Filed 2/26/21 Zuleta v. Housing and Community etc. CA2/1

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

LUIS ZULETA et al.,

Plaintiffs and Appellants,

v.

HOUSING AND COMMUNITY

INVESTMENT DEPARTMENT OF

LOS ANGELES et al.,

Defendants and Respondents;

ELIZA KIM et al.,

Real Parties in Interest and 

Respondents.

 B302939

 (Los Angeles County

 Super. Ct. No. BS175319)

APPEAL from a judgment of the Superior Court of 

Los Angeles County, James C. Chalfant, Judge. Affirmed. 

Los Angeles Center for Community Law and Action, Noah 

Grynberg, Tyler Anderson, Gina Hong, and Sarah Walkowicz for 

Plaintiffs and Appellants.
2

Michael N. Feuer, City Attorney, Kathleen A. Kenealy, 

Chief Deputy City Attorney, Scott Marcus, Assisting City Attorney, 

Blithe S. Bock, Managing Assistant City Attorney, Matthew A. 

Scherb and Shaun Dabby Jacobs, Deputy City Attorneys for 

Defendants and Respondents.

No appearance for Real Parties in Interest and Respondents.

_________________________

Eliza Kim and Michael Marzouk own separate residential 

rental properties in Los Angeles. Luis Zuleta and Jose Luis 

Moreno Rios are tenants of Kim. Juan De Dios Garcia is a tenant 

of Marzouk.

Kim and Marzouk separately applied to the Los Angeles 

Housing and Community Investment Department (the Department) 

for a “just and reasonable” increase of the rents they may charge 

their tenants. Department hearing officers granted the applications 

in part and their decisions were approved by an appeals board of 

the Los Angeles Rent Adjustment Commission (the Commission).

Zuleta, Rios, and Garcia filed a petition for writ of 

administrative mandamus in the superior court challenging the 

Department’s and the Commission’s rulings. In November 2019, 

the court denied the petition. This appeal followed.

Zuleta and Rios contend that the Department and the 

Commission erroneously determined that Kim’s “base year” is 

1984 for purposes of determining whether Kim is eligible for a rent 

increase and the Commission failed to account for income Kim had 

received from short term rentals through Airbnb. Garcia contends 

that the Department and the Commission erred in determining that 

Marzouk’s base year is 2011. We affirm. 
3

LEGAL AND REGULATORY BACKGROUND

The Rent Stabilization Ordinance of the City of Los Angeles 

(LARSO) regulates the ability of landlords to increase the rent 

charged to tenants. (L.A. Mun. Code, § 151.04, subd. (A).) A 

landlord may apply to the Department for a rent increase greater 

than that ordinarily permitted under the LARSO on the ground 

that the increase is necessary to provide the landlord with a “just 

and reasonable return” on the rental property. (L.A. Mun. Code, 

§§ 151.01, 151.07, subd. (B)(1); see Birkenfeld v. City of Berkeley

(1976) 17 Cal.3d 129, 165 [rent control ordinance must provide 

landlords with a “just and reasonable return on their property”]; 

Palos Verdes Shores Mobile Estates, Ltd. v. City of Los Angeles

(1983) 142 Cal.App.3d 362, 368 [LARSO upheld against 

constitutional challenge because it ensures “ ‘a just and reasonable 

return’ ” for landlords].) 

The LARSO established the Commission, which has issued 

“Just and Reasonable Guidelines” (the Guidelines) for Department 

hearing officers to use in determining a just and reasonable return. 

(L.A. Mun. Code, § 151.03, subd. (A); L.A. Housing & Community 

Investment Dept., Rent Adjustment Commission, Just and 

Reasonable Guidelines (Sept. 1, 2005) § 240.00 et seq. (Guidelines).) 

Under the Guidelines, the hearing officer calculates and 

compares “Net Operating Income” for the “Current Year” with 

the “Net Operating Income” for the “Base Year,” adjusted for price 

inflation. (Guidelines, supra, §§ 242.05–243.03.) For our purposes, 

net operating income is, generally, the income received from 

dwelling units minus certain expenses, such as management and 

administrative expenses, maintenance expenses, taxes, insurance, 

and operating expenses such as electricity, water, sewer, and gas. 

