BILL ANALYSIS                                                                                                                                                                                                    Ó






                             SENATE JUDICIARY COMMITTEE
                             Senator Noreen Evans, Chair
                              2013-2014 Regular Session


          AB 1404 (Committee on Judiciary)
          As Amended April 30, 2013
          Hearing Date: June 11, 2013
          Fiscal: No
          Urgency: No
          BCP


                                       SUBJECT
                                           
                              Real property: boundaries

                                      DESCRIPTION 

          The bill would establish a presumption that adjoining landowners  
          share an equal benefit from any fence dividing their properties  
          and, absent a written agreement to the contrary, are equally  
          responsible for the reasonable costs for the fence, as  
          specified.

                                      BACKGROUND  

          Under existing law, "coterminous" landowners (property owners  
          that share the same boundary) are required to equally maintain  
          the fences between them, unless one of them chooses to let his  
          or her land lie without fencing.  (Civ. Code Sec. 841.)  The  
          requirement for landowners to equally share in the costs of  
          fences between their properties was enacted in 1872 and based  
          upon prior requirements for landowners to share costs for  
          fencing.  In Bliss v. Sneath (1894) 103 Cal. 43, the California  
          Supreme Court further observed:

            [Civil Code Section 841 is] one of many code provisions  
            relating to the rights and duties of property holders, and  
            the liability arising from the conditions mentioned cannot  
            justly be said to be a statutory liability.  The liability  
            arises from the fact that plaintiff's principal made use of  
            a fence built by the defendant under circumstances which  
            create the liability.  She has been benefited, and the law  
            says she must pay for it.  Here are all the elements of an  
            implied contract.  The obligation to pay legal interest  
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            could be claimed, with much greater plausibility, to be a  
            statutory liability, and therefore not a contract liability.  
             The fact that the Civil Code has changed some common-law  
            rules, by which the rights and obligations of persons were  
            ascertained, does not make the new or changed obligations  
            any less obligations arising from implied contracts than  
            were the different obligations fixed by the common law.   
            (Id. at 45.)

          The existing statutory requirement generally imposing a mutual  
          obligation upon landowners to maintain fences has not been  
          amended in over 140 years.  This bill seeks to update and  
          clarify that section by codifying a presumption that adjoining  
          landowners are equally responsible for construction, maintenance  
          or necessary replacement of a fence, requiring a landowner to  
          give 30 days written notice to affected adjoining landowners  
          prior to incurring costs for a fence, and allowing the  
          presumption to be overcome by a preponderance of the evidence  
          demonstrating that imposing equal responsibility would be  
          unjust.

                                CHANGES TO EXISTING LAW
           
           Existing law  provides that coterminous owners are mutually bound  
          equally to maintain: (1) the boundaries and monuments between  
          them; and (2) the fences between them, unless one of them  
          chooses to let his land lie without fencing, in which case, if  
          he afterwards encloses it, he must refund to the other a just  
          portion of the value, at that time, of any division fence made  
          by the latter.  (Civ. Code Sec. 841.)

           This bill  would repeal the above provision and, instead, provide  
          that adjoining landowners shall share equally in the  
          responsibility for maintaining the boundaries and monuments  
          between them.

           This bill  would provide that adjoining landowners are presumed  
          to share an equal benefit from any fence dividing their  
          properties and, unless otherwise agreed to by the parties in a  
          written agreement, shall be presumed to be equally responsible  
          for reasonable costs of construction, maintenance, or necessary  
          replacement of the fence.

           This bill  would require a landowner to give 30 days' written  
          notice to each affected adjoining landowner if the landowner  
          intends to incur costs for a fence, as specified.  The notice  
                                                                      



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          shall include notification of the presumption of equal  
          responsibility for the reasonable costs of construction,  
          maintenance, or necessary replacement of the fence.  The notice  
          shall also include a description of the nature of the problem  
          facing the shared fence, the proposed solution addressing the  
          problem, the estimated construction or maintenance costs  
          involved to address the problem, the proposed cost sharing  
          approach, and the proposed timeline for getting the problem  
          addressed.

           This bill  would allow the above presumption to be overcome by a  
          preponderance of the evidence demonstrating that imposing equal  
          responsibility for the reasonable costs of construction,  
          maintenance, or necessary replacement of the fence would be  
          unjust.  In determining whether equal responsibility for the  
          reasonable costs would be unjust, the court shall consider:  (1)  
          whether the financial burden to one landowner is substantially  
          disproportionate to the benefit conferred upon that landowner by  
          the fence in question; (2) whether the cost of the fence would  
          exceed the difference in the value of the real property before  
          and after its installation; (3) whether the financial burden to  
          one landowner would impose an undue hardship given that party's  
          financial circumstances as demonstrated by reasonable proof; (4)  
          the reasonableness of the particular construction or maintenance  
          project, as specified; and (5) any other equitable factors  
          appropriate under the circumstances.
          
