BILL NUMBER: SB 1403	CHAPTERED
	BILL TEXT

	CHAPTER  301
	FILED WITH SECRETARY OF STATE  AUGUST 28, 2002
	APPROVED BY GOVERNOR  AUGUST 28, 2002
	PASSED THE SENATE  AUGUST 14, 2002
	PASSED THE ASSEMBLY  AUGUST 8, 2002
	AMENDED IN ASSEMBLY  JUNE 30, 2002
	AMENDED IN ASSEMBLY  JUNE 12, 2002

INTRODUCED BY   Senator Kuehl

                        FEBRUARY 13, 2002

   An act to amend Sections 1946.1, 1947.15, and 1954 of the Civil
Code, to amend Section 1179 of the Code of Civil Procedure, and to
amend Section 7060.2 of the Government Code, relating to
landlord-tenant.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1403, Kuehl.  Landlord-tenant.
   (1) Existing law provides for the renewal or termination of a
hiring of real property for an unspecified term, as specified.
Existing law, effective until January 1, 2005, also sets forth a
separate provision governing the renewal and termination of a hiring
of residential real property in the Cities of Los Angeles, Santa
Monica, and West Hollywood.
   This bill would modify the above provision to make it applicable
on a statewide basis and effective until January 1, 2006, as
specified.  Among other things, the bill would require an owner of a
residential dwelling giving notice to a tenant of his or her intent
to terminate the dwelling to give at least 60 days' notice prior to
termination or 30 days' notice prior to termination if the tenant has
resided in the dwelling for less than one year or if other
enumerated circumstances are satisfied.
   (2) Existing law requires any city, county, or city and county,
including a chartered city, that has a system of rent control that
does not include a system of vacancy decontrol, as defined, to permit
reasonable expenses, fees, and other costs for professional services
incurred in the course of successfully pursuing specified rights,
including a fair rate of return, to be included in any calculation of
net operating income and operating expenses used to determine a fair
return to the owner of the property.
   This bill would provide that those provisions be inoperative until
the Costa-Hawkins Rental Housing Act is repealed.
   (3) Existing law permits a landlord to enter a dwelling unit under
specified circumstances.  Existing law also requires reasonable
notice of an intent to enter, as defined, except in an emergency,
when the tenant has abandoned or surrendered the premises, or when
impracticable.
   This bill would require that a landlord give written notice of an
intent to enter and have the notice served on the tenant, as
specified, except in an emergency or when the tenant has abandoned or
surrendered the premises.  The bill would provide that written
notice mailed at least 6 days prior to entry is presumed reasonable.
The bill would permit a landlord, if entry is for the purpose of
exhibition to prospective or actual purchasers, to provide notice
orally, as specified, 24 hours prior to entry.
   (4) Existing law permits the court to relieve a tenant against the
forfeiture of his or her lease and restore the tenant to his or her
former estate, upon an application made within 30 days after a
forfeiture of a lease is declared by the court.
   This bill would permit the court to relieve a tenant against a
forfeiture of a lease or rental agreement, as specified, upon its own
motion or pursuant with an application made at any time prior to
restoration of the premises to the landlord.  The bill would permit
oral applications by persons appearing in court without an attorney,
if the plaintiff is present and has an opportunity to contest that
application or has been given ex parte notice.
   (5) Under the Ellis Act, public entities generally are prohibited
from adopting any statute, ordinance, or regulation, or taking any
administrative action, to compel the owner of residential real
property to offer or to continue to offer accommodations in the
property for rent or lease.  However, existing law authorizes any
public entity that has in effect any system of rent control to
regulate any accommodations withdrawn from rent or lease and that are
again offered for rent or lease for residential purposes within 2
years of the date that the accommodations were withdrawn.