(Guidelines, supra, §§ 240.00, 241.00–241.19.)
4

The “Current Year” is the most recent calendar or fiscal year 

prior to the date of the landlord’s application. (Guidelines, supra, 

§ 240.00.)

The “Base Year shall be 1977 when the financial information 

for that year is available.” (Guidelines, supra, § 242.01.)1 If the 

landlord did not own the property in 1977 and records for that 

year “are not available from a previous landlord, the present 

landlord may, when the unavailability of the 1977 records can 

be substantiated by clear and convincing evidence, substitute 

as a Base Year the first year following 1977 for which a previous 

landlord’s records are available.” (Guidelines, supra, § 243.02.) 

If the current year net operating income is less than the

inflation-adjusted base year net operating income, the landlord 

is eligible for a rent increase. (Guidelines, supra, § 243.07.) The 

increase is allocated equally among the rental units. (Guidelines, 

supra, § 245.02.) 

The Department must give notice of the landlord’s application 

to the tenants and set an evidentiary hearing. (L.A. Mun. Code, 

§ 151.07, subd. (B)(3)(b) & (c); Guidelines, supra, §§ 247.01–247.05.) 

1 The rationale for a 1977 base year is explained in the 

Guidelines: “In most cases the automatic increases allowed 

by the [LARSO] and the property tax savings resulting from 

Proposition 13 provide sufficient additional operating income to

landlords to maintain at least the same net operating income they 

experienced in 1977 adjusted by an inflation factor. However[,]

in some cases landlords may have incurred reasonable operating 

expenses which exceed the rent increases allowed by the [LARSO] 

and the tax savings resulting from Proposition 13. Therefore, 

landlords who have had such reasonable increased operating 

expenses shall be able to maintain the same level of net operating 

income as they experienced in 1977, plus a Price Level Adjustment 

as determined by the [Commission] from time to time.” (Guidelines, 

supra, § 240.03.)
5

The hearing officer must issue a “determination with written 

findings in support thereof,” and may grant an application for a 

rent increase less than the amount requested. (L.A. Mun. Code, 

§ 151.07, subd. (B)(3)(d); Guidelines, supra, § 247.09.)

The landlord or the tenant may appeal the hearing officer’s 

decision to the Commission on the grounds that “there was an error

or abuse of discretion by the hearing officer.” (L.A. Mun. Code, 

§ 151.07, subd. (B)(4)(a); see also Guidelines, supra, § 248.02.) 

The appellant may rely “on new, relevant information which 

was not submitted to the hearing officer at the time of the 

initial determination due to mistake, surprise, inadvertence, or 

excusable neglect, and which information would have affected 

the determination of the hearing officer if it had been submitted 

earlier.” (L.A. Mun. Code, § 151.07, subd. (B)(4)(a); see also 

Guidelines, supra, § 248.02(C).) The appeals board may affirm, 

modify, or reverse the decision of the hearing officer. (L.A. Mun. 

Code, § 151.07, subd. (B)(4)(d); Guidelines, supra, § 248.16.) 

FACTUAL AND PROCEDURAL SUMMARY

A. Kim’s Application for a Just and Reasonable 

Rent Increase

Kim owns a four-unit apartment building in Los Angeles 

(the Kim property). In January 2016, Kim inherited the building 

from her father, who purchased it in July 2006 from Yasutake 

Takushi.

In 2016, Kim lived in one unit and rented the other three

units. Zuleta and Rios rent one of the units. In October 2018, 

Zuleta and Rios were paying rent of $1,169.11 per month.

On October 18, 2017, Kim submitted to the Department 

an application for a just and reasonable rent increase, seeking 

an increase in the amount of $1,247.74 per unit per month. The 
6

application is supported by a comparison of a “base year” of 1984 

with a “current year” of 2016.

Kim explained that she selected 1984 as the base year based 

on the following. She found among her “father’s boxes” a lease 

containing Takushi’s address and then drove to the address. 

Takushi had died several years earlier and his son was then living 

in the residence. She explained to the son why she needed records 

regarding the property and “earnestly asked him to look for all 

papers,” including “the earliest he could find.” The son initially 

told her “there was no chance” of finding such records. Eventually, 

however, he provided Kim with a 1984 tax return schedule 

regarding the property and, a few days later, called Kim to tell 

her he had found an amended schedule for that tax year. Kim 

explained to the Department, “I could not get 1977 tax forms 

because I did not get that from Mr. Takushi’s son. I did not want 

to bother him anymore.”

