BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 1421| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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 CONTINUED SB 1421 Page 2 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 CONTINUED SB 1421 Page 3 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 CONTINUED SB 1421 Page 4 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 **** END **** CONTINUED