   This bill would, instead, require that tenancies commenced either
during a 5-year period after the notice of intent to withdraw is
filed with the public entity  or the 5-year period after the
accommodations are withdrawn be offered at the rent in effect at the
time the notice of intent to withdraw was filed.  The bill would
require that accommodations first offered again during a 10-year
period after the notice of intent to withdraw is filed with the
public entity for the first rerental and subsequent rerentals during
the following 2 years be offered at the rent in effect at the time
the notice of intent to withdraw was filed.  The bill would provide
that those amendments apply to all new tenancies created after
December 31, 2002, unless the tenancy was created prior to January 1,
2003, after a lawful withdrawal of the unit, as specified.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 1946.1 of the Civil Code is amended to read:
   1946.1.  (a) Notwithstanding Section 1946, a hiring of residential
real property for a term not specified by the parties, is deemed to
be renewed as stated in Section 1945, at the end of the term implied
by law unless one of the parties gives written notice to the other of
his or her intention to terminate the tenancy, as provided in this
section.
   (b) An owner of a residential dwelling giving notice pursuant to
this section shall give notice at least 60 days prior to the proposed
date of termination.  A tenant giving notice pursuant to this
section shall give notice for a period at least as long as the term
of the periodic tenancy prior to the proposed date of termination.
   (c) Notwithstanding subdivision (b), an owner of a residential
dwelling giving notice pursuant to this section shall give notice at
least 30 days prior to the proposed date of termination if the tenant
has resided in the dwelling for less than one year.
   (d) Notwithstanding subdivision (b), an owner of a residential
dwelling giving notice pursuant to this section shall give notice at
least 30 days prior to the proposed date of termination if all of the
following are true:
   (1) The dwelling or unit is alienable separate from the title to
any other dwelling unit.
   (2) The owner has contracted to sell the dwelling or unit to a
bona fide purchaser for value, and has established an escrow with a
licensed escrow agent, as defined in Sections 17004 and 17200 of the
Financial Code, or a licensed real estate broker, as defined in
Section 10131 of the Business and Professions Code.
   (3) The purchaser is a natural person or persons.
   (4) The notice is given no more than 120 days after the escrow has
been established.
   (5) Notice was not previously given to the tenant pursuant to this
section.
   (6) The purchaser in good faith intends to reside in the property
for at least one full year after the termination of the tenancy.
   (e) The notices required by this section shall be given in the
manner prescribed in Section 1162 of the Code of Civil Procedure or
by sending a copy by certified or registered mail.
   (f) This section may not be construed to affect the authority of a
public entity that otherwise exists to regulate or monitor the basis
for eviction.
   (g) This section shall remain in effect only until January 1,
2006, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2006, deletes or extends
that date.
  SEC. 2.  Section 1947.15 of the Civil Code is amended to read:
   1947.15.  (a) The Legislature declares the purpose of this section
is to:
   (1) Ensure that owners of residential rental units that are
subject to a system of controls on the price at which the units may
be offered for rent or lease, or controls on the adjustment of the
rent level, are not precluded or discouraged from obtaining a fair
return on their properties as guaranteed by the United States
Constitution and California Constitution because the professional
expenses reasonably required in the course of the administrative
proceedings, in order to obtain the rent increases necessary to
provide a fair return, are not treated as a legitimate business
expense.
   (2) Encourage agencies which administer a system of controls on
the price at which residential rental units may be offered for rent
or lease, or controls the adjustment of the rent level, to enact
streamlined administrative procedures governing rent adjustment
petitions which minimize, to the extent possible, the cost and
expense of these administrative proceedings.
   (3) Ensure that the cost of professional services reasonably
incurred and required by owners of residential rental units subject
to a system of controls in the price at which the units may be
offered for rent or lease, or controls on the adjustments of the rent
level in the course of defending rights related to the rent control
system, be treated as a legitimate business expense.
   (b) Any city, county, or city and county, including a charter
city, which administers an ordinance, charter provision, rule, or
regulation that controls or establishes a system of controls on the
price at which all or any portion of the residential rental units
located within the city, county, or city and county, may be offered
for rent or lease, or controls the adjustment of the rent level, and
which does not include a system of vacancy decontrol, as defined in
subdivision (i), shall permit reasonable expenses, fees, and other
costs for professional services, including, but not limited to,
legal, accounting, appraisal, bookkeeping, consulting, property
management, or architectural services, reasonably incurred in the
course of successfully pursuing rights under or in relationship to,
that ordinance, charter provision, rule, or regulation, or the right
to a fair return on an owner's property as protected by the United
States Constitution or California Constitution, to be included in any
calculation of net operating income and operating expenses used to
determine a fair return to the owner of the property.  All expenses,
fees, and other costs reasonably incurred by an owner of property in
relation to administrative proceedings for purposes specified in this
subdivision shall be included in the calculation specified in this
subdivision.
