BILL ANALYSIS Ó
AB 1953
Page 1
Date of Hearing: May 1, 2012
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 1953 (Ammiano) - As Amended: March 29, 2012
As Proposed to be Amended
SUBJECT : RENTAL HOUSING: TENANT NOTICE
KEY ISSUE: SHOULD TENANTS BE PROTECTED FROM EVICTION BY A
SUCCESSOR OWNER OF THE RENTAL PROPERTY FOR NONPAYMENT OF RENT
THAT COULD HAVE OTHERWISE BEEN PAID AND RECEIVED IF THAT OWNER
HAD COMPLIED WITH EXISTING LAW REQUIRING PROMPT NOTICE OF WHERE
TO PAY RENT?
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
SYNOPSIS
Existing law requires property owners to notify the tenant of
the name, telephone number, and address of the person or entity
to whom rent payments shall be made, and requires a successor
owner or manager to make this disclosure within 15 days of
succeeding the previous owner. However, the law is silent with
respect to the rights of the parties when the successor owner
fails to comply with this notice requirement. According to the
author, this gap in the law unfairly allows a successor owner to
potentially take advantage of his own noncompliance and initiate
eviction against a tenant for nonpayment of rent that could have
otherwise been paid and received if the owner had simply
complied with the notice requirement. As proposed to be
amended, this bill seeks to prohibit a successor owner or
manager from initiating eviction against a tenant for nonpayment
of rent that accrued during any period where a successor owner
or manager failed to comply with the existing notice requirement
under Section 1962. The bill also establishes that this
provision shall in no case relieve the tenant of any liability
for unpaid rent. The introduced version of this bill is
supported by tenant advocates and legal service providers for
low-income populations, and is opposed by a number of landlord
groups and apartment associations. The proposed amendments are
believed to have largely removed opposition from the apartment
associations at this time.
AB 1953
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SUMMARY : Establishes a conditional defense from eviction for
nonpayment of rent in cases where the tenant has not been
notified who or where to pay rent. Specifically, this bill :
1)Prohibits a successor owner or manager from serving a notice
pursuant to Section 1161(2) of the Code of Civil Procedure or
otherwise evicting a tenant for nonpayment of rent that
accrued during any period where the successor owner or manager
failed to comply with the existing obligation to disclose the
name and address of the person to whom rent shall be paid.
2)Clarifies that the above restriction shall in no case relieve
the tenant of any liability for unpaid rent.
EXISTING LAW :
1)Requires an owner of residential rental property or a party
signing a rental agreement or lease on behalf of the owner to
disclose in the rental agreement or lease all of the
following:
a) The name, telephone number, and usual street address at
which personal service may be effected of each person who
is authorized to manage the premises or act for and on
behalf of the owner for the purpose of service of process
and for the purpose of receiving and receipting for all
notices and demands.
b) The name, telephone number, and address of the person or
entity to whom rent payments shall be made.
c) If rent payments may be made personally, the usual days
and hours that the person will be available to receive the
payments.
d) At the owner's option, either the number of an account
in a financial institution into which rent payments may be
made, and the name and street address of the institution,
provided that the institution is located within five miles
of the rental property, or the information necessary to
establish an electronic funds transfer procedure to pay the
rent.
AB 1953
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e) The form or forms in which rent payments are to be made.
(Civil Code Section 1962(a). All further references are
to this code unless otherwise stated.)
2)Provides that the above information required to be disclosed
shall be kept current and this obligation shall extend to and
be enforceable against any successor owner or manager, who
shall comply with this section within 15 days of succeeding
the previous owner or manager. (Section 1962(c).)
3)Requires an owner of residential rental property or a party
signing a rental agreement or lease on behalf of the owner to
provide a copy of the rental agreement or lease to the tenant
within 15 days of its execution by the tenant. (Section
1962(a)(4).)
4)Provides that, in the case of an oral rental agreement, the
owner, or a person acting on behalf of the owner for the
receipt of rent or otherwise, shall furnish the tenant, within
15 days of the agreement, with a written statement containing
the above required information, as specified. (Section
1962(b).)
5)Provides that if the address provided by the owner does not
allow for personal delivery, then it shall be conclusively
presumed that upon the mailing of any rent or notice to the
owner by the tenant to the name and address provided, the
notice or rent is deemed receivable by the owner on the date
posted, if the tenant can show proof of mailing to the name
and address provided by the owner. (Section 1962(f).)
COMMENTS : Existing law, Civil Code Section 1962, requires
property owners to notify the tenant of the name, telephone
number, and address of the person or entity to whom rent
payments shall be made, and requires a successor owner or
manager to make this disclosure within 15 days of succeeding the
previous owner. However, the law is silent with respect to the
rights of the parties when the successor owner fails to comply
with this notice requirement. According to the author, this gap
in the law unfairly allows a successor owner to potentially take
advantage of his own noncompliance and initiate eviction against
a tenant for nonpayment of rent that could have otherwise been
paid and received if the owner had simply provided the required
notice.
