. 9, ch. 9.50.) 
Until 1994, Luis J. Cacho’s mother had also been a part owner of Don Luis 
Estates, but she died during that year.  Because of the change in ownership 
resulting from her death, the county assessor reassessed the mobilehome park 
property, and the property taxes increased by $18,676.57. 
 
3 
At that time, Chula Vista’s rent control ordinance defined “space rent” as 
“the consideration . . . demanded or received in connection with the use and 
occupancy of the mobilehome space . . . exclusive of . . . allowable pass-throughs 
. . . .”  (Chula Vista Mun. Code, tit. 9, ch. 9.50, former § 9.50.030, subd. (A), 
italics added.)  One of the pass-throughs that the ordinance then allowed, and 
excluded from the definition of “space rent,” was “governmental assessments such 
as real property taxes . . . .”  (Id., former § 9.50.030, subd. (H).)  The ordinance 
also listed “[p]roperty or other taxes” as one component of the owner expense 
factor that the mobilehome rent review commission was to consider in fixing 
space rent through the hearing process.  (Id., former § 9.50.073, subd. (A)(1)(a).) 
In April 1998, the Cachos consulted Juan Arroyo, a senior official with the 
Housing Division of the Chula Vista Community Development Department, to 
determine whether they could “pass through” their property tax increase to the 
park residents without following the administrative procedure required to obtain a 
space rent increase.  In a letter dated October 26, 1998, Arroyo told them that the 
proposed pass-through of the property tax increase would not violate Chula 
Vista’s rent control ordinance.  Although he acknowledged that the state 
Mobilehome Residency Law, in section 798.49, “contains language which could 
preclude the automatic pass-through of increased property taxes as a separately 
stated amount,” he asserted that “where a City’s rent control ordinance specifically 
allows the pass-through of increased property taxes, such pass-through does not 
violate the State Law.”  Arroyo added this caution:  “As we have stated in past 
discussions, the City Attorney cannot be your legal counsel.  Our conclusions are 
for the benefit of the City.  You should consult with your own attorney regarding 
the legal interpretation of Section 798.49.”  In the letter, Arroyo also requested 
that the pass-through “not be included in the space rent” and instead that it be 
 
4 
“billed as a separate item to avoid confusion and to ensure that such pass-through 
is not included in any calculation of the increase in the rent.” 
The leases for the rental spaces contained a provision stating that the rent 
could be changed upon 90 days’ notice under the state Mobilehome Residency 
Law and that any rental increase would be governed by the City of Chula Vista.  
In November 1998, to implement the property tax pass-through, the Cachos sent 
the residents a 90-day notice of a rental increase in the amount of $12.31 per 
month per space.  Thereafter, the Cachos began including this amount as part of 
the “monthly rent” specified in lease agreements for park spaces and in the 
monthly rental invoices sent to park residents.2  The Cachos increased the pass-
through amount to $12.56 in 2000 and to $12.81 in 2001.  On the invoices, the 
amount was variously listed as “rent tax,” “rent adj,” “adj,” “other,” and 
“CVMC9.50.030H.” 
In 2001, some of the park residents filed individual small claims actions 
against the Cachos alleging that the property tax pass-through was invalid because 
it violated the state Mobilehome Residency Law.  In September 2001, the Cachos 
filed a complaint for declaratory relief in superior court, naming as defendants the 
same park residents who had brought the small claims actions.  Those residents 
dismissed their small claims actions and instead cross-complained against the 
Cachos, seeking injunctive and declaratory relief, damages, statutory penalties, 
and attorney fees.  In April 2002, in overruling the Cachos’ demurrer to the 
residents’ cross-complaint, the superior court issued an interlocutory ruling that 
                                              
2  
In leases for the calendar year 1999, and again for the year 2001, the 
monthly rent was broken down into two components, one of which was the 
property tax pass-through.  In leases for the year 2000, the monthly rent was stated 
as a single amount, but that amount included the pass-through. 
 