Kim also supported the application with a property report and

copies of deeds indicating that Takushi transferred the property to

Kim’s father in 2006, and Kim’s father transferred the property to 

Kim in 2016. The report also indicates a transfer of the property in 

September 1982, presumably to Takushi.

On January 18, 2018, the Department staff issued its analysis 

and recommendation regarding Kim’s application, which concluded 

that Kim was “not receiving a just and reasonable return on the 

property and is entitled to a monthly rent increase of $543.72 per

unit per month.” The staff’s analysis was based on a base year of 

1984 and a current year of 2016. The staff reduced the amount of 

the requested rent increase in part because it divided the total rent 

increase for the building among four units, including the unit Kim 

lived in, instead of the three units rented to tenants.
7

On February 9, 2018, a Department hearing officer held 

a hearing on Kim’s application. Zuleta and Rios did not appear 

at the hearing personally or through counsel.

On March 23, 2018, the hearing officer issued his decision 

approving Kim’s application as modified in accordance with 

the Department’s recommendation. Regarding the base year 

determination, the hearing officer stated that Kim “provided 

documentary evidence to the Department indicating that 1984 

was the first year for which a full record of income and expenses 

was available from the previous landlord. Accordingly, for this 

application the base year was deemed to be 1984 and the current 

year is 2016.”

Zuleta and Rios filed an appeal to the Commission.

Zuleta and Rios moved to augment the record in the appeal to 

the Commission to include documents showing that Kim had rented 

the unit she had been living in to third parties through Airbnb and 

that she had converted a garage on the property and was living 

in that unit. They also submitted their declarations stating that 

the building has four apartment units and that Kim is living in a 

separate garage unit “so that she could rent out” the unit she had 

been living in.2

Prior to the hearing on the appeal, the Department submitted 

a report stating that Kim began renting her unit through Airbnb 

in March 2017 and, because the “current year” for purposes of the 

application is 2016, the Airbnb income is irrelevant.

At the hearing before the Commission, Zuleta and Rios, 

through counsel, argued, among other arguments, that the 

2 Our record does not disclose whether the Commission 

appeals board granted the motion to augment the record. Its ruling 

on the appeal, however, implies that it considered the additional 

evidence.
8

Department and the hearing officer improperly failed to consider 

the undisclosed Airbnb income. They also asserted that the rent 

increase for the building should be divided among five apartments, 

not four, because Kim was living in the converted garage unit on 

the property.

In a written decision issued on July 6, 2018, the Commission 

appeals board affirmed the hearing officer’s decision to grant in part 

Kim’s requested rent increase. The panel rejected the argument 

that the rent increase should be divided among five units because 

the alleged fifth unit was based on hearsay. The panel deemed 

evidence of Airbnb rental income to be immaterial because there 

was no evidence of such income in 2016. The panel concluded 

that there was “no reason to reverse the Hearing Officer’s decision 

because there is insufficient evidence that the Hearing Officer 

abused [his] discretion or made an error.”

B. Marzouk’s Application for a Just and Reasonable 

Rent Increase

In October 2017, Marzouk acquired a four-unit apartment 

building in Los Angeles. He rents three of the units and lives in 

the fourth. Garcia is one of Marzouk’s tenants.

On November 14, 2017, Marzouk submitted an application 

to the Department for a “just and reasonable” increase in the rent. 

The Department determined that the application was incomplete 

and requested further information. Marzouk filed a new 

application on February 5, 2018, seeking increases of $1,153.59 

per unit. At the time of the application, Garcia’s rent was $645.30.

Marzouk’s application was based on a base year of 2011 and 

a current year of 2017. He initially supported the 2011 base year 

claim with evidence that he acquired the property from his father 

or an entity (Mar Mena Properties, LLC) in which his father is 

a partner or principal. His father submitted a statement that his 
9

company had purchased the property in 2009 “as a foreclosure,” and 

that the foreclosing bank did not provide him with any documents. 