   (c) Reasonable fees that are incurred by the owner in successfully
obtaining a judicial reversal of an adverse administrative decision
regarding a petition for upward adjustment of rents shall be assessed
against the respondent public agency which issued the adverse
administrative decision, and shall not be included in the
calculations specified in subdivisions (b) and (d).
   (d) (1) Notwithstanding subdivision (b), the city, county, or city
and county, on the basis of substantial evidence in the record that
the expenses reasonably incurred in the underlying proceeding will
not reoccur annually, may amortize the expenses for a period not to
exceed five years, except that in extraordinary circumstances, the
amortization period may be extended to a period of eight years.  The
extended amortization period shall not apply to vacant units and
shall end if the unit becomes vacant during the period that the
expense is being amortized.  An amortization schedule shall include a
reasonable rate of interest.
   (2) Any determination of the reasonableness of the expenses
claimed, of an appropriate amortization period, or of the award of an
upward adjustment of rents to compensate the owner for expenses and
costs incurred shall be made as part of, or immediately following,
the decision in the underlying administrative proceeding.
   (e) Any and all of the following factors shall be considered in
the determination of the reasonableness of the expenses, fees, or
other costs authorized by this section:
   (1) The rate charged for those professional services in the
relevant geographic area.
   (2) The complexity of the matter.
   (3) The degree of administrative burden or judicial burden, or
both, imposed upon the property owner.
   (4) The amount of adjustment sought or the significance of the
rights defended and the results obtained.
   (5) The relationship of the result obtained to the expenses, fees,
and other costs incurred (that is, whether professional assistance
was reasonably related to the result achieved).
   (f) This section shall not be applicable to any ordinance, rule,
regulation, or charter provision of any city, county, or city and
county, including a charter city, to the extent that the ordinance,
rule, or regulation, or charter provision places a limit on the
amount of rent that an owner may charge a tenant of a mobilehome
park.
   (g) For purposes of this section, the rights of a property owner
shall be deemed to be successfully pursued or defended if the owner
obtains an upward adjustment in rents, successfully defends his or
her rights in an administrative proceeding brought by the tenant or
the local rent board, or prevails in a proceeding, brought pursuant
to Section 1947.8 concerning certification of maximum lawful rents.
   (h) (1) If it is determined that a landlord petition assisted by
attorneys or consultants is wholly without merit, the tenant shall be
awarded a reduction in rent to compensate for the reasonable costs
of attorneys or consultants retained by the tenant to defend the
petition brought by the landlord.  The reasonableness of the costs of
the tenant's defense of the action brought by the landlord shall be
determined pursuant to the same provisions established by this
section for determining the reasonableness of the landlord's costs
for the professional services.  The determination of the
reasonableness of the expenses claimed, an appropriate amortization
period, and the award of a reduction in rents to compensate the
tenant for costs incurred shall be made immediately following the
decision in the underlying administrative proceeding.
   (2) If it is determined that a landlord's appeal of an adverse
administrative decision is frivolous or solely intended to cause
unnecessary delay, the public agency which defended the action shall
be awarded its reasonably incurred expenses, including attorney's
fees, in defending the action.  As used in this paragraph, "frivolous"
means either (A) totally and completely without merit; or (B) for
the sole purpose of harassing an opposing party.
   (i) For purposes of this section, the following terms shall have
the following meanings:
   (1) "Vacancy decontrol" means a system of controls on the price at
which residential rental units may be offered for rent or lease
which permits the rent to be increased to its market level, without
restriction, each time a vacancy occurs.  "Vacancy decontrol"
includes systems which reimpose controls on the price at which
residential rental units may be offered for rent or lease upon
rerental of the unit.
   (2) "Vacancy decontrol" includes circumstances where the tenant
vacates the unit of his or her own volition, or where the local
jurisdiction permits the rent to be raised to market rate after an
eviction for cause, as specified in the ordinance, charter provision,
rule, or regulation.
