BILL ANALYSIS Ó
AB 2819
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Date of Hearing: April 26, 2016
ASSEMBLY COMMITTEE ON JUDICIARY
Mark Stone, Chair
AB 2819
(Chiu) - As Amended April 18, 2016
As Proposed to be Amended
SUBJECT: UNLAWFUL DETAINER PROCEEDINGS: RELEASE OF COURT
RECORDS
KEY ISSUE: IN ORDER TO PROTECT THE CREDIT HISTORY AND
REPUTATION OF INNOCENT TENANTS INVOLVED IN EVICTION PROCEEDINGS,
SHOULD TENANTS BE ENTITLED TO HAVE COURT RECORDs OF eviction
proceedings KEPT PRIVATE UNLESS THE LANDLORD PREVAILS WITHIN 60
DAYS OF HAVING FILED THE LAWSUIT?
SYNOPSIS
Under Code of Civil Procedure Section 1161.2, court unlawful
detainer records are withheld from public access (or "masked")
by the court clerk for 60 days after the date of the filing of
the complaint. At the end of the 60-day masking period, unless
the tenant has already prevailed in the eviction, the record
becomes public and is available to credit agencies, landlord
registries, and others.
According to the author, once these unlawful detainer records
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become public, tenant screening companies and credit reporting
agencies capture and publish personal identifying information
regarding tenants who are named as defendants in those records.
This information appears in published lists, known as unlawful
detainer registries, and on tenants' credit reports. So long as
it is accurate, the fact that a tenant was once sued for
unlawful detainer is publicly available for up to seven years
and cannot be challenged under federal or state laws governing
consumer credit reporting. Because this information is made
public, regardless of tenants ultimately prevail in these
proceedings, the names of thousands of innocent tenants whose
cases were favorably resolved after the 60-day masking period
appear on unlawful detainer registries. Many of these tenants
successfully settle, secure a dismissal, or win at trial. But
for resolving their cases after the 60-day period, they would
have escaped negative credit reporting. In other instances,
unlawful detainer complaints are filed against tenants but never
served. Because these complaints are never dismissed, the
tenant's names are publicly released after 60 days and negative
credit reporting consequences ensue. Landlords, when attempting
to decide between numerous applicants for scarce rental housing,
rely on unlawful detainer registries and credit reports, and
therefore often choose not to rent to tenants who appear on
these registries, even if the tenants were eventually found
innocent of unlawful detainer. As a result, given the statewide
housing shortage, these innocent tenants may be shut out of
rental markets for up to seven years through no fault of their
own.
This bill, co-sponsored by the Western Center on Law and Poverty
and California Rural Legal Assistance Foundation, seeks to keep
court records of eviction lawsuits from becoming public unless
the landlord prevails within 60 days of filing the lawsuit. The
bill also establishes a 60-day masking period that is measured
from the date when a default or a default judgment is set aside
any time after expiration of the first 60-day period. This
provision essentially ensures that the 60-day timeline is reset
to begin running when the tenant successfully obtains a default
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judgment, or a default judgment is set aside. According to the
author, this bill attempts to strike a balance between the
interests of protecting the credit records of innocent tenants
and allowing landlords and others sufficient access to court
records. The bill is supported by numerous legal aid
organizations who report examples of clients whose credit
records have been damaged simply by being named as defendants in
unlawful detainer cases that were settled but never officially
dismissed, or otherwise resolved in a manner in which the
landlord did not prevail. Supporters believe this bill will
directly help address the problems reported by their clients
arising from the existing masking period rule. The bill is
opposed by several apartment associations who believe that the
proposed changes go too far in shielding records of nonpayment
of rent from the public. They contend that this bill will put
landlords at risk of renting to serial defaulters, conflicts
with California's open records and public access policies, and
unfairly keeps rental property owners from knowing the truth
about prospective tenants.
