BILL NUMBER: AB 2314 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 26, 2012
AMENDED IN ASSEMBLY APRIL 11, 2012
AMENDED IN ASSEMBLY MARCH 29, 2012
INTRODUCED BY Assembly Member Carter
( Principal coauthor: Assembly Member
Eng )
( Coauthors: Assembly Members
Davis and Skinner )
FEBRUARY 24, 2012
An act to amend Section 2929.3 of the Civil Code, and to
amendSections amend Sections 17980 and 17980.7
of the Health and Safety Code, relating to real property.
LEGISLATIVE COUNSEL'S DIGEST
AB 2314, as amended, Carter. Real property: blight.
(1) Existing law, until January 1, 2013, requires a legal owner to
maintain vacant residential property purchased at a foreclosure sale
or acquired by that owner through foreclosure under a mortgage or
deed of trust. Existing law, until January 1, 2013, authorizes a
governmental entity to impose civil fines and penalties for failure
to maintain that property of up to $1,000 per day for a violation.
Existing law, until January 1, 2013, requires a governmental entity
that seeks to impose those fines and penalties to give notice of the
claimed violation and an opportunity to correct the violation at
least 14 days prior to imposing the fines and penalties, and to allow
a hearing for contesting those fines and penalties.
This bill would delete the repeal clause for these provisions and
thus extend the operation of these provisions indefinitely.
(2) The State Housing Law requires the housing or building
department or, if there is no building department, the health
department, of every city, county, or city and county, or a specified
environmental agency, to enforce within its jurisdiction all of the
State Housing Law, the building standards published in the State
Building Standards Code, and other specified rules and regulations.
If there is a violation of these provisions or any order or notice
that gives a reasonable time to correct that violation, or if a
nuisance exists, an enforcement agency is required, after 30 days'
notice to abate the nuisance, to institute any appropriate action or
proceeding to prevent, restrain, correct, or abate the violation or
nuisance.
This bill would prohibit an enforcement agency from commencing any
action or proceeding until at least 60 days after a person takes
title to the property, unless a shorter period of time is deemed
necessary by the enforcement agency, as specified, if the person has
purchased and is in the process of diligently abating any
violation at a residential property that had been foreclosed on or
after January 1, 2008. This bill would require any entity that
releases a lien securing a deed of trust or mortgage on a property
for which a notice of pendency of action, as defined, has been
recorded against the property, as specified, to notify the
enforcement agency that issued the order or notice within 30 days of
releasing the lien.
(3) Existing law authorizes, among other things, the enforcement
agency to seek and the court to order imposition of specified
penalties or the enforcement agency, tenant, or tenant association or
organization to seek, and the court to order, the appointment of a
receiver for a substandard building, if the owner of the property
fails to comply within a reasonable time with the terms of an order
or notice.
This bill would authorize a court to require the owner of the
property to pay all unrecovered costs associated with the
receivership in addition to any other remedy authorized by law.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 2929.3 of the Civil Code is amended to read:
2929.3. (a) (1) A legal owner shall maintain vacant residential
property purchased by that owner at a foreclosure sale, or acquired
by that owner through foreclosure under a mortgage or deed of trust.
A governmental entity may impose a civil fine of up to one thousand
dollars ($1,000) per day for a violation. If the governmental entity
chooses to impose a fine pursuant to this section, it shall give
notice of the alleged violation, including a description of the
conditions that gave rise to the allegation, and notice of the entity'
s intent to assess a civil fine if action to correct the violation is
not commenced within a period of not less than 14 days and completed
within a period of not less than 30 days. The notice shall be mailed
to the address provided in the deed or other instrument as specified
in subdivision (a) of Section 27321.5 of the Government Code, or, if
none, to the return address provided on the deed or other
instrument.
(2) The governmental entity shall provide a period of not less
than 30 days for the legal owner to remedy the violation prior to
imposing a civil fine and shall allow for a hearing and opportunity
to contest any fine imposed. In determining the amount of the fine,
the governmental entity shall take into consideration any timely and
good faith efforts by the legal owner to remedy the violation. The
maximum civil fine authorized by this section is one thousand dollars
($1,000) for each day that the owner fails to maintain the property,
commencing on the day following the expiration of the period to
remedy the violation established by the governmental entity.
