BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1263| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1263 Author: Audra Strickland (R) Amended: 6/24/10 in Senate Vote: 21 SENATE JUDICIARY COMMITTEE : 5-0, 6/15/10 AYES: Corbett, Harman, Hancock, Leno, Walters ASSEMBLY FLOOR : 68-0, 1/27/10 - See last page for vote (Consent) SUBJECT : Unlawful detainer: service of notice SOURCE : Author DIGEST : This bill would revise the process for serving commercial tenants with a notice of unlawful detainer by tailoring the procedure to the commercial context. Specifically, this bill requires those notices to be served as follows: (1) by delivering a copy to the tenant personally; (2) if the tenant is absent from the commercial rental property, by leaving a copy with someone 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; or (3) if, at the time attempted service, a person of suitable age or discretion is not found at the rental property through the exercise of reasonable diligence, 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 address CONTINUED AB 1263 Page 2 where the property is situated. Senate Floor Amendments of 6/24/10 strike language encouraging the use of process servers and sheriffs, and insert clarifying language. ANALYSIS : Existing law 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: 1.When the tenant continues in possession after the lease term expires; 2.When the tenant continues in possession without the landlord's permission after defaulting on rent payment; 3.When the tenant continues in possession after failure to perform other lease requirements; 4.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; or 5.When the tenant agrees to surrender the property on a certain date and fails to do so. (Code Civ. Proc. Sec. 1161.) Existing law provides that, before a landlord can seek repossession of rental property through an unlawful detainer action, based on the circumstances above, the tenant must be served notice to quit the property or cure the default or other lease violation. Existing law requires those notices to be served as follows: 1.By personally delivering the notice to the tenant; or 2.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 3.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: A. Affixing the notice in a conspicuous place at the property from which the tenant is to be removed; CONTINUED AB 1263 Page 3 B. Delivering a copy to the person there residing, if such person can be found; and C. Mailing a copy to the tenant at the property address. (Code Civ. Proc. Sec. 1162.) This bill specifies that the above provisions apply only to residential tenants, and create a similar set of provisions for commercial tenants. This bill would not substantively modify the process for serving residential tenants. This bill requires the above unlawful detainer notices to be served on a commercial tenant by any of the following methods: 1.By delivering a copy to the tenant personally; 2.If the tenant is absent from the commercial rental property, by leaving a copy with someone 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; or 3.If, at the time of attempted service, a person of suitable age or discretion is not found at the rental property through the exercise of reasonable diligence, 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 address where the property is situated. This bill defines "commercial tenant" as a person or entity that hires any real property that is not a dwelling unit or a mobilehome, as specified. Comments According to the author's office, the purpose of this bill is to close a gap in law governing unlawful detainer evictions. Specifically, the author states: The problem is an anomaly in the Code of Civil Procedures Section 1162, which governs how service of the first step in the process is served. Three methods of service are set forth: (1) in-person service (person is handed the CONTINUED AB 1263 Page 4 notice); (2) so-called "substitute service," where a responsible person on the premises is handed the notice for another person named on the notice and then mailing of the notice takes place to that person, and then (3) the "nail-and-mail" or "posting" service, where nobody is around to serve so service is made by posting a copy on the premises and then mailing a copy to the named person at the subject location. The problem exists with the second service method, and specifically with how it directs mailing to be made. In this second method, mailing must be made to the residence address of the person served. This is where the problem arises. In residential evictions, this generally does not present a problem. The address of the property involved in the action is usually the same in that situation, the person's residence. However, it can present a problem with a non-resident tenant and nearly always does so with commercial tenants, who do not and cannot live there. Whereas nail-and-mail service permits proper service by mailing to the property in the action, property substituted service depends on the landlord having and mailing the notice to the person['s] residence address. This is not available to many landlords for many different reasons, such as the tenants never providing it, moving around or actually evading contact in one way or another. This bill takes care of the anomaly in the unlawful detainer law, which was drafted primarily focused on most residential tenancies but which did not take into consideration the problems faced in all commercial transactions and many residential situations. FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No ASSEMBLY FLOOR : AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield, Bradford, Brownley, Buchanan, Caballero, Charles Calderon, Chesbro, Cook, Coto, De La Torre, Emmerson, Eng, Evans, Feuer, Fletcher, Fong, Fuentes, Fuller, CONTINUED AB 1263 Page 5 Furutani, Gaines, Galgiani, Garrick, Gilmore, Hagman, Harkey, Hayashi, Hernandez, Hill, Huber, Huffman, Jeffries, Jones, Knight, Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza, Miller, Monning, Nava, Nestande, Niello, Nielsen, John A. Perez, Portantino, Ruskin, Saldana, Silva, Skinner, Smyth, Solorio, Audra Strickland, Swanson, Torres, Torrico, Tran, Villines, Yamada NO VOTE RECORDED: Carter, Conway, Davis, De Leon, DeVore, Hall, V. Manuel Perez, Salas, Torlakson, Bass RJG:nl 6/30/10 Senate Floor Analyses SUPPORT/OPPOSITION: NONE RECEIVED **** END **** CONTINUED