BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2015-2016 Regular Session
AB 723 (Rendon)
Version: June 23, 2015
Hearing Date: July 14, 2015
Fiscal: Yes
Urgency: No
TH
SUBJECT
Rental Property: Plumbing Fixtures: Replacement
DESCRIPTION
This bill would require the lease of a single-family residential
real property or any portion of a multifamily residential real
property or commercial real property that is entered into,
renewed, or amended after January 1, 2016, to contain a
provision in which the property owner discloses his or her
responsibility to replace all noncompliant plumbing fixtures
with water-conserving plumbing fixtures on or before January 1,
2017, or January 1, 2019, respectively.
BACKGROUND
California is currently in its fourth year of drought, with rain
and snowfall -- the primary sources of water -- well below
normal levels. The resulting water shortage, as well as
California's growing population and the effects of long-term
climate change, have put pressure on the state's water storage
and delivery system, contributing to California's current water
crisis. On January 17, 2014, Governor Brown proclaimed a State
of Emergency due to the ongoing drought, and directed state
officials to take all necessary actions to prepare for drought
conditions, including calling on all Californians to voluntarily
reduce their water usage by 20 percent. On April 1, 2015, for
the first time in state history, the Governor ordered mandatory
water reductions in cities and towns across California to reduce
water usage by 25 percent. (See Executive Order B-29-15.)
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According to the California Energy Commission, household water
use accounts for approximately 64 percent of total urban water
use in California, and 18 percent of indoor water use can be
attributed to leaking fixtures. (See California's Drought
Rebate Program Factsheet, California Energy Commission
[as
of July 4, 2015].) Although there are many ways to reduce water
usage and leaks, one of the most effective is to replace older
high-water use plumbing fixtures with newer, more efficient
models. To facilitate the replacement of older high-water use
plumbing fixtures with water conserving fixtures, the
Legislature passed SB 407 (Padilla, Ch. 587, Stats. 2009), which
established requirements for residential and commercial real
property built on or before January 1, 1994, to replace plumbing
fixtures that are not water conserving. Among other things, SB
407 required all noncompliant plumbing fixtures in multifamily
residential real property and commercial real property be
replaced with water-conserving plumbing fixtures by January 1,
2019, and all noncompliant plumbing fixtures in single-family
residential real property be replaced with water-conserving
plumbing fixtures by January 1, 2017.
This bill would require landlords who lease single-family and
multi-family residential real property and commercial real
property to contain a provision in leases entered into, renewed,
or amended after January 1, 2016, in which the property owner
states his or her responsibility to replace all noncompliant
plumbing fixtures with water-conserving plumbing fixtures. This
bill would also authorize any party, including a city, county,
or water supplier to enforce that lease provision.
CHANGES TO EXISTING LAW
Existing law finds and declares, as the policy of this state,
that management of urban water demands and efficient use of
water shall be actively pursued to protect both the people of
the state and their water resources. (Wat. Code Sec. 10610.4.)
Existing law regulates the terms and conditions of residential
and commercial tenancies. (Civ. Code Sec. 1940 et seq.)
Existing law regulates the transfer of real property, including
the provision of mandatory disclosures during a transfer. (Civ.
Code Sec. 1091 et seq.)
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Existing law provides on and after January 1, 2014, for all
building alterations or improvements to single-family
residential real property, as a condition for issuance of a
certificate of final completion and occupancy or final permit
approval by the local building department, the permit applicant
shall replace all noncompliant plumbing fixtures with
water-conserving plumbing fixtures. (Civ. Code Sec. 1101.4(a).)
Existing law requires on or before January 1, 2017, noncompliant
plumbing fixtures in any single-family residential real property
to be replaced by the property owner with water-conserving
plumbing fixtures. (Civ. Code Sec. 1101.4(b).)
Existing law states that on and after January 1, 2017, a seller
or transferor of single-family residential real property shall
disclose in writing to the prospective purchaser or transferee
the requirements of the above provision and whether the real
property includes any noncompliant plumbing fixtures. (Civ.
Code Sec. 1101.4(c).)
Existing law requires on or before January 1, 2019, all
noncompliant plumbing fixtures in any multifamily residential
real property and in any commercial real property to be replaced
with water-conserving plumbing fixtures. (Civ. Code Sec.
