BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2011-2012 Regular Session
SB 1421 (Correa)
As Amended April 25, 2012
Hearing Date: June 26, 2012
Fiscal: No
Urgency: Yes
BCP:rm
SUBJECT
Mobilehomes: Resident-owned Mobilehome Parks
DESCRIPTION
Existing law states that the tenant provisions of the Mobilehome
Residency Law apply to mobilehome parks operated by a nonprofit
mutual benefit corporation whose members consist of park
residents, as specified.
This bill would make two clarifying changes to that provision
related to parcel maps and rental agreements.
BACKGROUND
Enacted in 1978, the Mobilehome Residency Law (MRL) governs the
relationship between park owners or managers and the residents
of the 4,800+ mobilehome parks and manufactured housing
communities in California. In most of those parks, residents
own their home but lease the land on which their home is
installed.
Over the past twenty years, residents have been increasingly
interested in various ways to purchase their parks and the space
upon which the home is installed. One method of purchasing a
park - the nonprofit mutual benefit corporation (the subject of
this bill) - is described by the Department of Real Estate as
follows:
Park residents need a legal entity to purchase their park.
A nonprofit mutual benefit corporation is well suited to
this purpose. In general, the nonprofit corporation makes
(more)
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an offer of participation to the residents. Residents who
decided to participate become shareholders or members of the
corporation. As residents purchase shares or memberships in
the corporation, cash is accumulated for the down payment
required to purchase the park. The officers of the
corporation, elected by the members and acting on their
behalf, negotiate with the seller to purchase the park and
solve problems relating to conversion. After conversion,
the corporation may manage the park.
To deal with the various facets of mobilehome parks and
manufactured housing communities, the MRL is divided into nine
different Articles. Articles 1-8 of the MRL deal with legal
rights and remedies for mobilehome parks which rent space to
residents. Article 9 of the MRL generally deals with the legal
rights and remedies of resident owned mobilehome parks. To
address concerns that residents who have shares in a nonprofit
mutual benefit corporation but lease their space from that
corporation should be subject to the provisions of the MRL that
deal with tenants, SB 1047 (Correa, Chapter 175, Statutes of
2010) clarified that Articles 1-8, but not Article 9, of the MRL
apply in that circumstance. This bill would make two technical
changes to the subdivision enacted by SB 1047 in order to
address issues that arose since enactment.
CHANGES TO EXISTING LAW
Existing law , the Mobilehome Residency Law (MRL), contains nine
Articles that extensively regulate the rights, responsibilities,
obligations, and relationships between mobilehome park
owners/management and park residents. Articles 1-8 deal with
legal rights and remedies related to the leasing of space by
tenants; Article 9 contains provisions that apply to resident
owned parks. (Civ. Code Sec. 789 et seq.)
Existing law provides that in a subdivision, cooperative, or
condominium for mobilehomes, or a resident-owned mobilehome
park, Articles 1-8 of the MRL apply only to residents who do not
have an ownership interest in the subdivision, cooperative, or
condominium for mobilehomes, or the resident-owned park in which
his or her mobilehome is located or installed. (Civ. Code Sec.
799.1(a).)
Existing law provides that in a mobilehome park owned and
operated by a nonprofit mutual benefit corporation whose members
consist of park residents where there is no recorded condominium
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plan, tract, parcel map, or declaration, Article 1-8 of the MRL
shall govern the rights of members who are residents that have a
rental agreement with the corporation. (Civ. Code Sec.
799.1(b).)
This bill would strike the reference to "parcel map" in the
above subdivision, thereby removing the requirement for there to
be no recorded parcel map.
This bill would, in that same subdivision, replace "residents
who have a rental agreement" with "residents that rent their
space."
COMMENT
1. Stated need for the bill
According to the author:
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A simple, clean-up amendment to SB 1047 (Correa, Chap. 17,
Stats. 2011) is needed to protect the rights of residents who
have an ownership interest in a resident owned park (ROP), or
subdivision or condominium. Civil Code 799.1(b), as it is
currently written, unintentionally allows all ROPs to be
treated as subdivided parks. The amendment proposed in SB
1421 would restore the original intent of the law.
2. Clarifying amendments
The provisions of the Mobilehome Residency law (MRL) are
separated into nine different articles - the first eight deal
with residents who rent their space from the park, including
requirements regarding the rental agreement, rules and
regulations, fees, utilities, rent control, homeowner
communications and meeting, termination of tenancy, and transfer
of mobilehomes. Article 9 (the last article) applies to
residents who have an ownership interest in a subdivision,
cooperative, or condominium for mobilehomes, or a resident-owned
mobilehome park. Although SB 1047 clarified that in a
mobilehome park owned and operated by a nonprofit mutual
corporation whose members consist of park residents and there is
no recorded condominium plan, tract, parcel map, or declaration,
Articles 1-8 shall govern the rights of members who are
residents that have a rental agreement with the corporation.
In response to recent concerns, this bill would make two
clarifying changes to that provision: (1) strike the reference
to parcel map; and (2) replace the reference to rental agreement
with residents that rent their space. Those changes seek to
preserve the original intent of SB 1047.
a. Parcel map
As noted above, in order for Articles 1-8 to apply to resident
owned parks, among other things, SB 1047 stated that there
must not be a recorded parcel map. The author asserts:
In SB 1047, the inclusion of the term "parcel map" in
799.1(b) resulted, without intention, in significantly
reducing the number of affected parks. The inclusion of
this term in many cases removes the protection of the
amendment and places the parks to which it should apply,
back in the category of subdivided parks. Consequently,
since its enactment at the beginning of this year, a
small loophole has been unearthed by some unscrupulous
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homeowners' association board members who are using it to
charge penalty fees on members, who, under the intent of
this section, are not subject to such penalties.
This bill would address that issue by striking "parcel map"
from subdivision (b) of Section 799.1, thereby clarifying that
Article 1-8 may apply to resident owned parks which do not
have a recorded parcel map (provided the other conditions are
met).
b. Rental agreement
Provided the other requirements were met, SB 1047 stated that
Articles 1-8 shall govern the rights of members (of resident
owned parks) who are residents that have a rental agreement
with the corporation. The author notes:
The second unintended consequence was the addition of the
term "have a rental agreement with" instead of the
correct term "rent their space". Not all residents who
rent their space in corporate parks may necessarily have
a rental agreement, but who still rent the space on which
their home is sited. Many of the resident owned parks
intended to be covered do, in fact, have members who rent
the space, but they may never have signed an agreement
with the corporation or even the prior park owner. Many
members have only an oral agreement and when the
clarifying amendment in SB 1421 is made effective, they
will all be offered a formal rental agreement but not
forced into signing that document and the provisions of
Civil Code Section 798 will guaranty the protection
intended.
To ensure that oral agreements are covered by the provision,
this bill would clarify that provision by replacing "rental
agreement" with residents that "rent their space" from the
corporation. The effect of that change would ensure that the
tenant protections of Articles 1-8 do apply in those
circumstances in these resident owned parks.
Support : None Known
Opposition : None Known
HISTORY
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Source : Author
Related Pending Legislation : None Known
Prior Legislation : SB 1047 (Correa, Chapter 175, Statutes of
2010) See Background.
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