BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: AB 587 Hearing Date: 6/30/2015
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|Author: |Chau |
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|Version: |6/23/2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Alison Dinmore |
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SUBJECT: Mobilehomes: payments: nonpayment or late payments
DIGEST: This bill creates an 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.
ANALYSIS:
Existing law:
1) Requires mobilehomes sold as new prior to July 1, 1980, to
pay a vehicle license fee (VLF) and requires annual payment
to the Department of Housing and Community Development
(HCD).
2) Provides that non-payment of the 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.
3) Provides that mobilehomes not subject to the VLF are
subject to local property tax (LPT) until the applicant
presents a tax clearance certificate (TCC) or conditional
TCC issued by the county tax collector.
4) Requires the county tax collector to issue a TCC to a
mobilehome owner if specified requirements are met.
AB 587 (Chau) Page 2 of ?
5) 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.
6) 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.
7) Requires specified information to be included in a rental
agreement between the management and the homeowner,
establishing the terms and conditions of a park tenancy.
8) Permits the management to require the right of prior
approval of a purchaser of a mobilehome that will remain in
the park and may require that the selling homeowner give
notice of the sale to the management before the close of the
sale.
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.
10) Prohibits any person to use or cause to be used, or permit
to be used for occupancy, a mobilehome that does not conform
to HCD's registration requirements.
11) Reinstates the State Controller's Property Tax
Postponement Program, which allows senior, blind, and
disabled citizens with an annual household income of $35,500
or less and 40% equity in their homes to apply to defer
payment of property taxes on their principal residence.
Applications may be filed with the State Controller's Office
beginning September 1, 2016.
This bill creates an 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. This bill
AB 587 (Chau) Page 3 of ?
also establishes notification requirements for the transfer of
any ownership interest or transferring or creating any security
interest in a mobilehome.
1) Abatement process
a) Creates an abatement process for mobilehome owners if
the following requirements are met:
The applicant is not currently the registered owner;
The applicant provides documentation demonstrating
ownership and the date of acquisition of ownership
interest, to HCD's satisfaction;
The application is made prior to December 31, 2018;
The applicant pays any charges assessed by HCD
during the period between the time the applicant took
ownership interest or December 31, 2014, whichever is
later, and the time the applicant applies for relief;
Any lien under the Property Tax Postponement (PTP)
program has been satisfied; and
The applicant has not previously filed for relief
under this section.
a) HCD shall waive the outstanding charges, fees, or
penalties, amend the title record, and issue a duplicate,
substitute, or new certificate of title, registration card,
or copy of a registration card, if the applicant meets the
requirements of the abatement program and is subject to the
VLF.
b) 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 after the applicant
takes ownership, which must be paid in full if the
mobilehome is later transferred. Failure to make payments
required by the plan is a violation of the program and HCD
may suspend, revoke, or cancel the certificate of title.
c) Provides that, if the applicant is eligible for the
abatement program and the mobilehome is subject to the LPT,
HCD must issue a conditional transfer of title.
d) Requires HCD to amend the title record and issue a
duplicate, substitute, or new certificate of title if the
applicant presents a completed tax liability certificate
AB 587 (Chau) Page 4 of ?
and meets the requirement of the abatement program.
e) Requires a county tax collector to issue a tax liability
or tax clearance 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. The reduced taxes include those
reasonably owed from the date of sale as shown on the
conditional transfer of title without penalties or
interest, and not to exceed the amounts attributable one
year prior to January 1, 2016.
f) Provides that upon the issuance of a tax liability
certificate, the applicant shall be listed as the owner of
record for all local property tax purposes and the home
shall not be subject to lien or seizure based on any taxes
abated pursuant to this program.
g) Provides that the abatement program does not relieve any
owner other than the applicant from tax liability,
including penalties and interest, arising from the
non-payment prior to the date of sale. The abatement
program does not 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.
2) Notification requirements - transferor/owner
a) Requires a registered owner to apply to HCD for a
transfer clearance certificate indicating HCD may amend the
title and transfer the registration of the mobilehome,
before transferring any ownership interest or transferring
or creating any security interest in the mobilehome.
b) The transferor shall notify HCD within 20 days whenever
any title or interest in a mobilehome is transferred to
another person. The transferor shall provide the interest
transferred and the party to whom it was transferred.