According to Marzouk, his father “did not keep proper records for 

2010 as it was his first year owning real estate,” and his father 

“could only provide [him] information dating back to 2011.” In a 

subsequent writing, Marzouk stated that there is no data available 

prior to 2011 “due to multiple foreclosures/short sales and not being 

able to track down the current addresses of previous owners.”

The Department staff issued a report, which accepted 2011 

as the base year and recommended that Marzouk be granted a rent 

increase of $364.55 per unit per month.

Prior to the hearing on the application, Marzouk obtained 

a title report for the property and copies of deeds concerning the 

property. These documents showed that the property was owned 

by Karl and Louise Duus in 2001, who transferred the property 

that year to Mei and Effendi Fendi. In 2006, the Fendis deeded 

the property to Mariano Galvan, who transferred it to Marzouk’s 

parents and uncle in 2009. 

At the hearing before the Department hearing officer in June 

2018, Marzouk testified that the only address he had for Galvan 

(the owner from 2006 to 2009) was the apartment building that 

is the subject of this proceeding, and Marzouk “couldn’t track 

him down.” Marzouk obtained an address for the Fendis (the 

owners from 2001 to 2006), and mailed them a letter, which was 

returned to him undelivered. He then drove to the address in 

South Pasadena, but no one answered his knock on the door. A 

neighbor on that street informed him that the Fendis no longer 

lived at that address.

Marzouk further testified that, although his parents and 

uncle bought the property in August 2009, they “didn’t have the 

books in order” and did not prepare the tax form used for reporting 
10

rental real estate income and loss in 2010. 2011 was the first year 

for which he had such a form.

The hearing officer issued his decision on July 6, 2018. He 

found that “the previous owners’ records were available beginning 

in 2011. Accordingly, the base year was deemed to be 2011 because 

it was the earliest possible year of record that could be secured 

from the previous owner.” The hearing officer agreed with the 

Department’s recommendation and approved Marzouk’s application 

as modified.

Garcia appealed to the Commission.

At the hearing before the Commission appeals board 

in September 2018, a Department representative explained 

that although the Department “request[s] clear and convincing 

evidence, . . . it’s impossible for owners to [prove] a negative. 

Therefore, we have to go with evidence submitted to show that 

they’ve made their best effort. And having documentation of the 

title report going to the last known address of a previous owner 

that wasn’t listed as the property address and taking a picture 

that he actually went there, I don’t see how much else he could 

have done.”

Upon further inquiry from the appeals board panel, Marzouk

testified that he had found online the obituaries of the Duuses, 

who owned the property from 1954 until they transferred it to 

the Fendis in 2001. According to the title company he retained to

prepare the title report, “there was no address on record” for the 

Duuses. The Department representative added: “I don’t see what 

else [Marzouk] could have done beyond spending thousands of 

dollars for a private investigator to investigate records that don’t 

exist because the county said they don’t have them.”

On September 26, 2018, the Commission’s appeals board 

affirmed the hearing officer’s decision, stating that “there was 
11

insufficient evidence that the Hearing Officer abused [his] 

discretion or made an error.”

C. Proceedings in the Superior Court

In October 2018, Zuleta, Rios, and Garcia filed a petition 

for writ of administrative mandamus, among other relief, against 

the Department and the Commission. The court severed the 

individual’s claims for trial, but maintained a single case number 

and issued a single judgment denying the petitions. Zuleta, Rios, 

and Garcia appealed.

DISCUSSION

A. Standards of Review

When, as here, the underlying petition for writ of 

administrative mandamus does not involve fundamental rights, 

our review of a denial of the petition is identical to the trial court’s 

review of the administrative ruling. (Hoag Memorial Hospital 

Presbyterian v. Kent (2019) 36 Cal.App.5th 413, 421.) We review 

the record of the administrative proceeding to determine whether 

the agency “proceeded without, or in excess of, jurisdiction; whether 

there was a fair trial; and whether there was any prejudicial abuse 

of discretion. Abuse of discretion is established if the [agency] has 

not proceeded in the manner required by law, the order or decision 

is not supported by the findings, or the findings are not supported 

by substantial evidence.” (Code Civ. Proc., § 1094.5, subd. (b).) We 

review legal issues and conclusions of law de novo. (Hoag Memorial 

Hospital Presbyterian, supra, at p. 421.)
12

B. Zuleta and Rios’s Challenge to Kim’s Just and 

Reasonable Rental Increase

1. Clear and Convincing Standard Regarding 

Unavailable Documents in Determining the 

1984 Base Year

Zuleta and Rios contend that the hearing officer erred by 

failing to properly apply a clear and convincing evidence standard 

to Kim’s evidence that pre-1984 financial records concerning the 

property were unavailable to her. We disagree.

