Hobbs v. City of Pacific Grove

Facts: A city annually issues licenses permitting the operation of transient rentals in residential areas. The city restricts the number of licenses issued, a condition all transient rental licenses are subject to. After issuing licenses, the city determines they issued too many licenses. To correct the surplus of licenses issued, the city conducts a lottery to decide which licenses are ineligible for renewal. A license holder was selected for non-renewal following the license’s expiration.

Claim: The license holder seeks to compel the city to renew their transient rental license, claiming the city violated their procedural and substantive due process rights since they were not given an opportunity to be heard on the matter and the inability to renew is overly burdensome as an operator of transient occupancies.

Counterclaim: The city claims they had no obligation to extend licenses since issuance of the transient occupancy operator’s license was conditioned on a limited number to be annually renewed.

Holding: A California appeals court holds the holder of a license to operate transient rentals had no right to the renewal of their license since the license was conditional and the city’s restrictions on the issuance of transient licenses were reasonably related to the public interest for housing. [Ramirez v. PK I Plaza 580 SC LP (2022) 85 CA5th 252]

Hobbs v. City of Pacific Grove



Related Reading:

Legal Aspects of Real Estate — Chapter 6: Types of tenancies — Transient occupants and their removal

RPI Form 593 — Guest Occupancy Agreement – For Transient Occupancy Properties