BILL ANALYSIS Ó
AB 587
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Date of Hearing: April 15, 2015
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Ed Chau, Chair
AB 587
(Chau) - As Amended March 26, 2015
SUBJECT: Mobilehomes: payments: nonpayment or late payments
SUMMARY: Creates a tax abatement program for mobilehome owners
who cannot transfer title into their names due to delinquent
taxes and fees that may have been incurred by prior owners.
Specifically, this bill:
1)Creates a tax abatement program for mobilehome owners meeting
the following requirements:
a) The applicant applies for the abatement program with
the Department of Housing and Community Development (HCD)
prior to December 31, 2018;
b) The applicant is not currently the registered owner;
c) The applicant provides satisfactory documentation
demonstrating the date of acquisition of title or
interest in the mobilehome;
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d) The applicant pays any charges assessed by HCD
during the period between the time the applicant took
title or interest or December 31, 2014, whichever is
later, and the time the applicant applies for the
abatement program;
e) If the applicant's mobilehome is on the local
property tax (LPT) system, the applicant must pay the
taxes reasonably owed from the date of sale of the
mobilehome, without penalties or interest, but not to
exceed the amounts attributable one year prior to January
1, 2016; and
f) The applicant is in compliance with other
registration and titling requirements not related to
nonpayment or late payment of the HCD charges related to
registration and titling.
2)Provides that, if the applicant meets the requirements of the
abatement program, HCD must release any lien related to those
charges, issue a duplicate or new certificate of title or
registration card, and amend the title record of the
mobilehome.
3)Provides that HCD may establish a long-term payment program of
up to five years, and may take out a lien in favor of the
state in the amount owing which must be paid in full if the
mobilehome is later transferred.
4)Provides that, if an abatement program participant is on a
long term payment plan with HCD, failure to make the payments
required by the plan is a violation of the program and HCD may
suspend, revoke, or cancel the certificate of title.
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5)Provides that, if the applicant is eligible for the abatement
program and the mobilehome is subject to LPT, HCD must issue a
conditional transfer of title.
6)Requires a county tax collector to issue a tax liability
certificate to a person with a conditional transfer of title
who applies for the certificate prior to January 1, 2019 and
pays the reduced taxes under the abatement program.
7)Provides that upon issuance of a tax liability certificate,
the applicant must be listed as the owner of record for all
local property tax purposes and the home is not subject to
lien or seizure based on any taxes abated pursuant to the
program.
8)Provides that the abatement program does not relieve any owner
other than the applicant from tax liability, including
penalties and interest, arising from nonpayment prior to the
date of sale to the applicant, or prohibit a county tax
collector from collecting delinquent taxes, penalties, or
interest due prior to the date of sale, from any owner other
than the applicant.
9)Prohibits eviction from a mobilehome park for nonconformance
with the registration and titling requirements of state law
when an application for the abatement program is filed prior
to January 1, 2019, and title is transferred within one year
of the filing date.
10)Provides that a park owner may allow a resident not in
compliance with the State registration requirements to occupy
a mobilehome if the resident applies for the abatement program
prior to January 1, 2019, and title is transferred within one
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year of the filing date.
11)Provides that if the Commission on State Mandates determines
that the bill contains costs mandated by the state,
reimbursement for those costs shall be made.
12)Provides that no appropriation is made and the state shall
not reimburse local agencies for property tax revenues lost by
them pursuant to the bill.
EXISTING LAW:
1)Subjects mobilehomes sold as new prior to July 1, 1980, to a
vehicle license registration fee (VLF) and requires annual
payment to HCD (Health and Safety Code Section 18115-18116).
2)Provides that HCD must transfer a mobilehome which is subject
to VLF to LPT upon a request for the transfer from the owner
(Health and Safety Code Section 18119).
3)Provides that nonpayment of VLF constitutes a lien on the
mobilehome, and prohibits HCD from issuing a duplicate or new
certificate of title or registration card or amending the
permanent title record of the mobilehome that is the subject
of that lien (Health and Safety Code Section 18116.1).