SUMMARY: Keeps court records in eviction lawsuits from becoming
public unless the landlord prevails within 60 days of having
filed the lawsuit. Specifically, this bill:
1)Provides that, in unlawful detainer cases, the court clerk
shall allow access to civil case records to any person 60 days
after the complaint has been filed if the plaintiff prevails
in the action within 60 days of the filing of the complaint,
in which case the clerk shall allow access to any court
records in the action.
2)Provides that if a default or default judgment is set aside
more than 60 days after the complaint has been filed, the
above timekeeping rule shall apply as if the complaint has
been filed on the date the default or default judgment is set
aside.
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3)Clarifies that these provisions do not prohibit the court from
issuing an order that bars access to the court record in an
unlawful detainer case if the parties to the action so
stipulate.
4)Revises the definition of "good cause" to include the
gathering of evidence by a party to an unlawful detainer
action solely for the purpose of making a request for judicial
notice pursuant to subdivision (d) of Section 452 of the
Evidence Code (i.e. judicial notice of an abusive litigant.)
5)Clarifies that nothing in this act alters any provision of the
Evidence Code.
6)Allows (but does not require) the action to be dismissed by
the court without prejudice if 60 days elapse after the
complaint is filed and no proof of service of the summons has
been filed. Further clarifies that nothing in this provision
shall require a court to dismiss a case.
EXISTING LAW:
1)Provides that, in unlawful detainer proceedings, the court
clerk shall allow access to case records to the following
persons:
a) A party to the action, including a party's attorney.
b) Any person who provides the clerk with the names of at
least one plaintiff and one defendant and the address of
the premises, including the apartment or unit number, if
any.
c) A resident of the premises who provides the clerk with
the name of one of the parties or the case number and shows
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proof of residency.
d) To any person by order of the court on a showing of good
cause, as defined.
e) To any other person 60 days after the complaint has been
filed, unless a defendant prevails in the action within 60
days of the filing of the complaint, in which case the
clerk may not allow access to any courts records in the
action, except to a party to the action or by court order,
as specified. (Code of Civil Procedure Section 1161.2 (a),
paragraphs (1) to (5).)
2)Provides that the court clerk, in addition to observing the
above, shall allow access to case records in the case of a
unlawful detainer complaint involving residential property
based on Section 1161a ("foreclosure eviction") as indicated
in the caption of the complaint, to any other person, if 60
days have elapsed since the complaint was filed with the
court, and, as of that date, judgment against all defendants
has been entered for the plaintiff, after a trial. Further
provides that if judgment is not entered under the conditions
described above, the clerk shall not allow access to any court
records in the action, except as provided. (Code of Civil
Procedure Section 1161.2 (a), paragraph (6).)
FISCAL EFFECT: As currently in print this bill is keyed
non-fiscal.
COMMENTS: This bill seeks to keep court records in eviction
lawsuits private unless the landlord prevails within 60 days of
having filed the lawsuit. The author wishes to find a balance
that allows landlords and others sufficient access to court
records, but that better protects innocent tenants who may be
unfairly shut out of a difficult housing market because of an
undeserved black mark on their credit report. According to the
author:
The recent economic and foreclosure crises have only
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exacerbated the challenges that low-income households face
in securing affordable housing. The difficulty of securing
affordable housing in competitive rental markets is
worsened by the existing law governing access to civil case
records in unlawful detainer proceedings. Specifically,
once unlawful detainer civil case records become public,
tenant screening companies and credit reporting agencies
capture and publish personal identifying information
regarding tenants named as defendants in those records.
This information appears in published lists, known as
unlawful detainer registries, and on tenants' credit
reports. So long as it is accurate, the fact that a tenant
was once sued for unlawful detainer is publicly available
for up to seven years and cannot be challenged under
federal or state laws governing consumer credit reporting.
