BILL ANALYSIS Ó
AB 999
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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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