BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: AB 587 Hearing Date: 6/14/2016
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|Author: |Chau |
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|Version: |6/8/2016 |
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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 mobilehome park management, prior to February 1
of each year, to provide a notice to all homeowners which
contains, among other things, the following:
a) The Mobilehome Residency Law establishes the rights and
responsibilities of homeowners and park management and that
a copy can be obtained by management at no charge.
b) A list of rights and responsibilities for homeowners and
park management, including but not limited to the
following:
i. Management may require certain upgrades
ii. The sale of a mobilehome
iii. Management's rights to enter the space upon
which a mobilehome resides and for what purpose
iv. Rules and regulations for improvements or
alterations to a mobilehome
1) Requires mobilehomes sold as new prior to July 1, 1980, to
pay a vehicle license fee (VLF), and requires annual payment
AB 587 (Chau) Page 2 of ?
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.
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.
AB 587 (Chau) Page 3 of ?
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.
12) Requires a tenancy to be terminated by the management for
failure of the homeowner or resident to comply with a state
law or regulation within a reasonable amount of time after
the homeowner receives a notice of noncompliance from the
appropriate governmental agency.
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.
Specifically, this bill:
1) Amends the Management Notice to All Homeowners in the
following ways:
a) Removes information regarding management's rights to
require certain upgrades; rights regarding the sale of a
mobilehome; management's rights to enter the space upon
which a mobilehome resides and for what purpose; and the
rules and regulations for improvements or alterations to a
mobilehome.
b) Adds that when a mobilehome is sold, the owner is
required to transfer the title to the buyer. The sale of
the home is not complete until you receive the title from
the seller. The buyer must also file paperwork with HCD.
c) Adds that in California, mobilehome owners must pay
annual property tax to the county tax collector fee in lieu
of taxes to HCD. If a homeowner is unsure which to pay,
contact HCD. Failure to pay taxes or in lieu fees can have
serious consequences, including losing your home at a tax
sale.
AB 587 (Chau) Page 4 of ?
d) Adds that information on registration, titling, and
taxes, can be found at the HCD web site and provides a
phone number, provides the web site for a listing of the
county tax collector, and instructs homeowners to call the
local county government.
1) Creates an abatement process for mobilehome owners if
the following requirements are met:
a) The applicant is not currently the registered owner.
b) The applicant provides documentation demonstrating
ownership and the date of acquisition of ownership
interest, to HCD's satisfaction.
c) The application is made prior to December 31, 2019.
d) The applicant pays any charges assessed by HCD during
the period between the time the applicant took ownership
interest or December 31, 2015, whichever is later, and the
time the applicant applies for relief.
e) Any lien under the Property Tax Postponement (PTP)
program has been satisfied.
f) The applicant has not previously filed for relief under
this section.
1) Requires HCD to 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.
2) 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.
3) 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.
4) Requires HCD to amend the title record and issue a
duplicate, substitute, or new certificate of title if the
AB 587 (Chau) Page 5 of ?
applicant presents a completed tax liability certificate
and meets the requirement of the abatement program.
5) 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.
6) 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.
7) 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.
8) Removes the provision that is unlawful for any person to
use or permit a mobilehome to be used if the mobilehome
does not conform with HCDs registration requirements.
9) Provides that on or after January 1, 2020, it is
unlawful for any person to use, cause, or permit to be used
for occupancy, any mobilehome, wherever the mobilehome is
located, that does not conform to HCDs registration
requirements, provided that HCD has provided notice to the
occupant of the registration requirements and any
registration fees due.
COMMENTS:
1) 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
AB 587 (Chau) Page 6 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
into 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 2017, and eligible homeowners would apply through
HCD.
2) 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 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
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HCD's registration requirements. Additionally, buyers
cannot legally make repairs to the home, insure their home,
or transfer ownership to another person.
3) 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. The bill
further clarifies that after January 1, 2020, it will be
unlawful for anyone to use a mobilehome that does not
conform to HCD's registration requirements, provided that
HCD has provided notice to the occupant of the registration
requirements and any registration fees due.
Current law permits mobilehome park owners to evict a
tenant for failure to abide by state law, such as properly
titling a mobilehome. To encourage owners to come forward
and utilize this program, this bill removes the provision
that makes it unlawful for a person to fail to conform with
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HCD's registration requirements and instead states that on
or after January 1, 2020, it is unlawful for any person to
fail to conform to HCD's registration requirements,
provided that HCD provided that the department has provided
notice to the occupant of the registration requirements any
fees due.
4) 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 by
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.
5) Double-referred. This bill has been referred to both
this committee and the Senate Judiciary Committee.
Assembly Votes:
Floor: 78-0
Appr: 17-0
Jud: 10-0
H&CD: 7-0
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: Yes
AB 587 (Chau) Page 9 of ?
POSITIONS: (Communicated to the committee before noon on
Wednesday,
June 8, 2016.)
SUPPORT:
California Rural Legal Assistance Foundation (co-sponsor)
Golden State Manufactured-Home Owners League (co-sponsor)
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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