4)Provides that mobilehomes not subject to the VLF are subject
to LPT, and requires HCD to withhold amending the title of any
mobilehome subject to LPT until the applicant presents a tax
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clearance certificate (TCC) or conditional tax clearance
certificate issued by the county tax collector (Health and
Safety Code Section 18092.7).
5)Requires the county tax collector to issue a TCC to a
mobilehome owner if specified requirements are met (Revenue
and Taxation Code Section 5832).
6)Provides that a TCC may indicate that no LPT is due or is
likely to become due, or that any applicable LPT has been paid
or will be paid in a manner not requiring the withholding of
registration or the transfer of registration (Revenue and
Taxation Code Section 5832).
7)Provides that LPT on unsecured property, including
mobilehomes, are transferred from the secured roll to the
unsecured roll of the corresponding year by the county
auditor, and are collected in the same manner as other
delinquent taxes on the unsecured roll (Revenue and Taxation
Code Section 2921.5).
8)Provides that used mobilehomes subject to LPT are exempt from
the payment of use tax upon resale or transfer (Health and
Safety Code Section 18116.5).
9)Authorizes the management of a mobilehome park to terminate a
tenancy for failure of the homeowner or resident to comply
with a local ordinance or state law or regulation relating to
mobilehomes within a reasonable time after the homeowner
receives a notice of noncompliance from the appropriate
governmental agency (Civil Code Section 798.56).
10)Prohibits any person to use or cause, or permit to be used
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for occupancy, a mobilehome that does not conform to HCD's
registration requirements (Health and Safety Code Section
18550).
FISCAL EFFECT: Unknown.
COMMENTS:
Background:
HCD is responsible for the titling and registration of
mobilehomes. Homes that were purchased new prior to July 1, 1980
were treated as vehicles and not subject to LPT, but rather to
an "in lieu" VLF paid annually to HCD. Mobilehomes that were
purchased after July 1, 1980 are generally subject to LPT.
Homeowners have the option to voluntarily transfer their homes
from the VLF system to the LPT system, but not vice-versa.
Prior to transferring title of a mobilehome, a buyer of a home
on the LPT system must obtain a TCC from the county tax
collector indicating that all property taxes have been paid.
Similarly, if the mobilehome is on the VLF system, all past due
fees and penalties must be paid to HCD prior to transfer of
title, as well as a use tax. Regardless of whether a mobilehome
is on the VLF or LPT system, delinquent fees or taxes prevent
HCD from amending the title of that home. If a buyer cannot
pay, and the seller will not pay or cannot be located, the buyer
is left without legal proof of ownership of the home, and HCD,
the county tax collector, and the county tax assessor may not
have up-to-date ownership information for the home.
Nonconformance with HCD's titling requirements can cause a
number of issues. It could be the basis of an eviction from a
mobilehome park, as parks are prohibited from allowing homes
that do not conform to HCD's registration requirements in a
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park. It also prevents owners from legally making repairs to the
home, insuring the home, and from transferring ownership of the
home to another party.
Purpose of this bill:
According to the author, the problem that AB 587 seeks to
address has been festering for over 30 years. There are
thousands, perhaps tens of thousands, of homeowners who believe
they own their homes, but never had title properly transferred
to them. The author contends that "[m]obilehomes are an
important source of affordable housing statewide, and these
homes are regularly sold on a somewhat informal basis. For
example, a buyer pays cash for the home, obtains a bill of sale,
and takes possession of the property. The problem arises when
the buyer subsequently tries to transfer title into his or her
name and discovers that the previous owner fell behind on their
tax bill. If the buyer is unable to pay, then the title cannot
transfer. As a result, some buyers are in a situation where
they paid for their home, but have no meaningful proof of
ownership, which can cause a host of other issues such as the
inability to legally make repairs to the home."
