BILL ANALYSIS                                                                                                                                                                                                    Ó



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          ASSEMBLY THIRD READING
          AB 317 (Charles Calderon) 
          As Amended  January 23, 2012
          Majority vote 

           HOUSING             4-1                                         
           
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          |Ayes:|Torres, Atkins, Jeffries, |     |                          |
          |     |Miller                    |     |                          |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Cedillo                   |     |                          |
          |     |                          |     |                          |
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           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 mobilehome 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 








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               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;

             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)Specifies that any disputes related to whether or not a 
            mobilehome is the sole residence of the mobilehome owner may 
            be arbitrated and that it is up to the mobilehome owner to 
            decide whether or not to pursue arbitration.


          4)Specifies that if the mobilehome owner chooses arbitration, 
            the following shall apply:


             a)   The owner or management of the mobilehome park must pay 
               the costs of the arbitration;


             b)   The parties must meet and confer to select a mutually 
               agreeable arbitrator;


             c)   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;


             d)   Each party may disqualify up to two arbitrators from the 
               list and allows any remaining arbitrator to be selected;










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             e)   The arbitrator must hear the evidence relevant to the 
               dispute within 30 days after selection, at a time and place 
               reasonably convenient to the parties;


             f)   No attorney may represent either party at an arbitration 
               hearing;


             g)   The arbitrator must render a written decision within 15 
               days of hearing the evidence as to whether the mobilehome 
               is the sole residence of the mobilehome owner; and,


             h)   The decision of the arbitrator is final.


          5)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 








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               residence of the mobilehome owner for the space to remain 
               under rent control while being actively held available for 
               sale. 

          6)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.

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

          8)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 
            the base rental rate for purposes of rent control, plus any 
            increases that were allowed during the term of the sublease.

          9)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. 

          10)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. 

           FISCAL EFFECT  :   None

           COMMENTS  :  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 








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          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 12 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.  
           
          This bill 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 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 at their pre-sublease 
          rent plus any increases that were permitted during the term of 
          the sublease. 

          Finally, this bill 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 








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          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 (WMA), 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 
          cannot 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 need 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 








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          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 many 
          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. 
           

          Analysis Prepared by  :    Anya Lawler / H. & C.D. / (916) 
          319-2085 

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