BILL ANALYSIS Ó
AB 2819
Page 1
ASSEMBLY THIRD READING
AB
2819 (Chiu)
As Amended May 2, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
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| | | | |
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|----------------+-----+----------------------+--------------------|
|Judiciary |7-1 |Mark Stone, Alejo, |Wagner |
| | |Chau, Chiu, Cristina | |
| | |Garcia, Holden, Ting | |
| | | | |
| | | | |
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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.
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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.
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 Evidence Code Section 452 subdivision (d)
(i.e. judicial notice of an abusive litigant.)
5)Clarifies that nothing in this act alters any provision of the
Evidence Code.
6)Allows the court to dismiss the action without prejudice if 60
days elapse after the complaint is filed and no proof of
service of the summons has been filed.
FISCAL EFFECT: None
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
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undeserved black mark on their credit report.
According to the author: "The recent economic and foreclosure
crises have only 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. 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."
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Existing law allows the court record of the filing of an
eviction to potentially jeopardize a tenant's credit report or
rental history. This bill seeks to address the potential damage
to an innocent tenant's credit record that can occur even when a
tenant prevails in an unlawful detainer filed against him or
her, but it happens more than 60 days after the date the
complaint was 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
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 California Rural Legal
Assistance (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
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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.
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.
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
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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
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 [unlawful detainer]
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. (This bill) unfairly
keeps rental property owners in the dark and from
knowing the truth about prospective tenants.
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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
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
has recently amended the bill to clarify the definition of "good
cause" for the purpose of facilitating 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
amendment 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.
With respect to opponents' contentions that this bill keeps
rental property owners in the dark about prospective tenants, it
should be noted that there is nothing in existing law or in this
bill that prevents landlords from simply requesting references
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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 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.
Legal aid organizations who support 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, recent amendments to the bill
authorize courts 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. This authority is discretionary and
simply authorizes but does not require any court to dismiss a
case.
Analysis Prepared by: Anthony Lew / JUD. /
(916) 319-2334 FN: 0002845
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