3) Notification requirements - HCD
a) Requires HCD to issue a transfer clearance certificate
to a registered owner upon application if HCD determines
that it is not prohibited by law from amending the title
AB 587 (Chau) Page 5 of ?
and transferring the mobilehome registration. The
certificate will expire 90 days from the date of issuance.
b) Requires HCD to notify the transferee of the obligation
of and procedure for titling and registering the home upon
notification of any transfer of any ownership interest or
transferring or creating any security interest in a
mobilehome. If after 90 days the transferee has not
complied with titling and registration, HCD shall notify
the transferee and, if the mobilehome is located in a
mobilehome park, the park management of the transferee's
failure to comply.
4) Notification requirements - mobilehome park management
a) Requires the rental agreement between the management and
the homeowner to contain a provision stating that, prior to
transferring any ownership interest in the mobilehome, the
management may require proof of registration as owner and a
copy of a TCC issued by HCD.
b) Permits the management to require the selling homeowner
to give proof of registration as owner and a copy of the
TCC issued by HCD.
c) Requires management to notify HCD of the sale of a home
by providing the name of the transferor, the name of the
transferee, and the address or location of the home, if the
management approves a prospective homeowner who is
purchasing a home that will stay in the park and enters a
lease agreement with the prospective homeowner.
d) Requires the owners of a mobilehome park to notify HCD
within 20 days whenever any title or interest of a
registered owner of a mobilehome located within a
mobilehome park is transferred to another person or entity.
The owner shall provide the name of the transferor, the
name of the transferee, and the address or location of the
home.
5) Eviction protections
a) Prohibits eviction from a mobilehome park for
nonconformance with the registration and titling
requirements of state law when an application for the
AB 587 (Chau) Page 6 of ?
abatement program is filed before January 1, 2019, and the
nonconformance occurred prior to January 1, 2017.
COMMENTS:
Purpose of the bill. According to the author, the problem this
bill seeks to address has been festering for more than 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. Mobilehomes are an important source of
affordable housing statewide and are regularly sold on an
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 in his or her name and discovers that the prior owner fell
behind on their tax bill. If the buyer is unable to pay, 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.
This bill creates a tax abatement program for mobilehome owners
who are unable to transfer title of their home into their name
due to tax delinquencies incurred by prior owners. The program
would run for three years, beginning January 2016, and eligible
homeowners would apply through HCD. This bill also creates a
moratorium on evictions, coinciding with the abatement program,
based on lack of accurate title, to encourage owners to come
forward.
Background. HCD is responsible for titling and registering
mobilehomes. Mobilehomes purchased before July 1, 1980, are
treated as vehicles and subject to a VLF rather than an LPT.
Mobilehomes purchased after July 1, 1980, however, are subject
to LPT. Before transferring title of a mobilehome, a buyer of a
mobilehome subject to LPT must obtain a TCC from the county tax
collector indicating that all property taxes have been paid. If
a mobilehome is subject to VLF, the buyer must pay all fees and
penalties to HCD before title can be transferred. Non-payment
of VLF constitutes a lien on the mobilehome in favor of the
state, and nonpayment of LPT means the county tax collector can
pursue collection of the delinquent LPT in the same way as other
delinquent taxes on the unsecured roll. If either of these
situations arises, HCD cannot amend the title to reflect the new
owner's name, and therefore the new owner cannot obtain proof of
AB 587 (Chau) Page 7 of ?
ownership over the home.
Without proper title to a mobilehome, a buyer may face a number
of issues. Current law provides that the buyer may be subject
to eviction from a mobilehome park because parks are prohibited
from renting to homes that do not conform to HCD's registration
requirements. Additionally, buyers cannot legally make repairs
to the home, insure their home, or transfer ownership to another
person.
Widespread problem. Buying and selling mobilehomes often
transpires informally, which means that buyers and sellers may
not be aware of delinquent taxes and fees that prevent the
transfer of title. Presently, there are few notification
requirements for VLF delinquencies, and a buyer may only become
aware of a delinquency when he or she attempts to transfer title
of an already purchased mobilehome. If a seller does not pay
these delinquent fees and a buyer is unable to do so, there is
little else the buyer can do.
