BILL ANALYSIS Ó
AB 2391
Page 1
Date of Hearing: April 12, 2016
ASSEMBLY COMMITTEE ON JUDICIARY
Mark Stone, Chair
AB 2391
(Steinorth) - As Amended March 30, 2016
SUBJECT: RESIDENTIAL PROPERTY: POSSESSION BY DECLARATION
KEY ISSUE: should a controversial pilot program that may impair
the due process rights of occupants in foreclosed homes be
expanded geographically and extended until 2020, despite the
fact that the program has only been in effect for 15 months out
of an intended 36 month pilot period and no evaluation has been
made of its effectiveness or impact?
SYNOPSIS
In 2014, the Legislature approved and the Governor signed AB
1513 (Fox), Ch. 666, Stats. 2014, which provided temporary
authority to owners of residential property in three California
cities to declare their property to be vacant, register it with
local law enforcement, and obtain a TRO against any person not
authorized to be on the property. This bill seeks to extend
authorization for this temporary pilot program by two years,
until January 1, 2020, and to expand authorization for the pilot
program to include the County of San Bernardino and any city
within the County of San Bernardino that adopts an ordinance or
resolution to participate and comply with the pilot program.
Proponents of the bill, including the Realtors and the
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California Apartment Association, contend that, other than this
pilot program, the only process available today for property
owners to remove a squatter from residential property is the
formal court eviction (unlawful detainer) process, which can
take months to complete and does not allow the owner to take
immediate possession of the premises. The bill is opposed by
tenant advocates who contend that the court eviction process-a
summary expedited proceeding-- is indeed the best way for a
property owner to regain possession of the property while also
allowing a tenant who claims a legal right to possess the
property to have his or her claim decided by a court on its
merits-thereby ensuring due process for both parties. Opponents
emphasize that due process protections are particularly
important here, where the author seeks to expand the AB 1513
pilot program to areas containing so many residential properties
that have gone through foreclosure, because of a history of
post-foreclosure owners improperly treating legitimate tenants
as "squatters" or otherwise unauthorized occupants of the
property. Opponents note that the Legislature in 2012 passed AB
2610, part of the Homeowners' Bill of Rights, to protect
innocent tenants in foreclosed homes (i.e. typically tenants who
paid their rent every month but whose landlord defaulted on the
mortgage payments) from being removed from their homes without
due process and judicial review. They strongly oppose this bill
on the ground that it would allow property owners to undermine
or circumvent the very protections established by the
Legislature in the HBOR. In addition to the concerns expressed
about this bill's impact on tenants in foreclosed homes, the
Committee's own analysis of the pilot program provisions, as
well as a review of the legislative history of the program,
reveal a number of other due process and workability concerns
about the program that have never been addressed. For these
reasons, it appears that it is premature to expand and extend
authorization of the AB 1513 pilot program, prior to any
meaningful evaluation of its operation and impact.
SUMMARY: Expands participation of cities in a residential
property pilot program and renews program authorization for an
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additional two years, until 2020. Specifically, this bill:
1)Expands authorization for the CCP Section 527.11 pilot program
to include the County of San Bernardino and any city within
the County of San Bernardino, provided that the city or county
has adopted an ordinance or resolution indicating the intent
of the city or county to participate and comply with the
program requirements.
2)Provides that the County of San Bernardino or any
participating city within the county may withdraw its
participation at any time by adopting a subsequent ordinance
or resolution of the legislative body indicating the intent of
the city or county to withdraw its participation.
3)Extends authorization for the pilot program an additional two
years by extending the sunset date from January 1, 2018 to
January 1, 2020.
EXISTING LAW:
1)Provides the statutory requirements for unlawful detainer, a
summary proceeding the primary purpose of which is to
determine right to possession of real property. (Code of
Civil Procedure Section 1161 et seq. All further references
are to this code unless otherwise stated.)
2)Provides that a former owner of a foreclosed property who
holds over and remains in the property after it has been sold
through foreclosure may be removed after a three-day notice to
quit has been served. (Section 1161a.)
3)Requires a tenant or subtenant in possession of a rental
housing unit under a month-to-month lease or periodic tenancy
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at the time the property is sold in foreclosure to be given 90
days' written notice to quit before the tenant or subtenant
may be removed from the property as prescribed. (Section
1161b, subd. (a).)
4)Provides that the purchaser or successor in interest shall
bear the burden of proof in establishing that tenants or
subtenants holding possession of a rental housing unit under a
fixed-term residential lease entered into before transfer of
title at the foreclosure sale do not have the right to
possession until the end of the lease term. (Section 1161b,
(b)-(c).)
