BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 1149|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
UNFINISHED BUSINESS
Bill No: SB 1149
Author: Corbett (D)
Amended: 8/20/10
Vote: 21
SENATE JUDICIARY COMMITTEE : 3-2, 3/23/10
AYES: Corbett, Hancock, Leno
NOES: Harman, Walters
SENATE FLOOR : 21-9, 4/22/10
AYES: Alquist, Cedillo, Corbett, DeSaulnier, Ducheny,
Florez, Hancock, Leno, Liu, Lowenthal, Negrete McLeod,
Oropeza, Padilla, Pavley, Price, Romero, Simitian,
Steinberg, Wolk, Wright, Yee
NOES: Ashburn, Correa, Denham, Dutton, Hollingsworth, Huff,
Strickland, Walters, Wyland
NO VOTE RECORDED: Aanestad, Calderon, Cogdill, Cox, Harman,
Kehoe, Maldonado, Runner, Wiggins, Vacancy
ASSEMBLY FLOOR : Not available
SUBJECT : Residential tenancies: foreclosure
SOURCE : Western Center on Law and Poverty
California Reinvestment Coalition
California Rural Legal Assistance Foundation
DIGEST : This bill prohibits the release of court records
in a foreclosure-related eviction unless the plaintiff
landlord prevails, as specified, and requires that a
CONTINUED
SB 1149
Page
2
prescribed cover sheet, notifying a tenant of his or her
rights and responsibilities, be attached to any eviction
notice that is served within one year after a foreclosure.
Assembly Amendments (1) delete the January 1, 2013
effective date and instead add a January 1, 2013 sunset
date, (2) delete the $500 fine for the failure to attach a
cover sheet, (3) add technical and clarifying language.
ANALYSIS : Existing law:
1. Provides, until January 1, 2013, that a tenant or
subtenant in possession of rental housing at the time
the property is sold in foreclosure shall be given 60
days' written notice to quit before the tenant or
subtenant may be removed from the property.
2. Provides, under federal law, that a successor in
interest in a property subject to foreclosure shall
provide any tenants residing in the property with a
90-day notice to vacate, and requires the successor in
interest to honor the tenant's lease until the end of
the lease term unless the property is sold to a person
who intends to occupy it as his or her primary
residence. Specifies that these provision shall sunset
on December 31, 2012.
3. Provides that, in unlawful detainer proceedings, the
court clerk shall only allow access to case records to
the following:
A. A party to the action, including a party's
attorney;
B. Any person who provides the clerk with the names of
at least one plaintiff and one defendant and the
address of the premises, including the apartment or
unit number, if any;
C. A resident of the premises who provides the clerk
with the name of one of the parties or the case number
and shows proof of residency;
D. To any person by order of the court on a showing of
good cause, as defined; or,
E. To any other person 60 days after the complaint has
been filed, unless a defendant prevails in the action
CONTINUED
SB 1149
Page
3
within 60 days of the filing of the complaint, in
which case the clerk may not allow access to any
courts records in the action, except to a party to the
action or by court order, as specified.
This bill:
1.Prohibits a court clerk from releasing records in an
eviction action involving a residential property that has
been sold in foreclosure unless, after 60 days have
elapsed since the complaint was filed, a judgment against
all defendants has been entered for the plaintiff, after
a trial. Provides that if judgment is not entered for the
plaintiff the clerk could only allow access to court
records to parties to the action or by order of a court,
as specified.
2.Provides that in the case of any foreclosure of a
residential property, the immediate successor in interest
in the property shall attach a cover sheet, as
prescribed, to any notice of termination of tenancy
served on a tenant of that property within one year after
the foreclosure sale.
3.Provides that the above cover sheet shall not be required
if any of the following apply:
A. The tenancy is terminated due to a tenant's
violation of the terms of the tenancy pursuant to
Code of Civil Procedure Section 1161;
B. The successor in interest and the tenant have
executed a written rental agreement or lease or
written acknowledgement of a preexisting rental
agreement or lease; or,
C. The tenant receiving the notice was not a
tenant at the time of the foreclosure.
4.Specifies that the required cover sheet, in at least
12-point type, shall advise the tenant of his or her
rights and responsibilities, including information on how
to obtain legal assistance and notification that the
tenant may have the right to stay in the unit for 90
days.
CONTINUED
SB 1149
Page
4
5.Provides that the cover sheet requirements in this bill
shall sunset on January 1, 2013, unless a later enacted
statute deletes or extends that date.
6.Provides that in certain unlawful detainer actions the
statutory basis of the action shall be indicated in the
caption of the complaint, as specified.
Background
California leads the nation with one of the highest rates
of foreclosure. More than 1.2 million Californians have
received a notice of default from their lender over the
past three years, and more than 500,000 California homes
have been the subject of a foreclosure. Tenants living in
those homes have overwhelmingly been impacted. A New York
Times November 18, 2007 article, "As Owners Feel Mortgage
Pain, So Do Renters," noted "[i]n the foreclosure crisis of
2007, thousands of American families are losing their homes
without ever missing a payment. They are renters in houses
whose owners default on their mortgages - a large but
little noticed class of casualties." A March 2009 study by
Tenants Together entitled "Hidden Impact: California
Renters in the Foreclosure Crisis," found that
approximately one third of residential units in foreclosure
in 2008 were rentals. The study estimated that 250,000
California renters lived in homes that went into
foreclosure in 2008. Tenants Together further estimated
that these numbers, based on data from Foreclosure Radar
and drawn from county parcel tax records, likely undercount
the number of foreclosed homes that are in fact rentals.
The impact of foreclosure on tenants has not gone unnoticed
by policymakers, and recent state and federal laws have
been enacted to provide tenants with additional time to
move when the home in which they are living is the subject
of a foreclosure. In 2008, the Legislature passed and the
Governor signed SB 1137 (Perata, Corbett, Machado, Chapter
69, Statutes of 2008) which requires that tenants receive
60-days notice before they may be evicted after the rental
unit in which they are living is foreclosed upon. And, on
May 20, 2009, President Obama signed S. 896, Public Law
111-22, which included the "Protecting Tenants at
Foreclosure Act of 2009" (Act). That Act generally
CONTINUED
SB 1149
Page
5
requires a successor in interest in a property subject to
foreclosure to provide tenants with a 90-day notice to
vacate and, with limited exceptions, to honor the tenant's
lease until the end of the lease term.
This bill seeks to ensure that tenants who are living in
foreclosed homes be given sufficient notice of their rights
and responsibilities under these state and federal laws by
requiring a form cover sheet be attached to any eviction
notice served within one year of a foreclosure sale. The
bill also seeks to help protect innocent tenants who would
otherwise have a negative mark on their rental history by
revising existing law regarding the "masking" of eviction
records in foreclosure situations.
Prior Legislation
SB 1137 (Perata, Corbett, Machado) Chapter 69, Statutes of
2008, which passed the Senate on 7/2/08 (32-8).
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 8/25/10)
Western Center on Law and Poverty (co-source)
California Reinvestment Coalition (co-source)
California Rural Legal Assistance Foundation (co-source)
AARP
California Coalition for Rural Housing
Center for Responsible Lending
Center for Responsible Lending
Housing California
Non-Profit Housing Association of Northern California
ARGUMENTS IN SUPPORT : The Western Center on Law and
Poverty (WCLP) and the California Reinvestment Coalition
(CRC) state "Many tenants know their rights, but are afraid
to assert them. Merely standing up for one's rights in
court can put a negative mark on their rental history for 7
years. Tenant and credit reporting agencies scour court
filings as they become available to record any tenants
involved in an eviction action, whether or not the suit was
CONTINUED
SB 1149
Page
6
justified. Most tenants decide to surrender their rights
rather than being denied future housing because of a bad
credit report."
WCLP and CRC further state:
Under current law, eviction actions are "masked"
(i.e., not generally available to non-parties other
than the media) for 60 days. After that they are
unmasked, unless the tenant has "prevailed" in the
case. . . . In foreclosures, the equation is turned
upside down. The problem in the foreclosure context
is that because of factors beyond the innocent
tenant's control - the bank delays in taking the case
to trial, or the bank drops its lawsuit after the
issue of inadequate notice is raised - the tenant
never "prevails" and the case is unmasked, even though
the tenant is innocent. SB 1149 addresses this very
special situation by reversing the presumption: the
bank must prevail (i.e. show that it gave the correct
notice) for a case to be reported.
RJG:nl 8/25/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED