BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 1421
                                                                  Page  1

          Date of Hearing:   August 15, 2012

               ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
                                 Norma Torres, Chair
                   SB 1421 (Correa) - As Amended:  August 13, 2012

           SENATE VOTE  :   36-0
           
          SUBJECT  :   Mobilehomes: resident-owned mobilehome parks.

           SUMMARY  :   Makes clarifying changes related to the application 
          of the Mobilehome Residency Law (MRL) in a mobilehome park owned 
          and operated by a non-profit mutual benefit corporation.  
          Specifically,  this bill  :   

          1)Deletes language specifying that Articles 1 through 8 of the 
            MRL apply to residents who rent their space in a mobilehome 
            park owned and operated by a non-profit mutual benefit 
            corporation for which there is no recorded parcel or tract 
            map.

          2)Clarifies that in a mobilehome park owned and operated by a 
            non-profit mutual benefit corporation, Articles 1 through 8 of 
            the MRL apply to any residents who rent their space from the 
            corporation.

          3)Includes an urgency clause.

           EXISTING LAW  specifies that in a mobilehome park owned and 
          operated by a non-profit mutual benefit corporation whose 
          members consist of park residents where there is no recorded 
          condominium plan, tract, parcel map, or declaration, Articles 1 
          through 8 of the MRL shall govern the rights of members who are 
          residents that have a rental agreement with the corporation 
          (Civil Code Section 799.1).

           FISCAL EFFECT  :   None

           COMMENTS  :   

          Enacted in 1978, the MRL governs the relationship between park 
          owners or managers and the residents of the over 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.  








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          Over the past twenty years, residents have been increasingly 
          interested in various ways to purchase their parks and the 
          spaces upon which their homes are installed.  One method of 
          purchasing a park-the nonprofit mutual benefit corporation-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.
           
          The provisions of the MRL are separated into nine different 
          articles. The first eight apply to residents who rent their 
          space from the park and include 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. SB 1047 (Correa), Chapter 17, 
          Statutes of 2011, clarified that in a mobilehome park owned and 
          operated by a non-profit mutual corporation whose members 
          consist of park residents where there is no recorded condominium 
          plan, tract, parcel map, or declaration, Articles 1-8 of the MRL 
          govern the rights of members who are residents that have a 
          rental agreement with the corporation.  

          SB 1421 makes three technical changes to the subdivision enacted 
          by SB 1047 in order to further clarify the language and address 
          issues that arose since enactment. First, it strikes the 
          reference to tract and parcel map. As noted above, in order for 
          Articles 1-8 to apply in a resident-owned park owned by a 
          non-profit mutual benefit corporation, among other things, SB 
          1047 stated that there must not be a recorded tract or parcel 
          map.  According to the author:









                                                                  SB 1421
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               In SB 1047, the inclusion of the term "parcel map" 
               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 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.

          SB 1421 would address this issue by striking the term "parcel 
          map," thus ensuring that Articles 1-8 of the MRL apply to any 
          resident renting his or her space regardless of whether the park 
          has a recorded parcel map. This bill additionally deletes the 
          term "tract," because the same issue could arise with a tract 
          map.

          Second, SB 1421 replaces the phrase "residents who have a rental 
          agreement" with "residents that rent their space" because not 
          all residents who rent their spaces in these types of parks have 
          a signed rental agreement with the corporation. Many only have 
          an oral agreement. The change will ensure that all residents who 
          rent their space from the corporation are covered by Articles 
          1-8 of the MRL.

          Finally, SB 1421 replaces the term "declaration" with 
          "subdivision declaration" to improve clarity. While the word 
          subdivision is implied, given the problems that have emerged 
          with other portions of the language, it seems appropriate to 
          ensure that the language is as clear as possible.

           



          REGISTERED SUPPORT / OPPOSITION  :

          Support 
           
          None on file
           
            Opposition 
           








                                                                  SB 1421
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          None on file

           Analysis Prepared by  :    Anya Lawler / H. & C.D. / (916) 
          319-2085