SAN DIEGO -- The city of San Diego must pay mandatory relocation benefits to residents of the De Anza Cove Mobile Home Park, who may be forced to move from the city-owned land, a judge has ruled.

The city has wanted to close the mobile home park since 2003, when its operator's 50-year lease ran out.

The land is public Mission Bay parkland and can't be used for permanent residences.

The City Council approved a package that offered up to $8,000 to mobile home residents who agree to move.

The De Anza Cove Homeowners Association filed a lawsuit against the city, saying the city didn't follow state law governing closure of mobile home parks.

Thursday, Superior Court Judge Charles Hayes ruled that the De Anza residents are not squatters, as they have been called by the city.

Furthermore, the homes in the Mission Bay Park were permitted by a city document requiring the construction of at least 160 "permanent units" on or before June 15, 1963, with a total of 284 permanent units by the end of construction, according to the ruling.

The city has since collected millions of dollars in revenues from the rental of the land to the park residents, Hayes said.

The court further found that the city, aware of the Mobilehome Residency Law, in 1981 calculated relocation costs to be at least $7 million.

However, when the city actually began notifying residents of the November 2003 closure date, the city failed to provide the benefits those residents were entitled to under the Mobilehome Residency Law, the judge ruled.

As such, all the prior notices purporting to require the residents to move out were ineffective because they were not accompanied by a tenant impact report and an offer of statutory relocation benefits, as required by law, according to the court ruling.

The court also addressed the issue related to residents who signed settlement/lease agreements with the city after being threatened with immediate eviction, finding that those agreements, given their nature and the provisions of the Mobilehome Residency Law, may not be enforceable.