(3) Subject to the provisions of this section, a governmental
entity may establish different compliance periods for different
conditions on the same property in the notice of alleged violation
mailed to the legal owner.
(b) For purposes of this section, "failure to maintain" means
failure to care for the exterior of the property, including, but not
limited to, permitting excessive foliage growth that diminishes the
value of surrounding properties, failing to take action to prevent
trespassers or squatters from remaining on the property, or failing
to take action to prevent mosquito larvae from growing in standing
water or other conditions that create a public nuisance.
(c) Notwithstanding subdivisions (a) and (b), a governmental
entity may provide less than 30 days' notice to remedy a condition
before imposing a civil fine if the entity determines that a specific
condition of the property threatens public health or safety and
provided that notice of that determination and time for compliance is
given.
(d) Fines and penalties collected pursuant to this section shall
be directed to local nuisance abatement programs.
(e) A governmental entity may not impose fines on a legal owner
under both this section and a local ordinance.
(f) These provisions shall not preempt any local ordinance.
(g) This section shall only apply to residential real property.
(h) The rights and remedies provided in this section are
cumulative and in addition to any other rights and remedies provided
by law.
SEC. 2. Section 17980 of the Health and Safety Code is amended to
read:
17980. (a) If any building is constructed, altered, converted, or
maintained in violation of any provision of, or in violation of any
order or notice that gives a reasonable time to correct that
violation issued by an enforcement agency pursuant to this part, the
building standards published in the California Building Standards
Code, or other rules and regulations adopted pursuant to this part,
or if a nuisance exists in any building or upon the lot on which it
is situated, the enforcement agency shall, after 30 days' notice to
abate the nuisance or violation, or a notice to abate with a shorter
period of time if deemed necessary by the enforcement agency to
prevent or remedy an immediate threat to the health and safety of the
public or occupants of the structure, institute any appropriate
action or proceeding to prevent, restrain, correct, or abate the
violation or nuisance. Notwithstanding the above, if a person has
purchased and is in the process of diligently abating any
violation at a residential property that had been foreclosed on or
after January 1, 2008, an enforcement agency shall not commence any
action or proceeding until at least 60 days after the person takes
title to the property, unless a shorter period of time is deemed
necessary by the enforcement agency to prevent or remedy an immediate
threat to the health and safety of the public or occupants of the
structure.
(b) If any entity releases a lien securing a deed of trust or
mortgage on a property for which a notice of pendency of action, as
defined in Section 405.2 of the Code of Civil Procedure, has been
recorded against the property by an enforcement agency pursuant to
subdivision (a) of Section 17985 of the Health and Safety Code or
Section 405.7 or 405.20 of the Code of Civil Procedure, it shall
notify the enforcement agency that issued the order or notice within
30 days of releasing the lien.
(c) (1) Whenever the enforcement agency has inspected or caused to
be inspected any building and has determined that the building is a
substandard building or a building described in Section 17920.10, the
enforcement agency shall commence proceedings to abate the violation
by repair, rehabilitation, vacation, or demolition of the building.
The enforcement agency shall not require the vacating of a
residential building unless it concurrently requires expeditious
demolition or repair to comply with this part, the building standards
published in the California Building Standards Code, or other rules
and regulations adopted pursuant to this part. The owner shall have
the choice of repairing or demolishing. However, if the owner chooses
to repair, the enforcement agency shall require that the building be
brought into compliance according to a reasonable and feasible
schedule for expeditious repair. The enforcement agency may require
vacation and demolition or may itself vacate the building, repair,
demolish, or institute any other appropriate action or proceeding, if
any of the following occur:
(A) The repair work is not done within the period required by the
notice.
(B) The owner does not make a timely choice of repair or
demolition.
