BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  April 14, 2015


                           ASSEMBLY COMMITTEE ON JUDICIARY


                                  Mark Stone, Chair


          AB 999  
          (Daly) - As Amended April 7, 2015


                              As Proposed to be Amended


          SUBJECT:  ABANDONED MOBILEHOMES: DISPOSAL


          KEY ISSUE:  SHOULD MOBILEHOME PARK OWNERS THAT FOLLOW A  
          COURT-SUPERVISED PROCEDURE WHICH PROVIDES DUE PROCESS TO  
          MOBILEHOME OWNERS AND LIENHOLDERS BE ALLOWED TO DISPOSE OF AN  
          ABANDONED MOBILEHOME WITHOUT BEING RESPONSIBLE FOR PAYING  
          DELINQUENT PROPERTY TAXES OWED BY THE MOBILEHOME OWNER?


                                      SYNOPSIS


          This bill, sponsored by the Western Manufactured Housing  
          Communities Association (WMA), an association representing  
          owners of mobilehome parks, seeks to establish due process  
          requirements for mobilehome park owners that, if satisfied,  
          would allow mobilehome park owners to dispose of abandoned  
          mobilehomes without being required to pay the unpaid property  
          taxes on the home. According to the author, it is an unfunded  
          burden to the mobilehome park owner to have to pay the unpaid  
          property taxes owed by a delinquent homeowner, particularly when  
          the park owner is seeking to remove and dispose of an abandoned  








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          mobilehome that may be uninhabitable or a blight on the rest of  
          the park.  This bill establishes due process procedures for  
          disposal of abandoned mobilehomes and their contents: provisions  
          that largely track those currently governing the sale of  
          abandoned mobilehomes and which provide the homeowner and  
          lienholders with notice and an opportunity to be heard with  
          respect to a petition for declaration of abandonment.  According  
          to the author, this bill does not result in any abatement of  
          taxes because under existing law, the registered homeowner  
          ultimately remains responsible for unpaid taxes after those  
          taxes are transferred from the secured roll to the unsecured  
          roll for tax collection.  Proposed amendments to the bill are  
          largely technical, consolidating and reorganizing the due  
          process provisions for disposal of abandoned mobilehomes into a  
          single subdivision.  The bill is supported by mobilehome park  
          owners who contend that the bill would help expedite the removal  
          of uninhabitable abandoned homes while providing sufficient due  
          process protection and avoiding any abatement of taxes.  After  
          removal, new homes could be installed on those vacated sites,  
          improving the park community and generating additional property  
          taxes for local government.  There is no registered opposition  
          to the bill. 


          SUMMARY:  Establishes due process requirements for mobilehome  
          park owners (park management) seeking to dispose of an abandoned  
          mobilehome without first being required to pay any unpaid  
          property taxes on the mobilehome.  Specifically, in order for  
          park management to dispose of an abandoned mobile home, this  
          bill:   


          1)Requires park management to file a petition for judicial  
            declaration of abandonment and in the petition, declare its  
            intent to not seek a tax clearance certificate, and then  
            notify the county tax collector and the Department of Housing  
            and Community Development (HCD) by mailing a copy of the  
            petition by first-class mail. 









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          2)Requires park management, within ten days following a judgment  
            of abandonment, to enter the mobilehome, make an inventory of  
            the contents, and submit the inventory to the court.


          3)Requires park management to post and mail a notice of intent  
            to dispose of the abandoned mobilehome and its contents under  
            this section, and announcing the date of disposal, in a  
            specified manner.  Further requires the management to provide  
            notice to the county tax collector and HCD.


          4)Authorizes park management to dispose of the abandoned  
            mobilehome following a judgment of abandonment, but not less  
            than ten days following the above notice of intent to dispose.  
             Defines "dispose" to mean to remove an abandoned mobilehome  
            from a mobilehome park and destroy it, thus making it unusable  
            for any purpose.


          5)Authorizes any person having right to possession of the  
            abandoned mobilehome to recover and remove it from the  
            premises at any time prior to disposal upon payment to the  
            management of all rent, reasonable storage charges, and any  
            other costs due.  Requires the management to immediately file  
            an acknowledgment of satisfaction of judgment upon receipt of  
            such payment and removal of the mobilehome.