           This bill  would provide that when a party rebuts the presumption  
          by a preponderance of the evidence, the court shall, in its  
          discretion, consistent with the party's circumstances, order  
          either a contribution of less than an equal share for the costs  
          of construction, maintenance, or necessary replacement of the  
          fence, or order no contribution.

           This bill  would define "landowner" as a private person or entity  
          that lawfully holds any possessory interest in real property,  
          and provide that landowner does not include a city, city and  
          county, district, public corporation, or other political  
          subdivision, public body or public agency.  

           This bill  would also define "adjoining" as contiguous or in  
          contact with.

                                        COMMENT
           
          1.   Stated need for the bill  
                                                                      



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          According to the author:

            This non-controversial bill seeks to clarify and modernize  
            California's almost 150 year old neighborhood fence statute,  
            maintaining the state's long tradition which holds that  
            neighbors are presumed to gain mutual benefits from the  
            construction and maintenance of a boundary fence between  
            their properties, and as a result are generally equally  
            responsible to contribute to the construction and  
            maintenance of their shared fencing.  This appears to be the  
            approach intended for the past 141 years since Section 841  
            of the Civil Code was originally enacted in order to  
            safeguard against the unjust enrichment of one landowner by  
            the adjoining landowner's construction or maintenance of a  
            boundary fence between them. 

            The current language of Civil Code section 841 reflects this  
            narrow understanding of the benefits associated with a  
            boundary fence.  However in a society no longer dominated by  
            agrarian pursuits, modernizing the statute to better reflect  
            the contemporary benefits associated with neighborhood  
            fences makes sense.  Today, the landscape of California has  
            changed dramatically.  The United States Census Bureau  
            reports that nearly 95 percent of California's population  
            resides in urban areas. 

            Fences dividing adjoining landowner's properties in an urban  
            society are usually necessary and generally expected.  The  
            modernization of the statute in this bill will thus better  
            recognize these contemporary mutual benefits by clarifying  
            the rebuttable presumption that adjoining landowners share  
            an equal benefit and an equal responsibility for the  
            reasonable costs of construction and maintenance of any  
            fence dividing their properties.

            At the same time, the bill appropriately takes into account  
            that neighborhood fences are not always mutually beneficial,  
            and that an adjoining landowner who clearly receives little  
            or no benefit from a boundary fence should not be forced to  
            subsidize an adjoining landowner's fence construction.  By  
            allowing such owners to demonstrate the unfairness of  
            imposing equal responsibility in a particular case, this  
            bill seeks to prevent the inequities that would result from  
            a hard and fast "blanket" presumption of equal benefit and  
            responsibility.  The current statute in place does not speak  
                                                                      



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            to this issue at all.  

          2.    Presumption of benefit and responsibility for fences 
           
          Under existing law, coterminous landowners (owners that share  
          the same boundaries) are required to equally maintain the fences  
          between them. (Civ. Code Sec. 841.) That requirement does not  
          apply if one landowner chooses to not place fencing on his or  
          her land, unless, the landowner later chooses to enclose the  
          land, in which case, that owner must pay a just portion of the  
          value of the fence.  This bill seeks to update and clarify that  
          statute by repealing the above requirements and, instead,  
          enacting a presumption that adjoining landowners share an equal  
          benefit from any fence dividing their properties and, unless  
          otherwise agreed to in writing, are equally responsible for the  
          reasonable costs of construction, maintenance, or necessary  
          replacement of the fence.  

          That presumption appears to be consistent with prior law, case  
          law, and the common perception of landowners in California that  
          he or she must share in the costs of a fence shared with a  
          neighbor.  To provide clarity as to the burden that must be met  
          if a landowner disagrees with the presumption, this bill would  
          allow the presumption to be overcome by a preponderance of the  
          evidence demonstrating that equal responsibility for the  
          reasonable costs of construction, maintenance, or necessary  
          replacement of the fence would be unjust.  

