BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 317
                                                                  Page  1

          Date of Hearing:   January 11, 2012

               ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
                                 Norma Torres, Chair
                   AB 317 (Calderon) - As Amended:  January 9, 2012
           
          SUBJECT  :   Mobilehomes.

           SUMMARY  :   Exempts any mobilehome that is not the sole residence 
          of the homeowner from rent control.  Specifically,  this bill  :  

          1)Exempts a mobilehome space within a mobilehome park that is 
            not the sole residence of the mobhilehome owner from any 
            ordinance, rule, regulation, or initiative measure adopted by 
            any city, county, or city and county that establishes a 
            maximum amount that the landlord may charge a tenant for rent. 


          2)Specifies that evidence that a mobilehome is not the sole 
            residence of the mobilehome owner must be weighted in light of 
            the totality of the circumstances and may include, but is not 
            limited to, the following factors:

             a)   The mobilehome owner rents, leases, occupies, or has a 
               present ownership interest in another place of residence, 
               other than an ownership interest in a place of residence 
               solely and exclusively occupied by the mobilehome owner's 
               child or parent and his or her immediate family.  

             b)   Another place of residence appears as a matter of public 
               record or in other evidence obtained by management;

             c)   Monthly statements are mailed to, or payments are made 
               from, a different place of residence;

             d)   The mobilehome owner is regularly absent from the 
               mobilehome for extended periods of time, other than for 
               military service, hospitalization, vacation, family or 
               friend emergency care, or other reasonable temporary or 
               seasonal periods of absence, such as travel necessitated by 
               employment or education;

             e)   The mobilehome is used primarily for vacationing, 
               storage, or business;









                                                                  AB 317
                                                                  Page  2

             f)   The mobilehome has been subleased or possession of the 
               mobilehome has been transferred without management's 
               approval; and

             g)   A review of state or county records demonstrates that 
               the homeowner is receiving a homeowner's exemption for 
               another property or mobilehome.


          3)Requires any disputes related to whether or not a mobilehome 
            is the sole residence of the mobilhome owner to be arbitrated, 
            with the cost of the arbitration paid by the owner or 
            management of the mobilehome park.


          4)Requires the parties to meet and confer to select a mutually 
            agreeable arbitrator. 


          5)Specifies that if the parties cannot agree to an arbitrator 
            within 10 days after the homeowner's written response is 
            received, the management must obtain a list of five 
            arbitrators from any bona fide dispute resolution provider 
            serving the judicial district in which the mobilehome park is 
            located. 


          6)Allows each party to disqualify up to two arbitrators from the 
            list and allows any remaining arbitrator to be selected.


          7)Requires the arbitrator to hear the evidence relevant to the 
            dispute within 30 days after selection, at a time and place 
            reasonably convenient to the parties.


          8)Specifies that no attorney may represent either party at an 
            arbitration hearing.


          9)Requires the arbitrator to render a written decision within 15 
            days of hearing the evidence as to whether the mobilehome is 
            the sole residence of the mobilehome owner. 










                                                                  AB 317
                                                                  Page  3

          10)Specifies that the decision of the arbitrator is final.


          11)Specifies that the exemption from rent control does not apply 
            under any of the following circumstances:

             a)   The mobilehome is the sole residence of the mobilehome 
               owner, which is defined as a person who has a full-time 
               tenancy in a mobilehome park under a rental agreement, a 
               senior who is a full-time resident of a mobilehome owned by 
               a child of the senior, or a child with a disability or 
               handicap who is a full-time resident of a mobilehome owned 
               by a parent or guardian of the child. 

             b)   The space is subleased by the owner for a medical 
               hardship;

             c)   Ownership of the mobilehome is transferred to an heir, 
               joint tenant, or personal representative upon the death of 
               mobilehome owner;

             d)   Management elects to apply an exemption or right set 
               forth in the ordinance, rule, regulation, or initiative 
               measure that establishes a maximum amount that a landlord 
               may charge a tenant for rent; and

             e)   The mobilehome is actively being held available for sale 
               by the homeowner and the home remains vacant and 
               unoccupied. If the home remains occupied, provides 120 days 
               from the time management provides notice of a rent increase 
               based on a finding that the home is not the sole residence 
               of the mobilehome owner for the space to remain under rent 
               control while being actively held available for sale. 

          12)Provides that if management authorizes the subleasing of 
            mobilehomes in the park, management shall not restrict the 
            amount of rent that the mobilehome owner may charge for rent 
            in a sublease situation.

          13)Provides that sublet mobilehomes are exempt from rent 
            control, except when subleased for a medical hardship.