1101.5(a).)
Existing law states that on and after January 1, 2019, the
water-conserving plumbing fixtures required by the above
provision shall be operating at the manufacturer's rated water
consumption at the time that the tenant takes possession. A
tenant shall be responsible for notifying the owner or owner's
agent if the tenant becomes aware that a water-conserving
plumbing fixture within his or her unit is not operating at the
manufacturer's rated water consumption. The owner or owner's
agent shall correct an inoperability in a water-conserving
plumbing fixture upon notice by the tenant or if detected by the
owner or the owner's agent. (Civ. Code Sec. 1101.5(c).)
Existing law requires on and after January 1, 2014, all
noncompliant plumbing fixtures in any multifamily residential
real property and any commercial real property to be replaced
with water-conserving plumbing fixtures in the following
circumstances:
for building additions in which the sum of concurrent building
permits by the same permit applicant would increase the floor
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area of the space in a building by more than 10 percent; and
for building alterations or improvements in which the total
construction cost estimated in the building permit is greater
than one hundred fifty thousand dollars ($150,000), as
specified. (Civ. Code Sec. 1101.5(d).)
Existing law requires on and after January 1, 2019, the seller
or transferor of multifamily residential real property or of
commercial real property to disclose to the prospective
purchaser or transferee in writing, among other things, whether
the property includes any noncompliant plumbing fixtures, and
specifies that this disclosure may be included in other
transactional documents. (Civ. Code Sec. 1101.5(e).)
Existing law defines the following terms:
"noncompliant plumbing fixture" means any of the following: a
toilet manufactured to use more than 1.6 gallons of water per
flush; a urinal manufactured to use more than one gallon of
water per flush; a showerhead manufactured to have a flow
capacity of more than 2.5 gallons of water per minute; or an
interior faucet that emits more than 2.2 gallons of water per
minute; and
"water-conserving plumbing fixture" means any fixture that is
in compliance with current building standards applicable to a
newly constructed real property of the same type. (Civ. Code
Sec. 1101.3(e).)
This bill would provide that the lease of any single-family
residential real property that is entered into, renewed, or
amended on or after January 1, 2016, shall contain a provision
in which the property owner states his or her responsibility to
replace all noncompliant plumbing fixtures with water-conserving
plumbing fixtures on or before January 1, 2017.
This bill would provide that the lease of any portion of a
multifamily residential real property or commercial real
property that is entered into, renewed, or amended on or after
January 1, 2016, shall contain a provision in which the property
owner states his or her responsibility to replace all
noncompliant plumbing fixtures with water-conserving plumbing
fixtures on or before January 1, 2019.
This bill would specify that the above provisions may be
enforced by a city, county, city and county, water supplier, or
any other party.
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COMMENT
1.Stated need for the bill
According to the author:
In 2007, California passed AB 715 (Laird), which required that
all toilets and urinals sold or installed in the state must
meet high water-efficiency standards. These standards abide
by the federally-set EPA WaterSense qualifications, which are
considered some of the most advanced and stringent, in terms
of both performance and efficiency measures. In 2008,
California began developing the California Green Buildings
Standard Code, commonly known as CALGreen, which is the
state's and nation's first mandated green building code.
Plumbing fixtures required by CALGreen must also abide by
federally-set EPA WaterSense standards. In 2009, the
Legislature directed state agencies and California residents
to reduce statewide water consumption by 20 [percent] by 2020.
This plan, also known as the 20x2020 Water Conservation Plan,
aimed to maximize residential water efficiency and
conservation.
SB 407, passed in [2009], aimed to implement a portion of the
20x2020 plan. It called for the replacement of inefficient
plumbing fixtures and ensures that by 2020, the building stock
in California will be equipped with high-efficiency plumbing
fixtures in order to accomplish the administration's
conservation goals. SB 407 was somewhat unclear and did not
designate enforcement authority, which resulted in ineffective
implementation of the bill. SB 407 . . . has proven to be a
challenge to implement for the following reasons:
Lack of local jurisdictions' technical capacities or
budgets
No incentive for localities to comply
Inconsistent and vague language
Lack of enforcement authority
This bill would require the lease of a single-family
residential real property or any portion of a multifamily
residential real property or commercial real property that is
entered into, renewed, or amended after January 1, 2016, to
contain a provision in which the property owner states his or
her responsibility to replace all noncompliant plumbing
fixtures with water-conserving plumbing fixtures on or before
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January 1, 2017, or January 1, 2019, respectively. The bill
would authorize any party, including a city, county, or water
supplier to enforce that lease provision. This provision
would add teeth to SB 407, and create an enforcing mechanism,
holding landlords accountable for the inefficient fixtures on
their property.