(C) The owner selects an option which cannot be completed within a
reasonable period of time, as determined by the enforcement agency,
for any reason, including, but not limited to, an outstanding
judicial or administrative order.
(2) In deciding whether to require vacation of the building or to
repair as necessary, the enforcement agency shall give preference to
the repair of the building whenever it is economically feasible to do
so without having to repair more than 75 percent of the dwelling, as
determined by the enforcement agency, and shall give full
consideration to the needs for housing as expressed in the local
jurisdiction's housing element.
(d) (1) Notwithstanding subdivision (b) and notwithstanding local
ordinances, tenants in a residential building shall be provided
copies of any of the following:
(A) The notice of any violation described in subdivision (a) that
affects the health and safety of the occupants and that causes the
building to be substandard pursuant to Section 17920.3 or in
violation of Section 17920.10.
(B) An order of the code enforcement agency issued after
inspection of the premises declaring the dwelling to be in violation
of any provision described in subdivision (a).
(C) The enforcement agency's decision to repair or demolish.
(D) The issuance of a building or demolition permit following the
abatement order of an enforcement agency.
(2) Each document provided pursuant to paragraph (1) shall be
provided to each affected residential unit by the enforcement agency
that issued the order or notice, in the manner prescribed by
subdivision (a) of Section 17980.6.
(e) All notices issued by the enforcement agency to correct
violations or to abate nuisances shall contain a provision notifying
the owner that, in accordance with Sections 17274 and 24436.5 of the
Revenue and Taxation Code, a tax deduction may not be allowed for
interest, taxes, depreciation, or amortization paid or incurred in
the taxable year. In addition, in Los Angeles County, the notice
shall contain a provision notifying the owner that within 10 days of
recordation of a notice of substandard conditions or similar
document, the owner is required to comply with Section 17997.
(f) The enforcement agency may charge the owner of the building
for its postage or mileage cost for sending or posting the notices
required to be given by this section.
SEC. 3. Section 17980.7 of the Health and Safety Code is amended
to read:
17980.7. If the owner fails to comply within a reasonable time
with the terms of the order or notice issued pursuant to Section
17980.6, the following provisions shall apply:
(a) The enforcement agency may seek and the court may order
imposition of the penalties provided for under Chapter 6 (commencing
with Section 17995).
(b) (1) The enforcement agency may seek and the court may order
the owner to not claim any deduction with respect to state taxes for
interest, taxes, expenses, depreciation, or amortization paid or
incurred with respect to the cited structure, in the taxable year of
the initial order or notice, in lieu of the enforcement agency
processing a violation in accordance with Sections 17274 and 24436.5
of the Revenue and Taxation Code.
(2) If the owner fails to comply with the terms of the order or
notice to correct the condition that caused the violation pursuant to
Section 17980.6, the court may order the owner to not claim these
tax benefits for the following year.
(c) The enforcement agency, tenant, or tenant association or
organization may seek and the court may order, the appointment of a
receiver for the substandard building pursuant to this subdivision.
In its petition to the court, the enforcement agency, tenant, or
tenant association or organization shall include proof that notice of
the petition was served not less than three days prior to filing the
petition, pursuant to Article 3 (commencing with Section 415.10) of
Chapter 4 of Title 5 of Part 2 of the Code of Civil Procedure, to all
persons with a recorded interest in the real property upon which the
substandard building exists.
(1) In appointing a receiver, the court shall consider whether the
owner has been afforded a reasonable opportunity to correct the
conditions cited in the notice of violation.
(2) The court shall not appoint any person as a receiver unless
the person has demonstrated to the court his or her capacity and
expertise to develop and supervise a viable financial and
construction plan for the satisfactory rehabilitation of the
building. A court may appoint as a receiver a nonprofit organization
or community development corporation. In addition to the duties and
powers that may be granted pursuant to this section, the nonprofit
organization or community development corporation may also apply for
grants to assist in the rehabilitation of the building.
(3) If a receiver is appointed, the owner and his or her agent of
the substandard building shall be enjoined from collecting rents from
the tenants, interfering with the receiver in the operation of the
substandard building, and encumbering or transferring the substandard
building or real property upon which the building is situated.
(4) Any receiver appointed pursuant to this section shall have all
of the following powers and duties in the order of priority listed
in this paragraph, unless the court otherwise permits:
(A) To take full and complete control of the substandard property.
(B) To manage the substandard building and pay expenses of the
operation of the substandard building and real property upon which
the building is located, including taxes, insurance, utilities,
general maintenance, and debt secured by an interest in the real
property.
(C) To secure a cost estimate and construction plan from a
licensed contractor for the repairs necessary to correct the
conditions cited in the notice of violation.
(D) To enter into contracts and employ a licensed contractor as
necessary to correct the conditions cited in the notice of violation.
(E) To collect all rents and income from the substandard building.
(F) To use all rents and income from the substandard building to
pay for the cost of rehabilitation and repairs determined by the
court as necessary to correct the conditions cited in the notice of
violation.
(G) To borrow funds to pay for repairs necessary to correct the
conditions cited in the notice of violation and to borrow funds to
pay for any relocation benefits authorized by paragraph (6) and, with
court approval, secure that debt and any moneys owed to the receiver
for services performed pursuant to this section with a lien on the
real property upon which the substandard building is located. The
lien shall be recorded in the county recorder's office in the county
within which the building is located.
(H) To exercise the powers granted to receivers under Section 568
of the Code of Civil Procedure.
(5) The receiver shall be entitled to the same fees, commissions,
and necessary expenses as receivers in actions to foreclose
mortgages.
(6) If the conditions of the premises or the repair or
rehabilitation thereof significantly affect the safe and sanitary use
of the substandard building by any tenant, to the extent that the
tenant cannot safely reside in his or her unit, then the receiver
shall provide relocation benefits in accordance with subparagraph (A)
of paragraph (3) of subdivision (d).
(7) The relocation compensation provided for in this section shall
not preempt any local ordinance that provides for greater relocation
assistance.
(8) In addition to any reporting required by the court, the
receiver shall prepare monthly reports to the state or local
enforcement agency which shall contain information on at least the
following items:
(A) The total amount of rent payments received.
(B) Nature and amount of contracts negotiated relative to the
operation or repair of the property.
(C) Payments made toward the repair of the premises.
(D) Progress of necessary repairs.
(E) Other payments made relative to the operation of the building.
(F) Amount of tenant relocation benefits paid.
(9) The receiver shall be discharged when the conditions cited in
the notice of violation have been remedied in accordance with the
court order or judgment and a complete accounting of all costs and
repairs has been delivered to the court. Upon removal of the
condition, the owner, the mortgagee, or any lienor of record may
apply for the discharge of all moneys not used by the receiver for
removal of the condition and all other costs authorized by this
section.
(10) After discharging the receiver, the court may retain
jurisdiction for a time period not to exceed 18 consecutive months,
and require the owner and the enforcement agency responsible for
enforcing Section 17980 to report to the court in accordance with a
schedule determined by the court.
(11) The prevailing party in an action pursuant to this section
shall be entitled to reasonable attorney's fees and court costs as
may be fixed by the court.
(12) The county recorder may charge and collect fees for the
recording of all notices and other documents required by this section
pursuant to Article 5 (commencing with Section 27360) of Chapter 6
of Division 2 of Title 3 of the Government Code.
(13) This section shall not be construed to limit those rights
available to tenants and owners under any other provision of the law.
(14) This section shall not be construed to deprive an owner of a
substandard building of all procedural due process rights guaranteed
by the California Constitution and the United States Constitution,
including, but not limited to, receipt of notice of the violation
claimed and an adequate and reasonable period of time to comply with
any orders which are issued by the enforcement agency or the court.
(15) Upon the request of a receiver, a court may require the owner
of the property to pay all unrecovered costs associated with the
receivership in addition to any other remedy authorized by law.