This abatement program allows a buyer to transfer title in his
or her name in instances where the mobilehome is subject to
delinquent fees or taxes. For mobilehomes subject to VLF,
applicants must first prove ownership to HCD and, upon the
payment of reduced charges assessed by HCD or entry into a
payment plan, title could transfer. For mobilehomes subject to
LPT, HCD would issue the applicant a "conditional title" that is
then taken to the county tax collector. Once the applicant pays
a reduced LPT pursuant to the abatement program, the tax
collector would update their property tax records and issue a
tax liability certificate. This tax liability certificate would
permit HCD to transfer title. The abatement program would not
relieve any prior owners from liability for the non-payment of
taxes, and does not 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.
Going forward, this bill establishes reporting requirements on
owners or transferors, HCD, and mobilehome park owners. This
will help ensure the state maintains accurate records of
mobilehome ownership and encourage proper titling of homes when
sold. Additionally, this will ensure the state and county
receive adequate fees and taxes.
Current law permits mobilehome park owners to evict a tenant for
AB 587 (Chau) Page 8 of ?
failure to abide by state law, such as property titling a
mobilehome. To encourage owners to come forward and utilize
this program, this bill creates a moratorium on evictions based
upon lack of title, if the owner applies for the program and
completes the title transfer in time.
Opposition. The California Association of County Treasurers and
Tax Collectors (CATTC) opposes this bill unless amended to
remove any abatement of taxes, which is the central purpose of
the bill. CATTC disputes that people purchasing mobilehomes in
California do not understand the necessary steps to property
transfer title and ownership of mobilehomes. CATTC contends
that removing a county's ability to enforce tax collection on
taxes in arrears and assess penalties in interest, the bill
would remove the fiscal incentive to pay taxes in a timely
manner. CATTC proposes reducing the length of the program to
two years, requiring the payment of overdue taxes, and
permitting tax collectors to charge a fee for processing
paperwork associated with the program.
The Western Manufactured Housing Communities Association (WMA)
opposes this bill unless amended because it maintains the
responsibility for reporting ownership transfers should lie with
mobilehome owners and HCD, not with mobilehome park owners. WMA
is also concerned that the provisions in the bill that reference
evictions create a responsibility on park management to police
residents for inadequate restrictions, and fear that these
provisions will require park management to evict residents based
on their status with HCD.
Double-referred. This bill has been referred to both this
committee and the Senate Judiciary Committee.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: Yes
POSITIONS: (Communicated to the committee before noon on
Wednesday,
June 24, 2015.)
SUPPORT:
California Rural Legal Assistance Foundation (co-sponsor)
Golden State Manufactured-Home Owners League (co-sponsor)
AB 587 (Chau) Page 9 of ?
Western Center on Law and Poverty (co-sponsor)
Cabrillo Wetland Village HOA, Inc.
Educational Community for Homeowners
Fountain Valley Estates Homeowners Association
Golden State Manufactured-home Owners League, Chapter 708
Golden State Manufactured-home Owners League, Chapter 776
Golden State Manufactured-home Owners League, Chapter 1128
Golden State Manufactured-home Owners League, Sonoma Valley
Los Casas Homeowner's Association
Northern Santa Barbara County Manufactured Homeowners Team
Oceanside Manufactured homeowners Alliance
Orcutt Ranch Home Owners Association
Prothero Mobile Estates Homeowners' Association
Ranch Club Homeowners Association
San Joaquin Village Mobile Park Homeowners Association
San Louis Obispo Mobilehome Residents Assistance Panel
San Marcos Mobilehome Residents Association
Santa Cruz County Manufactured/Mobile Homeowners Association
Santee Mobile Home Owner's Action Committee
Sea Oaks Mobilehome Park Homeowners Association
Sierra Homeowners Association
Trico Mobile Estates Homeowners Association
188 individuals
OPPOSITION:
California Association of County Treasurers and Tax Collectors
Western Manufactured Housing Communities Association
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