BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                  SB 1047|
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                                 THIRD READING


          Bill No:  SB 1047
          Author:   Correa (D)
          Amended:  5/12/10
          Vote:     21

           
           SENATE JUDICIARY COMMITTEE  :  4-0, 5/4/10
          AYES:  Corbett, Harman, Hancock, Leno
          NO VOTE RECORDED:  Walters


           SUBJECT  :    Mobilehomes:  nonprofit resident-owned  
          mobilehome parks

           SOURCE  :     Author


           DIGEST  :    This bill clarifies that the tenant provisions  
          of the Mobilehome Residency Law apply in nonprofit  
          resident-owned mobilehome parks to members of the nonprofit  
          mutual benefit corporation that lease a space in the park.

           ANALYSIS  :    Existing law, the Mobilehome Residency Law  
          (MRL), contains nine Articles that extensively regulate the  
          rights, responsibilities, obligations, and relationships  
          between mobilehome park owners/ management and park  
          residents.  Articles 1-8 deal with legal rights and  
          remedies related to the leasing of space by tenants;  
          Article 9 contains provisions that apply to resident owned  
          parks.  (Section 799 et seq. of the Civil Code)

          Existing law provides that in a subdivision, cooperative,  
          or condominium for mobilehomes, or a resident-owned  
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          mobilehome park, Articles 1-8 of the MRL apply only to  
          residents who do not have an ownership interest in the  
          subdivision, cooperative, or condominium for mobilehomes,  
          or a resident-owned mobilehome park.  Existing law further  
          provides that Article 9 of the MRL governs residents who do  
          have an ownership interest in the subdivision, cooperative,  
          or condominium for mobilehomes, or resident-owned  
          mobilehome park.  (Section 799.1 of the Civil Code)  

          This bill provides, with specified exceptions, that in a  
          mobilehome park owned and operated by a nonprofit mutual  
          benefit corporation whose members consist of park residents  
          where there is no recorded condominium plan, tract, parcel  
          map, or declaration, Article 1 (commencing with Section  
          798) through Article 8 (commencing with Section 798.84)  
          shall govern the rights of members who are residents that  
          have a rental agreement with the corporation.

           Comments  

          According to the author, "The present law treats ? members  
          of a mutual benefit non-profit corporation as if they  
          actually own the space in which their home is sited and  
          treats them as if the typical CC&R [Covenants, Conditions,  
          and Restrictions] provisions apply and provide governance  
          as to their actions in such a park.  No such CC&R  
          provisions exist and the persons who are members lease the  
          home site from the Corporation in which they are members  
          and as such these members have neither the protection of  
          the Civil Code sections set forth in [Civil Code Section  
          798] or the typical CC&R provisions.  The Corporation also  
          has no viable method to enforce the members obligations  
          outside the leases which often refer to [Civil Code  
          Section] 798 which per [Civil Code Section 799] cannot  
          apply and cannot be used to enforce the Park leases or  
          Rules and Regulations."

           Background  

          Enacted in 1978, the MRL governs the relationship between  
          park owners or managers and the residents of the 4,800-plus  
          mobilehome parks and manufactured housing communities in  
          California.  In most of those parks, residents own their  
          home but lease the land on which their home is installed.  







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          Over the past 20 years, residents have been increasingly  
          interested in various ways to purchase their parks and the  
          space upon which the home is installed.  One method of  
          purchasing a park - the nonprofit mutual benefit  
          corporation (the subject of this bill) - is described by  
          the Department of Real Estate as follows:

            Park residents need a legal entity to purchase their  
            park.  A nonprofit mutual benefit corporation is well  
            suited to this purpose.  In general, the nonprofit  
            corporation makes an offer of participation to the  
            residents.  Residents who decided to participate become  
            shareholders or members of the corporation.  As residents  
            purchase shares or memberships in the corporation, cash  
            is accumulated for the down payment required to purchase  
            the park.  The officers of the corporation, elected by  
            the members and acting on their behalf, negotiate with  
            the seller to purchase the park and solve problems  
            relating to conversion.  After conversion, the  
            corporation may manage the park.

          To deal with the various facets of mobilehome parks and  
          manufactured housing communities, the MRL is divided into  
          nine different Articles.  Articles 1-8 of the MRL deal with  
          legal rights and remedies for mobilehome parks which rent  
          space to residents.  Article 9 of the MRL generally deals  
          with the legal rights and remedies of resident owned  
          mobilehome parks. Under existing law, residents who have  
          shares in a nonprofit mutual benefit corporation but lease  
          their space from that corporation fall under Article 9, but  
          not Articles 1-8 of the MRL.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No    
          Local:  No

          RJG:mw  5/12/10   Senate Floor Analyses 

                       SUPPORT/OPPOSITION:  NONE RECEIVED

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