5)Provides that every person other than a public officer or
employee acting within the course and scope of his or her
employment in performance of a duty imposed by law, who enters
or remains in any noncommercial dwelling house, apartment, or
other residential place without consent of the owner, his or
her agent, or the person in lawful possession thereof, is
guilty of a misdemeanor. (Penal Code Section 602.5 (a).)
6)Establishes, until January 1, 2018, a pilot program to
facilitate removal of persons unlawfully occupying residential
property that, pursuant to the program, has been registered
with and verified by local law enforcement to be vacant. This
program:
a) Authorizes the owner of vacant real property, or his or
her agent, to register vacant property with the local
police agency using a specified form, signed under penalty
of perjury, and attesting that the property is vacant and
is not authorized to be occupied by any person. (Section
527.11 (a).)
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b) Authorizes the owner or his or her agent to execute a
"Declaration of Ownership," worded as specified or in
substantially similar language, and file it with the
appropriate local law enforcement agency where the property
is located. (Section 527.12.)
c) Requires a licensed private security services company or
police agency retained by the owner or owner's agent
pursuant to the pilot program to inspect the vacant
property not less than once every three days, and
immediately notify the police agency where the property is
registered if any unauthorized person is found on the
property. (Section 527.11 (e).)
d) Requires the police agency where the property is
registered to respond to the property as soon as
practicable after being notified by the licensed security
business that an unauthorized person is found on the
property, and requires the responding officer to take
action, as specified. (Section 527.11 (f).)
e) Authorizes the owner to file an action for a temporary
restraining order (TRO) and injunctive relief against any
person found on the vacant property not less than 48 hours
after that person has been notified by local law
enforcement to produce written authorization to be on the
property or other evidence demonstrating right to
possession, or face arrest. Allows the court to order a
hearing on a TRO within three days following service of the
summons and complaint, and to grant a TRO including an
order directing that the property be vacated in not less
than 48 hours. (Section 527.11 (g).)
f) Limits application of these provisions to residential
property consisting of one to four units, located in the
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cities of Palmdale and Lancaster, in Los Angeles County,
and the city of Ukiah, in Mendocino County. (Section
527.11 (k).)
FISCAL EFFECT: As currently in print this bill is keyed fiscal.
COMMENTS: In 2014, the Legislature approved and the Governor
signed AB 1513 (Fox), Ch. 666, Stats. 2014, which provided
temporary authority to owners of residential property in three
California cities to declare their property to be vacant,
register it with local law enforcement, and obtain a TRO against
any person not authorized to be on the property. This bill
seeks to extend the operation of this temporary pilot program by
two years, until January 1, 2020, and expand authorization for
the pilot program to include the County of San Bernardino and
any city within the County of San Bernardino, provided that the
city or county has adopted an ordinance or resolution indicating
its intent to participate in and comply with program
requirements. According to the author, expansion of the program
is needed because:
Cities and counties across the state are grappling with
the ongoing issue of how to deal with unauthorized
tenants occupying vacant properties. There have been
numerous stories from around the state in recent years
detailing the vandalism and even burning down of vacant
property occupied by "squatters." Existing law does not
provide a direct method for evicting squatters, making it
very difficult and time-consuming to quickly control the
issue.
In response, California enacted AB 1513 (Fox) in 2014 to
create a pilot program that allowed the cities of
Palmdale, Lancaster, and Ukiah to utilize an expedited
process for inspecting for and removing squatters from
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vacant property. The program is set to expire after next
year, and is very restrictive geographically, leaving
many communities' safety at risk.
Background on AB 1513 pilot program. According to the intent
language of AB 1513, the pilot program was intended to provide a
means to prevent squatting in vacant residential property and to
provide a timely and orderly procedure for squatters to vacate
the premises in lieu of arrest, and is not intended to be an
abridgment of other statutes relating to trespass or civil
eviction proceedings.
As enacted under CCP Section 527.11, the property owner
registering the property under the pilot program must provide a
phone number where he or she can be reached within a 24-hour
period, which is intended to enable law enforcement to quickly
contact the owner should unauthorized occupants ever be
discovered on the property during one of the regular inspections
required under the program. In addition, the owner must retain
either law enforcement or a private security service to
regularly inspect the vacant property, and provide a copy of the
contract or agreement to perform those services at the time of
registration. The security company or law enforcement agent
must then inspect the vacant property at least every three days
to ensure that it is vacant.