5 
the pass-through provisions of Chula Vista’s rent control ordinance, which 
allowed a property tax charge that was separate from and in addition to space rent, 
were preempted by sections 798.31 and 798.49. 
While this litigation was proceeding, the Cachos applied for an increase in 
space rent as a substitute for the disputed property tax pass-through.  In May 2002, 
the Chula Vista Mobilehome Rent Review Commission approved the Cachos’ 
request for a rent increase to compensate for the property tax increase, at the same 
time directing that the Cachos “should no longer bill residents for this increase in 
property tax.”  By this means, the Cachos continued to obtain reimbursement for 
the added expense caused by the property tax increase, albeit in the form of a 
discretionary rent increase rather than a pass-through of the property taxes as a 
separately stated item on the monthly rent invoices.  The residents have apparently 
not challenged the validity of that rent increase.3 
The litigation proceeded.  In March 2003, the parties filed cross motions for 
summary judgment or summary adjudication.  The superior court granted 
summary judgment in favor of the residents, and it awarded damages of $10,067, 
civil penalties of $23,000, attorney fees of $87,321, and litigation costs of $9,230.  
The court treated the Cachos’ reliance on the city’s advice about the legality of the 
pass-through as a mitigating factor in fixing the amount of the statutory penalty.  
The judgment was filed in February 2004, and the Cachos appealed. 
                                              
3  
Around the same time, in July 2002, the Chula Vista City Council repealed 
the pass-through provisions of the city’s rent control ordinance, instead amending 
the ordinance’s definition of “rent” to exclude “any separate charge for those fees, 
assessments or costs which may be charged to mobilehome residents pursuant to 
the California Civil Code.”  (Chula Vista Mun. Code, tit. 9, ch. 9.50, § 9.50.010, 
subd. (G).)  
 
6 
The Court of Appeal affirmed the judgment.  It agreed with the superior 
court that the Chula Vista ordinance that formerly had permitted mobilehome park 
owners to pass through property taxes to park residents conflicted directly with, 
and was preempted by, the state Mobilehome Residency Law, and that the 
Cachos’ violation of that state law was willful.  It also concluded that the superior 
court had not abused its discretion in awarding civil penalties in the amount of 
$23,000. 
II.  PREEMPTION 
“A county or city may make and enforce within its limits all local, police, 
sanitary, and other ordinances and regulations not in conflict with general laws.”  
(Cal. Const., art. XI, § 7.)  A local law conflicts with state law, and is therefore 
preempted and invalid, if it “duplicates [citations], contradicts [citation], or enters 
an area fully occupied by general law, either expressly or by legislative 
implication [citations].”  (Lancaster v. Municipal Court (1972) 6 Cal.3d 805, 807-
808; accord, Great Western Shows, Inc. v. County of Los Angeles (2002) 27 
Cal.4th 853, 860; Sherwin-Williams Co. v. City of Los Angeles (1993) 4 Cal.4th 
893, 897.) 
State law, in section 798.31, prohibits mobilehome park owners from 
imposing on their residents any fee “for other than rent, utilities, and incidental 
reasonable charges for services actually rendered.”  A charge for real property 
taxes is neither a charge for utilities nor a charge for services actually rendered by 
the mobilehome park owner to the park residents.  Thus, under state law, a 
mobilehome park owner may not charge residents a fee for real property taxes 
unless that charge constitutes “rent” within the meaning of that term in section 
798.31.  Under Chula Vista’s rent control ordinance during the time at issue here, 
however, real property taxes were an allowable separate charge, or pass-through, 
that was excluded from the ordinance’s definition of “space rent.”  Did this 
 
7 
constitute an actual and irreconcilable conflict between state and local law, as the 
Court of Appeal concluded, or was it just an immaterial difference in terminology, 
as the Cachos argue? 
To answer that question, we begin by inquiring into the purpose of the state 
law. 
The state Mobilehome Residency Law does not define the term “rent.”  In 
the absence of a statutory definition, we assume that the Legislature intended that 
“rent” would have its ordinary meaning, which is compensation for the use of land 
(Shintaffer v. Bank of Italy etc. Assn.. (1932) 216 Cal. 243, 246) and the means by 
which landlords make a profit on their property (Action Apartment Assn. v. Santa 
Monica Rent Control Bd. (2001) 94 Cal.App.4th 587, 598).  In a mobilehome 
park, rent is compensation not only for the use of the resident’s individual space 
but also for use of common areas.  (Robinson v. City of Yucaipa (1994) 28 
Cal.App.4th 1506, 1513 (Robinson).)  The terms of the lease for the rented space 
will normally determine the amount of the agreed-upon rent. 
In Dills v. Redwoods Associates, Ltd. (1994) 28 Cal.App.4th 888 (Dills), 
the Court of Appeal traced the history of section 798.31:  “When first enacted in 
1971, the predecessor to section 798.31 simply provided, ‘The owner of a 
mobilehome park . . . shall not charge any fees to tenants other than charges for 
rent, utilities, or incidental reasonable service charges.’  (Stats. 1971, ch. 1143, 
§ 2, p. 2165.)  In 1975, the Legislature amended the statute, prescribing that any 
service charges be for services actually rendered, that the rental agreement 
disclose any services (and the charges associated with them), and that no services 
and fees could be assessed against current tenants without notice of 60 days.  The 
Legislature also added a proscription against service charges for pets, short-term 
guests, per-person charges (if the persons are immediate family members), and 
enforcement of park rules.  (Stats. 1975, ch. 613, § 1, pp. 1342-1343; id., ch. 1092, 
 