2.Enforcement of Lease Terms
As the author notes in Comment 1, the intent of this bill is to
"add teeth" to the efficiency requirements imposed by SB 407
(Padilla, Ch. 587, Stats. 2009). However, it is unclear how the
current version of this bill would actually work in situations
where a landlord fails to meet SB 407's efficiency requirements.
Would enforcement of this new lease term, for example,
authorize a tenant to claim that the presence of inefficient
plumbing fixtures amounts to a material breach of the lease?
Would a tenant have a right to repair or replace non-compliant
fixtures and withhold rent for the amount of the repairs? Would
another party unrelated to the landlord-tenant relationship be
empowered to seek an injunction to force the landlord to comply
with these efficiency requirements?
Under existing law, Civil Code Section 1941 provides that the
lessor of a building intended for the occupation of human beings
must, in the absence of an agreement to the contrary, put it
into a condition fit for such occupation, and repair all
subsequent dilapidations thereof, which render it untenantable.
Existing law only recognizes certain conditions as amounting to
a landlord's failure to maintain the habitability of a tenancy,
including when a unit substantially lacks such things as a
"water supply approved under applicable law that is under the
control of the tenant, capable of producing hot and cold running
water, or a system that is under the control of the landlord,
that produces hot and cold running water, furnished to
appropriate fixtures, and connected to a sewage disposal system
approved under applicable law." (Civ. Code Sec. 1941.1(a)(3).)
When a unit substantially lacks any of the standard
characteristics necessary for its habitation as a dwelling,
existing law, under specified conditions, prohibits a landlord
from demanding or collecting rent from the tenant, or from
issuing a three-day notice to pay rent or quit the premises.
(See Civ. Code Sec. 1942.2.) Additionally, existing law
recognizes a tenant's right to repair or vacate premises
rendered untenantable due to a landlord's failure to maintain
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the standard characteristics necessary for habitation. (See
Civ. Code Sec. 1942.) Failure to maintain residential premises
in a habitable condition also operates as an affirmative defense
to an unlawful detainer action when a tenant withholds the
payment of rent, provided the defects constitute a "substantial
breach" of the landlord's obligation to maintain the
habitability of a dwelling. (See Code Civ. Proc. Sec. 1174.2.)
The policy rationale underlying these existing provisions
recognizes that tenants should not be forced to live in, and pay
rent for, substandard housing. The law recognizes that forced
living in such conditions threatens the health and safety of the
residents.
3.Amendments to Require Disclosure
Recognizing the difficulty of enforcing water efficiency
standards in a lease, as discussed in Comment 2, the author
offers the following set of amendments to clarify how
non-compliance with the efficiency standards imposed by SB 407
should affect the landlord-tenant relationship. These
amendments remove the duty to state a property owner's
obligation to provide water-conserving plumbing fixtures as a
term of a lease, and instead require the landlord to provide a
tenant with a separate disclosure informing them of this duty
when entering into, renewing or amending a lease. These
amendments provide a sample notice deemed to comply with this
new requirement, and extend the date by which this separate
notice must be provided to tenants to those leases entered into,
amended, or renewed on or after July 1, 2016. These amendments
also exempt the landlords of single-family residential real
properties, multifamily residential real properties, and
commercial real properties from the obligation to provide this
separate notice for properties that have complied with the
efficiency requirements of SB 407.
Author's Amendments :
On page 2, line 19, after "lease" insert "or rental agreement"
On page 2, line 20, strike "January," and insert "July,"
On page 3, strike lines 1 through 5 and insert "shall be
accompanied by a written disclosure stating the property
owner's responsibility to replace all noncompliant plumbing
fixtures with water-conserving plumbing fixtures on or before
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January 1, 2017."