Under Guidelines, supra, section 243.02, a landlord who did 

not own the property in 1977 may “substitute as a Base Year the 

first year following 1977 for which a previous landlord’s records 

are available” “when the unavailability of the 1977 records can be 

substantiated by clear and convincing evidence.”

A clear and convincing evidence standard of proof 

“demands a degree of certainty greater than that involved with 

the preponderance standard, but less than what is required by the 

standard of proof beyond a reasonable doubt. This intermediate 

standard ‘requires a finding of high probability.’ ” (Conservatorship 

of O.B. (2020) 9 Cal.5th 989, 998.) Where clear and convincing 

proof is required, the party bearing that burden of proof “ ‘must 

do more than show that the facts are probably true’ ”; he or she 

must convince the trier of fact “ ‘that it is highly probable that the

facts . . . are true.’ ” (Id. at pp. 998–999.)

In the context in which that standard is to be applied here, 

the question for the hearing officer is whether Kim has shown that 

it is highly probable that the records necessary to calculate the net 

operating income of the property for years between 1977 and 1984 

are unavailable to her.

Zuleta and Rios contend that the hearing officer failed to 

apply the clear and convincing standard. They point out correctly 

that the hearing officer did not explicitly refer to this standard in 
13

his written ruling. He stated that Kim “provided documentary 

evidence to the Department indicating that 1984 was the first year 

for which a full record of income and expenses was available from 

the previous landlord. Accordingly, for this application the base 

year was deemed to be 1984 and the current year is 2016.”

Although the hearing officer did not explicitly recite the 

clear and convincing standard in his ruling, he did introduce 

his discussion of the issue by referring to the applicability of 

section 243.02 of the Guidelines, which mandates the clear and 

convincing evidence standard. The reference to that guideline 

implies that the hearing officer applied that standard. Further, 

the hearing officer did not indicate that he had applied a different 

standard of proof and neither the Guidelines nor the LARSO 

require the hearing officer to recite the clear and convincing 

standard in the officer’s ruling. In the absence of a contrary 

indication in the record, we presume that the hearing officer 

regularly performed his duty (see Evid. Code, § 664) and that he

“ ‘applied the correct standard of proof.’ [Citation.]” (Saraswati v. 

County of San Diego (2011) 202 Cal.App.4th 917, 929.) We 

therefore reject the argument that the hearing officer failed to 

apply the correct standard.

Zuleta and Rios further assert that the hearing officer 

incorrectly applied a clear and convincing evidence standard

to them. They refer to the following statements in the hearing 

officer’s decision: “After due consideration of the testimony and 

documentation submitted by all parties, the Hearing Officer hereby 

finds that the income and expenses claimed by the owners for 

the base and current years are supported by clear and convincing 

evidence. Although the tenants and their attorney expressed some 

subjective concerns about the amount of the proposed rent increase 

and voiced their objections to same, they failed to proffer any clear 

and convincing evidence to rebut the owner’s claims or demonstrate 
14

that the income or expenses reported in the application lacked 

credibility in any way.” These statements relate solely to issues

concerning Kim’s evidence of income and expenses, not to her 

selection of the base year. Zuleta and Rios have not, however, 

challenged on appeal the hearing officer’s determination regarding 

income and expenses (other than the Airbnb income discussed 

below) and nothing in the hearing officer’s ruling suggests that he 

required the tenants to make any showing, by clear and convincing 

evidence or otherwise, as to the base year issue.

Zuleta and Rios next contend that, even if the hearing officer 

applied the clear and convincing standard, he did so erroneously.3 

The challenge is to the sufficiency of the evidence supporting 

the hearing officer’s implied finding. Our Supreme Court has 

recently clarified that, “when presented with a challenge to the 

sufficiency of the evidence associated with a finding requiring 

clear and convincing evidence, the court must determine whether 

the record, viewed as a whole, contains substantial evidence from 

which a reasonable trier of fact could have made the finding of high 

probability demanded by this standard of proof.” (Conservatorship 

of O.B., supra, 9 Cal.5th at p. 1005.) 