8 
§ 2, pp. 2659-2660.)  In 1978, the Legislature transferred the substance of the 
former statute to current section 789.15, subdivision (f)—governing the contents 
of rental agreements—and sections 798.31 through 798.36 (the article concerning 
fees and charges) ‘without substantive change.’  (4 Stats. 1978 (Reg. Sess.) 
Summary Dig., p. 280.)”  (Dills, supra, at pp. 892-893; see also People v. Mel 
Mack Co. (1975) 53 Cal.App.3d 621, 626.) 
The Dills Court of Appeal drew this conclusion:  “As this progression 
demonstrates, the focus of the Legislature was the prevention of a proliferation of 
service charges above and beyond rent or utilities.  The unscrupulous park owner 
could lure mobilehome owners with a competitive rent, then ‘nickle-and-dime’ 
this relatively captive market with an array of unanticipated charges which when 
aggregated could render the tenant unable to afford to continue the tenancy.”  
(Dills, supra, 28 Cal.App.4th at p. 893, fn. omitted.)  What the legislative history 
does not show is any concern about whether park owners structure space rent as a 
lump sum, rather than breaking it down into separate components, or any concern 
about park owners passing on to park residents the expense of property taxes. 
Despite its various limitations on allowable fees, the state Mobilehome 
Residency Law does not restrict the amount of rent that a mobilehome park owner 
may charge park residents; it is not a rent control law.  (Griffith v. County of Santa 
Cruz (2000) 79 Cal.App.4th 1318, 1323 (Griffith); Vance v. Villa Park 
Mobilehome Estates (1995) 36 Cal.App.4th 698, 702, 707 (Vance).) 
In the absence of a state law imposing rent control in mobilehome parks, 
many California cities, including Chula Vista, have enacted mobilehome park rent 
control ordinances.  (See Galland v. City of Clovis (2001) 24 Cal.4th 1003, 1010.)  
The state Mobilehome Residency Law does not prohibit local governments from 
imposing rent control in mobilehome parks.  (Griffith, supra, 79 Cal.App.4th at 
p. 1323; Robinson, supra, 28 Cal.App.4th at p. 1513.)  To be constitutionally 
 
9 
valid, however, a rent control law must permit the landlord to earn a fair return on 
investment and thereby not be confiscatory.  (Galland v. City of Clovis, supra, at 
p. 1021; see also Santa Monica Beach, Ltd. v. Superior Court (1999) 19 Cal.4th 
952, 962-964.)  Typically, rent control laws contain a list of factors for the 
regulator to consider in setting the maximum allowable rent, including typical 
business costs.  One of the typical business costs commonly included as a 
consideration in fixing allowable rents is property taxes.  (See Galland v. City of 
Clovis, supra, at p. 1010; Carson Mobilehome Park Owners’ Assn. v. City of 
Carson (1983) 35 Cal.3d 184, 188, fn. 2, & 193-194.)  In this sense, property taxes 
have commonly been treated as a component of rent. 
To determine the proper meaning of the term “rent” in section 798.31 
(which prohibits mobilehome park owners from imposing on their residents any 
fee “for other than rent, utilities, and incidental reasonable charges for services 
actually rendered”), and whether that section prohibits pass-throughs of business 
expenses like property taxes, it is helpful to consider that section in relation to 
another provision of the state Mobilehome Residency Law at issue here, section 
798.49.  Two subdivisions of section 798.49—subdivisions (a) and (d)—are 
relevant here. 
Subdivision (a) of section 798.49 states:  “Except as provided in 
subdivision (d), the local agency of any city, including a charter city, county, or 
city and county, which administers an ordinance, rule, regulation, or initiative 
measure that establishes a maximum amount that management may charge a 
tenant for rent shall permit the management to separately charge a homeowner for 
any of the following:  [¶]  (1) The amount of any fee, assessment or other charge 
first imposed by a city, including a charter city, a county, a city and county, the 
state, or the federal government on or after January 1, 1995, upon the space rented 
by the homeowner.  [¶]  (2) The amount of any increase on or after January 1, 
 
