California
Appeals

Standard of Review-Due Process-rational relationship-Baychester Shop. Center v. SF Res. Rent Stab.and Arb. Bd.

C.        The Rent Ordinance Does Not Violate Due Process

            Baychester next contends that the rent ordinance violates due process because successor owners can be held responsible for the conduct of prior owners.  Baychester, however, has waived this issue on appeal because it failed to raise it below.[4]  It is well settled that points not asserted in the trial court are deemed waived and will not be considered for the first time on appeal.  (In re Marriage of Eben-King & King (2000) 80 Cal.App.4th 92, 117.)

            In any event, there were no due process violations here.  The standard to be applied in evaluating a substantive due process challenge is well settled.  In order to demonstrate that the rent ordinance violates due process, Baychester must show that there is no rational relationship between the ordinance and the City’s legitimate ends.  (20th Century Ins. Co. v. Garamendi (1994) 8 Cal.4th 216, 292.)  “ ‘In the exercise of it police power a Legislature does not violate due process so long as an enactment is procedurally fair and reasonably related to a proper legislative goal.’ ”  (Perkey v. Department of Motor Vehicles (1986) 42 Cal.3d 185, 189.)

            Here, the rent ordinance was created to “ ‘safeguard tenants from excessive rent increases and, at the same time, to assure landlords fair and adequate rents . . . .’ (S.F. Admin. Code, § 37.1(b)(6).)”  (Golden Gateway Center v. San Francisco Residential Rent Stabilization & Arbitration Bd. (1999) 73 Cal.App.4th 1204, 1208.)  In advancing this legislative purpose, the ordinance established a procedure for an expedited process for tenants to secure refunds of rent overpayments, and further provided that tenants could seek rent overpayments from a landlord or his successor within a three-year statutory period.  (See § 37.8(e)(1) [hearing before Board on tenant’s petition contesting rent increase to be held within 45 days of filing of petition].)  The provisions in the ordinance concerning rent increases and challenges are reasonably related to the ordinance’s purpose of regulating rents to ensure that tenants are not subjected to excessive rent increases.

            With respect to procedural due process, the expedited hearing procedure ensures a fair and practicable procedure for tenants to rectify rent overpayments without having to resort to civil litigation.[5]  While a successor landlord may be subjected to liability for a prior landlord’s unlawful rent increases, we cannot conclude that it is unreasonable to place the burden on the successor landlord to exercise due diligence in purchasing rental property and to determine if tenants’ rents have been charged in accordance with the rent ordinance.  Moreover, we recognize that a successor landlord is in a better position to seek recourse against the prior owner for any unlawful rent increases.  The rent ordinance’s procedures thus protect tenants from uncontrolled rent increases and place the burden of safeguarding against those increases on the party best able to absorb the costs.

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