          6)Requires park management, within 30 days of the date of the  
            disposal of an abandoned mobilehome and its contents, to  
            submit to the court, the county tax collector, and HCD a  
            statement that the abandoned mobilehome and its contents were  
            disposed with supporting documentation.  Alternatively, if the  
            contents of the mobilehome were sold at a public sale instead  
            of being disposed of along with the mobilehome, then  
            management shall also submit an accounting of the moneys  
            received from the sale and the disposition of the money and  








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            the items contained in the inventory.


          7)Provides that, notwithstanding any other law, park management  
            shall not be required to obtain a tax clearance certificate,  
            as set forth in Section 5832 of the Revenue and Taxation Code,  
            to either dispose of an abandoned mobilehome and sell its  
            contents, or dispose of an abandoned mobilehome and its  
            contents.


          EXISTING LAW:   


          1)Defines "abandoned mobilehome" to mean a mobilehome that is  
            unoccupied, is located in a mobilehome park on a site for  
            which no rent has not been paid to the management for the  
            preceding 60 days, and is in such condition that a reasonable  
            person would believe it to be abandoned.  (Civil Code Section  
            798.61(a).  All further references are to this code unless  
            otherwise stated.)


          2)Establishes a specified procedure for determining the  
            abandonment of a mobilehome, which includes posting a notice  
            of belief of abandonment on the mobilehome for a minimum of 30  
            days and mailing copies of the notice to the homeowner and any  
            known holder of a security interest in the mobilehome.   
            (Section 798.61(b).)


          3)Establishes a court-supervised process to petition for a  
            judicial declaration of abandonment, which includes serving  
            the petition upon the homeowner and known lienholders in a  
            manner specified.  (Section 798.61(c).)


          4)Provides for a hearing whereby a court may enter a judgment of  
            abandonment in favor of the petitioner, and allow him or her  








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            to recover various costs and charges, plus attorney's fees,  
            against the owner of the mobilehome.  (Section 798.61(d).)


          5)Establishes due process requirements for park management  
            seeking to sell an abandoned mobilehome and/or its contents,  
            including various notice provisions, a public sale  
            requirement, and specifying the division of proceeds from the  
            sale.  (Section 798.61(e).)  Requires management to provide  
            the purchaser of the mobilehome at the public sale with a copy  
            of the judgment of abandonment and evidence of the sale, and  
            requires either the HCD or the Department of Motor Vehicles to  
            subsequently register title of the abandoned mobilehome in the  
            name of the purchaser upon presentation thereof.  Further  
            provides that the sale shall pass title to the purchaser free  
            of any prior interest, including any security interest or  
            lien, except as specified.  (Section 798.61(h).)


          6)Provides that property taxes due on mobilehomes are entered on  
            the secured roll for collection, but if they go unpaid and  
            become delinquent, shall be transferred from the secured roll  
            to the unsecured roll.  Further provides that unpaid property  
            tax amounts transferred to the unsecured roll continue to be  
            subject to delinquent penalties until the amounts are paid,  
            and are collectible from either the person from whom the  
            property was acquired or the public entity that acquired the  
            property.  (Revenue and Taxation Code Section 2921.5.)


          FISCAL EFFECT:  As currently in print this bill is keyed fiscal.


          COMMENTS:  Under existing law, owners of mobilehome parks must  
          follow a specified court-supervised abandonment proceeding to  
          dispose of a mobilehome when the homeowner has not only stopped  
          paying rent on the site, but apparently abandoned the mobilehome  
          itself, leaving it unoccupied and in a condition rendering it  
          uninhabitable and unattractive for resale.  In many cases, the  








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          property is burdened with unpaid property taxes owed by the  
          homeowner-taxes which create an obstacle to disposal and removal  
          of the home by park management because current law requires the  
          unpaid taxes to be paid off before title to the mobilehome can  
          be transferred to the park management, even for the purpose of  
          disposal.