10 
1995, in an existing fee, assessment or other charge imposed by any governmental 
entity upon the space rented by the homeowner.  [¶]  (3) The amount of any fee, 
assessment or other charge upon the space first imposed or increased on or after 
January 1, 1993, pursuant to any state or locally mandated program relating to 
housing contained in the Health and Safety Code.”  Thus, subdivision (a) 
mandates a pass-through of certain mobilehome park business expenses—the 
specified government fees and assessments—to the park residents. 
The government fees and assessments listed in subdivision (a) of section 
798.49 do not include property taxes.  To prevent any possible confusion on this 
point, subdivision (d) of section 798.49 states that the section “shall not apply” to 
property taxes.  That means only that local rent control agencies are not required 
to allow park owners to separately charge park residents for property taxes; it does 
not mean that local rent control agencies are prohibited from doing so. 
Although the pass-through mandated by subdivision (a) of section 798.49 
does not include property taxes, it is nonetheless significant in determining the 
meaning of the term “rent” in section 798.31, and, more specifically whether rent 
includes otherwise lawful pass-throughs of business expenses like property taxes. 
On its face, section 798.49, subdivision (a), appears inconsistent with 
section 798.31.  Under section 798.31, a mobilehome park owner may not charge 
the park residents for anything other than rent, utilities, or “incidental reasonable 
charges for services actually rendered,” but under section 798.49, subdivision (a), 
a local rent control agency must allow a mobilehome park owner to “separately 
charge” the residents for new or increased governmental fees or assessments 
imposed on the rented spaces.  Under accepted rules of statutory construction, we 
must harmonize these provisions, if possible, giving full effect to each.  (Mejia v. 
Reed (2003) 31 Cal.4th 657, 663; DeVita v. County of Napa (1995) 9 Cal.4th 763, 
778-779.) 
 
11 
We may resolve the inconsistency between these statutory provisions in 
either of two ways.  Section 798.49, subdivision (a), might be construed as 
establishing an implied exception to section 798.31.  Under that construction, the 
charges that a mobilehome park owner is permitted to impose on park residents 
fall into four categories:  (1) rent, (2) utilities, (3) “incidental reasonable charges 
for services actually rendered,” and (4) the governmental fees and assessments 
listed in subdivision (a) of section 798.49.  There is a serious objection to that 
construction, however, because under general rules of statutory interpretation 
“amendments by implication” and “exceptions by implication” are generally 
disfavored and are accepted only in the absence of another rational way to 
harmonize the statutory provisions.  (Peatros v. Bank of America (2000) 22 
Cal.4th 147, 167-168 (plur. opn. of Mosk, J.); Lesher Communications, Inc. v. 
City of Walnut Creek (1990) 52 Cal.3d 531, 540-541; In re Sean W. (2005) 127 
Cal.App.4th 1177, 1187.) 
As previously mentioned, there is another way to reconcile the two 
provisions.  Unlike the construction just mentioned, this interpretation does not 
treat subdivision (a) of section 798.49 as establishing an implied exception to 
section 798.31.  Rather, the separate charges for governmental assessments and 
fees allowed under subdivision (a) of section 798.49 may be included as a 
component of rent within the meaning of that term in section 798.31.  Under this 
construction, the charges that a mobilehome park owner is permitted to impose on 
park residents are limited to three categories:  (1) rent (which may include separate 
charges for governmental fees and assessments listed in subdivision (a) of section 
798.49), (2) utilities, and (3) “incidental reasonable charges for services actually 
rendered.”  Because it fully harmonizes the two provisions, this construction is 
favored under the rules of statutory construction.  To satisfy ourselves that it is not 
 
12 
inconsistent with legislative intent, we consider the legislative history of section 
798.49. 
Enacted in 1992 as Senate Bill No. 1365 (Stats. 1992, ch. 338, § 3, 
pp. 1306-1307), section 798.49 was proposed by the Western Mobilehome 
Association (WMA).  A legislative committee analysis summarized the argument 
in favor of the legislation in these words:  “WMA asserts that several rent control 
ordinances in California contain provisions which place an unfair burden on 
mobilehome park owners.  One of the most onerous requirements is the imposition 
of additional government mandated costs without the ability to offset or pass 
through those new costs in rent control jurisdictions.  In a number of local 
jurisdictions, the local ordinance provides a set formula for the maximum 
permissible yearly rent increase.  Some local ordinances, however, do not allow 
any additional offset or price increase for added costs that may be imposed by a 
state or local mandate, e.g., new fees for local program.  SB 1365 would enable 
the park owner to separately bill and charge the park tenant for any new or 
increased fees imposed upon the park space by the local government or by a state 
or locally mandated program relating to housing health and safety standards.”  
(Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of Sen. Bill 
No. 1365 (1991-1992 Reg. Sess.) as amended June 25, 1992, pp. 2-3.)  The same 
legislative committee analysis gives this explanation of the legislation’s purpose:  
“The purpose of this bill is to enable mobilehome park owners to pass-through the 
costs of any new government fee or program to the park tenants in rent control 
jurisdictions.”  (Id. at p. 2.) 
Thus, the aim of the legislation was to enable park owners to pass through 
to park residents the costs of new or increased fees and assessments imposed on 
the rented spaces.  In the absence of local rent control, the park owners would 
accomplish this through a rent increase, but some local rent control agencies did 
 
