BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 2521| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 2521 Author: Blumenfield (D) Amended: 8/6/12 in Senate Vote: 21 SENATE JUDICIARY COMMITTEE : 4-0, 7/3/12 AYES: Evans, Blakeslee, Corbett, Leno NO VOTE RECORDED: Harman ASSEMBLY FLOOR : 76-0, 5/14/12 - See last page for vote SUBJECT : Landlord and tenant: personal property SOURCE : Author DIGEST : This bill increases to $700, from $300, the threshold amount of determining whether the landlord must dispose of the departed tenant's unclaimed property via a public sale, with the proceeds of the sale (less storage and sale costs) held for the tenant, or whether the landlord may dispose of the property in any manner or retain it for his/her own use. This bill, among other things, (1) requires a landlord to release the personal property to the former tenant without paying the cost of storage, if, the property remained in the dwelling and the former tenant or other person reasonably believed by the landlord to be its owner reclaims the property within two days of vacating the dwelling; and (2) requires a landlord to inform the tenant of his or her general right to recover abandoned property in the notice to terminate a tenancy, or CONTINUED AB 2521 Page 2 in the notice to request an initial inspection of the property prior to termination. Senate Floor Amendments of 8/6/12 add double-jointing language to address a chaptering-out issue with AB 1679 (Bonilla). ANALYSIS : Existing law requires a landlord to provide written notice to a former tenant of the tenant's right to reclaim personal property left behind when the tenancy was terminated. The notice must inform the tenant whether the landlord intends to hold a public sale for the property, or to keep, sell, or destroy the property without further notice because the landlord believes the property to be worth less than $300. (Civil Code (CIV) Section 1984 and 1988) Existing law provides the tenant at least 15 days to claim the property if the notice is personally delivered, and at least 18 days if the notice is mailed. If mailed, the notice must be sent by first-class mail to the tenant at his/her last known address and, if that mailing address is reasonably believed to be deficient, to another address known by the landlord where the tenant may reasonably be expected to receive the notice. (CIV Section 1983) Existing law authorizes a landlord to retain or dispose of personal property left on the premises and unclaimed by the former tenant if the landlord reasonably believes that the property has a total resale value of less than $300. (CIV Section 1988) Existing law 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. (CIV Section 1988) Existing law generally defines "reasonable belief" as the actual knowledge or belief a prudent person would have without making an investigation. (CIV Section 1980(d)) This bill increases the above monetary threshold value from $300 to $700, thereby allowing a landlord to keep, sell, or destroy a tenant's unclaimed personal property if the total CONTINUED AB 2521 Page 3 resale value of the property is reasonably believed to be less than $700. This bill requires a landlord to release the personal property to the former tenant without paying the cost of storage, if the property remained in the dwelling and the former tenant or other person reasonably believed by the landlord to be its owner reclaims the property within two days of vacating the dwelling. This bill revises the notice of the tenant's right to reclaim personal property so as to include language informing the tenant that if he/she claims the property by a specified date (not less than two days after the tenant vacated the premises), the tenant may minimize the costs of storage. This bill also requires the landlord to inform the tenant of his/her general 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. This bill further allows 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. This bill is double-jointed with AB 1679 (Bonilla). FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No SUPPORT : (Verified 8/6/12) Apartment Association, California Southern Cities Apartment Association of Greater Los Angeles Apartment Association of Orange County East Bay Rental Housing Association NORCAL Rental Property Association San Diego County Apartment Association Santa Barbara Rental Property Association CONTINUED AB 2521 Page 4 ARGUMENTS IN SUPPORT : According to the author: AB 2521 would provide a one-time inflation adjustment in the threshold for the handling of abandoned tenant property by landlords to $700. The bill also requires a change in the notice to tenants consistent with the threshold adjustment so tenants will be informed that "Ýb]ecause this property is believed to be worth less than $700, it may be kept, sold, or destroyed without further notice if you fail to reclaim it within the time indicated above." AB 2521 would provide a reasonable adjustment in the dollar value of abandoned tenant property that triggers a public sale, which has not been increased since 1983. Using the Consumer Price Index as a measure for inflation, the proposed adjustment would raise the threshold to $700. This legislation reflects the compromise we worked out with the apartment owners and Western Center on Law and Poverty to ensure that this bill not only benefits landlords but tenants as well. It would, for the first time, allow tenants who act promptly to reclaim abandoned personal property without charge. Additionally, AB 2521 propels the process into the 21st Century by allowing landlords to contact tenants by e-mail about abandoned property found - in addition to the current mailed notification process. AB 2521 would also give tenants earlier notice of their rights to reclaim abandoned property. The bill does not change requirements that a landlord act reasonably in removing and storing the tenant's abandoned property. The bill does not change requirements that a landlord act reasonably in removing and storing the tenant's abandoned property. The landlord still must take specified steps to notify a former tenant who abandoned property at the rental unit and store the property at the tenant's expense if the property is reclaimed. The current costs of advertising, storage and sale paid by a CONTINUED AB 2521 Page 5 landlord may far exceed the value of the abandoned property. According to the Apartment Association of Greater Los Angeles, tenants often do not reclaim abandoned property valued at under $300. Los Angeles County reports receiving $26,149 as of January 31, 2012 from the public auction of abandoned tenant property with few claims filed for proceeds from the sale of their property. AB 2521 would provide a much-needed update that reflects today's economic realities. ASSEMBLY FLOOR : 76-0, 5/14/12 AYES: Achadjian, Alejo, Allen, Ammiano, Beall, Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles Calderon, Campos, Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson, Donnelly, Eng, Feuer, Fong, Fuentes, Furutani, Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Gorell, Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan, V. Manuel Pérez, Portantino, Silva, Skinner, Smyth, Solorio, Swanson, Torres, Wagner, Wieckowski, Williams, Yamada, John A. Pérez NO VOTE RECORDED: Atkins, Fletcher, Perea, Valadao RJG:m 8/6/12 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED