BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                  SB 1421|
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                                    CONSENT


          Bill No:  SB 1421
          Author:   Correa (D)
          Amended:  4/25/12
          Vote:     27 - Urgency

           
           SENATE JUDICIARY COMMITTEE  :  4-0, 6/26/12
          AYES:  Evans, Harman, Corbett, Leno
          NO VOTE RECORDED:  Blakeslee


           SUBJECT  :    Mobilehomes: resident-owned mobilehome parks

           SOURCE  :     Author


           DIGEST  :    This bill makes two clarifying changes to the 
          Mobilehome Residency Law related to parcel maps and rental 
          agreements.

           ANALYSIS  :    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. (Civil Code ÝCIV] Section 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 
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          subdivision, cooperative, or condominium for mobilehomes, 
          or the resident-owned park in which his/her mobilehome is 
          located or installed.  (CIV 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 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 Sec. 799.1(b).)

          This bill strikes the reference to "parcel map" in the 
          above subdivision, thereby removing the requirement for 
          there to be no recorded parcel map.

          This bill, in that same subdivision, replaces "residents 
          who have a rental agreement" with "residents that rent 
          their space."

           Background

          Clarifying amendments  .  The provisions of the 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 (Correa), Chapter 17, Statutes of 2011, (this bill 
          passed the Senate on Consent, 33-0) clarifies 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 makes two 
          clarifying changes to that provision:  (1) strikes the 
          reference to parcel map; and (2) replaces the reference to 

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          rental agreement with residents that rent their space.   
          Those changes seek to preserve the original intent of SB 
          1047.  
           
          Enacted in 1978, the 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 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) clarifies that Articles 1-8, but not Article 
          9, of the MRL apply in that circumstance.  This bill makes 
          two technical changes to the subdivision enacted by SB 1047 

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          in order to address issues that arose since enactment.

           Comments
           
          According to the author, "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."

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No   
          Local:  No


          RJG:do  6/28/12   Senate Floor Analyses 

                       SUPPORT/OPPOSITION:  NONE RECEIVED

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