13 
not allow rent adjustments for this purpose, with the result that park owners had to 
bear this “unfair burden.”  To prevent this perceived inequity, section 798.49 
mandates that local rent control agencies allow park owners to separately bill and 
charge the tenants for the new or increased fees.  Although the separate charge is 
thereby exempted from the restrictions on rent increases in rent control 
jurisdictions, it may be considered “rent” within the meaning of section 798.31.  
Nothing in section 798.49 prohibits park owners from structuring their leases for 
park spaces to including the separate charge as a component of rent.  The separate 
charge is compensation for the use of the rented space and common areas of the 
park, and thus within the common definition of “rent.”  Because nothing other 
than the renting of the space is required to trigger the charge, it is unlike the 
service charges for pets and short-term guests that the Legislature has expressly 
prohibited.  Moreover, the government fees and assessments passed through to the 
tenants are a category of business expense that owners of mobilehome parks and 
other rental property have traditionally recovered from their tenants through the 
amount charged as rent. 
With this understanding in mind, we may now harmonize section 798.49, 
subdivision (a), with section 798.31, under which a mobilehome park owner may 
not charge the park residents for anything other than rent, utilities, or reasonable 
service charges.  We conclude that these two provisions are best harmonized by 
construing the separate charges for governmental assessments and fees under 
section 798.49, subdivision (a), as a permissible component of the total rent.  
Accordingly, section 798.49 demonstrates that the state Mobilehome Residency 
Law does not prohibit park owners from separately charging park residents, as a 
component of the total rent, for governmental fees and assessments. 
This conclusion is not inconsistent with subdivision (d) of section 798.49, 
which states that the section “does not apply” to property taxes.  As we have 
 
14 
explained, this means only that local rent control agencies are not required to 
allow park owners to separately charge park residents for property taxes; it does 
not mean that local rent control agencies are prohibited from doing so.  The effect 
of the exclusion is to preserve the authority of local rent control agencies to deal 
with property taxes as a pass-through item, like the assessments and fees listed in 
subdivision (a) of section 798.49, as a factor to be considered in periodic 
discretionary adjustments of base rent, or as both (as did the former provisions of 
the Chula Vista ordinance at issue here). 
Our review of the text and history of sections 798.31 and 798.49 leads us to 
conclude that the state Mobilehome Residency Law does not preempt local rent 
control ordinances that permit mobilehome park owners to pass-through property 
taxes to park residents as a separately stated item.  Exclusion of the property tax 
pass-through from the definition of “space rent” under the local ordinance is not 
inconsistent with the inclusion of the property tax pass-through within the 
meaning of “rent” as that term is used in section 798.31.  A single term (here, 
“rent”) may have different meanings in different legal contexts.  (See, e.g., People 
v. American Contractors Indemnity Co. (2004) 33 Cal.4th 653, 660 [noting that 
the term “jurisdiction” has various meanings]; Grissom v. Vons Companies, Inc. 
(1991) 1 Cal.App.4th 52, 58 [same for term “necessary”]; see also Delaney v. 
Baker (1999) 20 Cal.4th 23, 41-42 [a term is not presumed to have the same 
meaning when it appears in different statutory schemes with distinct objectives].)  
Here, the ordinance does not purport to define the term “rent” under the state 
Mobilehome Residency Law or as used in the leases subject to the ordinance.  It 
merely defines and uses the term “space rent” as a way of specifying the charges 
that the ordinance regulates.  In recognizing other charges that the ordinance refers 
to as “allowable pass-throughs” and that the ordinance excludes from its own 
 