The names of thousands of innocent tenants whose cases are
resolved only after the 60-day deadline appear on unlawful
detainer registries. Many of these tenants successfully
settle, secure a dismissal, or win at trial, and would have
escaped negative credit reporting if only they had
prevailed before the deadline. In other instances, unlawful
detainer complaints are filed against tenants but never
served. Because these complaints are never dismissed, the
tenant's name is publicly released after 60 days and
negative credit reporting ensues. Because landlords, who
are attempting to decide between numerous applicants for
scarce rental housing, rely on unlawful detainer registries
and on credit reports, landlords often choose not to rent
to tenants who appear on these registries, even if the
tenants were eventually found innocent of unlawful
detainer. As a result, given the statewide housing
shortage, these tenants may be shut out of rental markets
for up to seven years through no fault of their own.
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This bill seeks to protect the credit and reputation of
innocent tenants by requiring that civil case records in
unlawful detainer proceedings remain sealed unless
landlords prevail in eviction lawsuits within 60 days of
filing.
Legislative history of 60-day masking policy . In 1991, the
Legislature approved and the governor signed SB 892 (Ch. 1007,
Stats. 1991), legislation that restricted public access to court
files in unlawful detainer (UD) cases for the first 30 days
after filing of the complaint. The rationale at the time, as
stated in the uncodified findings and declarations of SB 892,
was to address a "crisis due to unscrupulous eviction defense
services which utilize records of court filings . . . to solicit
and defraud tenants." A pilot project was established to
evaluate the effectiveness of this new restrictive access
policy, and in 1993, the Legislature determined that the
available data demonstrated the policy was effective in meeting
predetermined benchmarks for success. The Legislature also
noted that some tenants continued to be solicited and defrauded,
however, so it enacted SB 236 (Ch. 1191, Stats. 1993) to extend
the masking period from 30 days to 60 days in order to further
prevent tenants from being defrauded by eviction defense scams.
In 2003, the Legislature enacted SB 345 (Kuehl, Ch. 787, Stats.
2003), which for the first time established the rule of
permanent masking of court records for UD actions in which the
tenant prevails within 60 days of the filing of the complaint.
The reason for this new rule, however, was to combat the problem
of blacklisting of tenants who had had a UD filed against them,
rather than to prevent fraudulent eviction defense scams.
According to the Assembly Judiciary analysis, SB 345 was a
legislative response to a Court of Appeals decision, U.D.
Registry, Inc. v. State of California (1995) 34 Cal. App. 4th
107, which invalidated a previous anti-blacklisting statute that
prohibited credit reporting agencies from including in a credit
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report any information relating to a UD unless the landlord
prevailed. In its decision, the court held that the statute
could not single out credit reporting agencies for its
prohibition of disclosure of court records. The court also
specifically noted that the state could control the initial
release of such information without distinguishing between users
of the information. Subsequently, the Legislature passed SB 345
to establish precisely this type of control of the information
at issue.
Finally, in 2010 the Legislature enacted SB 1149 (Corbett, Ch.
641, Stats. 2010), which provided for a strong masking policy of
court records (often permanently) for many defendants in
foreclosure evictions pursuant to Section 1161a (authorizing
banks to initiate post-foreclosure evictions of former owners
who hold-over after the property has been sold.) As reflected
in this Committee's analysis of SB 1149, what made those
evictions so inequitable was the fact that tenants are often
evicted through no fault of their own, but only because the
property owner has failed to make payments to the lender.
Existing law allows the court record of the filing of an
eviction to potentially jeopardize a tenant's credit report or
rental history. Similarly, this bill recognizes the potential
damage to an innocent tenant's credit record created the moment
when an unlawful detainer is filed in court against the tenant,
even when the tenant later prevails in the case, but the
favorable outcome occurs more than 60 days after the date when
the complaint is filed. Under Code of Civil Procedure Section
1161.2, court unlawful detainer records are withheld from public
access (or "masked") by the court clerk for 60 days after the
date when the complaint is filed. At the end of the 60-day
masking period, unless the tenant has already prevailed in the
eviction, the record becomes public and is available to credit
reporting agencies, landlord registries, and others. Unless
access is withheld by the court, the fact that an eviction was
filed against the tenant may very well end up reflected in
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landlord registry records compiled by specialized credit
reporting agencies whose services are often used by landlords
for a fee, even if the tenant ultimately prevails in the case.