          This bill, sponsored by the Western Manufactured Housing  
          Communities Association (WMA), seeks to establish due process  
          requirements for mobilehome park owners that if satisfied, would  
          allow them to dispose of an abandoned mobilehome without first  
          being required to pay the unpaid property taxes on the home.  In  
          justifying the need for the bill, the author states:


               Manufactured homes and mobilehomes are regularly  
               abandoned in mobilehome communities.  With abandoned  
               mobilehomes, frequently the registered owner has failed  
               to pay the required personal property taxes for an  
               extended period of time.  Normally when an owner is  
               delinquent, the respective county tax collector would  
               place a lien on the mobilehome and discharge of it  
               accordingly.  However, tax collectors are reluctant to  
               pursue this course of action when a mobilehome lacks  
               value, as is the case with many abandoned properties.


               Abandoned mobilehomes negatively impact the community,  
               the landlord, and tax collectors.  They are unsightly  
               and potentially hazardous, thus depreciating the value  
               of nearby mobilehomes and impacting the health of  
               residents.  Landlords cannot rent out the space  
               occupied by an abandoned mobilehome, thus decreasing  
               revenue and also precluding the collection of taxes.   
               This bill (AB 999) will help expedite the removal of  
               abandoned mobilehomes by allowing a landlord to dispose  
               of the property without the unjust burden of paying the  
               delinquent resident's taxes.








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          Definitions of "abandoned" and "disposal."  Under existing law,  
          an abandoned mobilehome means a mobilehome about which all of  
          the following are true: (1) it is unoccupied; (2) it is located  
          in a mobilehome park on a site for which no rent has been paid  
          to the management for the preceding 60 days; and (3) a  
          reasonable person would believe it to be abandoned.  Existing  
          law also provides, rather curiously, that if all three of these  
          conditions are true, then a mobilehome "that is uninhabitable  
          because of its total or partial destruction that cannot be  
          rehabilitated" shall also be included in the definition of  
          "abandoned mobilehome."  According to WMA, this provision likely  
          refers to mobilehomes damaged by fire ("burnt out homes"), but  
          in any case, it is important to note that even burnt-out homes  
          may not be deemed abandoned under the statute unless all three  
          criteria are met, including nonpayment of rent on the site for  
          60 days.


          This bill does not modify the definition of "abandoned  
          mobilehome," but it does provide a definition for "disposal,"  
          specifically that to dispose of an abandoned mobilehome means to  
          "remove it from a mobilehome park and destroy it, thus making it  
          unusable for any purpose."  Thus, under the plain language of  
          the bill, a mobilehome park owner using the procedure authorized  
          by this bill to dispose of an abandoned mobilehome must destroy  
          it upon removal from the park, and may not use the home for any  
          other purpose, including salvage or resale to others.


          Due process for disposing of an abandoned mobilehome.  This bill  
          establishes due process procedures for disposal of abandoned  
          mobilehomes and their contents-provisions that largely track  
          those currently governing the sale of abandoned mobilehomes.  As  
          a prerequisite, the management must first post a notice of  
          belief of abandonment on the mobilehome for a minimum of 30 days  
          and mail copies of the notice to the homeowner and any known  
          lienholders.  To further protect due process for the homeowner  








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          who may wish to contest abandonment, existing law requires the  
          management to file a petition for judicial declaration of  
          abandonment and serve it upon the homeowner, as well as any  
          known lienholders on the home.  Because the bill seeks to  
          relieve park management from clearing unpaid taxes on the home,  
          the bill requires management to declare its intent in the  
          petition to not seek a tax clearance certificate, and then  
          requires notification to the county tax collector and the HCD by  
          mailing first-class a copy of the petition.  If at the hearing  
          on the petition, the petitioner shows sufficient evidence that  
          the criteria for abandonment are satisfied and no party  
          establishes a right to possession or security or ownership  
          interest in the mobilehome, then the court shall enter a  
          judgment of abandonment.  