15 
definition of “space rent,” the ordinance does not prohibit the parties from 
including those other charges as rent in their leases, as the parties did here. 
When it has been included within the overall rental charge specified in the 
lease for the rented space, a property tax pass-through is appropriately 
characterized as rent under section 798.31 because nothing other than use of the 
rented space and common areas is required to trigger the charge, because it is 
compensation for the use of the rented space and common areas of the park, and 
because property taxes are a business expense that owners of mobilehome parks 
and other rental property have traditionally recovered from their tenants through 
the amount charged as rent.  This conclusion means, of course, that a property tax 
pass-through, because it is rent, is subject to provisions of the state Mobilehome 
Residency Law regulating rent, such as the requirement that the park management 
give the resident at least 90 days’ notice of any increase in the rent.  (§ 798.30.) 
This conclusion is consistent with the Court of Appeal decisions in Dills, 
supra, 28 Cal.App.4th 888, and Robinson, supra, 28 Cal.App.4th 1506, but 
inconsistent with the decision in Karrin v. Ocean-Aire Mobile Home Estates 
(1991) 1 Cal.App.4th 1066 (Karrin). 
In Karrin, the City of Oxnard enacted a rent control ordinance for 
mobilehome parks.  (Karrin, supra, 1 Cal.App.4th at p. 1068.)  The ordinance 
allowed park owners to “ ‘segregate and separately bill the actual cost for any 
mobilehome ordinance assessment . . . and pass on any increase in such charges as 
they occur’ ” (ibid.), and it expressly excluded from the definition of “space rent” 
“ ‘[p]assthrough items, including but not limited to mobilehome ordinance 
assessment[s], . . . and capital improvements’ ” (id. at pp. 1068-1069).  Following 
the procedure set forth in the ordinance, a mobilehome park owner held an 
election for the park residents to determine whether they should assess themselves 
$7.35 per month for repaving roads within the park.  (Id. at p. 1069.)  After 
 
16 
obtaining the residents’ approval through the election, the park owner began 
charging the assessment.  (Ibid.) 
One of the park residents sued the owner, alleging that the capital 
improvement assessment imposed under the local ordinance violated the state 
Mobilehome Residency Law.  (Karrin, supra, 1 Cal.App.4th at p. 1069.)  The trial 
court upheld the election and the assessment, but after the resident appealed, the 
Court of Appeal reversed the trial court’s judgment.  The court noted that the park 
owner could have (but had not) applied for a discretionary rent increase based on 
the capital improvement costs.  (Id. at p. 1072.)  Rejecting the argument that the 
assessment could be considered a form of rent, the Court of Appeal observed that 
the ordinance “expressly distinguishes between rent and assessments for pass-
through items . . . .”  (Id. at p. 1073.)  The court declined to consider a city council 
resolution declaring that the assessment “ ‘is and was part of the rent’ ” on the 
ground that it could not consider it because it had occurred after the trial court had 
entered judgment.  (Id. at p. 1070.) 
In Dills, however, another Court of Appeal took a somewhat different view.  
There, a lease for a mobilehome park space provided for “base rent” in a specified 
amount and subject to annual increases according to a specified formula, with 
property taxes and utility charges to be added to the base rent when they exceeded 
certain threshold levels.  (Dills, supra, 28 Cal.App.4th at p. 890.)  Finally, the 
lease provided for a pass-through of the costs of capital improvements to the park, 
to be amortized over five years, describing the pass-through amount “ ‘as a 
component separate from the base rent.’ ”  (Ibid.)  When the park owner added a 
$15 charge to the monthly rent bills to cover the cost of road repairs within the 
park, two of the residents sued for declaratory and injunctive relief, as well as 
damages.  (Id. at p. 891.)  They maintained that the capital improvement pass-
through violated section 798.31 of the state Mobilehome Residency Law as a 
 
