Hillsboro Properties v. City of Rohnert Park

A property owner is prevented from charging increased rent by a rent control ordinance that is subsequently determined to be unconstitutional. Is the owner entitled to recover the lost rental income, either from its tenants or from the city that imposed the limit, if the ordinance did not deny the owner a fair return on its investment? We hold that it is not.

In 1987, the City of Rohnert Park (the city) passed a rent control ordinance that limited the amount by which a landlord of a mobilehome park could raise rents. Plaintiffs Hillsboro Properties and Goldstone Enterprises, Inc., doing business as Rancho Grande Mobilehome Park (collectively, Hillsboro) seek to recover, either from their tenants or from the city, rents in excess of the rent control ceiling for the period during which the ordinance, subsequently held to be unconstitutional, was in force. Hillsboro relies principally on Kavanau v. Santa Monica Rent Control Bd. (1997) 16 Cal.4th 761 [ 66 Cal.Rptr.2d 672 , 941 P.2d 851 ] (Kavanau) in arguing that it is entitled to recover additional rents from its tenants, and on Galland v. City of Clovis (2001) 24 Cal.4th 1003 [ 103 Cal.Rptr.2d 711 , 16 P.3d 130 ] (Galland)…