BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  April 29, 2015


               ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT


                                   Ed Chau, Chair


          AB 999  
          (Daly) - As Amended April 20, 2015


          SUBJECT:  Abandoned mobilehomes:  disposal


          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. 


          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  








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            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.


          5)Defines "dispose" to mean the removal and destruction of an  
            abandoned mobilehome from a mobilehome park, thus making it  
            unusable for any purpose.


          6)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 or other charges due, including  
            reasonable costs of storage and other costs awarded by the  
            court.  Requires the management to immediately file an  
            acknowledgment of satisfaction of judgment upon receipt of  
            such payment and removal of the mobilehome.


          7)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 of, 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  
            the items contained in the inventory.


          8)Provides that, notwithstanding any other law, park management  
            shall not be required to obtain a tax clearance certificate,  








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            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.


          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.


          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.


          4)Provides for a hearing whereby a court may enter a judgment of  
            abandonment in favor of the petitioner, and allow him or her  
            to recover various costs and charges, plus attorney's fees,  
            against the owner of the mobilehome.


          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  








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            sale.


          6)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 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  
            (Civil Code Section 798.61).


          7)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:  Unknown.


          COMMENTS:  


           Background:   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  
          property is burdened with unpaid property taxes owed by the  
          homeowner-taxes which create an obstacle to disposal and removal  








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          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.


           Need for this bill:   This bill, sponsored by the Western  
          Manufactured Housing Communities Association (WMA), seeks to  
          establish procedures 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.  Disposal of an abandoned mobilehome  
            entails the filing of a petition in court by a landlord in  
            order to establish a lien and seize ownership of the property  
            (Civil Codes § 798.56a and 798.61).  However, before a  
            landlord can complete the lien, he or she must pay any past  
            due personal property taxes owed by the mobilehome's previous  
            owner.


            "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 sell it.  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  








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            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.  Importantly, AB 999 ensures that the  
            registered owner remains responsible for the personal property  
            taxes, thus avoiding tax abatement."


           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 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."   
          Under this provision, even homes that have been completely  
          destroyed 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 define "disposal," specifically that to  
          dispose of an abandoned mobilehome means "the removal and  
          destruction of an abandoned mobilehome from a mobilehome park,  
          thus making it unusable for any purpose."  Under this  
          definition, a 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.









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           Disposal procedures for abandoned mobilehomes:   This bill  
          establishes due process procedures for the 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.  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 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  








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          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  
          inventory.





           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  
          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.








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           Related legislation: 


           AB 587 (Chau): Creates a tax 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.  AB 587 is currently pending hearing in the Assembly  
          Judiciary Committee.


          AB 682 (Williams): Would authorize a person to have specified  
          alterations, conversions, and repairs made to a mobilehome  
          without filing an application with HCD.  AB 682 is currently  
          pending hearing in the Assembly Committee on Housing and  
          Community Development.


          SB 69 (Kelley) Ch. 446, Statutes of 1995: Provided that an  
          interest in a 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, Statutes of 1991: Revised due process  
          requirements for mobilehome owners seeking to obtain a court  
          order declaring the abandonment of a mobilehome.





           Double-referral  :  This bill was double-referred to the Assembly  
          Judiciary Committee, where it passed 10-0 on April 14, 2015.  


           









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          REGISTERED SUPPORT / OPPOSITION:




          Support


          Western Manufactured Housing Communities Association (Sponsor)


          California Mobilehome Parkowners Alliance (CMPA)







          Opposition


          None on file




          Analysis Prepared by:Rebecca Rabovsky / H. & C.D. / (916)  
          319-2085

















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