Under the program, law enforcement is required to respond in a
timely manner after being notified that an unauthorized person
is found on the property. Law enforcement personnel responding
to a first call shall not arrest the person for trespass, but
must instead advise the person that he or she is required to
produce written authorization from the owner to be on the
property or other evidence demonstrating his or her right to
possession, or the owner may seek to obtain a TRO and the person
may be subject to arrest for trespass if subsequently found on
the property in violation of the order.
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An owner of vacant real property may file an action for a
temporary restraining order and injunctive relief against any
person who is found on the property 48 hours or more after that
person has been notified by local law enforcement to produce
written authorization from the owner to be on the property or
other evidence demonstrating right to possession. Without
either being produced, that person subsequently may face arrest
for trespass, pursuant to Penal Code Section 602.5, for failing
to vacate the property pursuant to the TRO, and may therefore be
subject to a criminal penalty of imprisonment in the county jail
for up to one year and a fine of up to $1,000, or both.
Numerous due process concerns remain with the provisions
expanded by this bill, particularly with respect to tenants in
foreclosed homes. According to the author of AB 1513, the
reason for the bill is to address a district-wide epidemic of
"squatting" (i.e. people occupying vacant residential properties
without permission of the owner). The author asserted that the
primary reason for the high number of vacant properties ripe for
squatting is the foreclosure crisis of the past ten years has
resulted in a large number of bank-owned foreclosure properties
in the district. According to the author of this bill, local
governments in his district are interested in expanding this
pilot program to San Bernardino County, where not coincidentally
there are a large number of vacant homes due to the foreclosure
crisis. (According to figures compiled by RealtyTrac, for
example, in May 2012 the Riverside-San Bernardino metropolitan
area posted the highest foreclosure rate among the country's 20
largest metropolitan areas-more than 3.5 times the national
average.)
The bill is supported by the District Attorney from San
Bernardino County, the California Association of Realtors, and
the California Apartment Association (CAA), among others. In
support of the bill, CAA states:
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The current statute extended and expanded by AB 2391 is
a fair and equitable process for the removal of
squatters from property. The law gives property owners
the ability to execute a written form and file that
with the district attorney, therein declaring that the
property owner has authorized no one to occupy the
property. Law enforcement is required to enforce the
declaration as an order for immediate possession of the
premises. Unfortunately, the only process available
today for property owners to remove a squatter is the
formal court eviction process. That process can take
months to complete, all the while the squatter is
living illegally at the property and in many cases
damaging the premises.
The legislative history of AB 1513 reveals many concerns
expressed about whether the pilot program affords sufficient due
process to persons who are alleged by a property owners to be
unauthorized occupants of the property. (See, e.g. Assembly
Judiciary Committee analysis (April 29, 2014) and Senate Public
Safety Committee analysis (June 24, 2014)). Opponents of this
bill continue to be concerned that the pilot program, sought to
be expanded by AB 2391 without any additional protections, does
not provide sufficient due process, especially with respect to
the occupants of foreclosed homes. As the Western Center on Law
and Poverty explains:
The problem with the policy in AB 2391 is that it puts
innocent tenants at risk of being summarily removed
from property, despite a legitimate claim to
possession. In the foreclosure crisis that followed
the collapse of the nation's housing market, legal
services attorneys represented thousands of lawful
tenants of landlords that had lost properties in
foreclosure. The foreclosing entity or its agents
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commonly regarded anyone in the property
post-foreclosure as trespassers, despite the tenants'
statutory and contractual rights to remain on the
premises. Tenants' rights to a termination notice and
a hearing in court through the normal unlawful
detainer process were routinely ignored.
The policy in AB 2391 reinforces this erroneous notion
that a person inhabiting a foreclosed home must be
there unlawfully, and we fear that it will be abused
as an end-run around the unlawful detainer process.
Stripping tenants of legal protections is unwise
policy, particularly in light of California's housing
crisis
Tenants Together, a statewide organization for renters' rights,
contends that the current pilot program should not be expanded
or extended because it runs contrary to the recently enacted
Homeowners' Bill of Rights (HBOR), which included reforms
intended to protect tenants in foreclosed properties. They
state:
Tenants Together operates a renters' rights hotline
through which we have counseled over 8,000 tenant
households since 2009. We regularly receive calls from
legitimate tenants being falsely accused of being
unauthorized occupants. Whether because of ignorance or
bad faith, many owners, particularly after foreclosure,
treat tenants as if they are trespassers despite the fact
that rental agreements run with the land and verbal
rental agreements are fully enforceable and legitimate in
California. These new owners threaten to call, and in
some cases call, the police or sheriff to have tenants
arrested or otherwise removed as trespassers. Giving
these owners an additional tool for summary removal would
be extremely harmful.