AB 1953
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As proposed to be amended, this bill seeks to prohibit a
successor owner or manager from initiating eviction against a
tenant for nonpayment of rent that accrued during any period
where a successor owner or manager failed to comply with the
existing notice requirement under Section 1962. The bill also
establishes that this provision shall in no case relieve the
tenant of any liability for unpaid rent.
Stated need for the bill . The author explains the need for the
bill as follows:
Purchasers of rental properties, especially foreclosed
homes, are increasingly allowing months to go by
without notifying tenants where to pay rent. When a
new owner fails to timely inform the tenant to whom
rent should be paid, but then months later serve a
three-day notice demanding all of the accumulated rent,
many low-income tenants no longer have the money to pay
and keep their homes. Good tenants end up losing their
housing because their landlord failed to comply with
the law, unnecessarily creating nonpayment situations.
This bill will help prevent unnecessary evictions after
ownership changes.
Author's amendment: The author proposes to amend the bill to no
longer allow any waiver of rent, but instead establish a
conditional defense to eviction. The proposed amendment is:
On page 3, strike lines 17 through 21 and replace with:
A successor owner or manager may not serve a notice pursuant
to Section 1161(2) of the Code of Civil Procedure or
otherwise evict a tenant for nonpayment of rent that accrued
during any period of noncompliance with this subdivision by a
successor owner or manager; however, nothing in this
subdivision shall relieve the tenant of any liability for
unpaid rent.
As proposed to be amended, this bill protects tenants from
evictions that stem from an initial act of noncompliance by a
successor owner. According to Tenants Together, the sponsor of
the bill, some tenants have received three day pay-or-quit
notices from their landlord for failure to pay rent when such
AB 1953
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failure occurred only because the tenant had not been properly
notified by the new owner of the property where to send the rent
payment. With accounts of rental scams increasingly in the news
(see e.g. "Foreclosure rattles upscale San Jose neighborhood and
tenants." San Jose Mercury News, 3/14/12), supporters contend
that it is reasonable for tenants to refrain from sending rent
to the person they know to be the former owner, or other unknown
persons, unless they have received proper notice from the new
owner where to send rent, as required by law. As acknowledged
by the California Apartment Association, "It is logical to
assume that if a new owner doesn't provide notice to a tenant
about change in ownership, the new owner cannot expect to
receive the rent timely."
As proposed to be amended, this bill seeks to prohibit a
successor owner or manager from initiating eviction against a
tenant for nonpayment of rent that accrued during any period
where the successor owner or manager failed to comply with the
existing notice requirement under Section 1962. New owners of
property presumably have sufficient incentive to comply with the
15-day notice requirement -they cannot receive rent until they
do so. Moreover, compliance with this modest notice requirement
makes defense from eviction moot in such cases. This bill,
however, protects tenants from the unfair consequences of facing
eviction for nonpayment from a successor owner who perhaps may
be trying to game the system by manufacturing cause to remove
the tenant that would not otherwise exist.
This bill clarifies that tenants remain liable for unpaid rent.
As proposed to be amended, this bill expressly provides that
nothing in this bill shall relieve the tenant of any liability
for unpaid rent. It is believed that this amendment is
sufficient to remove opposition to the bill at this time from
most if not all of the apartment associations who opposed the
previous version of the bill.
Under this approach, the tenant would remain liable for back
rent, but the rent that accrued when a landlord was out of
compliance could not be the basis for a nonpayment eviction.
This approach is similar to that already provided for by Code of
Civil Procedure Section 1161(2), which in certain cases prevents
a landlord from evicting for non-payment of rent that is over a
year old, yet does not waive the rent obligation itself. A
landlord could enforce the rent obligation by filing a small
claims action, or by deducting from the security deposit where
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feasible. If an eviction action is nonetheless filed, this bill
would provide the tenant with clear defense from eviction, and
the court may be in the best position to fashion a solution for
the payment of unpaid rent suited to the unique circumstances of
each case. For example, where the tenant can demonstrate he or
she was faithfully paying the rent to the former owner during
that time, the new owner would have a cause of action to obtain
the rent money from the former owner who wrongfully kept
receiving the rent.
REGISTERED SUPPORT / OPPOSITION :
Support (as introduced)
Tenants Together (sponsor)
Asian Law Caucus
Eviction Defense Collaborative
Public Interest Law Project
Legal Aid Society of San Mateo County
Law Foundation of Silicon Valley-Fair Housing Law Project
Santa Monicans for Renter's Rights
Senior Action Network
One individual
Neutral (as proposed to be amended)
California Apartment Association
Opposition (as introduced)
Apartment Association of California Southern Cities
East Bay Rental Housing Association
NORCAL Rental Property Association
Apartment Association of Orange County
Western Manufactured Housing Communities Association
Analysis Prepared by : Anthony Lew / JUD. / (916) 319-2334