BILL ANALYSIS Ó
AB 2521
Page 1
Date of Hearing: May 1, 2012
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 2521 (Blumenfield) - As Introduced: February 24, 2012
As Proposed to be Amended
SUBJECT : TERMINATION OF TENANCY: UNCLAIMED PERSONAL PROPERTY
KEY ISSUE : SHOULD THE STATUTORY PROCEDURE GOVERNING THE
DISPOSITION OF A FORMER TENANT'S UNCLAIMED PERSONAL PROPERTY BE
REVISED TO FACILITATE GREATER RECOVERY OF THE PROPERTY BY
TENANTS, AS WELL AS TO REDUCE STORAGE AND OTHER COSTS FOR
LANDLORDS?
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
SYNOPSIS
Under current law, a landlord is authorized to retain or dispose
of unclaimed property left behind by a former tenant if the
landlord reasonably believes that the property has a resale
value less than $300 and the property goes unclaimed after a
minimum 15-day notice period. Unclaimed property valued over
that amount must be offered by the landlord at a public sale
rather than being tossed or kept for personal use. This bill
seeks to revise statutory procedures governing the disposition
of unclaimed personal property left behind on the premises by
the former tenant after termination of the tenancy. Among other
things, this bill seeks to increase the threshold amount from
$300 to $700-an increase based on Consumer Price Index data,
according to the author, that reflects the first adjustment of
this figure for inflation since 1983. As proposed to be
amended, this bill also includes measures intended to increase
the rate that tenants reclaim and are reunited with their
personal property. First, this bill offers tenants a limited
opportunity to reclaim property left behind without paying
storage fees, as long as it is reclaimed within two days since
the tenant vacated and the property remained in the dwelling
during that time. In addition, this bill seeks to expand early
notice given to the former tenant so he or she clearly
understands the options and costs associated with reclaiming the
personal property. As proposed to be amended, the bill is
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supported by a number of apartment associations and has no known
opposition from tenant groups or others.
SUMMARY : Revises procedures for the disposition of private
property left behind by former tenants of real property.
Specifically, this bill :
1)Increases the minimum value, from $300 to $700, of a former
tenant's unclaimed personal property that a landlord must
offer at a public sale rather than disposing of it or keeping
the property for his or her own use.
2)Authorizes the landlord to provide to the former tenant by
email, in addition to personal delivery or first class mail,
written notice describing personal property left behind by the
former tenant and how to reclaim such property, but only if
the former tenant had provided the landlord with his or her
email address.
3)Revises the above statutorily prescribed notices provided to
former tenants and other persons who the landlord reasonably
believes to be the owner of personal property left behind
after termination of the tenancy.
4)Requires the landlord to inform the tenant of his or her right
to recover abandoned property in the notice to terminate a
tenancy, or in the notice to request an initial inspection of
the property prior to termination.
5)Provides that the landlord shall release the unclaimed
personal property to the former tenant and shall not require
the former tenant to pay the cost of storage if such property
remained in the dwelling and is reclaimed by the former tenant
within 2 days of having vacated the dwelling.
EXISTING LAW :
1)Requires the landlord, when personal property has been left
behind after termination of a tenancy, to provide written
notice to the former tenant of his or her right to reclaim the
abandoned property for at least 15 days after the notice is
personally delivered, or 18 days if mailed. (Civil Code
Section 1983. All further references are to this code unless
otherwise stated.)
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2)Requires the above notice to inform the tenant whether the
landlord intends to hold a public sale for the property, or
intends to keep or dispose of the property if it is not
claimed within the time specified because it is believed to be
worth less than $300. (Section 1984.)
3)Requires the landlord to release the personal property to the
former tenant or, at the landlord's option, to any person
reasonably believed by the landlord to be its owner if such
tenant or other person pays the reasonable cost of storage and
takes possession of the property not later than the date
specified in the above notice for taking possession. (Section
1987.)
4)Authorizes a landlord, to retain or dispose of personal
property left on the premises by the former tenant if the
landlord reasonably believes that the property has a resale
value less than $300. (Section 1988.)
5)Requires the landlord to hold a public sale with competitive
bidding for unclaimed personal property left by a former
tenant if the value of the property is believed to be worth
$300 or more. (Section 1988.)
6)Limits the liability of the landlord for the release or
disposal of property that is carried out in compliance with
all statutory requirements. (Section 1989.)
COMMENTS : This bill seeks to revise statutory procedures
governing the disposition of unclaimed personal property left
behind on the premises by the former tenant after termination of
the tenancy. Among other things, this bill seeks to increase
the threshold amount under existing law that determines whether
a landlord has the option to keep or dispose of a former
tenant's unclaimed personal property, rather than being required
by law to hold a public sale for such property. Under this
bill, the current threshold amount would be increased from $300
to $700-an increase based on Consumer Price Index data that
reflects the first adjustment of this figure for inflation since
1983, according to the author. By reducing the number of public
sales that would be required by law to be held, this adjustment
would have the effect of relieving some of the associated
storage and sale costs that landlords contend is an inefficient
burden placed on them by the current law.