   (j) This section shall not be construed to affect in any way the
ability of a local agency to set its own fair return standards or to
limit other actions under its local rent control program other than
those expressly set forth in this section.
   (k) This section is not operative unless the Costa-Hawkins Rental
Housing Act (Chapter 2.7 (commencing with Section 1954.50) of Title 5
of Part 4 of Division 3) is repealed.
  SEC. 3.  Section 1954 of the Civil Code is amended to read:
   1954.  A landlord may enter the dwelling unit only in the
following cases:
   (a) In case of emergency.
   (b) To make necessary or agreed repairs, decorations, alterations
or improvements, supply necessary or agreed services, or exhibit the
dwelling unit to prospective or actual purchasers, mortgagees,
tenants, workmen or contractors.
   (c) When the tenant has abandoned or surrendered the premises.
   (d) Pursuant to court order.
   Except in cases of emergency or when the tenant has abandoned or
surrendered the premises, entry may not be made during other than
normal business hours unless the tenant consents at the time of
entry.
   The landlord shall not abuse the right of access or use it to
harass the tenant.  Except in cases of emergency or when the tenant
has abandoned or surrendered the premises, the landlord shall give
the tenant reasonable notice in writing of his or her intent to enter
and enter only during normal business hours.  The notice may be
personally delivered to the tenant, left with someone of a suitable
age and discretion at the premises, or, left on, near, or under the
usual entry door of the premises in a manner in which a reasonable
person would discover the notice.  Twenty-four hours  is presumed
reasonable notice in the absence of evidence to the contrary.  The
notice may be mailed to the tenant.  Mailing of the notice at least
six days prior to an intended entry is presumed reasonable notice in
the absence of evidence to the contrary.
   If the purpose of the entry is to exhibit the dwelling unit to
prospective or actual purchasers, the notice may be given orally, in
person or by telephone, if the landlord or his or her agent has
notified the tenant in writing within 120 days of the oral notice
that the property is for sale and that the landlord or agent may
contact the tenant orally for the purpose described above.
Twenty-four hours is presumed reasonable notice in the absence of
evidence to the contrary.  At the time of entry, the landlord or
agent shall leave written evidence of the entry inside the unit.
  SEC. 4.  Section 1179 of the Code of Civil Procedure is amended to
read:
   1179.  The court may relieve a tenant against a forfeiture of a
lease or rental agreement, whether written or oral, and whether or
not the tenancy has terminated, and restore him or her to his or her
former estate or tenancy, in case of hardship, as provided in Section
1174.  The court has the discretion to relieve any person against
forfeiture on its own motion.
   An application for relief against forfeiture may be made at any
time prior to restoration of the premises to the landlord.  The
application may be made by a tenant or subtenant, or a mortgagee of
the term, or any person interested in the continuance of the term.
It must be made upon petition, setting forth the facts upon which the
relief is sought, and be verified by the applicant.  Notice of the
application, with a copy of the petition, must be served at least
five days prior to the hearing on the plaintiff in the judgment, who
may appear and contest the application.  Alternatively, a person
appearing without an attorney may make the application orally, if the
plaintiff either is present and has an opportunity to contest the
application, or has been given ex parte notice of the hearing and the
purpose of the oral application.  In no case shall the application
or motion be granted except on condition that full payment of rent
due, or full performance of conditions or covenants stipulated, so
far as the same is practicable, be made.
  SEC. 5.  Section 7060.2 of the Government Code is amended to read:

   7060.2.  If a public entity, by valid exercise of its police
power, has in effect any control or system of control on the price at
which accommodations may be offered for rent or lease, that entity
may, notwithstanding any provision of this chapter, provide by
statute or ordinance, or by regulation as specified in Section
7060.5, that any accommodations which have been offered for rent or
lease and which were subject to that control or system of control at
the time the accommodations were withdrawn from rent or lease, shall
be subject to the following:
   (a) (1) For all tenancies commenced during the time periods
described in paragraph (2), the accommodations shall be offered and
rented or leased at the lawful rent in effect at the time any notice
of intent to withdraw the accommodations is filed with the public
entity, plus annual adjustments available under the system of
control.
