BILL ANALYSIS SB 1047 Page 1 Date of Hearing: June 30, 2010 ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT Norma Torres, Chair SB 1047 (Correa) - As Amended: May 12, 2010 SENATE VOTE : 33-0 SUBJECT : Mobilehomes: nonprofit resident-owned mobilehome park. SUMMARY : Clarifies that the tenant provisions of the Mobilehome Residency Law (MRL) apply in nonprofit resident-owned mobilehome parks to members of the nonprofit mutual benefit corporation that lease a space in the park. EXISTING LAW , the MRL: 1)Extensively regulates the rights, responsibilities, obligations, and relationships between mobilehome park owners and 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. (Civil Code Section 799 et seq.) 2)Provides that in a subdivision, cooperative, or condominium for mobilehomes, or a resident-owned 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 (Civil Code Section 799.1). 3)Provides that Article 9 governs residents who do have an ownership interest in the subdivision, cooperative, or condominium for mobilehomes, or resident-owned mobilehome park (Civil Code Section 799.1). FISCAL EFFECT : None COMMENTS : 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 SB 1047 Page 2 but lease the land on which their home is installed. Over the past 20 years, residents have been increasingly interested in various ways to purchase their parks and the spaces upon which their homes are installed. One method of purchasing a park-the nonprofit mutual benefit corporation-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 that 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. 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." SB 1047 Page 3 SB 1047 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 Civil Code Section 798) through Article 8 (commencing with Civil Code Section 798.84) shall govern the rights of members who are residents that have a rental agreement with the corporation. REGISTERED SUPPORT / OPPOSITION : Support None on file Opposition None on file Analysis Prepared by : Anya Lawler / H. & C.D. / (916) 319-2085