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)



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               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 
                                                                      



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          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:

                                                                      



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            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 
                                                                      



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            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 
                                                                      



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            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 
                                                                      



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            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. 
                                                                      



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             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 
                                                                      



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          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 
                                                                      



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            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 
                                                                      



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          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.

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