BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1263
                                                                  Page 1

          Date of Hearing:  January 12, 2010

                           ASSEMBLY COMMITTEE ON JUDICIARY
                                  Mike Feuer, Chair
                  AB 1263 (Strickland) - As Amended: January 4, 2010

                    PROPOSED CONSENT (As Proposed To Be Amended) 
                                           
          SUBJECT  :  UNLAWFUL DETAINER: SERVICE OF NOTICE

           KEY ISSUE  :  SHOULD EXISTING LAW be amended to specify that a  
          lanDlord may serve unlawful detainer notices on a  commercial   
          tenant at the rental property, instead of requiring service at  
          the commercial tenant's "Place of residence," as is required by  
          existing law. 

           FISCAL EFFECT  :  As currently in print this bill is keyed fiscal.

                                      SYNOPSIS
          
          Existing law specifies that, before a landlord can remove a  
          tenant through an unlawful detainer proceeding, the landlord  
          must serve notice upon the tenant so that the tenant can leave  
          the property, cure whatever lease violation justifies the  
          eviction, or file an answer with the court.     As set out in  
          existing law, the landlord must serve notice upon the tenant in  
          one of the following ways:  (a) by personally delivering notice  
          to the tenant; or (b) if the tenant is absent from his or her  
          place of residence or business, by leaving a copy of the notice  
          with a person of suitable age and discretion and sending a copy  
          through the mail to the tenant at his or her residence; or (c)   
          if the tenant's place of residence and business cannot be  
          determined, or if a person of suitable age and discretion cannot  
          be found there, by affixing the notice in a conspicuous place at  
          the subject property and mailing another copy of the notice to  
          the tenant at the property address.  These steps may be  
          reasonable in regards to a residential tenant.  But in the case  
          of commercial tenants, if read literally, would require the  
          landlord to attempt personal service at the tenant's "place of  
          residence," and if the "post and mail" form of service is  
          permitted, the copy of the notice must be mailed to the  
          commercial tenant's "place of residence."  However, as the  
          author notes, a landlord has no reason to know the commercial  
          tenant's "place of residence."  Indeed, if the commercial tenant  
          is a corporation, it is not clear what would constitute its  








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          "place of residence."  Because the bill as currently in print  
          would have applied to either a residential or a commercial  
          tenant, and this apparently was not the author's intent, the  
          author will adopt amendments in this Committee that will apply  
          only to commercial tenants.  The foregoing bill summary and  
          analysis reflects the bill as proposed to be amended. 

           SUMMARY  :  Provides, as proposed to be amended, that in order to  
          effect removal of a  commercial  tenant from property under the  
          unlawful detainer statute, notice that the commercial tenant is  
          in violation of lease terms must be served as follows: 

             a)   By delivering a copy of the notice to the tenant  
               personally;
             b)   If the tenant is absent from the subject property, by  
               leaving a copy with a person of suitable age and discretion  
               at the property and mailing a copy to the tenant at the  
               rental property address.
             c)   If service cannot be achieved by (a) or (b) above, then  
               by affixing a copy in a conspicuous place at the rental  
               property and mailing a copy addressed to the tenant at the  
               rental property address. 

           EXISTING LAW  :

          1)Provides that a tenant of real property, for a term less than  
            life, or the executor or administrator of his or her estate is  
            guilty of unlawful detainer under any of the following  
            circumstances:

             a)   When the tenant continues in possession after the lease  
               term expires;
             b)   When the tenant continues in possession without the  
               landlord's permission after defaulting on rent payment;
             c)   When the tenant continues in possession after failure to  
               perform other lease requirements;
             d)   When the tenant is assigning, subletting, or committing  
               waste on the premises in violation of the lease agreement,  
               or using the premises for an unlawful purpose;
             e)   When the tenant agrees to surrender the property on a  
               certain date and fails to do so.  (Code of Civil Procedure  
               section 1161.)

          2)Provides that, before a landlord can seek repossession of  
            rental property through an unlawful detainer action, based on  








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            one the circumstances above, the tenant must be served notice  
            to quit the property or cure the default of other lease  
            violation.  Specifies that the required notice must be served  
            as follows:

             a)   By personally delivering it to the tenant; or 
             b)   If the tenant is absent from his or her place of  
               residence or business, by leaving a copy with a person of  
               suitable age and discretion at either place and sending a  
               copy through the mail to the tenant at his or her  
               residence; or
             c)   If the tenant's place of residence and business cannot  
               be determined, or if a person of suitable age and  
               discretion cannot be found, then by doing all of the  
               following:
               i)     Affixing the notice in a conspicuous place at the  
                 property from which the tenant is to be removed;
               ii)    Delivering a copy to the person there residing, if  
                 such person can be found; and
               iii)   Mailing a copy to the tenant at the property  
                 address.  (Code of Civil Procedure section 1162.)
           
          COMMENTS  :  Under existing law, before a landlord can initiate an  
          unlawful detainer (UD) action to regain possession of the rented  
          property, the landlord must serve notice upon the tenant that he  
          or she has violated a term of the lease, thereby giving the  
          tenant an opportunity to either correct the violation or leave  
          the premises.  The procedure serving notice upon the tenant is  
          set out in the statute in some detail.  Existing law creates a  
          strong preference for serving the tenant in person before  
          employing alternative forms of notice.  Specifically, existing  
          law requires that personal service be attempted at the tenant's  
          residence  and  the place of business, if known.  If the tenant is  
          absent from the residence and place of business, then service  
          may be accomplished by leaving the notice with another person of  
          suitable age and discretion at either the residence or place of  
          business, and then mailing a copy of notice to the tenant at his  
          or her place of residence (i.e. "substitute service").  If the  
          place of residence and place of business cannot be ascertained,  
          and there is no suitable person with whom to leave the notice at  
          either place, then service may be achieved by posting a copy of  
          the notice in a conspicuous place at the rental property and  
          then mailing a copy of the notice addressed to the tenant at the  
          place where the rental property is situated (i.e.  
          "post-and-mail" service). 