On page 3, before line 6, insert:
(e) The following provision is deemed adequate to satisfy the
notice requirement prescribed by subdivision (d): "Section
1101.4 of the Civil Code requires all single-family residences
to be equipped with water-conserving plumbing fixtures on or
after January 1, 2017. Section 1101.5 of the Civil Code
requires all multifamily residential real property and all
commercial real property to be equipped with water-conserving
plumbing fixtures on or after January 1, 2019. Fixtures in
this dwelling, multifamily residential real property or
commercial property may not comply with Sections 1101.4 or
1101.5 of the Civil Code. The property owner is responsible
for equipping this property with water-conserving plumbing
fixtures by January 1, 2017 or January 1, 2019."
(f) Single-family residential real properties in compliance
with subdivisions (a) or (b) shall not be required to comply
with the notice requirement prescribed by subdivision (d).
On page 4, line 15, after "lease" insert "or rental agreement"
On page 4, line 17, strike "2016" and insert "2017"
On page 4, line 17, strike "shall contain a provision," strike
lines 18 through 22, and insert "shall be accompanied by a
written disclosure stating the property owner's responsibility
to replace all noncompliant plumbing fixtures with
water-conserving plumbing fixtures on or before January 1,
2019."
On page 4, after line 22, insert:
(g) The following provision is deemed adequate to satisfy the
notice requirement prescribed by subdivision (f): "Section
1101.4 of the Civil Code requires all single-family residences
to be equipped with water-conserving plumbing fixtures on or
after January 1, 2017. Section 1101.5 of the Civil Code
requires all multifamily residential real property and all
commercial real property to be equipped with water-conserving
plumbing fixtures on or after January 1, 2019. Fixtures in
this dwelling, multifamily residential real property or
commercial property may not comply with Sections 1101.4 or
1101.5 of the Civil Code. The property owner is responsible
for equipping this property with water-conserving plumbing
fixtures by January 1, 2017 or January 1, 2019."
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(h) Multifamily residential real properties and commercial
real properties in compliance with subdivisions (a) or (d),
and commercial real properties without plumbing fixtures,
shall not be required to comply with the notice requirement
prescribed by subdivision (f).
4.Amendments to Allow Partial Withholding of Rent
Instead of allowing a tenant to potentially void a tenancy
agreement for a property owner's failure to install
water-conserving plumbing fixtures as required by SB 407, the
author offers the following amendments which would allow a
tenant to withhold a portion of their periodic rent that is
directly attributable to utility charges they incur due to the
use of non-compliant fixtures in their rental unit. Where it is
impractical or extremely difficult to quantify those charges,
these amendments would create a presumption that the amount
attributable to the non-compliant fixtures is $25 per rental
period. These amendments would also protect tenants from
eviction actions by prohibiting any person from bringing an
unlawful detainer action for withholding rent as authorized by
the amendments, and would clarify that remedies provided by this
bill are cumulative to remedies provided under a lease agreement
or under other law.
Author's Amendments :
On page 3, before line 6, insert:
(g) A tenant of a single-family residential real property who
receives residential water service from a water utility under
an account established by the tenant may deduct from the
payment of rent to the landlord all reasonable charges paid to
the water utility that are directly attributable to the
property owner's failure to comply with subdivision (b).
Where it would be impracticable or extremely difficult to fix
the actual charges attributable to the property owner's
failure to comply with subdivision (b), such charges shall be
presumed to be $25 per rental period. No tenant shall be
guilty of unlawful detainer pursuant to Section 1161 of the
Code of Civil Procedure for deducting from the payment of rent
to the landlord the amount authorized by this subdivision, and
no person may initiate an unlawful detainer action against a
tenant who elects to deduct from the payment of rent an amount
authorized by this subdivision. The remedies provided by this
subdivision are in addition to any other remedies provided by
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the lease agreement, or other applicable statutory or common
law.
On page 4, after line 22, insert:
(i) A tenant of a multifamily residential real property or
commercial real property who receives residential or
commercial water service from a water utility under an account
established by the tenant may deduct from the payment of rent
to the landlord all reasonable charges paid to the water
utility that are directly attributable to the property owner's
failure to comply with subdivision (a). Where it would be
impracticable or extremely difficult to fix the actual charges
attributable to the property owner's failure to comply with
subdivision (a), such charges shall be presumed to be $25 per
rental period. No tenant shall be guilty of unlawful detainer
pursuant to Section 1161 of the Code of Civil Procedure for
deducting from the payment of rent to the landlord the amount
authorized by this subdivision, and no person may initiate an
unlawful detainer action against a tenant who elects to deduct
from the payment of rent an amount authorized by this
subdivision. The remedies provided by this subdivision are in
addition to any other remedies provided by the lease
agreement, or other applicable statutory or common law.
