BILL ANALYSIS Ó SENATE JUDICIARY COMMITTEE Senator Noreen Evans, Chair 2011-2012 Regular Session SB 337 (Kehoe) As Amended March 24, 2011 Hearing Date: April 5, 2011 Fiscal: No Urgency: No BCP:rm SUBJECT Tenancy: Noncommercial Signs DESCRIPTION This bill would provide that a landlord shall not prohibit a tenant from posting or displaying noncommercial signs, posters, flags, or banners on or within any portion of the tenant's dwelling unit, unless the postings or display would violate a local, state, or federal law. This bill would state that the above prohibition is declaratory of existing law. BACKGROUND In City of Ladue v. Gilleo, (1994) 512 U.S. 43, the United States Supreme Court recognized that a person's ability to post a sign on his or her own residence is a valuable right protected by the First Amendment of the U.S. Constitution. In that case the city of Ladue, Missouri had enacted an ordinance generally prohibiting residents from posting signs in front of their houses, with a few specified exceptions. The Court found the ordinance to be unconstitutional, stating: Signs that react to a local happening or express a view on a controversial issue both reflect and animate change in the life of a community. Often placed on lawns or in windows, residential signs play an important part in political campaigns, during which they are displayed to signal the resident's support for particular candidates, parties, or causes. ? (more) SB 337 (Kehoe) Page 2 of ? Residential signs are an unusually cheap and convenient form of communication. Especially for persons of modest means or limited mobility, a yard or window sign may have no practical substitute. (City of Ladue, 512 U.S. at 55-57.) The State of California has since recognized the importance of permitting residents to post signs on residential property. For example, existing law restricts the ability of mobilehome park management to prohibit residents from posting political campaign signs on mobilehomes or the individual sites where the homes are located. (Civ. Code Sec. 799.10.) Existing law also restricts the ability of Common Interest Development (CID) housing associations to prohibit individual homeowners from posting noncommercial signs on their properties. (Civ. Code Sec. 1353.6.) This bill would address an additional situation in which California has not explicitly protected residents' ability to post residential signs by restricting the ability of a landlord to prohibit a tenant from posting a noncommercial sign on a residential rental property, unless the posting would violate a local, state, or federal law. CHANGES TO EXISTING LAW Existing federal law provides: "Congress shall make no law ? abridging the freedom of speech.?" (U.S. Const., Amend. I.) Existing federal law states that it is a violation of free speech rights under the First Amendment to "almost completely forecloseÝ ] a venerable means of communication" by generally prohibiting the use of residential signs, which "have long been an important and distinct medium of expression." (City of Ladue v. Gilleo (1994) 512 U.S. 43, 54-59.) Existing law provides: "Every person may freely speak, write, and publish his or her sentiments on all subjects, being responsible for the abuse of this right. A law may not restrain or abridge liberty of speech or press." (Cal. Const., art. I, sec. 2, subd. (a).) This clause is "more definitive and inclusive than the First Amendment?." (Wilson v. Superior Court (1975) 13 Cal.3d 652, 658.) Existing law provides that a CID governing document may not SB 337 (Kehoe) Page 3 of ? prohibit homeowners from posting noncommercial signs, posters, flags, or banners on or in their individual properties, except as required for the protection of public health or safety or if the posting would violate a local, state, or federal law. The law permits associations to prohibit signs or posters larger than 9 square feet, and flags or banners larger than 15 square feet. It also permits associations to prohibit signs made out of lights, roofing, siding, paving materials, flora, or balloons, or any other similar building, landscaping, or decorative component, or signs that include the painting of architectural surfaces. (Civ. Code Sec. 1353.6.) Existing law provides that a resident in a mobilehome park may not be prohibited from displaying a political campaign sign in the window or on the side of a manufactured home or mobilehome, or within the site on which the home is located or installed. The size of such signs may be limited to six square feet. A resident may be prohibited from displaying a political campaign sign for longer than the period of time between 90 days prior to an election and 15 days following the election, unless a local ordinance imposes a more restrictive period of time for the display of such signs. (Civ. Code Sec. 799.10.) Existing law provides that it is unlawful for a landlord to increase rent, decrease services, cause a tenant to quit involuntarily, bring an action to recover possession, or threaten to do any of those acts, for the purpose of retaliating against the tenant because he or she has, among other things, peaceably exercised any rights under law. (Civ. Code Sec. 1942.5.) This bill would provide that a landlord shall not prohibit a tenant from posting or displaying noncommercial signs, posters, flags, or banners on or within any portion of the tenant's dwelling unit, unless the posting or display would violate a local, state, or federal law. This bill would state that the above prohibition is declaratory of existing law. COMMENT 1. Stated need for the bill According to the author: SB 337 (Kehoe) Page 4 of ? The ability to freely express one-self . . . is denied to nearly 40% of all Californians. Tenants have no guaranteed right to expression on the very property they call home, simply because they are not the legal owner of where they live. While tenants have many rights provided to them under the law, several forms of expression are not protected. These forms include flying a flag or banner, posting non-commercial signs or even displaying signs that are political in nature. Should people lose their right to freedom of expression simply because they rent their property? The answer is no. Any discrimination that prevents freedom of expression, based on whether or not you own property is a denial of rights that belong to all people. . . . SB 337 grants tenants the right to post and display signs, flags or other noncommercial signs as a form of expression that may be displayed where they live. The American Civil Liberties Union (ACLU), sponsor, states that they have "successfully argued in court that current California law as expressed in Civil Code Section 1942.5(c) renders unlawful lease restrictions that bar tenants from posting political signs on their leased premises. The legislative history of Section 1945.5(c), made it clear that the Legislature intended that displaying political signs in windows was covered by the statutory protection of a tenant's exercise of 'any right under the law'. SB 337 would provide the specific statutory protection to post these signs." 2. Freedom of speech and expression By prohibiting landlords from restricting a tenant's posting or display of noncommercial signs, posters, flags or banners, this bill would further protect the ability of tenants to express themselves. While freedom of speech is protected under both the United States and California Constitution, that protection, which varies depending on the type of speech, is generally limited to situations involving a government actor. (See Comment 2(b).) a. Background on freedom of expression The freedom to express oneself is considered by many to be a SB 337 (Kehoe) Page 5 of ? fundamental part of our society. Although not absolute, the importance of freedom of speech has been a pivotal part of various societies for hundreds of years. The Declaration of the Rights of Man and of the Citizen, adopted during the French Revolution stated that: The free communication of ideas and opinions is one of the most precious of the rights of man. Every citizen may, accordingly, speak, write, and print with freedom, but shall be responsible for such abuses of this freedom as shall be defined by law. In order to protect citizens from oppression by the government, the First Amendment of the United States Constitution states that: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press . . ." Although the federal "state action" doctrine provides that First Amendment free speech rights may only be enforced against government actors, the free speech clause of the California Constitution, is "more definitive and inclusive than the First Amendment?." (Wilson v. Superior Court (1975) 13 Cal.3d 652, 658), and has been held to have broader application. For example, the California Supreme Court held in Robins v. Pruneyard Shopping Center (1979) 23 Cal.3d 899 that enforcement of the California free speech clause is not limited to government actors, and that the clause could be enforced against a privately owned shopping center. The court later found in Golden Gateway Center v. Golden Gateway Tenants Association (2001) 26 Cal.4th 1013 that the free speech clause could not be enforced against an apartment complex that had prohibited the distribution of pamphlets under apartment doors, but stated that "actions of a private property owner constitute state action for purposes of California's free speech clause only if the property is freely and openly accessible to the public." (Id. at 1033.) Although application of that standard would arguably not protect tenants who seek to post signs in the windows of their rental unit, the court did note that "many statutes and ordinances serve to protect tenants against unreasonable lease provisions and restrictions . . . tenants may always seek a legislative solution tailored to their specific concerns." (Id. at 1035.) While this bill represents that legislative step, it should be noted that only three of the SB 337 (Kehoe) Page 6 of ? seven justices signed on to that opinion and that the concurring opinion of former Chief Justice Ron George made it clear that the decision was limited to its facts, and that California's free speech clause may ultimately be found enforceable against a private person who attempts to use power in one area "to censor or undermine what might be viewed as another individual's 'core' free speech rights." (Id. at 1042.) Staff also notes that the author provided examples of two cities that have taken action on a local level. Those cities, Davis and Woodland, have enacted ordinances to prevent a landlord from prohibiting a tenant from posting political signs. Given that local governments are acting to address this issue, and that state law would preempt a local ordinance, the Committee should be cognizant that any amendments that enable landlords to impose greater restrictions could have the potential of preempting any local ordinance that simply bans landlords from interfering with the tenant's right to post a noncommercial signs. b. Intersection with property rights Owners of property are said to have a "bundle of rights" associated with the property; different circumstances can take away some of those rights (for example, a lien removes some, but