BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                  AB 2314|
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                                 THIRD READING


          Bill No:  AB 2314
          Author:   Carter (D), et al.
          Amended:  7/2/12 in Senate
          Vote:     21

           
           SENATE TRANSPORTATION & HOUSING COMM.  :  8-0, 6/12/12
          AYES:  DeSaulnier, Gaines, Harman, Kehoe, Lowenthal, 
            Pavley, Rubio, Simitian
          NO VOTE RECORDED:  Wyland

           SENATE JUDICIARY COMMITTEE  :  4-0, 6/26/12
          AYES:  Evans, Harman, Corbett, Leno
          NO VOTE RECORDED:  Blakeslee

           ASSEMBLY FLOOR  :  71-0, 5/3/12 - See last page for vote


           SUBJECT  :    Maintenance of foreclosed properties

           SOURCE  :     Attorney General Kamala Harris 


           DIGEST  :    This bill provides certain purchasers of 
          foreclosed residential properties 60 days to remedy code 
          violations before being subject to enforcement actions and 
          eliminates the sunset on existing provisions requiring an 
          owner of a foreclosed, vacant, residential property to 
          maintain the property.

           Senate Floor Amendments  of 7/2/12 make a technical 
          correction and add a coauthor.

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           ANALYSIS  :    Under Health and Safety Code Section 17980, a 
          local government enforcement agency may issue a notice of 
          violation to the owner of a residential property for the 
          failure to comply with building codes or for the existence 
          of a nuisance on the property.  After giving the owner 30 
          days' notice to abate the violation or nuisance, or a 
          shorter period of time if deemed necessary to prevent or 
          remedy an immediate threat to the health and safety of the 
          public or occupants of the structure, the enforcement 
          agency may institute any appropriate action or proceeding 
          to prevent, restrain, correct, or abate the violation or 
          nuisance.  

          These actions or proceedings may include civil fines, 
          prosecution of the owner for a misdemeanor, and in the case 
          of a property that meets the definition of a substandard 
          building, court appointment of a receiver.  If a court 
          appoints a receiver, the receiver takes full and complete 
          control of the property, collects rents, and pays all 
          operating expenses.  The receiver also hires contractors to 
          remedy the code violations.  For his/her services, the 
          receiver is entitled to the same fees, commissions, and 
          necessary expenses as receivers in actions to foreclose 
          mortgages.  If the rents and other income from the property 
          are insufficient to cover the costs of repair, the receiver 
          may borrow funds and, with court approval, secure that debt 
          and any unrecovered costs and fees of the receiver with a 
          lien against the property.  
          A different section of law in the Civil Code, until January 
          1, 2013, requires the owner of a foreclosed, vacant, 
          residential property to maintain the property.  In this 
          context, maintaining the property means caring for the 
          exterior of the property, including, but not limited to, 
          preventing excessive foliage growth that diminishes the 
          value of surrounding properties, preventing trespassers or 
          squatters from remaining on the property, preventing 
          mosquito larvae from growing in standing water, and 
          preventing other conditions that create a public nuisance.  
          After giving the owner at least 30 days to remedy the 
          violations, or less if conditions on the property threaten 
          public health or safety, a governmental entity may impose a 
          fine of up to $1,000 per day for a violation of these 
          requirements.  The governmental agency must allow for a 
          hearing and the opportunity to contest any fine imposed.  

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          Existing law directs these fine revenues to local nuisance 
          abatement programs.

          This bill:

          1. Provides that if a person has purchased and is in the 
             process of diligently abating any violation at a 
             residential property that has 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 in its sole discretion to prevent or 
             remedy an immediate threat to the health and safety of 
             the neighboring community, the public or occupants of 
             the structure.

          2. Provides that if an entity releases a lien securing a 
             deed of trust or mortgage on a property for which a 
             notice of pendency of action has been recorded, as 
             specified, it shall notify in writing the enforcement 
             agency that issued the order or notice within 30 days of 
             releasing the lien.

          3. Allows a receiver for substandard residential property 
             to seek a court order ordering the property owner to pay 
             all unrecovered costs associated with a receivership.  

          4. Deletes the sunset on the Civil Code provisions 
             requiring an owner of a foreclosed, vacant, residential 
             property to maintain the property, and provides that 
             fines and penalties collected under those provisions may 
             be directed to legal abatement proceedings.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No   
          Local:  No

           SUPPORT  :   (Verified  6/28/12)

          Attorney General Kamala Harris (source)
          American Federation of State, County and Municipal 
          Employees 
          California Bankers Association
          California Credit Union League

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          California Financial Services Association
          California Independent Bankers
          California Mortgage Association
          California Mortgage Bankers Association
          California Nurses Association
          California State Association of Counties
          Community Associations Institute
          Los Angeles County Democratic Party
          National Asian American Coalition 
          Public Counsel 
          United Trustees Association



           ASSEMBLY FLOOR  :  71-0, 5/3/12
          AYES:  Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, 
            Bill Berryhill, Block, Blumenfield, Bradford, Brownley, 
            Buchanan, Butler, Campos, Carter, Cedillo, Chesbro, 
            Conway, Cook, Davis, Dickinson, Donnelly, Eng, Feuer, 
            Fong, Fuentes, Beth Gaines, Galgiani, Garrick, Gatto, 
            Gordon, Gorell, Grove, Hagman, Halderman, Harkey, 
            Hayashi, Hill, Huber, Hueso, Huffman, Jeffries, Knight, 
            Lara, Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, 
            Miller, Mitchell, Monning, Morrell, Nestande, Nielsen, 
            Norby, Olsen, Pan, Perea, V. Manuel Pérez, Portantino, 
            Silva, Skinner, Solorio, Swanson, Torres, Valadao, 
            Wagner, Wieckowski, Yamada, John A. Pérez
          NO VOTE RECORDED:  Bonilla, Charles Calderon, Fletcher, 
            Furutani, Hall, Roger Hernández, Jones, Smyth, Williams


          JJA:m  7/2/12   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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