          The bill would also include various factors that a court must  
          examine in determining whether the equal sharing of costs would  
          be unjust, including, whether the financial burden is  
          substantially disproportionate to the benefit, whether the  
          financial burden would impose a financial hardship, the  
          reasonableness of the particular construction or project, and  
          any other equitable factors.  Thus, a landowner that objects to  
          sharing the equal costs could rebut the presumption by proving,  
          among other things, that the project is excessive, or that the  
          owner is financially unable to pay for his or her share of the  
          fence at that time.

          Staff further notes that while most homeowners do share a fence  
          with at least one neighbor, the last published case citing Civil  
          Code Section 841 (dealing with equal contribution for fences)  
          occurred in 1964.  Given the regularity with which fence repairs  
          are likely made within the state, and the lack of reported cases  
          brought on the issue, it appears as though many landowners  
                                                                      



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          attempt to resolve any fence dispute without seeking court  
          involvement (or go to small claims court for reimbursement of  
          costs).  To the extent that this bill clarifies the presumption  
          of equal responsibility for reasonable costs, as well as  
          circumstances where equal responsibility would be unjust, the  
          criteria provided by this bill would provide guidance not only  
          for the courts, but for parties seeking to resolve the dispute  
          between themselves.  

          It should also be noted that the language proposed by this bill  
          does not expressly include the exemption under existing law for  
          a landowner who elects to not place fencing on his or her land.   
          Despite that omission, the factors that must be considered by  
          the court (including "any other equitable factors appropriate  
          under the circumstances") would appear to provide sufficient  
          discretion to allow such an exemption to continue forward where  
          appropriate.  

          3.  Thirty day notice

           In an effort to encourage cooperation and minimize disputes,  
          this bill would require a landowner to give 30 days' prior  
          written notice to each affected landowner if he or she intends  
          to incur costs for which there is a presumption of equal  
          responsibility.  That notice must include notice of a  
          presumption of equal responsibility and a description of the  
          problem, proposed solution, estimated costs, proposed cost  
          sharing, and proposed timeline.  While, as noted above, many  
          landowners may be resolving these disputes without seeking  
          assistance from a court, it appears appropriate that any update  
          and clarification of the fence law also include a requirement  
          for notice prior to replacing a fence (especially when the  
          landowner will then be seeking contributions for costs).  That  
          advance notice would potentially allow adjoining landowners to  
          proactively resolve disputes before the fence is actually built  
          - that resolution could avoid a situation where a party refuses  
          to pay, which could result in an action filed in court. 

          It should also be noted that fences can be expensive and that it  
          would appear to be reasonable to give a landowner at least one  
          month's notice that he or she may be required to pay several  
          thousand dollars towards replacement of a fence.  Furthermore,  
          as noted above, since financial hardship is a factor a court  
          must consider with respect to the presumption of equal  
          responsibility, that advance notice may promote a discussion  
          whereby the landowner seeking to erect or repair a fence can be  
                                                                      



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          made aware that the cost may be a financial hardship for a  
          particular neighbor.  This would assist the landowner in making  
          an informed decision about whether or not to proceed with the  
          planned fence construction.
           
           4.   Local ordinances  

          The author notes that "there are several California cities that  
          explicitly require property owners to maintain any fences on  
          their properties.  However, the ordinances do not address - as  
          this bill will - how adjoining property owners should avoid and,  
          if needed, settle disputes regarding the reasonable  
          apportionment of costs of construction or maintenance of such  
          shared fencing." As an example of a statute requiring fence  
          maintenance, Sacramento Municipal Code Section 17.76.010(c)  
          provides that maintenance of a wall or fence shall be the  
          responsibility of the owner(s) of the property on which the  
          fence in located.  While this bill is not inconsistent with that  
          section, it would, as noted by the author, provide detail as to  
          how costs generally are to be shared between landowners.

          5.   Scope limited by definition of landowner  

          This bill would define "landowner" as a private person or entity  
          that lawfully holds any possessory interest in real property,  
          but provide that landowner does not include a city, city and  
          county, district, public corporation, or other political  
          subdivision, public body, or public agency.  As a result, the  
          definition seeks to limit the proposed presumption to private  
          landowners but exclude state or local public lands (such as  
          California's numerous state parks).

          To clarify that the definition would also not apply to a county,  
          the author offers the following amendment:

                Author's amendment:  

               On page 3, line 23 after "city," insert:  "county," 

           Support  :  None Known

           Opposition  :  None Known

                                        HISTORY
           
           Source  :  Author
                                                                      



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           Related Pending Legislation :  None Known

           Prior Legislation  :  None Known

           Prior Vote :

          Assembly Committee on Judiciary (Ayes 10, Noes 0)
          Assembly Floor (Ayes 72, Noes 0)

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