          14)Specifies that upon reoccupation of the space by the 
            mobilehome owner after the term of the sublease has expired, 
            the last rental rate charged to the mobilehome owner shall be 








                                                                  AB 317
                                                                  Page  4

            the base rental rate for purposes of rent control, plus any 
            increases that were allowed during the term of the sublease.

          15)Deletes the following exemptions to the current law that 
            exempts mobilehome spaces that are not the principal residence 
            of the homeowner from rent control:

             a)   The homeowner is unable to rent or lease the mobilehome 
               because the park prohibits subletting; and 

             b)   The legal owner has taken possession or ownership, or 
               both, of the mobilehome from a registered owner through 
               either a surrender of ownership interest by the registered 
               owner or a foreclosure proceeding. 

          16)Adds language to an existing disclosure form that the 
            management of a mobilehome park must provide to prospective 
            homeowners stating that purchasers who do not occupy the 
            mobilehome as their sole residence may be subject to rent 
            levels that are not governed by rent control. 

           EXISTING LAW  

          1)Exempts any mobilehome that is not the principal residence of 
            the homeowner and that has not been rented to another party 
            from rent control (Civil Code Section 798.21).

          2)Specifies that a mobilehome is considered the homeowners 
            principal residence unless the homeowner is receiving a 
            homeowner's exemption for another property or mobilehome in 
            California, or unless a review of public records reasonably 
            demonstrates that the principal residence of the homeowner is 
            out of state (Civil Code Section 798.21).

          3)Requires the management to notify the homeowner in writing of 
            any proposed change in rent before modifying the rent or other 
            terms of tenancy based on evidence that the mobilehome is not 
            the homeowner's principal residence, and requires the 
            management to provide the copy of the documents upon which 
            management relied (Civil Code Section 798.21).

          4)Specifies that homeowners are not required to disclose 
            information concerning their personal finances and management 
            is not authorized to gain access to any records which would 
            otherwise be confidential or privileged (Civil Code Section 








                                                                  AB 317
                                                                  Page  5

            798.21).

          5)Gives homeowners 90 days from the date they receive notice 
            from the management of a proposed change in rent to respond 
            (Civil Code Section 798.21).

          6)Prohibits management from modifying the rent or other terms of 
            tenancy prior to the expiration of the 90-day period or prior 
            to responding, in writing, to information provided by the 
            homeowner (Civil Code Section 798.21).

          7)Prohibits management from modifying the rent or other terms of 
            tenancy if the homeowner provides documentation reasonably 
            establishing that the information provided by management is 
            incorrect or that the homeowner is not the same person 
            identified in the documents (Civil Code Section 798.21).

          8)Prohibits a homeowner from changing the homeowner's exemption 
            status of the other property or mobilehome owned by the 
            homeowner after receiving the notice from the management 
            (Civil Code Section 798.21).

          9)Specifies that the exemption from rent control does not apply 
            under any of the following conditions:

             a)   The homeowner is unable to rent or lease the mobilehome 
               because the owner or management of the mobilehome park does 
               not permit subleasing;

             b)   The mobilehome is being actively held available for 
               sale; or

             c)   The legal owner has taken possession or ownership, or 
               both, of the mobilehome from a registered owner through 
               either a surrender of ownership interest by the registered 
               owner or a foreclosure proceeding.

            (Civil Code Section 798.21)

          10)Requires management to permit a homeowner to rent his or her 
            mobilehome or sublet his or her space if a medical emergency 
            or medical treatment requires the homeowner to be absent from 
            his or her home and this is confirmed in writing by an 
            attending physician. In such cases, the homeowner is 
            prohibited from charging a renter or sublessee more than an 








                                                                  AB 317
                                                                  Page  6

            amount necessary to cover the cost of space rent, utilities, 
            and scheduled loan payments on the mobilehome, if any. (Civil 
            Code Section 798.23.5)

           FISCAL EFFECT  :   None

           COMMENTS  :   

           Background  : Birkenfeld v. Berkeley (1976) 17 Cal. 3d 129, 
          provides that cities and counties have within their policy and 
          regulation powers the authority to enact rent control laws so 
          long as a fair return is assured to property owners.  
          Approximately 111 local jurisdictions have enacted measures 
          limiting the amount of rent or establishing a maximum amount of 
          rent that the management of a mobilehome park may charge a 
          tenant for rent of a lot space.  Under existing law, local 
          governmental entities are free to enact rent control laws 
          regarding mobilehome parks.  These local laws are not subject to 
          the state's Costa-Hawkins Act restricting permissible rent 
          control ordinances, but in certain limited circumstances the 
          Mobilehome Residency Law (MRL) exempts certain mobilehome park 
          spaces from local rent control.  Under existing law rental 
          agreements which are twelve months or longer are exempt from 
          local rent control.  

          SB 1181 (Haynes), Chapter 392, Statutes of 1996, created an 
          exemption to rent control for mobilehomes that are not the 
          principal residence of the homeowner and established that a 
          mobilehome is deemed the principal residence of the homeowner 
          unless the owner claims the homeowner's exemption on another 
          residence in California or unless records show that the owner's 
          principal residence is out of state. At the time, the sponsor of 
          the bill, the Mobilehome Park Alliance (MPA), stated that as 
          many as 20% of the mobilehomes in luxury parks in communities 
          such as Malibu, Palm Springs, Santa Barbara County, Palm Desert, 
          and Escondido are used as vacation homes and remain vacant for 
          significant periods of the year while their owners are living 
          elsewhere. MPA argued that vacation homes should not be eligible 
          for rent control.  
           
           Purpose of the bill:  AB 317 exempts any home that is not the 
          sole residence of the homeowner from rent control. The bill 
          contains a non-exclusive list of factors that could be used to 
          determine that a home is not the sole residence of the owner. 
          The bill requires arbitration, paid for by the park owner or 








                                                                  AB 317
                                                                  Page  7

          management, if the homeowner disputes a finding that the home is 
          not their sole residence. The arbitrator must be mutually agreed 
          upon by both parties and the decision of the arbitrator is 
          final.  
           
          The bill additionally provides that subleased mobilehomes, 
          except those subleased in the event of a medical hardship, are 
          exempt from rent control.  If a mobilehome owner reoccupies 
          their home after a sublease, the bill requires that their base 
          rent for purposes of rent control be set out their pre-sublease 
          rent plus any increases that were permitted during the term of 
          the sublease. 

          Finally, AB 317 adds language to an existing disclosure form 
          that the management of a mobilehome park must provide to 
          prospective homeowners stating that purchasers who do not occupy 
          the mobilehome as their sole residence may be subject to rent 
          levels that are not governed by rent control.

          According to the sponsor, the Western Manufactured Housing 
          Communities Association, the homeowner's exemption test has 
          proved to be an inadequate way of determining whether a 
          mobilehome is a vacation home. Because the financial benefits of 
          rent control can be substantial and the value of the homeowner's 
          exemption is the same no matter what property an owner claims it 
          on, those who own mobilehomes as vacation properties have a 
          strong incentive to claim the exemption on the mobilehome rather 
          than on their true primary residence. While property tax law 
          requires that the homeowner's be claimed only on a primary 
          residence, there is no way for county assessors to determine 
          that a homeowner has instead claimed it on a vacation property. 
          As long as a homeowner is only claiming the exemption on one 
          residence, there is no reason why an assessor would question 
          where someone is claiming the exemption. 

          WMA additionally states that currently, most mobilehome parks do 
          not allow subleasing. They state that one reason for this is 
          that some homeowners have taken advantage of park owners by 
          purchasing multiple homes in rent-controlled communities and 
          creating a business of subletting out the homes at rents greater 
          than what the park owner is permitted to charge. 
           
          Arguments in Support:  WMA argues that the original intent of 
          rent control was to preserve a source of affordable housing and 
          protect residents who are captive in the community because they 








                                                                  AB 317
                                                                  Page  8

          can't move their home from large rent increases, not to make it 
          affordable for someone to own a second home. WMA believes that 
          current law is inadequate because it is easy for owners to claim 
          that a mobilehome is their primary residence even when it is 
          not, and further believes that the laws needs to be expanded to 
          prohibit rent control on any second home. WMA argues that those 
          who can afford to own two homes should not benefit from rent 
          control. They additionally argue that it is unfair for 
          homeowners to profit off of rent control in a sublease situation 
          and believe that if sublet mobilehomes were no longer subject to 
          rent control, more parks would allow subletting, providing 
          homeowners with more options.  

          Arguments in Opposition  : The Golden State Manufactured-Home 
          Owners League (GSMOL) believes that the current requirements for 
          determining whether a homeowner is entitled to a rent-stabilized 
          space are fair and adequate. They argue that the list of factors 
          that could be used to establish that a home is not the owner's 
          sole residence is so vague and overbroad that man innocent 
          activities of homeowners will be used as a basis for declaring a 
          residence to be a second home, thus ending rent control 
          protections and allowing park owners to increase space rent by 
          any amount desired. GSMOL further argues that very few 
          mobilehome parks allow subleasing, including the vast majority 
          of parks in jurisdictions without rent control and questions the 
          argument that removing sublet mobilehomes from rent control will 
          encourage subleasing. 

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          Western Manufactured Housing Communities Association

           Opposition 
           
          Golden State Manufactured Homeowners League
          Western Center on Law and Poverty
           
          Analysis Prepared by  :    Anya Lawler / H. & C.D. / (916) 
          319-2085 












                                                                  AB 317
                                                                  Page  9