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California Civil Code Section 1947.15

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(a) The Legislature declares the purpose of this section
is to:
   (1) Ensure that owners of residential rental units that are
subject to a system of controls on the price at which the units may
be offered for rent or lease, or controls on the adjustment of the
rent level, are not precluded or discouraged from obtaining a fair
return on their properties as guaranteed by the United States
Constitution and California Constitution because the professional
expenses reasonably required in the course of the administrative
proceedings, in order to obtain the rent increases necessary to
provide a fair return, are not treated as a legitimate business
expense.
   (2) Encourage agencies which administer a system of controls on
the price at which residential rental units may be offered for rent
or lease, or controls the adjustment of the rent level, to enact
streamlined administrative procedures governing rent adjustment
petitions which minimize, to the extent possible, the cost and
expense of these administrative proceedings.
   (3) Ensure that the cost of professional services reasonably
incurred and required by owners of residential rental units subject
to a system of controls in the price at which the units may be
offered for rent or lease, or controls on the adjustments of the rent
level in the course of defending rights related to the rent control
system, be treated as a legitimate business expense.
   (b) Any city, county, or city and county, including a charter
city, which administers an ordinance, charter provision, rule, or
regulation that controls or establishes a system of controls on the
price at which all or any portion of the residential rental units
located within the city, county, or city and county, may be offered
for rent or lease, or controls the adjustment of the rent level, and
which does not include a system of vacancy decontrol, as defined in
subdivision (i), shall permit reasonable expenses, fees, and other
costs for professional services, including, but not limited to,
legal, accounting, appraisal, bookkeeping, consulting, property
management, or architectural services, reasonably incurred in the
course of successfully pursuing rights under or in relationship to,
that ordinance, charter provision, rule, or regulation, or the right
to a fair return on an owner's property as protected by the United
States Constitution or California Constitution, to be included in any
calculation of net operating income and operating expenses used to
determine a fair return to the owner of the property.  All expenses,
fees, and other costs reasonably incurred by an owner of property in
relation to administrative proceedings for purposes specified in this
subdivision shall be included in the calculation specified in this
subdivision.
   (c) Reasonable fees that are incurred by the owner in successfully
obtaining a judicial reversal of an adverse administrative decision
regarding a petition for upward adjustment of rents shall be assessed
against the respondent public agency which issued the adverse
administrative decision, and shall not be included in the
calculations specified in subdivisions (b) and (d).
   (d) (1) Notwithstanding subdivision (b), the city, county, or city
and county, on the basis of substantial evidence in the record that
the expenses reasonably incurred in the underlying proceeding will
not reoccur annually, may amortize the expenses for a period not to
exceed five years, except that in extraordinary circumstances, the
amortization period may be extended to a period of eight years.  The
extended amortization period shall not apply to vacant units and
shall end if the unit becomes vacant during the period that the
expense is being amortized.  An amortization schedule shall include a
reasonable rate of interest.
   (2) Any determination of the reasonableness of the expenses
claimed, of an appropriate amortization period, or of the award of an
upward adjustment of rents to compensate the owner for expenses and
costs incurred shall be made as part of, or immediately following,
the decision in the underlying administrative proceeding.
   (e) Any and all of the following factors shall be considered in
the determination of the reasonableness of the expenses, fees, or
other costs authorized by this section:
   (1) The rate charged for those professional services in the
relevant geographic area.
   (2) The complexity of the matter.
   (3) The degree of administrative burden or judicial burden, or
both, imposed upon the property owner.
   (4) The amount of adjustment sought or the significance of the
rights defended and the results obtained.
   (5) The relationship of the result obtained to the expenses, fees,
and other costs incurred (that is, whether professional assistance
was reasonably related to the result achieved).
   (f) This section shall not be applicable to any ordinance, rule,
regulation, or charter provision of any city, county, or city and
county, including a charter city, to the extent that the ordinance,
rule, or regulation, or charter provision places a limit on the
amount of rent that an owner may charge a tenant of a mobilehome
park.
   (g) For purposes of this section, the rights of a property owner
shall be deemed to be successfully pursued or defended if the owner
obtains an upward adjustment in rents, successfully defends his or
her rights in an administrative proceeding brought by the tenant or
the local rent board, or prevails in a proceeding, brought pursuant
to Section 1947.8 concerning certification of maximum lawful rents.
   (h) (1) If it is determined that a landlord petition assisted by
attorneys or consultants is wholly without merit, the tenant shall be
awarded a reduction in rent to compensate for the reasonable costs
of attorneys or consultants retained by the tenant to defend the
petition brought by the landlord.  The reasonableness of the costs of
the tenant's defense of the action brought by the landlord shall be
determined pursuant to the same provisions established by this
section for determining the reasonableness of the landlord's costs
for the professional services.  The determination of the
reasonableness of the expenses claimed, an appropriate amortization
period, and the award of a reduction in rents to compensate the
tenant for costs incurred shall be made immediately following the
decision in the underlying administrative proceeding.
   (2) If it is determined that a landlord's appeal of an adverse
administrative decision is frivolous or solely intended to cause
unnecessary delay, the public agency which defended the action shall
be awarded its reasonably incurred expenses, including attorney's
fees, in defending the action.  As used in this paragraph, "frivolous"
means either (A) totally and completely without merit; or (B) for
the sole purpose of harassing an opposing party.
   (i) For purposes of this section, the following terms shall have
the following meanings:
   (1) "Vacancy decontrol" means a system of controls on the price at
which residential rental units may be offered for rent or lease
which permits the rent to be increased to its market level, without
restriction, each time a vacancy occurs.  "Vacancy decontrol"
includes systems which reimpose controls on the price at which
residential rental units may be offered for rent or lease upon
rerental of the unit.
   (2) "Vacancy decontrol" includes circumstances where the tenant
vacates the unit of his or her own volition, or where the local
jurisdiction permits the rent to be raised to market rate after an
eviction for cause, as specified in the ordinance, charter provision,
rule, or regulation.
   (j) This section shall not be construed to affect in any way the
ability of a local agency to set its own fair return standards or to
limit other actions under its local rent control program other than
those expressly set forth in this section.
   (k) This section is not operative unless the Costa-Hawkins Rental
Housing Act (Chapter 2.7 (commencing with Section 1954.50) of Title 5
of Part 4 of Division 3) is repealed.

Last modified: January 12, 2009