17 
charge for other than rent, utilities, or services actually rendered.  (Ibid.)  The trial 
court sustained the park owner’s demurrer to the complaint, and the residents 
appealed from the resulting judgment of dismissal.  (Id. at p. 889.) 
The Court of Appeal affirmed the judgment.  It concluded that “the 
breakdown of rent into separately calculated base-rent and capital-improvement 
components does not invalidate the capital component.”  (Dills, supra, 28 
Cal.App.4th at p. 892.)  The court observed that the parties had proposed 
conflicting definitions of “rent”:  “Both parties have cited authority that either 
‘rent is what you call it’ or ‘rent is defined by function.’  (E.g., Cal-American 
Income Property Fund IV v. Ho (1984) 161 Cal.App.3d 583, 586 [207 Cal.Rptr. 
532] [unlawful detainer action; certain charges that could have been charged as 
‘rent’ categorized otherwise in lease, so not rent]; Granberry v. Islay Investments 
(1984) 161 Cal.App.3d 382, 390-391 [207 Cal.Rptr. 652] [in distinguishing 
security deposits from rent, ‘merely calling an item “rent” does not make it so’]; 
cf. Shakespeare, Romeo and Juliet, act II, scene 2, lines 43-44 [roses].)”  To 
determine the meaning of “rent” in section 798.31, the Dills court reviewed the 
historical context of that provision’s enactment and amendment.  It concluded:  
“Neither the original enactment nor its amendments signaled in any way a concern 
with limiting a mobilehome park owner’s recovery of capital expenditures.  Since 
capital expenditures have otherwise been a traditionally recoverable component of 
rent, even under rent control ordinances, there is nothing in the statute which 
precludes a park owner from structuring its rent in the manner of the defendants.”  
(Dills, supra, at p. 893, fn. omitted; accord, Vance, supra, 36 Cal.App.4th at 
pp. 705-706.) 
The Dills court added that allowing park owners to pass through the costs 
of capital improvements by means of assessments “inures to the benefit of tenants” 
because they pay “only for actual costs as incurred.”  (Dills, supra, 28 Cal.App.4th 
 
18 
at p. 893.)  Otherwise, park owners would be forced to guess at future capital costs 
over the course of a lease, and likely would set the rent high enough to cover any 
possible expenditures.  (Ibid.)  The court acknowledged that its reasoning was not 
consistent with that of the Court of Appeal in Karrin, supra, 1 Cal.App.4th 1066, 
and it “respectfully part[ed] company from Karrin” to the extent it implied “that 
any effort to recover capital costs explicitly as opposed to an implicit component 
of rent run[s] afoul of” section 798.31.  (Dills, supra, at p. 893.) 
In Robinson, the owner of a mobilehome park in the City of Yucaipa 
resurfaced the park streets and in 1989 began to obtain reimbursement from the 
park residents through normal rent increases.  (Robinson, supra, 28 Cal.App.4th at 
p. 1510.)  The city council of Yucaipa then adopted a mobilehome park rent 
control ordinance that rolled back rents to those in effect on December 31, 1988.  
(Id. at pp. 1510-1511.)  The park owner applied for and obtained a capital 
improvement rent increase under the ordinance to recover the cost of the park road 
resurfacing, in the amount of $9.63 per month per space for a duration of 156 
months.  (Id. at pp. 1511-1512.)  Two park residents challenged the decision by 
petitioning the superior court for a writ of mandate, contending that the ordinance 
was preempted by section 798.31 insofar as it allowed capital improvement rent 
increases.  (Id. at p. 1512.)  The trial court denied the petition, and the Court of 
Appeal affirmed.  (Id. at pp. 1512, 1518.) 
The Court of Appeal in Robinson noted that Yucaipa’s rent control 
ordinance was in some respects similar to the Oxnard ordinance at issue in Karrin, 
supra, 1 Cal.App.4th 1066.  The Yucaipa ordinance stated “that capital 
improvement increases ‘shall not be included as part of the monthly space rent.’ ”  
(Robinson, supra, 28 Cal.App.4th at p. 1514.)  But the court found reasons to 
depart from Karrin’s conclusion:  “[O]ther parts of the City’s ordinance do not 
distinguish between rent and assessments for capital improvements, but rather 
 
19 
treat capital improvement adjustments as one of the components of the rental rate 
formula.  [Citation.]  Moreover, as noted above, the City’s ordinance defines rent 
to include the consideration paid not only for use of a space on which to place a 
mobile home but also for related housing services.  [Citation.]”  (Robinson, supra, 
at p. 1514.)  The court concluded that under the ordinance, “a capital improvement 
adjustment is a rent adjustment, not a fee” and therefore section 798.31 did not 
preempt the ordinance.  (Ibid.) 
The Robinson court rejected the residents’ contention “that any ordinance 
that permits rent to be fragmented into a number of separate assessments is void as 
contrary to public policy,” with this explanation:  “Residents concede that a 
general discretionary rent increase is valid, but [they argue that] a separate charge 
based on only one factor is not.  Residents make a distinction without a difference.  
So long as an increase is a rent increase, rather than a separate fee or assessment, it 
is permissible under the Mobilehome Residency Law.”  (Robinson, supra, 28 
Cal.App.4th at pp. 1514-1515.) 
The reasoning of Dills and Robinson supports the conclusion here that the 
former property-tax pass-through provisions of the Chula Vista mobilehome park 
rent control ordinance upon which the Cachos relied are not preempted by section 
798.31 of the state Mobilehome Residency Law.  Although the reasoning of those 
decisions was addressed specifically to capital improvement pass-throughs, much 
of that reasoning applies also to property tax pass-throughs.  Because both capital 
improvement costs and property tax expenditures have traditionally been 
recoverable components of rent, even under rent control ordinances, section 
798.31 does not prohibit a park owner, or a local rent control ordinance, from 
structuring mobilehome park space rent to allow pass-throughs for capital 
expenditures and property taxes as charges separate from a base rent.  (Dills, 
supra, 28 Cal.App.4th at p. 893.) 
 
