BILL ANALYSIS Ó AB 1938 Page 1 ASSEMBLY THIRD READING AB 1938 (Williams) As Amended May 7, 2012 Majority vote HOUSING 5-2 JUDICIARY 10-0 ----------------------------------------------------------------- |Ayes:|Torres, Atkins, Bradford, |Ayes:|Feuer, Wagner, Atkins, | | |Fong, Hueso | |Dickinson, Gorell, Huber, | | | | |Jones, Monning, | | | | |Wieckowski, Chesbro | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Beth Gaines, Jeffries | | | | | | | | ----------------------------------------------------------------- SUMMARY : Makes changes to the laws governing rental agreements in mobilehome parks. Specifically, this bill : 1)Specifies that a homeowner who signs a rental agreement in excess of 12 months' duration may void the agreement by notifying management in writing within 72 hours of returning the signed rental agreement to management, provided that management provides the homeowner with a copy of the signed rental agreement at the time the homeowner returns it. 2)Specifies that in cases where management does not provide the homeowner with a copy of the signed rental agreement at the time the homeowner returns it, the homeowner may void the agreement within 72 hours of receiving an executed copy of the rental agreement. 3)Prohibits the management in a mobilehome park from charging or imposing upon a homeowner any fee or increase in rent that reflects the cost to the management of any fine, forfeiture, penalty, money damages, or fee assessed or awarded by a court of law or an enforcement agency for a violation of the Mobilehome Parks Act (Health and Safety Code Section 18200, et seq.), including any attorney's fees and costs incurred by the management. EXISTING LAW : AB 1938 Page 2 1)Specifies that a rental agreement in a mobilehome park in excess of 12 months' duration that is entered into between the management and a homeowner for the personal residence of the homeowner is exempt from any ordinance, rule, regulation, or initiative measure adopted by any local governmental entity that establishes a maximum amount that a landlord may charge a tenant for rent (Civil Code Section 798.17). 2)Specifies that a homeowner who executes a long-term rental agreement may void the agreement by notifying management in writing within 72 hours of the homeowner's execution of the rental agreement (Civil Code Section 798.17). 3)Requires management to return an executed copy of the rental agreement to the homeowner within 15 business days after management has received the rental agreement signed by the homeowner (Civil Code Section 798.16). 4)Prohibits management from charging or imposing upon a homeowner any fee or increase in rent that reflects the cost to the management of any fine, forfeiture, penalty, money damages, or fee assessed or awarded by a court of law against the management for a violation of the Mobilehome Residency Law, including any attorney's fees and costs incurred by the management in connection therewith (Civil Code Section 798.39.5). FISCAL EFFECT : None COMMENTS : There are approximately 4,822 mobilehome parks and manufactured housing communities in California, with an estimated 700,000 residents living in these parks. In the majority of parks, mobilehome residents own their homes but rent the spaces on which their homes are installed. "Mobilehome" is something of a misnomer in that once installed in a park, it is very rare for a mobilehome to be moved. This is due to both the difficulty and cost involved, and also because the supply of mobilehome spaces is very limited, vacancies are rare, and most park owners do not allow the installation of older mobilehomes in their parks. Over 100 jurisdictions in California have some form of local rent control ordinance limiting the amount of rent or establishing a maximum amount of rent that the management of a mobilehome park may charge a tenant. Long-term rental AB 1938 Page 3 agreements, those with a term longer than 12 months, are exempt from local rent control. Under current law, a homeowner has 72 hours to void a long-term rental agreement after signing it. Current law also gives park management 15 business days to return a copy of the executed lease to the homeowner. Thus, the window of opportunity for a homeowner to void the lease closes 12 days before the park management is required to provide the homeowner with a copy of the fully executed lease. This bill addresses this issue by specifying that a homeowner has 72 hours to void a long-term rental agreement after signing it, so long as the homeowner gets a copy of the rental agreement at that time. If the homeowner does not get a copy of the rental agreement at the time of signing, then the homeowner would have 72 hours from the time he or she receives an executed copy of the agreement to void it. Under current law, park management is prohibited from passing through to homeowners the costs of any fines, penalties, or damages awarded by a court against the management for a violation of the Mobilehome Residency Law. This bill expands this provision by additionally prohibiting management from passing through damages awarded by a court or an enforcement agency against the management for a violation of the Mobilehome Parks Act, which governs health and safety conditions in mobilehome parks. Analysis Prepared by : Anya Lawler / H. & C.D. / (916) 319-2085 FN: 0003528