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For years, post-foreclosure owners blatantly violated
tenants' rights by improperly treating tenants as
"unknown occupants," utilizing a loophole in state law
that was recently addressed by the tenant protections
in the Homeowner Bill of Rights (HBOR). HBOR allows any
tenant in the property unnamed in an unlawful detainer
action to file a claim of right to possession at any
time to get a hearing to determine whether the tenant
can become a party to the eviction action. CCP
415.46(e)(2). By allowing owners to circumvent the
entire court eviction process when the right to occupy
is disputed, the current proposal would undermine the
very protections the legislature just adopted in HBOR.
With respect to due process concerns expressed by opponents, the
author contends that the pilot program sought to be expanded by
this bill "has a thorough set of requirements in order to
accomplish (due process)" and further states that:
This concern is mitigated by the fact that the property
owner (or their agent) and the law enforcement agency
or security service must follow a rigorous process to
assure that the property is supposed to be vacant. The
owner (or their agent) must declare and demonstrate
that the property is vacant, under penalty of perjury.
Law enforcement must follow a regular inspection
protocol. Upon discovery, law enforcement must provide
notification to anyone they discover on the property
that they are subject to arrest for trespassing or
removal after 48 hours if they cannot provide evidence
that they have a right to be on the property. Finally,
the court has the discretion to not grant the owner's
request for a temporary restraining order or injunctive
relief if they do not believe it is merited.
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Despite the requirements cited by the author as examples of due
process protections built into operation of the AB 1513 pilot
program, it appears that the pilot program still provides less
due process to a tenant in a foreclosed property who may have a
legitimate right to possession under the HBOR, than is afforded
under the existing unlawful detainer proceeding that has
traditionally allowed property owners to regain possession of
property from trespassers or unauthorized occupants. As the
Senate Public Safety committee analysis (June 24, 2014)
explains, there is some reason to question whether the program
requirements cited by the author are sufficient to ensure
adequate due process:
The foreclosure crisis has created circumstances where
ownership and rental tenancy of property may be
difficult to determine. A person in possession of
property - perhaps a person who believes that he or she
still owns the property - might even have difficulty
determining the person or entity to contact for
questions about the status of the property. A person
subject to ejectment and a misdemeanor conviction for
failure to leave property within 48 hours after notice
could be a legitimate tenant or reasonably believe that
he or she is validly in possession of the property.
While the bill provides that a person in possession of
property shall not be arrested for trespass if he or she
presents written authorization from the owner, the bill
does not provide a method for the police or the courts
to resolve conflicting claims of ownership or
authorization. The person in possession could have a
lease from a former owner. The new owner of a
foreclosed residence might have no knowledge of a lease
between the former owner and the tenant. Further, the
person in possession may have been a victim of a sham
rental from a person pretending to be the owner of the
property. This has occurred often enough on foreclosed
properties that former Assembly Member Fiona Ma authored
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a bill that raised penalties for sham rentals. (citing
AB 1800 (Ma), Ch. 531, Stats. 2010.)
[. . . ]
The lack of a clearly defined defense to trespass
through later establishing the right to be on the
property could be particularly problematic where the
owner of the property is a large bank or mortgage
company and the alleged trespasser is the former owner
of the house. The person may have received oral
authority to temporarily remain in the house from one
department or person at a company, but this authority or
permission was not conveyed to another department that
prepares foreclosure properties for sale. It could take
a person some time to document his or her authority.
For these reasons, the Committee may wish to consider whether it
is appropriate to expand the AB 1513 pilot program to San
Bernardino or other areas where its application would appear to
impair the due process rights of tenants in foreclosed
properties, including those established recently through passage
of the Homeowners' Bill of Rights.
This bill seeks to expand and renew the pilot program
prematurely, prior to any real evaluation of its operation and
impact. In part because of due process concerns with the
original legislation, it should be noted that the Legislature
only approved AB 1513 for a three year period, establishing a
January 1, 2018 sunset date, and further limited its application
to residential property of one to four units, in the Cities of
Palmdale, Lancaster, and Ukiah.