(d) If the court finds that a building is in a condition which
substantially endangers the health and safety of residents pursuant
to Section 17980.6, upon the entry of any order or judgment, the
court shall do all of the following:
(1) Order the owner to pay all reasonable and actual costs of the
enforcement agency including, but not limited to, inspection costs,
investigation costs, enforcement costs, attorney fees or costs, and
all costs of prosecution.
(2) Order that the local enforcement agency shall provide the
tenant with notice of the court order or judgment.
(3) (A) Order that if the owner undertakes repairs or
rehabilitation as a result of being cited for a notice under this
chapter, and if the conditions of the premises or the repair or
rehabilitation thereof significantly affect the safe and sanitary use
of the premises by any lawful tenant, so that the tenant cannot
safely reside in the premises, then the owner shall provide or pay
relocation benefits to each lawful tenant. These benefits shall
consist of actual reasonable moving and storage costs and relocation
compensation. The actual moving and storage costs shall consist of
all of the following:
(i) Transportation of the tenant's personal property to the new
location. The new location shall be in close proximity to the
substandard premises, except where relocation to a new location
beyond a close proximity is determined by the court to be justified.
(ii) Packing, crating, unpacking, and uncrating the tenant's
personal property.
(iii) Insurance of the tenant's property while in transit.
(iv) The reasonable replacement value of property lost, stolen, or
damaged (not through the fault or negligence of the displaced
person, his or her agent or employee) in the process of moving, where
insurance covering the loss, theft, or damage is not reasonably
available.
(v) The cost of disconnecting, dismantling, removing,
reassembling, reconnecting, and reinstalling machinery, equipment, or
other personal property of the tenant, including connection charges
imposed by utility companies for starting utility service.
(B) (i) The relocation compensation shall be an amount equal to
the differential between the contract rent and the fair market rental
value determined by the federal Department of Housing and Urban
Development for a unit of comparable size within the area for the
period that the unit is being repaired, not to exceed 120 days.
(ii) If the court finds that a tenant has been substantially
responsible for causing or substantially contributing to the
substandard conditions, then the relocation benefits of this section
shall not be paid to this tenant. Each other tenant on the premises
who has been ordered to relocate due to the substandard conditions
and who is not substantially responsible for causing or contributing
to the conditions shall be paid these benefits and moving costs at
the time that he or she actually relocates.
(4) Determine the date when the tenant is to relocate, and order
the tenant to notify the enforcement agency and the owner of the
address of the premises to which he or she has relocated within five
days after the relocation.
(5) (A) Order that the owner shall offer the first right to
occupancy of the premises to each tenant who received benefits
pursuant to subparagraph (A) of paragraph (3), before letting the
unit for rent to a third party. The owner's offer on the first right
to occupancy to the tenant shall be in writing, and sent by
first-class certified mail to the address given by the tenant at the
time of relocation. If the owner has not been provided the tenant's
address by the tenant as prescribed by this section, the owner shall
not be required to provide notice under this section or offer the
tenant the right to return to occupancy.
(B) The tenant shall notify the owner in writing that he or she
will occupy the unit. The notice shall be sent by first-class
certified mail no later than 10 days after the notice has been mailed
by the owner.
(6) Order that failure to comply with any abatement order under
this chapter shall be punishable by civil contempt, penalties under
Chapter 6 (commencing with Section 17995), and any other penalties
and fines as are available.
(e) The initiation of a proceeding or entry of a judgment pursuant
to this section or Section 17980.6 shall be deemed to be a
"proceeding" or "judgment" as provided by paragraph (4) or (5) of
subdivision (a) of Section 1942.5 of the Civil Code.
(f) The term "owner," for the purposes of this section, shall
include the owner, including any public entity that owns residential
real property, at the time of the initial notice or order and any
successor in interest who had actual or constructive knowledge of the
notice, order, or prosecution.
(g) These remedies shall be in addition to those provided by any
other law.
(h) This section and Section 17980.6 shall not impair the rights
of an owner exercising his or her rights established pursuant to
Chapter 12.75 (commencing with Section 7060) of Division 7 of Title 1
of the Government Code.