BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: AB 999 Hearing Date: 6/23/2015
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|Author: |Daly |
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|Version: |6/15/2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Christine Hochmuth |
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SUBJECT: Mobilehomes: salvage and disposal.
DIGEST: This bill allows mobilehome park owners to dispose of
abandoned mobilehomes without being required to pay a
homeowner's unpaid property taxes, either through a specified
due process proceeding or through enforcement of a warehouse
lien.
ANALYSIS:
Existing law:
1)Defines a mobilehome as "abandoned" when it is 1) located in a
mobilehome park on a site for which no rent has been paid for
the prior 60 days, 2) unoccupied, and 3) believed to be
abandoned by reasonable standards. A mobilehome can be deemed
abandoned if it meets the above criteria and is also
uninhabitable due to total or partial destruction that cannot
be fixed.
2)Establishes procedures for mobilehomes that have been
determined to be abandoned and allows mobilehome park
management (referred to hereafter as "management") to sell the
home and its contents following a court-supervised process.
This procedure includes posting and mailing a notice of belief
of abandonment, filing a court petition and receiving a
judicial declaration of abandonment at a court hearing, taking
an inventory of the contents of the mobilehome, and posting
and mailing notice of intent to sell the abandoned mobilehome
AB 999 (Daly) Page 2 of ?
and its contents.
The management may not make money above the total amount due
to them, as determined by the court at the time of hearing on
the petition, from the public sale of the home and its
contents by this process. The unclaimed amount above what
management is entitled to must be paid to the county treasurer
within 30 days, at which point it may be reclaimed by the
former homeowner for up to one year.
3)Requires management to provide the purchaser with a copy of
the judgment of abandonment and evidence of the sale. The
Department of Housing and Community Development (HCD) or the
Department of Motor Vehicles (DMV) are required to register
title to the purchaser after receipt of this paperwork. The
title is required to be passed to the purchaser free of any
prior interest, including any security interest or lien,
excepting a lien of state due to nonpayment of fees and
penalties.
4)Requires management to have a warehouse lien against a
mobilehome for the costs of dismantling and moving, if
appropriate, as well as storage, if the homeowner does not
respond to a notice of termination of tenancy within 60 days.
A warehouse lien is superior to all other liens, except a lien
of state.
This bill:
1)Defines "dispose" or "disposal" as the removal and destruction
of an abandoned mobilehome from a mobilehome park, thus making
it unusable for any purpose.
2)Adds the requirement that a mobilehome cannot be permanently
affixed to the ground to be considered abandoned.
3)Establishes procedural regulations to obtain a judicial
declaration of abandonment for purposes of disposal. The
management is required to:
a)Declare in the court petition that they will dispose of the
abandoned mobilehome, and therefore will not seek a tax
clearance certificate.
b)Declare whether they intend to sell the contents of the
abandoned mobilehome before its disposal.
c)Send the county tax collector and HCD a copy of the court
AB 999 (Daly) Page 3 of ?
petition as notification that they plan to dispose of the
abandoned mobilehome.
4)Authorizes management to dispose of an abandoned mobilehome
following the judgment of abandonment, but not less than 10
days following the notice of disposal (below).
5)Establishes procedural regulations for the disposal of an
abandoned mobilehome by management. The management is
required to:
a) Enter the abandoned mobilehome and complete an inventory
of the contents and submit the inventory to the courts
within 10 days following a judgment of abandonment.
b) Post and mail a notice of intent to dispose of the
abandoned mobilehome and its contents, announcing the date
of disposal, to the homeowner, any known registered owner,
any known holder of security interest, the county tax
collector, and HCD.
c) Submit to the court, county tax collector, and HCD,
within 30 days of the date of disposal of an abandoned
mobilehome and its contents, a statement that the abandoned
mobilehome and its contents were disposed with supporting
documentation.
d) Submit to the court, county tax collector, and HCD,
within 30 days of the date of disposal or the date of the
sale of its contents, a statement that the abandoned
mobilehome was disposed with supporting documentation and
an accounting of the moneys received from the sale and
disposition of the money and the items contained in the
inventory.