not all of their rights). When a landlord rents his or her property, some (but not all) of those rights are transferred to the tenant. This bill would clarify that the landlord does not retain the right, as owner of the property, to restrict the use of noncommercial signs, posters, flags, or banners on or within the dwelling. While the ability to display noncommercial signs is consistent with the principles of free speech, the display should also comply with any applicable lawful restrictions that have been placed on the property. The logic for that distinction is that a landlord, in his or her "bundle of rights" cannot transfer a right to the tenant that the landlord does not have themselves. For example, covenants, conditions, and restrictions (CC&Rs), or the governing documents in a CID, may lawfully restrict the display of certain signs. Alternatively, local ordinances could also prohibit certain displays, or place conditions on their use. Since a tenant arguably does not have a property right that SB 337 (Kehoe) Page 7 of ? cannot be transferred from the owner, the bill should ensure (to the extent possible), that a landlord is able to require the tenant to comply with all restrictions that the property is subject. Failure to allow a landlord to require compliance could arguably create a situation where a tenant is able to violate a restriction, subject the landlord to a penalty, and effectively prevent the landlord from taking action. Although the bill currently allows a landlord to prohibit a tenant from violating local (e.g.: ordinance or zoning requirement), state, or federal law, it does not authorize a landlord to prohibit a tenant from posting or displaying signs that would violate another type of lawful restriction on the property. Staff also notes that while existing law restricts the ability of CIDs to prohibit the display of noncommercial signs, it does allow CIDs to restrict the materials used for the sign and their overall size. (Civ. Code Sec. 1352.6.) Those same restrictions are not contained within this bill, thus, a landlord would not be able to require a tenant to comply with lawful restrictions imposed by the homeowners association pursuant to existing law. Community Associations Institute (CAI), in an oppose unless amended position, notes that "SB 337 inadvertently poses a problem for ÝCIDs] in that its provisions appear to conflict with Civil Code Sec. 1353.6 on the same topic (signage) . . . Owners of rented units in CID's, and their tenants, are required to abide by Ýthat] statute as well as the CID's local governing documents, including rules and restrictions." CAI further requests that the bill be amended so as not to conflict with that section, which was "the subject of major controversy in the Legislature." From a policy standpoint, it appears reasonable to allow a landlord to require a tenant to comply with all applicable laws and regulations when renting a property, including CC&Rs, and governing documents. Those same restrictions would apply to the landlord if he or she decided to occupy the property as their primary residence. Accordingly the author should consider amending the bill to clarify that a landlord can require a tenant to comply with other lawful restrictions on the property, specifically the governing documents of a CID and any applicable CC&Rs. Staff notes that while the current version of the bill would permit a landlord to prohibit the posting or display when it would violate a local, state or federal law, that provision would not encompass those other lawful restrictions that may have been placed on the property. SB 337 (Kehoe) Page 8 of ? Suggested amendment: On page 2, strike out ", unless the posting or display would violate" and line 3, and insert: , unless: (1) The posting or display would violate a local, state, or federal law. (2) The posting or display would violate a lawful provision in a common interest development governing document that satisfies the criteria of Section 1353.6. (3) The posting or display would violate a lawful provision in the covenants, conditions, and restrictions recorded against the property. 3. Opposition's concerns The California Apartment Association, in opposition, argues that the bill "proposes a significant and unconstitutional interference with property owners' rights to set standards at their property . . . and would deny property owners the ability to impose rules necessary to prevent visual blight and to prevent the posting of signs and banners that are offensive to other residents and the surrounding community." The California Association of Realtors, Apartment Association of Greater Los Angeles, San Diego County Apartment Association, and the Santa Barbara Rental Property Association oppose the bill on the basis that "rental property owners and managers must have the unfettered flexibility to judge what may or may not be suitable conduct by one resident if it has the prospect of affecting the quiet enjoyment of other residents in rental housing." Those organizations further contend that: (1) the bill leaves an apartment owner virtually powerless to preserve the quiet enjoyment of all residents in apartment units; (2) the bill threatens to remove an apartment owner's legitimate right to control the appearance of property; (3) that virtually any sign or banner can be hung or displayed anywhere; and (4) the bill creates new problems to solve a non-existent one. The Apartment Association, California Southern Cities, San Francisco Association of Realtors, and the Apartment Association of Orange County, in opposition, state similar concerns and SB 337 (Kehoe) Page 9 of ? contend, among other things, that the "primary beneficiary of SB 337 will be the tenants who will taunt others when they display objectionable signs, banners or posters," and that "Ýw]hen an alleged violation of law is at issue concerning the legality of a sign, government will be the only entity that can determine violation of laws." Staff notes that by allowing landlords to prohibit a posting or display when it would be in violation of a local law, this bill would allow local governments (and CIDs, if the suggested amendment in Comment 2(b) is accepted) to craft appropriate restrictions for properties at issue. If problems arise regarding the posting of signs, local governments would have authority to take narrow, directed action to address the problem. 