BILL ANALYSIS Ó
AB 265
Page 1
ASSEMBLY THIRD READING
AB 265 (Ammiano)
As Amended May 3, 2011
Majority vote
JUDICIARY 6-3
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|Ayes:|Feuer, Dickinson, Huber, | | |
| |Huffman, Monning, | | |
| |Wieckowski | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Wagner, Atkins, Jones | | |
| | | | |
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SUMMARY : Gives a tenant who has received a three-day notice to
quit or pay rent the right to redeem the tenancy after the
three-day period has expired by tendering rent due and other
fees and costs, as specified. Specifically, this bill :
1)Permits a residential tenant who has been served a three-day
notice to quit or pay rent to redeem the tenancy and continue
in possession by tendering to the owner or the owner's agent
all of the following:
a) The amount of rent specified in the three-day notice;
b) Any subsequent rent that has become due under the lease
or rental agreement; and,
c) Any reasonable court costs or attorney's fees incurred
by the plaintiff as of the date of tender, subject to the
following:
(i) No payment of costs and fees are required if
tender is made prior to the filing of an unlawful
detainer action; and,
(ii) Reasonable attorney's fees shall not exceed $350
if tender is made prior to the commencement of trial
if the matter is contested, or at any time if the
matter is not contested.
AB 265
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1)Provides that upon tender of the total amount specified,
including rent due and any applicable costs or fees, prior to
the entry of judgment in an unlawful detainer action,
plaintiff shall file with the court a request for dismissal of
the action. If the amount tendered is not accepted by the
owner or the owner's agent, the court shall upon ex parte
application grant conditional judgment for the tenant's
payment of the amount due.
2)Upon tender of the total amount due after entry of judgment
and before plaintiff's recovery of possession, the court shall
grant relief from forfeiture pursuant to the procedures set
forth pursuant to Code of Civil Procedure Section 1179 and
restore the tenant to possession.
3)Provides the right to redeem under this bill does not limit
any right a tenant may have to seek discretionary relief from
forfeiture pursuant to any other law.
4)Provides that the tenant's tender of any amount due must be
made by cashier's check, money order, or other certified form
of payment, except that payment tendered on behalf of a tenant
by a nonprofit organization or governmental agency, where the
entity states in writing that it makes no claim to right of
possession of the premises through the payment of rent, shall
be considered part of the tender regardless of the form of
that payment.
5)Provides that a tenant may not exercise the right to redeem as
provided by this bill more than once in any 12 month period.
EXISTING LAW :
1)Provides that a tenant is guilty of unlawful detainer when he
or she continues in possession of rental property after three
days' written notice to quit for non-payment of rent, as
specified.
2)Provides that a court may, at its discretion, grant a tenant
post-judgment relief against forfeiture of a lease or rental
agreement, whether or not the tenancy has terminated, and
restore the tenant to his or her tenancy in the case of
hardship. However, no relief of forfeiture may be granted
except on condition that payment of full rent is made.
AB 265
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FISCAL EFFECT : None
COMMENTS : This bill seeks to address a problem in which a
tenant who receives a three-day notice to quit or pay rent could
raise the amount owed if given more than three days. Under
existing law, once the three-day notice period has passed, a
landlord is not required to accept rent after the third day and
can proceed with filing an unlawful detainer. For example, a
tenant who faces an unexpected medical expense or takes a new
job with a later pay date might easily make the payment if given
a few more days. Similarly, low-income tenants are often
eligible for rental assistance from charitable organizations,
but it generally takes those organizations longer than three
days to process and arrange for payment to the landlord. This
is particularly a problem in California with its very short
three-day notice period. This bill confronts this problem by
creating a "right of redemption" - a remedy available in many
other states - by which a landlord may proceed with an unlawful
detainer after the three-day period has expired, but is
nonetheless required to accept payment from the tenant
thereafter, so long as the tenant tenders the full rent owed,
any rent accrued since three-day notice, and reasonable costs
and fees that the landlord incurred in filing the unlawful
detainer.
The amendments taken in the Assembly Judiciary Committee seek to
create a "right of redemption" that fulfills the underlying goal
of giving tenants additional time while addressing reasonable
concerns raised by some of the opponents. For example, the
author agreed to a requirement that the tenant give payment
directly to the owner (instead of to the court) and that the
payment be made by cashier's check, money order, or other
certified form of payment. In addition, the author agreed to
take an amendment that would limit the tenant's ability to
exercise the "right of redemption" to only once in a 12 month
period. (This is consistent with a parallel restriction in the
state retaliatory eviction statute.) Finally, the author agreed
to remove the language from the "relief from forfeiture" statute
in order to make it clear that the "right of redemption" is not
a post-judgment right and does not apply "whether or not the
tenancy has been terminated." In other words, a tenant who has
already vacated or been removed cannot have the tenancy restored
by tendering payment.
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Because existing law imposes no obligation on a landlord to
accept rent offered after the three-day notice has expired, the
author contends, "even tenants who are willing and able to pay
their rent are being kicked out of their homes." The author
notes that California "has the second highest rents in the
nation and in today's economy layoffs, pay cuts, or unexpected
health care costs can leave tenants scrambling to come up with
rent money." Existing law is "unfairly harsh" because it "does
not provide tenants enough time to reach out to friends,
families, and/or other community organizations to utilize any
available resources. Families who are unable to scrape together
rent must move in three days or face an eviction lawsuit." The
author also believes that California law is particularly harsh
relative to many other states that have notice periods extending
anywhere from 10 to even 30 days. Finally, the author notes
that tenants who are late with rent are punished
disproportionately compared with homeowners who default on
mortgages, who "are provided over six months in which to pay the
amount due and prevent foreclosure."
Opponents, generally landlord and realtor groups, contends that
as a matter of standard industry practice landlords and property
managers send reminders and attempt to work out voluntary
agreements with tenants before ever considering issuing a
three-day notice to pay or quit. Moreover, the California
Business Properties Association points out that the three-day
period is "a legal minimum" and, as a practical matter, because
the notice is an action of "last resort," most tenants will be
afforded much more notice and time to pay. Similarly, the San
Francisco Association of Realtors, the Southern California
Cities Apartment Association, and the Orange County Apartment
Association write that standard leases already contain grace
periods and landlords typically work out payment plans with
tenants. These same opponents warn, however, that "if this bill
is enacted, landlords will have no reason to negotiate and they
will be counseled to stop negotiating a delayed date to pay
rent." Finally, several of the opponents argue that while rent
payments are delayed, the landlords are still expected to make
payments to employees, service providers, and creditors.
Analysis Prepared by : Thomas Clark / JUD. / (916) 319-2334
AB 265
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FN: 0000387