BILL ANALYSIS                                                                                                                                                                                                    Ó






                             SENATE JUDICIARY COMMITTEE
                             Senator Noreen Evans, Chair
                              2011-2012 Regular Session


          AB 317 (Calderon)
          As Amended May 23, 2012
          Hearing Date: July 3, 2012
          Fiscal: No
          Urgency: No
          BCP  
                    

                                        SUBJECT
                                           
                                     Mobilehomes

                                      DESCRIPTION  

          Existing law requires the management of a mobilehome park to 
          provide prospective homeowners with a statutory notice entitled 
          "INFORMATION FOR PROSPECTIVE HOMEOWNERS."  This bill would 
          clarify that notice by including a statement that prospective 
          purchasers who do not occupy the mobilehome as their principal 
          residence may not be subject to rent control.

          (This analysis reflects author's amendments to be offered in 
          Committee.)

                                      BACKGROUND  

          Enacted in 1978, the Mobilehome Residency Law (MRL) governs the 
          relationship between park owners or managers and the residents 
          of the 4,800+ mobilehome parks and manufactured housing 
          communities in California.  In most of those parks, residents 
          own their home but lease the land on which their home is 
          installed.  Although they have historically been called 
          "mobilehomes," it is very difficult to actually move a 
          mobilehome once it has been installed in a park.
           
          To protect mobilehome park residents from rent increases on the 
          property underlying their home, over 100 jurisdictions in 
          California have enacted some form of rent control.  Those rent 
          control ordinances are a proper exercise of the local 
          government's police power if their provisions are "reasonably 
          calculated to eliminate excessive rents and at the same time 
                                                                (more)



          AB 317 (Calderon)
          Page 2 of ?



          provide landlords with a just and reasonable return on their 
          property." (Birkenfeld v. Berkeley (1976) 17 Cal.3d 129, 165.)  
          Although mobilehome parks are not subject to the Costa-Hawkins 
          Rental Housing Act (which restricts the use of rent control in 
          other residential properties), the MRL does limit the 
          application of rent control in certain circumstances, including 
          if the lease agreement is greater than 12 months, or if the 
          mobilehome is not the owner's principal residence and is not 
          being rented to another party. 

          This bill, as proposed to be amended, would clarify the required 
          statutory notice to prospective purchasers by informing 
          purchasers that if they do not occupy the mobilehome as their 
          principal residence, the space may not be subject to rent 
          control.

                                CHANGES TO EXISTING LAW
           
           Existing law  requires, within two business days of receiving a 
          request from a prospective homeowner for an application for 
          residence for a specific space within a mobilehome park, if the 
          management has been advised that the mobilehome occupying that 
          space is for sale, the management shall give the prospective 
          homeowner a separate document in at least 12-point type entitled 
          "INFORMATION FOR PROSPECTIVE HOMEOWNERS," which includes 
          specified information about being a tenant in a mobilehome park, 
          including that:

            Some spaces are governed by an ordinance, rule, regulation, 
            or initiative measure that limits or restricts rents in 
            mobilehome parks. Long-term leases specify rent increases 
            during the term of the lease. By signing a rental agreement 
            or lease for a term of more than one year, you may be 
            removing your rental space from a local rent control 
            ordinance during the term, or any extension, of the lease if 
            a local rent control ordinance is in effect for the area in 
            which the space is located.
            (Civ. Code Sec. 798.74.5.)

           This bill  would also add the following two sentences to the 
          above statutory notice to clarify the application of rent 
          control to residents in mobilehome parks:

            These laws are commonly known as "rent control." Prospective 
            purchasers who do not occupy the mobilehome as their 
            principal residence may be subject to rent levels which are 
                                                                      



          AB 317 (Calderon)
          Page 3 of ?



            not governed by these laws.

                                        COMMENT
           
          1.   Stated need for the bill  

          According to the author:

            Current law under Civil Code Section 798.21 requires that a 
            home be occupied as the homeowner's principal residence in 
            order to maintain the benefits of rent control.  Many 
            individuals get around this law by various means to qualify 
            for rent control to secure a vacation home with subsidized 
            rent by the property owner. . . . AB 318 will add a sentence 
            to the form requested to be given to all prospective tenants 
            in Civil Code 798.74.5 to read, "prospective purchasers who 
            do not occupy the mobilehome as their principal residence 
            may be subject to rent levels which are not governed by 
            these laws (rent control)."

          2.    Information for prospective homeowners

           Under existing law, management must generally provide 
          prospective homeowners with a document entitled "INFORMATION FOR 
          PROSPECTIVE HOMEOWNERS" that includes information regarding 
          owning a home in a mobilehome park, the monthly rent, additional 
          fees and charges that the person may be obligated to pay in 
          addition to rent, information about establishing tenancy in the 
          park, and other pertinent information.  (Civ. Code Sec. 
          798.45.5.)  This bill would clarify that notice by adding 
          language informing persons that "Ýp]rospective purchasers who do 
          not occupy the mobilehome as their principal residence may be 
          subject to rent levels which are not governed by these laws."  

          Staff notes that the proposed language appears to accurately 
          reflect existing Civil Code Section 798.21, which provides that 
          rent control does not apply to a mobilehome space that is not 
          the principal residence of the homeowner as long as the 
          homeowner has not rented the mobilehome to another party.  Thus, 
          from a policy standpoint, prospective purchasers who are 
          purchasing the mobilehome as a second or vacation home should be 
          aware that the space may not be subject to any rent control laws 
          if it is not their primary residence.

          3.   Opposition related to portions of the bill removed by 
          author's amendment  
                                                                      



          AB 317 (Calderon)
          Page 4 of ?




          It should be noted that while the Committee received numerous 
          letters in opposition to this bill, those letters expressed 
          concern about the provisions of the bill stricken by the 
          author's amendment discussed in Comment 4.  As a result, it is 
          unknown if there is any opposition to the bill as proposed to be 
          amended.

          4.   Author's amendment  

          The author offers the following amendment to strike the proposed 
          changes to Section 798.21 of the Civil Code relating to rent 
          control.

                Amendment:

                On page 2, strike out lines 1 through 19, and pages 4 
               through 7, inclusive, and on page 8, strike out lines 1 
               through 4, inclusive.


           Support  :  California Association of Realtors; Western 
          Manufactured Housing Communities Association

           Opposition  :  Unknown
                                        HISTORY
           
           Source  :  Author

           Related Pending Legislation  :  None Known

           Prior Legislation  :  None Known

           Prior Vote  :

          Assembly Rules Committee (Ayes 9, Noes 0)
          Assembly Housing & Community Development Committee (Ayes 4, Noes 
          1)
          Assembly Floor (Ayes 44, Noes 22)

                                   **************