In such cases, innocent tenants can suffer damage to their
credit histories simply by virtue of the fact that eviction
complaints were filed against them, without any regard to the
outcome of the cases. As the author explains, landlords who
rely on this information, unable to distinguish between
problematic and innocent tenants, are prone to end up screening
out meritorious applicants. These unfortunate prospective
tenants may find their credit records cause them to be rejected
over and over for rental housing, particularly in competitive
rental markets where there are multiple applicants for each
property listing.
According to Western Center and CRLA, the sponsors of the bill,
there are three groups of tenants who are most at risk for
suffering damage to their credit reports under the current
rules:
(1) Those who are named in eviction lawsuits but are never
served with a copy of the complaint because the landlord
decides not to pursue the case. Landlords are reluctant to
pay attorneys to dismiss such cases. As a result, these
tenants find themselves blacklisted for lawsuits they never
even knew about.
(2) Those that raise meritorious defenses to eviction, such
as habitability or retaliation, and successfully settle or
win at trial, but only after the 60-day period has expired.
Despite their victories, these unlucky individuals find
themselves unable to rent new housing.
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(3) Those that would have raised meritorious defenses, but
were too afraid of crossing the 60-day threshold and ruining
their credit for seven years. These tenants are wrongly
deprived of both their housing and their day in court, and
their successors in the unit will likely face the same
hardships.
The author believes that such tenants deserve stronger
protection of their credit reports and rental histories. In the
case of low and fixed-income tenants, this protection is crucial
to help them find replacement housing when they are forced to
move. This bill would aid such tenants by keeping court records
of eviction proceedings private unless the landlord, rather than
the tenant, prevails in the case within 60 days of the lawsuit
being filed.
This bill attempts to strike a balance between the interests of
protecting the credit records of innocent tenants and allowing
landlords and others access to court records. As discussed
above, the existing rule that provides for release of court
records unless the tenant prevails within 60 days after filing
of the complaint creates many problems for innocent tenants and
potentially threatens credit reporting profiles for years.
According to the author, the proposed new rule, which flips the
standard around and keeps these court records private unless the
landlord prevails within 60 days, is an attempt to balance
competing concerns while still allowing landlords sufficient
access to relevant court records.
The bill also establishes a 60-day masking period measured from
the date when a default or default judgment is set aside any
time after the expiration of the first 60-day period. This
essentially ensures that the 60-day timeline is set back to zero
whenever the tenant is successful in getting a default or
default judgment set aside and the case basically becomes an
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active case again. Without this provision, it would be a hollow
victory in the relatively rare occurrence where the tenant
successfully argues to get the default judgment set aside
because the 60 day period from the filing of the complaint would
surely have passed. This bill allows the tenant who prevails on
a motion to set aside the default to argue the underlying case
with a clean slate, instead of being in a position where the 60+
day old record of the initial filing of the eviction threatens
to damage the tenant's credit record, even as he or she is
defending the underlying case in court for the first time.
The bill is opposed by a number of apartment associations who
believe that the proposed changes go too far in shielding
records of eviction proceedings from the public. They write:
The problem is that tenants can default, never pay, but
never make it to trial. The default still occurs, but no
record of it will ever be made public. No other type of
financial default is treated this way. It puts landlords
at risk of renting to serial defaulters. Public access to
court records in UD cases not only serves to encourage
people to pay their rent on-time, property owners have the
right to know whether a prospective tenant is a serial rent
defaulter or vexatious litigant.
Legislation like this bill, that serves to keep important
information from public view, is contrary to California's
open records and public access policies, and unfairly keeps
rental property owners in the dark and from knowing the
truth about prospective tenants.