In response to concerns that it may be premature to expand the
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AB 1513 program at this time, the author states that "the
program has been in law for over a year, and will have been in
effect for two years by the time this bill would become
effective." The author also contends there have been no known
issues with it in that time, and states that the Ukiah Police
Department indicated that they would like to retain the
authority to use the program going forward.
The Committee notes that the AB 1513 program became effective on
January 1, 2015, and is set to sunset 36 months later, on
January 1, 2018. At the time this Committee is being asked to
vote to approve expansion and reauthorization of the program,
the program has only been in effect for 15 months out of the 36
months during which it was intended by the Legislature to
operate. When AB 205 (Wood), a bill that similarly sought to
expand this pilot program, was in this Committee in March 2015,
the Committee's preliminary outreach to officials in Lancaster
and Palmdale revealed that the program was still largely unknown
to the public, and local implementation of the registration and
other requirements was still in progress. (AB 205 was not
pursued by its author in April 2015 at its first hearing, nor in
January 2016, when it was eligible to be moved forward as a
two-year bill.)
With respect to the existence of "no known issues" with the
bill, that may simply reflect the difficulty in ascertaining any
reliable, empirical information about program implementation to
date. When AB 1513 was in this Committee, the author declined
to take amendments that would have greatly aided the Legislature
in conducting evaluation and oversight of the program--namely,
amendments specifying key reporting requirements by cities
participating in the program, similar to those that apply to
cities participating in the ongoing weapon and drug nuisance
eviction pilot program. (See Civil Code Sections 3485(g) and
3486.5(b).) Because AB 1513 was considered primarily to be a
stopgap measure to address a crisis associated with vacant
properties in the author's district, the bill was allowed to
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proceed with a three-year sunset date with the understanding
that it would not be expanded beyond the initial set of
participating cities, particularly because the bill did not help
facilitate the Legislature's evaluation of its operation or its
impact upon residents who might be adversely affected.
At the time of this analysis, the Committee had received no
information about how many property owners have elected to
register their properties with local law enforcement under the
program, so it is not even known what the universe of cases is
where the program can be said to have worked properly or
improperly. Furthermore, the definition of what constitutes an
"issue" with the program is subjective, as is what constitutes
"success". Proponents indicate that they would consider it a
success if the program helped expedite the removal of
"squatters" from vacant property. However, opponents point out
that without being able to evaluate whether the person removed
actually had a legal right to occupy the property, the simple
fact that the person in question is no longer occupying the
property cannot be considered a measure of success. What if the
person did not receive the due process that he or she was
entitled to under the circumstances, but the person elected to
vacate the property rather than face possible arrest or
retaliation? What if, for the sake of argument, no homeowners
in an entire city elected to register their properties through
the program? Would the lack of "issues" somehow make that a
program worth expanding and extending to other cities? Or would
it indicate that perhaps property owners themselves do not find
the pilot program worthy of participation?
Additional due process and workability questions remain
unanswered. The Senate Public Safety committee analysis (June
24, 2014) raised additional due process and workability
questions about the current pilot program that were not
addressed by subsequent amendments to AB 1513, but remain
concerning to the present day. Among these questions are:
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1)What constitutes "inspection" of the property - to verify that
the property is vacant, such that any persons later found on
the property are trespassers?
2)What happens in cases where ownership - perhaps by a large
bank or mortgage company - is unclear?
3)Is a person still guilty of a misdemeanor for failure to leave
property within 48 hours, if the person later establishes that
he or she owns or leases the property, or has permission to be
on the property?
4)In the misdemeanor defined by this bill for failure to vacate
residential property, should the prosecution have to prove as
an element of the offense that a defendant did not have the
right to occupy the property?
5)Should a defendant have the right to an affirmative defense
that he or she had a reasonable belief in his or her right to
occupy the property?
6)Would prosecutors have difficulty obtaining perjury
convictions for fraudulent or questionable claims of
ownership?
Until these questions are answered, the Committee may conclude
that it does not have enough information about the program to
judge its merit as it was originally conceived to operate for a
limited period in a limited area and certainly not enough
information to consider expanding it to operate for a longer
period of time in a larger area.
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REGISTERED SUPPORT / OPPOSITION:
Support
California Apartment Association
California Association of Realtors
California Police Chiefs Association
San Bernardino County, Office of the District Attorney
Opposition
California Rural Legal Assistance Foundation
Tenants Together
Western Center on Law and Poverty
Analysis Prepared by:Anthony Lew / JUD. / (916) 319-2334
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