6)Relieves management from the obligation of obtaining a tax
clearance certificate to dispose of an abandoned mobilehome
and dispose of its contents, following these procedures.
However, if contents are sold, management will be subject to
the tax clearance certificate requirements.
7)Authorizes any person having a right to possession of the
abandoned mobilehome to recover and remove it from the
premises, at any time prior to the 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. Following receipt of payment and removal of the
mobilehome, management is required to immediately file an
AB 999 (Daly) Page 4 of ?
acknowledgement of satisfaction of judgment.
8)Relieves management from the obligation of obtaining a tax
clearance certificate after enforcing the warehouse lien and
obtaining approval from HCD to designate the mobilehome for
salvage, provided management notifies the county tax collector
and HCD and applies to have the mobilehome designated for
salvage.
COMMENTS:
1)Purpose of the bill. According to the author and sponsor,
each year manufactured homes/mobilehomes are abandoned in
manufactured housing communities. Under current law,
management must proceed with a warehouse lien to dispose of an
abandoned property. These homes are often not worth the cost
of rehabilitation and must be salvaged (destroyed). However,
before an owner may legally complete the warehouse lien, he or
she is required to pay any past due personal property tax owed
on the property to the county tax collector. Frequently, the
taxes owed can exceed the value of the home. The author and
sponsor believe this is an unfair burden on the mobilehome
park owner.
The author and sponsor contend that this bill will benefit
landlords, residents, and tax collectors by creating a new
method to expeditiously deal with abandoned property, which
may ultimately allow for replacement of these abandoned,
tax-delinquent homes with newer homes.
2)Disposal. This bill creates a definition for disposal, namely
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." This is an important distinction to make
because the procedure authorized by this bill requires
management to destroy an abandoned mobilehome upon removal
from the park and does not allow management to resell it to
others. Sale of a mobilehome is still permissible under
separate, existing regulations.
3)Tax liability. 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
AB 999 (Daly) Page 5 of ?
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 of the home by management.
This is 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 would allow management to dispose of an abandoned
mobilehome without first being required to pay the unpaid
property taxes on the home.
This bill should 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.
This 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 will go
towards paying off tax liens or other obligations on the home.
This bill clarifies that management is only relieved of its
obligation to obtain a tax clearance certificate if the
mobilehome alone or the mobilehome and its contents are
disposed. If the contents are sold, management is still
required to obtain a tax clearance certificate. Any proceeds
from the sale of contents must go towards paying past due
taxes, as is required in current law for the sale of an
abandoned mobilehome.
4)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 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.
AB 999 (Daly) Page 6 of ?
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 interest in the mobilehome, then the
court shall enter a judgment of abandonment.
5)Warehouse lien. A warehouse lien is a procedure that
management may use to gain ownership of a home for termination
of tenancy. Under existing law, HCD approval of this process
requires a free and clear title. This bill allows management
to enforce a warehouse lien without obtaining a tax clearance
certificate to designate the mobilehome for salvage. While
separate from the court-monitored judicial declaration of
abandonment process, the warehouse lien process provides the
registered owner with a notice of termination and allows 60
days for a response.
6)Double-referral. The Rules Committee has referred this bill
to both this committee and the Judiciary Committee.
Related/PRIOR 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 Senate
Transportation and Housing Committee.
AB 682 (Williams) - authorizes a person to have specified
alterations, conversions, and repairs made to a mobilehome
without filing an application with HCD. AB 682 is also being
heard in this committee today.
Assembly Votes:
Floor: 74-0
Appr: 17-0
H&CD: 6-0
AB 999 (Daly) Page 7 of ?
Jud: 10-0
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: No
POSITIONS: (Communicated to the committee before noon on
Wednesday,
June 17, 2015.)
SUPPORT:
Western Manufactured Housing Communities Association (sponsor)
California Mobilehome Parkowners Alliance
OPPOSITION:
None received
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