20 
Just as the Yucaipa ordinance at issue in Robinson treated capital 
improvement costs as a component of the rental rate formula (Robinson, supra, 28 
Cal.App.4th at p. 1514), so also the Chula Vista ordinance at issue here treats 
property taxes as a component of the rental rate formula, supporting the 
conclusion that a property tax pass-through is a rental charge, not a fee prohibited 
by section 798.31.  Just as a discretionary rent increase to compensate for 
increased capital expenses does not differ in substance from a separately itemized 
pass-through of those same expenses (Robinson, supra, 28 Cal.App.4th at pp. 
1514-1515), so also a discretionary rent increase to compensate for increased 
property taxes and a separately itemized pass-through of those same property tax 
increases do not differ in any way that is relevant to the discernable purposes of 
the Mobilehome Residency Law.4 
III.  DISPOSITION 
The Court of Appeal’s judgment is reversed. 
 
 
 
 
 
 
 
 
KENNARD, J. 
WE CONCUR: 
 
GEORGE, C. J. 
BAXTER, J. 
WERDEGAR, J. 
CHIN, J. 
MORENO, J. 
CORRIGAN, J.
                                              
4  
To the extent it is inconsistent with our holding here, Karrin v. Ocean-Aire 
Mobile Home Estates, supra, 1 Cal.App.4th 1066, is disapproved. 
 
 
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. 
 
Name of Opinion Cacho v. Boudreau 
__________________________________________________________________________________ 
 
Unpublished Opinion 
Original Appeal 
Original Proceeding 
Review Granted XXX 127 Cal.App.4th 707 
Rehearing Granted 
 
__________________________________________________________________________________ 
 
Opinion No. S133378 
Date Filed: January 11, 2007 
__________________________________________________________________________________ 
 
Court: Superior 
County: San Diego 
Judge: Luis R. Vargas 
 
__________________________________________________________________________________ 
 
Attorneys for Appellant: 
 
Bruce Cornblum; Walters & Ward, R. Michael Walters; Bien & Summers, Elliot L. Bien and E. Elizabeth 
Summers for Plaintiffs and Appellants. 
 
Berger & Kahn and Arthur Grebow for California Mobilehome Parkowners Alliance as Amicus Curiae on 
behalf of Plaintiffs and Appellants. 
 
 
__________________________________________________________________________________ 
 
Attorneys for Respondent: 
 
Law Offices of Ron A. Stormoen, Stormoen & Associates, Ron A. Stormoen and Lori L. Krupa for 
Defendants and Respondents. 
 
Barbara A. Jones, Susan Ann Silverstein and Michael Schuster for AARP and National Consumer Law 
Center as Amici Curiae on behalf of Defendants and Respondents. 
 
Law Office of Bruce E. Stanton and Bruce E. Stanton for California Mobilehome Resource and Action 
Association, Inc., as Amicus Curiae on behalf of Defendants and Respondents. 
 
Maurice A. Priest for Golden State Manufactured-Home Owners League, Inc., as Amicus Curiae on behalf 
of Defendants and Respondents. 
 
Richard I. Singer Law Offices and Elvi J. Olesen for County Mobilehome Positive Action Committee, Inc., 
Santee Mobilehome Owners Action Committee, San Marcos Mobilehome Residents Association, 
Escondido Mobile/Manufactured Home Positive Action Committee, Inc., and Oceanside Manufactured 
Homeowners Alliance as Amici Curiae on behalf of Defendants and Respondents. 
 
 
 
 
 
 
 
Counsel who argued in Supreme Court (not intended for publication with opinion): 
 
Elliot L. Bien 
Bien & Summers 
23 Palomino Road 
Novato, CA  94947 
(415) 898-2900 
 
Ron A. Stormoen 
Stormoen & Associates 
111 Elm Street, Suite 350 
San Diego, CA  92101 
(619) 236-8655