Zuleta and Rios argue that the only evidence Kim presented 

to support her selection of 1984 as the base year is the tax form 

supplied by Takushi’s son and her statement regarding her efforts 

to locate the son and her request that he provide her with “the 

earliest” records he could find. Because Takushi appears to have 

3 The Department and the Commission argue that Zuleta and 

Rios waived this argument by failing to raise it below. As Zuleta 

and Rios point out, however, they raised the issue in their motion 

to augment before the appeals board and the issue was addressed 

by the Department’s representative, the appeals board panel, 

and counsel for Zuleta and Rios. We therefore reject the waiver 

argument. 
15

owned the property since 1982, such evidence, Zuleta and Rios 

argue, “did not establish anything about the availability of financial 

records between 1977 and 1982, or even who owned the [Kim]

[p]roperty between those dates.”

Even in the absence of evidence that Kim attempted to locate 

the person who owned the property prior to Takushi, we cannot 

conclude that the hearing officer erred in determining, implicitly, 

that it was highly probable that earlier records would not be 

available to Kim. At the time of Kim’s application, it had been 

35 years since someone other than Kim, her father, and Takushi 

owned the property. That passage of time is itself a fact that 

weighs heavily on the probability that the necessary documents 

would never be available to Kim. In evaluating that probability, 

the hearing officer could reasonably consider that the former owner 

of the property or other custodian of the owner’s records, if still 

living and locatable, had probably long since discarded any records 

concerning the rental income and operating expenses for the 

property. Even if the necessary records still exist and could be 

found, the likelihood that the owner or other custodian would 

decline to turn them over to Kim further reduces the probability 

of their availability to her. Kim would have no ability to compel 

production of the records and would need to resort, as she did in 

this case, to “earnestly ask[ing]” the former owner or custodian for 

such records. Although Kim was fortunate that Takushi’s son was 

willing to search for and provide her with his father’s records from 

1984, the kindness of strangers cannot be assumed, particularly 

when that kindness involves turning over one’s financial, property, 

or tax records. 

We do not suggest that a landlord never needs to attempt 

to track down those who owned the property many years earlier. 

But here, the question is whether there was sufficient evidence, 

including the passage of 35 years, for the hearing officer to 
16

reasonably conclude that it was highly probable that pre-1984 

records were unavailable to Kim. For the foregoing reasons, we 

conclude that there was sufficient evidence.

2. Failure to Adjust Current Year Income Based 

on Airbnb Income

Zuleta and Rios contend that the appeals board erred by 

failing to adjust upward the current year’s income by the income 

Kim received from Airbnb rentals. We reject the argument.

In determining whether Kim was eligible for a just and 

reasonable rent increase, the Guidelines direct the hearing officer 

to compare the base year net operating income with the current 

year net operating income. (Guidelines, supra, § 243.07.) The 

current year is defined as “[t]he most recent calendar or fiscal 

year prior to the date of the Just and Reasonable application.” 

(Guidelines, supra, § 240.00.) Kim submitted her application in 

October 2017. The current year was therefore 2016. 

The evidence Zuleta and Rios submitted regarding Kim’s 

Airbnb rentals indicates that such rentals occurred in 2017. This 

is consistent with Kim’s statement that she began Airbnb rentals 

in March 2017. Because only income received in 2016 is relevant 

to Kim’s application, the evidence of 2017 Airbnb rental income is 

irrelevant. 

Zuleta and Rios rely on Kim’s testimony at the appeals board 

hearing where she stated: “I’m a full-time student at Los Angeles 

City College. I don’t know how much time I have, but I’m trying to 

make the means—the mortgage means [sic]. That’s all and I can’t 

even remodify it because my income doesn’t meet and I can’t even 

lower the payments because I’m a student and nobody would talk 

to me. And I have records of people who try to help me. . . . After 

this, after we bought it I—I have so many things to do, but I’m 

very happy that I got up to here. Very grateful. I have no family,
17

no boyfriend. . . . It’s like two, three bedrooms. I mean, it’s—

and I knew this would take like six—five months and it did take 

six months and I couldn’t meet the mortgage so I had Airbnb.”