Supporters of the bill contend, in response, that the bill does
little to put landlords at risk of renting to serial defaulters,
as claimed. In order for a "serial defaulter" to repeat a
pattern of defaulting on rent shielded from public access over
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and over again, this person would have to somehow repeatedly get
each case of default past the 60-day timeline without the
landlord ever prevailing either at trial, or at summary
judgment-a task that could realistically only be accomplished
with legal representation. Only at that point would this bill
prevent those records, indicating repeated default of rent, from
being made public after 60 days. Supporters contend the
likelihood of the opponent's hypothetical example occurring is
minimal because statistics confirm the vast majority of tenants
in UD cases are unrepresented, and legal aid attorneys would not
realistically represent a person with a repeated history of
defaulting on rent who had no legitimate defenses.
With respect to opponents' concern about not being able to know
whether a prospective tenant is a vexatious litigant, the author
notes that he has made amendments to the bill (clarifying the
definition of "good cause") to help facilitate the release of
records for the purpose of making a request for judicial notice
of a vexatious litigant under Evidence Code Section 452 (d).
This should address opponents' concerns by ensuring access to
those records to take notice of a vexatious litigant. The
author also notes, for reasons laid out in the extensive
findings and declarations of the bill, that he takes seriously
the task of finding a balanced approach to ensuring open access
to public records and protecting the credit of innocent tenants,
but believes this legislation is needed to respond to an ongoing
crisis of affordable housing in the state.
Finally, with respect to opponents' contentions that this bill
keeps rental property owners in the dark about prospective
tenants, Committee staff notes that there is nothing in existing
law or in this bill that prevents landlords from simply
requesting references from a prospective tenant's previous
landlords and making a phone call to find out if the person is a
good tenant who pays rent on time, or is perhaps a "serial
defaulter" instead. It is not known why this direct,
common-sense practice of calling references is not sufficient to
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produce the information that a landlord needs to "find out the
truth" about a prospective tenant, unless landlords do not
routinely share truthful information with other landlords about
past tenants. In any case, as the author has argued, the
notation on a credit report that an eviction lawsuit was filed
against a person on a certain date in the past, without any
other information about the resolution of that case, can hardly
be said to convey "the truth" about a prospective tenant.
Proposed author's amendments. Supporters of the bill report
having many clients whose credit records were affected by
so-called "zombie UDs"-eviction lawsuits that were filed but
never pursued further, yet continue to wreak havoc with the
credit records of tenants because they were never dismissed by
the landlord or otherwise resolved. After discussions with the
Judicial Council and several superior courts, the author
proposes the following amendment to provide courts with
discretionary authority to dismiss such actions if 60 days have
elapsed since the complaint was filed and no proof of service of
the summons has been filed. The amendment is:
On page 7, after line 17, insert:
SEC. 4. Section 1167.1 is added to the Code of Civil
Procedure, to read:
1167.1. If 60 days elapse after the complaint is filed and no
proof of service of the summons has been filed, the action may
be dismissed by the court without prejudice. Nothing in this
section shall require a court to dismiss a case.
The author also proposes the following amendment to correct a
grammatical error:
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On page 5, line 10, strike "has" and insert "had"
ARGUMENTS IN SUPPORT: This bill is supported by numerous legal
aid organizations who report having represented clients whose
credit records have been damaged by their mere involvement in
unlawful detainer cases in which the landlord ultimately
dismissed the case, or otherwise did not prevail. For example,
the East Bay Community Law Center (EBCLC) writes:
The Housing Practice at EBCLC counsel tenants every week
who are unable to obtain rental housing due to evictions on
their credit records. Although reason enough to deny a
rental applicant, these records frequently paint and unfair
and inaccurate picture. Tenants who win or settle their
cases after the 60-day period, or whose landlords refuse to
dismiss the case before the 60 days are up, are routinely
denied housing because the court records become public, and
then appear as blemishes on the tenants' credit record.
One client, a homeless mother in Oakland, called our office
because she had been denied housing three times in one
month because of an eviction on her rental history.
However, the tenant had never been evicted. Rather, six
years earlier, her landlord began eviction proceedings
against her, but abandoned the case after she paid her
rent. Because the landlord neither set the case for trial
nor dismissed the case before the 60-day period expired,
the case became a public record, permanently marring her
rental history.