Staff Comments:
AB 587 creates an abatement program to address the situation
where a buyer has already purchased a mobilehome, but is unable
to transfer title into his or her name due to delinquent fees or
taxes. Nonpayment of VLF constitutes a lien on the mobilehome
in favor of the state. Nonpayment of LPT means the county tax
collector may pursue collection of the delinquent LPT in the
same manner as other delinquent taxes on the unsecured roll.
Both of these scenarios prevent HCD from amending the title into
the new owner's name. If the buyer cannot pay the delinquent
charges associated with the home, and the seller does not agree
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to pay or cannot be located, then the buyer cannot obtain legal
ownership.
Due to the sometimes informal nature of mobilehome sales, buyers
and sellers may not be aware that delinquent taxes and fees
prevent title from transferring. Sellers may not even be aware
that a delinquency exists because of, for example, limited
notification requirements for VLF delinquencies, or outdated
ownership information at the county or state level. In these
situations, a buyer may only become aware of the delinquency
when he or she tries to transfer title at HCD. If a seller does
not pay the delinquent fees or taxes and associated penalties,
and the buyer cannot pay them but has already purchased the
mobilehome, they are left with few options other than to keep
the home with an outdated title.
It is in the state's best interest to keep accurate records
relating to mobilehome ownership. The three-year abatement
program proposed by AB 587 would reduce specified past due taxes
and fees by capping the amount owed and waiving penalties and
interest. This would encourage homeowners with outdated title
to come forward and apply to transfer title into their names,
thereby updating state and county records to ensure accurate VLF
and LPT billing in the future.
Applicants for the abatement program would first be required to
prove ownership to the satisfaction of HCD and, upon payment of
any reduced charges assessed by HCD, or entry into a payment
plan, title would transfer for homes on the VLF system. For
homes on the LPT system, HCD would issue an applicant a
"conditional title" which the applicant would then bring to
their local county tax collector. Once the applicant pays the
reduced LPT due under the abatement program, the tax collector
would update their property tax records and issue a tax
liability certificate, which would perfect the transfer of title
once filed with HCD. The abatement program does not relieve any
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owner other than the applicant from tax liability arising from
nonpayment prior to the date of sale to the applicant, so a
county tax collector would still have the ability to collect
these amounts, including fees and penalties, from any owner
other than the applicant.
To further encourage owners to come forward, the bill also
creates a moratorium on evictions, coinciding with the abatement
program, based on lack of accurate title if the resident has
applied for the abatement program and completes the title
transfer within a specified time.
Double-referred: AB 587 was also referred to the Committee on
Judiciary, where it will be heard should it pass out of this
committee.
REGISTERED SUPPORT / OPPOSITION:
Support
Boyd, Nancy
Cabrillo Wetland Village HOA, Inc.
California Rural Legal Assistance Foundation (co-sponsor)
DeMatteo, Anthony C.
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Fountain Valley Estates Homeowners Association
Golden State Manufactured-Home Owners League (GSMOL)
(co-sponsor)
GSMOL, Chapter 1128, Ramona, CA
Hard, Sybil A.
Hard, William T.
Los Casas Homeowner's Association
Morrissey, Daphne
Northern Santa Barbara County Manufactured Homeowners Team
Orcutt Ranch Home Owners Association (ORHOA)
Parmelee, Susan
Powell, Bonnie
Ranch Club Homeowners Association
Risley, Joanna
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San Joaquin Village Mobile Park Homeowners Association
San Louis Obispo Mobilehome Residents Assistance Panel (SLOMAP)
San Marcos Mobilehome Residents Association (SMMRA)
Santa Cruz County Manufactured/Mobile Homeowners Association
(SCCMMHA)
Sea Oak Mobilehome Park Homeowners Association
Sierra Homeowners Association
Simpson, Kirk
Western Center on Law and Poverty (co-sponsor)
Opposition
None on file.
Analysis Prepared by:Rebecca Rabovsky / H. & C.D. / (916)
319-2085
AB 587
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