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          This bill, as proposed to be amended, seeks to address a problem  
          that arises when the existing statutory scheme is applied to a  
          commercial tenant.  According to the author, in residential  
          evictions, the existing law does not present a problem, since  
          the landlord obviously knows the tenant's place of residence.   
          However in the commercial context, the author contends, the  
          landlord typically has no reason to know the personal residence  
          of the commercial tenant - unlike the residential context, when  
          the rental property and the place of residence are one and the  
          same.  The author seeks to correct this problem by eliminating  
          from the existing statute all references to attempting personal  
          service or mailing notices to "the residence" or "place of  
          business" and instead requiring that personal service be  
          attempted at, or any required mailings be sent to, the rented  
          "property." 

           Proposed Amendments Remove Opposition  :  As currently in print  
          this bill would have changed existing law so that it would have  
          applied to both residential and commercial tenants, thereby  
          eliminating the existing requirement that landlords first  
          attempt personal service at both the residence and place of  
          business of a residential tenant.  Not only was this apparently  
          not the author's intended purpose, the bill in print was opposed  
          by the Western Center on Law and Poverty and California Rural  
          Legal Assistance on the grounds that it would weaken the law's  
          long-standing and well-established preference for personal  
          service, especially for residential tenants.  In response to  
          this concern, and to better reflect the author's original  
          concern, the bill now specifies that the proposed change applies  
          only to commercial tenants.  In addition, the bill in print had  
          two other provisions that engendered some opposition, and which  
          will be removed.  The bill in print would have provided that the  
          mailings required under the forms of alternate notice would be  
          sent to rental property and any alternate address that the  
          tenant may have designated in writing for this purpose, and  
          which was acknowledged by the landlord in writing.  However, in  
          the commercial context that this bill addresses, this simply  
          would have created an additional and unnecessary mailing at odds  
          with the underlying purpose of the bill.  In addition, the bill  
          in print - apparently to assuage concerns about failing to  
          provide personal service to residential tenants - would have  
          required process servers to attest under penalty of perjury that  
          they had exercised "reasonable diligence" in their attempt to  
          obtain personal service.  However, it became apparent that this  








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          change was at odds with existing case law, would have prompted  
          opposition from the process servers' organization, and, again,  
          would have created an added burden at odds with the purpose of  
          the bill.  The proposed author amendments, below, appear to  
          remove all opposition. 

           ARGUMENT IN SUPPORT  :  The author states that the bill is  
          necessary to provide landlords with a reasonable method of  
          serving notice on commercial tenants, whose residential  
          addresses are often unknown to the landlord. 
           
          AUTHOR'S PROPOSED AMENDMENTS  :  In light of the above  
          considerations, the author will accept the following amendments  
          in this Committee:

                                     Amendment 1

          On page 2, before line 1, insert:

          Section 1162 of the Code of Civil Procedure is amended to read  
          as follows:


          1162.   (a)Except as provided in (b),  the notices required by  
          Sections 1161 and 1161a may be served,  either   by any of the  
          following methods  :
             (1) By delivering a copy to the tenant personally;  or  ,
             (2) If he or she is absent from his or her place of  
          residence, and from his or her usual place of business, by  
          leaving a copy with some person of suitable age and discretion  
          at either place, and sending a copy through the mail addressed  
          to the tenant at his or her place of residence;  or  ,
             (3)If such place of residence and business can not be  
          ascertained, or a person of suitable age or discretion there can  
          not be found, then by affixing a copy in a conspicuous place on  
          the property, and also delivering a copy to a person there  
          residing, if such person can be found; and also sending a copy  
          through the mail addressed to the tenant at the place where the  
          property is situated. Service upon a subtenant may be made in  
          the same manner.

                 (b) The notices required by Section 1161 may be served  
          upon a commercial tenant by any of the following methods:

             (1) By delivering a copy to the tenant personally.








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             (2) If he or she is absent from the commercial rental  
          property, by leaving a copy with some person of suitable age and  
          discretion at the property, and sending a copy through the mail  
          addressed to the tenant at the address where the property is  
          situated.
             (3) If a person of suitable age or discretion can not be  
          found at the rental property, then by affixing a copy in a  
          conspicuous place on the property ,and  also sending a copy  
          through the mail addressed to the tenant at the place where the  
          property is situated. Service upon a subtenant may be made in  
          the same manner.

                (c)For purposes of subdivision (b), "commercial tenant"  
          means a person or entity that hires any real property in this  
          state that is not a dwelling unit, as defined in subdivision (c)  
          of Section 1940 of the Civil Code, or a mobilehome, as defined  
          in Section 798.3 of the Civil Code. 
           
          REGISTERED SUPPORT / OPPOSITION:   

           Support 

           California Apartment Association (for prior version only)
          California Association of Realtors (for prior version only)

           Opposition 

           None on file (as proposed to be amended) 
           

          Analysis Prepared by  :  Thomas Clark / JUD. / (916) 319-2334