          At this point, the bill requires park management, within ten  
          days following the judgment of abandonment, to enter the  
          mobilehome, inventory the contents, and submit the inventory to  
          the court.  Subsequently, management shall post and mail to the  
          homeowner and any known lienholders a notice of intent to  
          dispose of the abandoned mobilehome and its contents, including  
          the planned date of disposal.  The notice must also be provided  
          to the county tax collector and HCD.  The bill authorizes park  
          management to dispose of the abandoned mobilehome and its  
          contents following a judgment of abandonment, but not less than  
          ten days following the notice of intent to dispose.  Finally,  
          within 30 days of the date of the disposal, the bill requires  
          management to submit to the court, the county tax collector, and  
          HCD a statement that the abandoned mobilehome and its contents  
          were disposed with supporting documentation.  Alternatively, if  
          management elected to sell the contents of the mobilehome at a  
          public sale instead of disposing of them along with the  
          mobilehome, then the bill requires management to also submit an  
          accounting of the moneys received from the sale and the  
          disposition of the money and the items contained in the  








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          inventory.





          Proposed author amendments separate and reorganize due process  
          provisions for disposal. Section 798.61 of the Civil Code  
          specifies judicial due process for dealing with abandoned  
          mobilehomes, which ultimately involves noticed public sale of  
          the home and its contents after a judicial declaration of  
          abandonment has been issued.  As currently in print, the bill  
          provides for an alternative procedure allowing disposal of the  
          home without public sale, but integrates these requirements into  
          every step of the existing process.  In order to improve clarity  
          and avoid potential confusion about provisions that may apply to  
          sale, disposal, or both, the author proposes to amend the bill  
          to consolidate new provisions authorizing disposal of abandoned  
          mobilehomes into a single subdivision, and make corresponding  
          changes to reorganize Section 798.61.  The reorganization of the  
          bill as proposed to be amended also helpfully clarifies that the  
          bill is not intended to change due process provisions relating  
          to sale of abandoned mobilehomes, but rather to establish new,  
          substantially similar provisions for the disposal of such homes.


           


          Liability for unpaid taxes follows the registered former owner  
          of the abandoned mobilehome.  According to the author, this bill  
          does not result in any tax abatement because under existing law,  
          the registered owner of the home ultimately remains responsible  
          for unpaid taxes after those taxes are transferred from the  
          secured roll to the unsecured roll for tax collection.  Section  
          2921.5 of the Revenue and Taxation Code provides that property  
          taxes due on mobilehomes are entered on the secured roll for  
          collection, but if they go unpaid and become delinquent, are  
          transferred to the unsecured roll.  The law also provides that  








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          unpaid property tax amounts transferred to the unsecured roll  
          continue to be subject to delinquent penalties until the amounts  
          are paid, and are collectible from either the person from whom  
          the property was acquired or the public entity that acquired the  
          property.  


          This bill simply allows mobilehome park owners to dispose of  
          abandoned mobilehomes without being required to pay a  
          homeowner's unpaid property taxes, as long as specified due  
          process procedures are satisfied.  Because the bill does not  
          change procedures for the sale of abandoned mobilehomes, current  
          law dictating priority for the proceeds of the sale still  
          applies when the park owner elects to sell an abandoned  
          mobilehome, thus ensuring that proceeds may go towards paying  
          off tax liens or other obligations on the home.


          Pending/Previous Related Legislation.  AB 587 (Chau), introduced  
          earlier this year, proposes a new tax abatement program for  
          persons seeking to transfer title to mobilehomes, as specified.   
          AB 587 is currently pending hearing in the Assembly Housing and  
          Community Development Committee.  


          SB 69 (Kelley) Ch. 446, Stats. 1995, provided that an interest  
          in the mobilehome is established by evidence of a right to  
          possession of the mobilehome or a security or ownership interest  
          in the mobilehome.  


          AB 743 (Nolan) Ch. 564, Stats. 1991, revised due process  
          requirements for mobilehome owners seeking to obtain a court  
          order declaring the abandonment of a mobilehome.


          










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          REGISTERED SUPPORT / OPPOSITION:




          Support


          Western Manufactured Housing Communities Association (WMA)  
          (sponsor)


          California Mobilehome Parkowners Alliance




          Opposition


          None on file




          Analysis Prepared by:Anthony Lew / JUD. / (916) 319-2334















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