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Costa v. City of Allentown

Commonwealth Court of Pennsylvania

January 12, 2017

Thomas Costa and Karen Costa, and Elmtowne Gardens, LLC
City of Allentown Appeal of: Thomas Costa, Karen Costa and Elmtowne Gardens, LLC

          Argued: December 15, 2016



          P. KEVIN BROBSON, Judge

         Appellants Thomas Costa and Karen Costa (Costas) and Elmtowne Gardens, LLC (Elmtowne) (collectively, Appellants) appeal from an order of the Court of Common Pleas of Lehigh County (trial court), dated May 2, 2016, denying their post-trial motions following a nonjury trial. Upon conclusion of the trial, the trial court entered an order dated, December 22, 2015, finding in favor of Appellee City of Allentown (City) and against Appellants in all respects. For the reasons set forth below, we affirm.

         In 1999, the City passed Article 1759 of the City's Property Rehabilitation and Maintenance Code entitled "Licensing Residential Rental Units" (Ordinance). (Reproduced Record (R.R.) at 112a.) The Ordinance's stated purpose is

to protect and promote the public health, safety and welfare of its citizens, to establish rights and obligations of owners and occupants relating to residential rental units in the City and to encourage owners and occupants to maintain and improve the quality of rental housing within the community. As a means to these ends, this [O]rdinance provides for a systematic inspection program, registration and licensing of residential rental units, and penalties.

(Id.) In connection with its adoption of the Ordinance, the City made certain findings:

1. There is a growing concern in the community with the general decline in the physical condition of residential rental units;
2. City records indicate there is greater incidence of problems with the maintenance and upkeep of residential properties which are not owner occupied as compared to those that are owner occupied;
3. City records indicate there are a greater number of disturbances at residential rental units than all other properties combined; and
4. City records indicate that violations of the various codes are generally less severe at owner-occupied units as compared to residential rental units.

(Id.) The Ordinance requires each residential rental unit located within the City to have a residential rental registration or a residential rental license before it can be lawfully rented or occupied. (Id. at 113a-14a.) A residential rental registration must be obtained annually until such time that the residential rental unit is inspected and a residential rental license is issued. (Id. at 113a, 115a-16a.) A residential rental license is issued after the residential rental unit is inspected and found to be in compliance with all City codes. (Id. at 113a, 116a.) The residential rental license will thereafter remain in effect until the next regularly scheduled systematic inspection occurs, which inspection will occur no more frequently than once every five years, unless there is a complaint of violation or probable cause to believe that a violation of City codes has occurred. (Id. at 116a.) The residential rental license may be revoked if the property owner does not correct code violations discovered in connection with complaint inspections. (Id. at 116a-17a.) The City charges a $75 annual license fee per residential rental unit for all residential rental registrations and residential rental licenses. (Id. at 119a.)

         The Ordinance further requires every property owner to maintain the residential rental units in compliance with all applicable codes, laws, regulations, and local ordinances, to keep the residential rental units in a good and safe condition, and to act to eliminate disruptive conduct in all residential rental units. (Id. at 113a.) Occupants and their guests are required to conduct themselves in a manner that does not disturb the peaceful enjoyment of the premises or nearby properties. (Id. at 114a.) Occupants may not cause damage to the residential rental units or engage in disruptive conduct. (Id. at 115a.) Police officers and other public officers are required to investigate alleged incidents of disruptive conduct and complete a report if they determine that disruptive conduct has occurred. (Id. at 115a.) The Ordinance sets forth the manner by which property owners and occupants may appeal the contents of a disruptive conduct report. (Id. at 115a, 118a-19a.) In the event that there are three disruptive conduct reports for any one residential rental unit within a twelve month period, the property owner is required to commence eviction proceedings against the occupants. (Id.) These provisions are commonly referred to as the City's "Rental Program."

         At the time that the Ordinance was passed in 1999, there were approximately 16, 000 residential rental units located in the City, and the annual license fee ranged from $11 to $21 per unit. (Id. at 315a, 488a.) By 2014, the number of residential rental units had increased to approximately 24, 000, and the annual license fee was $75.[1] (Id. at 315a, 488a-89a.) The residential rental units consist of garden apartments, high-end apartments, low-end apartments, conversions, single-family properties turned into multiple units, loft apartments, mixed-use properties with commercial uses on the first floor and apartments on the second floor, single-family properties, rooming units, and efficiency units. (Supplemental Reproduced Record (Supp. R.R.) at 45b.) The quality of the residential rental units varies throughout the City. (Id. at 27b-28b.) Some residential rental units, such as older, conversion properties, are more complicated and take longer to inspect than newer, "cookie-cutter" units originally built as apartments. (Trial Tr. Vol. I at 31-32, 59-60.) The frequency of inspections performed on residential rental units varies depending on the location of the property, with some properties being ...

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