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In addition, as proposed to be amended, this bill seeks to
implement important changes intended to increase the rate that
tenants reclaim and are reunited with their personal property.
First, this bill offers a 2-day "grace period" from storage fees
whereby, in certain circumstances, the former tenant is
incentivized to reclaim his or her property right away and thus
avoid paying any storage costs that would otherwise start
accruing under current law. In addition, this bill seeks to
expand early notice given to the former tenant so he or she
clearly understands the options and costs associated with
reclaiming the personal property.
This bill raises the threshold amount for the first time since
1983. The bill is supported by a number of apartment
associations, who contend that the existing minimum value ($300)
of unclaimed property that requires a landlord to hold a public
sale was enacted almost 30 years ago, and is unreasonably low
given subsequent inflation. Moreover, they contend that it is
neither practical nor economical for a landlord to hold a public
sale for unclaimed property worth less than $300 when the costs
of holding a public sale, including costs for storage, an
auctioneer, advertising, and publication of notice, may far
exceed the value of the property.
This bill seeks to raise the threshold amount triggering the
need for a public sale from $300 to $700. According to the
author, the proposed amount of $700 reflects the appropriate
increase based on using the Consumer Price Index (CPI) as a
measure of inflation. Although it is unknown what proportion of
former tenants currently leave behind property valued in excess
of $300, tenants often do not reclaim abandoned or forgotten
property valued at $300 or less, according to the Apartment
Association of Greater Los Angeles. By raising the threshold
value to $700, this bill is expected to significantly reduce the
number of instances where a landlord would be required to hold a
public sale if that property goes unclaimed.
Expanded notice and 2-day grace period seeks to reunite tenants
with their property. Both tenant and landlord groups agree that
a policy of reuniting tenants with their property as soon as
possible benefits everyone involved. This bill expands early
notice to tenants about their general right to reclaim any
property they may leave behind after moving out. As proposed to
be amended, disclosure of this right shall be included in the
termination notice itself, pursuant to Section 1946 or 1946.1,
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and also shall be included in the notice to request inspection
of the unit prior to termination, pursuant to Section 1950.5(f).
This bill also authorizes the landlord, if provided with the
former tenant's email address, to email the specific notice to
the former tenant required by Section 1983, describing property
that has been left behind after termination of tenancy, and
advising the person of the rights and procedures associated with
reclaiming the property.
Western Center on Law and Poverty reports that when tenants
leave property behind after vacating the premises (particularly
large items like furniture), it is often the result of
unexpected difficulties with moving the property, transportation
issues, or simply running out of time and not necessarily the
intentional abandonment of the property. Unfortunately,
existing law is relatively inflexible because it requires the
tenant to pay storage costs that start accruing immediately
thereafter in order to reclaim his or her property. This may
provide a disincentive for the tenant to reclaim the property,
depending on its value, because storage and other associated
costs may quickly exceed the value of the property. If the
property is worth more than the threshold value yet goes
unclaimed after the 15-day period of notice, then the landlord
is required to hold a public sale for the property, thus
incurring additional costs.
This bill for the first time offers tenants a limited
opportunity to reclaim property left behind without paying
storage fees, as long as it is reclaimed within two days since
the tenant vacated and the property remained in the dwelling
during that time (i.e. no costs were incurred moving the
property out of the unit or putting it into storage.) Property
reclaimed after two days or that has been moved out of the unit
may still be reclaimed pursuant to existing law, which requires
its release if the tenant pays the reasonable cost of storage
and takes possession of the property no later than the date
specified in the notice (usually 15 days.)
Tenants still have options to reacquire their property after the
15-day notice period. Presently, a former tenant who leaves
personal property reasonably worth more than the threshold value
has a number of options provided by existing law to reacquire
the property if not reclaimed within the initial 15-day period
of notice. First, the landlord must release the property to the
former tenant if the tenant claims it prior to the time it is
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sold and pays the reasonable cost of storage, advertising, and
sale incurred prior to the time the property is withdrawn from
sale (Section 1987(b)). Second, the former tenant has the right
to bid on the property at the public sale (Section 1988(a)).
Finally, the former tenant may claim any proceeds remaining
after the costs of storage, advertising, and holding the sale
have been deducted and paid into the county treasury as long as
the claim is made within one year from the date of payment to
the county (Section 1988(c)). This bill does not change any of
these rights, although it does seek to encourage former tenants
to reclaim their property earlier so these less cost-effective
options would be exercised less frequently.
Previous Related Legislation : AB 410 (Adams) of 2007 sought to
increase the threshold amount to $650 and make a corresponding
change to the notice to former tenants. This bill failed in
Senate Judiciary.
REGISTERED SUPPORT / OPPOSITION :
Support
Apartment Association of Greater Los Angeles
San Diego County Apartment Association
Santa Barbara Rental Property Association
Opposition
None on file
Analysis Prepared by : Anthony Lew / JUD. / (916) 319-2334