5.Opposition Concerns
A number of groups have raised concerns about this bill and the
amendments described in Comments 3 and 4. The California
Association of Realtors, in opposition, articulates these
concerns as follows:
The [California Association of Realtors] (C.A.R.) is opposed
to AB 723, as proposed to be amended, unless the tenant
enforcement provisions are removed from [the] bill. Our
concern is the novel, and unworkable, enforcement mechanism
proposed to be added to AB 723.
. . .
The proposed mechanism is inappropriate.
C.A.R. opposes the proposed provisions that would empower
tenants to act as code enforcement officers or building code
officials. Tenants should not be the "watch dog" for building
code violations as they do not have the technical knowledge to
enforce state standards related to water conserving features.
This expertise should remain with those trained to enforce
state and local building standards.
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As proposed to be amended, AB 723 would encourage tenants to
deduct from their rent "reasonable charges paid to the water
utility" if the landlord has not updated the dwellings
plumbing fixtures. If that amount is unquantifiable, tenants
would be permitted to deduct $25 per rental period. Tenants
would not be subject to eviction if this deduction is made
from their rent. The duty is owed to the water purveyor, not
the tenant, and should not become a cheap continuance on every
eviction.
AB 723 confuses habitability and regulatory compliance in its
remedy .
Under current law, tenants may only withhold rent for
habitability or health and safety issues. While water
conservation is vital to all residents in California, AB 723
will not achieve its intended goal to reduce water consumption
by punishing property owners. AB 723 encourages tenants to
"allege" violations and requires landlords to prove they are
in compliance.
Existing enforcement provisions in SB 407 are working .
Building alterations and improvements require a property owner
to obtain a building permit prior to commencing work. As a
condition for issuance of completion for final permit approval
by the local building department, permit applicants seeking to
alter real property must replace noncompliant plumbing
fixtures with low-flow toilets, shower heads and faucets.
This requirement has been enforced by local building
departments since January 1, 2014.
Additional enforcement is premature .
The remaining requirements in SB 407 do not go into effect
immediately, and are phased in over the next few years. There
is no immediate urgency to enforce these provisions. It is
unfair to assume that property owners will not comply with
state mandated requirements before they even take effect.
The Apartment Association of Greater Los Angeles, in opposition,
additionally states that the disclosure requirements in AB 723
amount to an effort to "shame" landlords into retrofitting
plumbing fixtures as required by SB 407.
Support : Association of California Water Agencies; San Diego
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County Water Authority
Opposition : Apartment Association, California Southern Cities;
Apartment Association of Greater Los Angeles; Apartment
Association of Orange County; California Association of
Realtors; East Bay Rental Housing Association; Nor Cal Rental
Property Owner's Association; North Valley Property Owner's
Association; Santa Barbara Rental Property Association
HISTORY
Source : Natural Resources Defense Council
Related Pending Legislation : None Known
Prior Legislation :
SB 407 (Padilla, Ch. 587, Stats. 2009) established requirements
for residential and commercial real property built on or before
January 1, 1994, to replace plumbing fixtures that are not water
conserving. Among other things, this bill required, on or
before January 1, 2019, that all noncompliant plumbing fixtures
in multifamily residential real property and commercial real
property be replaced with water-conserving plumbing fixtures.
This bill also required, on or before January 1, 2017, that all
noncompliant plumbing fixtures in any single-family residential
real property be replaced by the property owner with
water-conserving plumbing fixtures.
AB 715 (Laird, Ch. 499, Stats. 2007) prohibited the sale, after
January 1, 2014, of toilets that exceed 1.28 gallons per flush
and urinals that exceed 0.5 gallon per flush.
Prior Vote :
Assembly Floor (Ayes 78, Noes 0)
Assembly Appropriations Committee (Ayes 17, Noes 0)
Assembly Housing and Community Development Committee (Ayes 6,
Noes 0)
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