Zuleta and Rios argue that the last sentence of this testimony 

shows that Kim “turned to Airbnb” six months from the date she

acquired the property in January 2016. This statement is at best 

ambiguous about when Kim turned to Airbnb. Thus, the appeals 

board was free to adopt an interpretation in favor of the evidence 

of Kim’s unambiguous statement to Department personnel that 

she began using Airbnb in 2017. We therefore reject the tenants’ 

argument. 

C. Garcia’s Challenge to Marzouk’s Just and 

Reasonable Rental Increase

Garcia contends that the hearing officer and appeals board 

erred in applying the clear and convincing evidence standard in 

determining that the base year for Marzouk’s application is 2011. 

In ruling on Marzouk’s application, the hearing officer stated 

that “the previous owners’ records were available beginning in 

2011. Accordingly, the base year was deemed to be 2011 because 

it was the earliest possible year of record that could be secured 

from the previous owner.” As with the ruling on Kim’s application, 

the hearing officer referred to section 243.02 of the Guidelines, 

which requires the application of the clear and convincing standard, 

but failed to explicitly state that he was applying the clear and 

convincing standard to the question whether earlier property 

records were unavailable. As we explained above, however, the 

failure to refer to that standard is not error and we presume that 

the hearing officer was aware of and applied the correct standard. 

As discussed above, the clear and convincing evidence 

standard in this context requires Marzouk, as the proponent of 

the fact that financial records of the property prior to 2011 were 
18

unavailable, to establish that the unavailability of such records 

is highly probable. (Conservatorship of O.B., supra, 9 Cal.5th 

at pp. 998–999.) On review, we must determine whether there is 

substantial evidence in the record from which the hearing officer 

could have made that finding of high probability. (Id. at p. 1005.) 

Here, Marzouk obtained the earliest records available from 

the prior owner—his father’s company. He obtained from a title 

company a title report and copies of deeds reflecting ownership of 

the property since 1954. Through online research, he determined 

that the couple who owned the property until 2001, the Duuses, 

had passed away. Marzouk attempted to contact the couple that 

owned the property from 2001 to 2006, the Fendis, but learned that 

they had moved from the only address he had for them.

Garcia focuses his argument on the lack of evidence regarding

Marzouk’s efforts to locate Galvan, the individual who owned the

property between the Fendis and Garcia’s father’s company. 

According to Garcia, Marzouk did no more than observe that 

Galvan listed the subject property as his address on the 2006 deed 

to the property and thereby concluded that he was unreachable. 

Marzouk did produce the deed to Galvan showing the subject 

property as Galvan’s address, but Marzouk did not state that 

he stopped there. He explained in a writing in support of his 

application that he was “not . . . able to track down the current 

addresses of previous owners,” and that he “attempted to reach out 

to the previous banks” but “they would not release the names of the 

previous owners nor contact information.” He also testified before 

the hearing officer that he “couldn’t track [Galvan] down.” He later 

explained to the appeals board that he asked the city and his escrow 

agent how to contact prior owners and was advised to obtain a title 

report. He did so and used the information the report provided; but, 

“[w]ithout a phone number and an email address [he did not] know 

what other methods are really out there.”
19

Although our record is not clear as to what, precisely, 

Marzouk did to “track down” Galvan, his statements imply some 

action beyond merely reading Galvan’s deed. His attempt to “reach 

out to the previous banks,” for example, implies that he contacted 

Galvan’s lender or lenders, who would have been disclosed on deeds 

of trust identified in the title report Marzouk obtained. Together 

with the evidence of his efforts to locate the Fendis and the passing 

of the Duuses, the hearing officer could reasonably conclude that 

there was a high probability that financial records concerning 

the property earlier than 2011 were unavailable to Marzouk.

DISPOSITION

The judgment is affirmed.

NOT TO BE PUBLISHED.

ROTHSCHILD, P. J.

We concur.

BENDIX, J.

FEDERMAN, J.*

* Judge of the San Luis Obispo County Superior Court, 

assigned by the Chief Justice pursuant to article VI, section 6 of

the California Constitution.