   (2) The provisions of paragraph (1) shall apply to all tenancies
commenced during either of the following time periods:
   (A) The five-year period after any notice of intent to withdraw
the accommodations is filed with the public entity, whether or not
the notice of intent is rescinded or the withdrawal of the
accommodations is completed pursuant to the notice of intent.
   (B) The five-year period after the accommodations are withdrawn.
   (3) This subdivision shall prevail over any conflicting provision
of law authorizing the landlord to establish the rental rate upon the
initial hiring of the accommodations.
   (b) If the accommodations are offered again for rent or lease for
residential purposes within two years of the date the accommodations
were withdrawn from rent or lease, the following provisions shall
govern:
   (1) The owner of the accommodations shall be liable to any tenant
or lessee who was displaced from the property by that action for
actual and exemplary damages.  Any action by a tenant or lessee
pursuant to this paragraph shall be brought within three years of the
withdrawal of the accommodations from rent or lease.  However,
nothing in this paragraph precludes a tenant from pursuing any
alternative remedy available under the law.
   (2) A public entity which has acted pursuant to this section may
institute a civil proceeding against any owner who has again offered
accommodations for rent or lease subject to this subdivision, for
exemplary damages for displacement of tenants or lessees.  Any action
by a public entity pursuant to this paragraph shall be brought
within three years of the withdrawal of the accommodations from rent
or lease.
   (3) Any owner who offers accommodations again for rent or lease
shall first offer the unit for rent or lease to the tenant or lessee
displaced from that unit by the withdrawal pursuant to this chapter,
if the tenant has advised the owner in writing within 30 days of the
displacement of his or her desire to consider an offer to renew the
tenancy and has furnished the owner with an address to which that
offer is to be directed.  That tenant, lessee, or former tenant or
lessee may advise the owner at any time during the eligibility of a
change of address to which an offer is to be directed.
   If the owner again offers the accommodations for rent or lease
pursuant to this subdivision, and the tenant or lessee has advised
the owner pursuant to this subdivision of a desire to consider an
offer to renew the tenancy, then the owner shall offer to reinstitute
a rental agreement or lease on terms permitted by law to that
displaced tenant or lessee.
   This offer shall be deposited in the United States mail, by
registered or certified mail with postage prepaid, addressed to the
displaced tenant or lessee at the address furnished to the owner as
provided in this subdivision, and shall describe the terms of the
offer.  The displaced tenant or lessee shall have 30 days from the
deposit of the offer in the mail to accept the offer by personal
delivery of that acceptance or by deposit of the acceptance in the
United States mail by registered or certified mail with postage
prepaid.
   (c) A public entity which has acted pursuant to this section, may
require by statute or ordinance, or by regulation as specified in
Section 7060.5, that an owner who offers accommodations again for
rent or lease within a period not exceeding 10 years from the date on
which they are withdrawn, and which are subject to this subdivision,
shall first offer the unit to the tenant or lessee displaced from
that unit by the withdrawal, if that tenant or lessee requests the
offer in writing within 30 days after the owner has notified the
public entity of an intention to offer the accommodations again for
residential rent or lease pursuant to a requirement adopted by the
public entity under subdivision (c) of Section 7060.4.  The owner of
the accommodations shall be liable to any tenant or lessee who was
displaced by that action for failure to comply with this paragraph,
for punitive damages in an amount which does not exceed the contract
rent for six months.
   (d) If the accommodations are demolished, and new accommodations
are constructed on the same property, and offered for rent or lease
within five years of the date the accommodations were withdrawn from
rent or lease, the newly constructed accommodations shall be subject
to any system of controls on the price at which they would be offered
on the basis of a fair and reasonable return on the newly
constructed accommodations, notwithstanding any exemption from the
system of controls for newly constructed accommodations.
   (e) The amendments to this section enacted by the act adding this
subdivision shall apply to all new tenancies created after December
31, 2002.  If a new tenancy was lawfully created prior to January 1,
2003, after a lawful withdrawal of the unit under this chapter, the
amendments to this section enacted by the act adding this subdivision
may not apply to new tenancies created after that date.