Another client we worked with had an eviction lawsuit filed
against her when she had been in a coma for several months,
and thus, had not paid her rent. When she regained
consciousness, she called us from the hospital, and
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immediately paid her landlord the full amount of rent due.
Her landlord accepted the money, and dismissed the case.
However, because it was dismissed more than 60-days from
the day it was filed, it is a public record and will appear
as an eviction on her rental history, making it difficult
for her to secure housing in the future.
ARGUMENTS IN OPPOSITION: A number of apartment associations,
led by the Apartment Association, California Southern Cities,
submitted a joint letter of opposition to the Committee
outlining three set of amendments:
The following are amendments that will achieve a more
balanced and fair approach to addressing UD masking and the
associated eviction defense problems:
1) UD proceedings should be allowed to permanently mask
under the following conditions: a) if the tenant prevails,
b) if a plaintiff-property owner voluntarily dismisses his
or her UD action against the tenant, c) if the parties
stipulate, or d) if the tenant vacates the premises within
30 days from the time the UD action is filed.
2) Tenants should also be barred from asserting a
habitability defense unless they have previously given
notice to the property owner of the habitability condition,
and the landlord has been given a reasonable time to remedy
the condition.
3) If public records contain any errors or mistakes
about a person pertaining to a UD proceeding, that person
should have the ability to go to court and request a
correction. That person already can seek correction in his
or her credit report and may also submit a writing that
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must be included in the debtors credit records.
This approach reflects a more balanced approached. Because
most UD proceedings begin because a tenant has not paid his
or her rent, UD proceedings should be made public. Allowing
a tenant to permanently mask the UD record if he or she
vacates the premises within 30 days promotes judicial
efficiency, and disincentives eviction defense
organizations from lodging frivolous claims. The proposed
amendments also address the central loophole-the
habitability defense-that allows eviction defense
organizations to prolong UD actions and force lopsided and
unfair settlements. Requiring tenants to give notice of
habitability conditions as they arise is reasonable and
fair, and removes a tactic used by eviction defense
organization to defraud property owners and delay UD
proceedings.
With respect to Amendment 2, proposing to bar the habitability
defense unless the landlord has been given notice and an
opportunity to correct, Committee staff notes that a similar
proposal has already been rejected by the Committee this year
(AB 2003, Lackey) and that it seems to be outside the scope of
this much more narrow bill, relating to the release of court
records.
With respect to Amendment 3, Committee staff notes that under
federal and state laws governing consumer credit reporting, a
person cannot seek a correction of the type of information at
issue in this bill. Specifically, the fact that an unlawful
detainer was filed against a person on a certain date in the
past cannot be challenged under credit reporting laws because it
is an accurate report of fact. There is nothing inaccurate to
correct. Proponents respond that inclusion of this fact without
any other information about the resolution of the case is the
precise reason why the information is so harmful and misleading
in its impact on tenants and their credit reports.
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REGISTERED SUPPORT / OPPOSITION:
Support
Western Center on Law & Poverty (co-sponsor)
California Rural Legal Assistance Foundation (co-sponsor)
AIDS Legal Referral Panel (ALRP)
American Civil Liberties Union (ACLU)
Bay Area Legal Aid
City of Santa Monica
Community Legal Services in East Palo Alto
East Bay Community Law Center
Eviction Defense Collaborative
Eviction Defense Network
Inner City Law Center
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Legal Aid Foundation of Los Angeles (LAFLA)
Legal Services of Northern California
National Housing Law Project
Neighborhood Legal Services of Los Angeles County (NLS-LA)
Public Law Center
Tenants Together
Opposition
Apartment Association, California Southern Cities
Apartment Association of Orange County
East Bay Rental Housing Association
North Valley Property Owners Association
San Diego County Apartment Association
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Western Manufactured Housing Communities Association
Analysis Prepared by:Anthony Lew / JUD. / (916) 319-2334