4. SB 540's veto and additional restrictions This bill is similar to, but less restrictive than, SB 540 (Kehoe, vetoed in 2006). That bill would have barred landlords from prohibiting tenants from posting or displaying campaign signs (arguably more restrictive than the noncommercial signs governed by this bill). As approved by this Committee, the bill would have allowed landlords to prohibit tenants from posting those signs in the following circumstances: (1) the campaign sign is more than nine square feet in size (this requirement was later reduced to six square feet); (2) the posting or display would violate a local, state, or federal law; (3) the posting or display would violate a lawful provision in a common interest development governing document, as specified; and (4) the posting is in excess of the period of time between 90 days prior to the relevant election or vote and 15 days following the vote. In comparison, the scope of the present bill extends beyond political signs and only contains the restriction that a landlord may prohibit postings or displays that would violate a local, state, or federal law. The veto message for SB 540 criticized the limitation to political signs, and contended that it failed to balance the rights of tenants and property owners. Specifically, the message stated: . . . ÝT]he bill would limit a tenants right to post campaign signs to those that meet certain size limitations and for a limited time immediately before an election. If the proponents of this measure believe that tenants have a right to express their political beliefs by posting signs on their rental property, why would they not have the right to SB 337 (Kehoe) Page 10 of ? express those beliefs whenever they choose? Do people lose their right to freedom of speech simply because they rent their property? Similarly, the bill seeks to offer a balance between the rights of tenants and the rights of property owners, but offers no clarity on the rights of property owners to control the appearance of their property and protect the environment for other tenants. While SB 540 arguably responds to part of the veto message by removing the specific time limitations that SB 540 included for political signs, the lack of additional limitations would shift the balance more in favor of the tenant's speech. Considering the large portion of our population who could be denied their ability to express a viewpoint if all leases contained a provision banning the posting or display of signs, facilitating the lawful expression of those individuals may be appropriate. From a public policy standpoint, only allowing individuals who own a home to express themselves via signs or displays appears to be a poor outcome when such large portions of our society have lost their homes due to foreclosure, cannot afford to buy a home, or have decided that renting makes the most sense for their situation. 5. Declaratory of existing law This bill would state that its provisions are declaratory of existing law. In support of the statement, the sponsor asserts that they have successfully argued that existing law relating to landlord retaliation renders unlawful lease restrictions that bar tenants from posting political signs on their leased premises. (See Civ. Code Sec. 1942.5(c).) The sponsor's argument is based on statements of legislative intent regarding Civil Code 1942.5(c). Specifically, this Committee's analysis for AB 771 (Hart, Chapter 652, Statutes of 1979) stated: "this bill would preclude retaliatory acts by the landlord against the tenant's joining or participating in a tenants' rights advocate group, or the tenant's exercise of his own rights (such as free speech by displaying posters and signs on windows, etc.) in a lawful and peaceful manner." (Emphasis added.) Although the sponsor may be correct about the Legislature's intent when enacting that section, it is within the purview of the courts to determine whether California law has actually imposed such a restriction since 1979. To ensure that this SB 337 (Kehoe) Page 11 of ? legislation does not affect the court's interpretation of prior legislative history, the author should consider amending the bill to strike the statement that it is declaratory of existing law. Suggested amendment: On page 2, strike out lines 3 through 4, inclusive. Support : None Known Opposition : Apartment Association, California Southern Cities; Apartment Association of Greater Los Angeles; Apartment Association of Orange County; California Apartment Association; California Association of Realtors; Community Associations Institute; San Diego County Apartment Association; San Francisco Association of Realtors; Santa Barbara Rental Property Association HISTORY Source : American Civil Liberties Union (ACLU) Related Pending Legislation : None Known Prior Legislation : SB 540 (Kehoe, 2006), see Comment 3. **************