BILL ANALYSIS                                                                                                                                                                                                    Ó





                             SENATE JUDICIARY COMMITTEE
                         Senator Hannah-Beth Jackson, Chair
                             2015-2016  Regular Session


          SB 419 (McGuire)
          Version: April 27, 2015
          Hearing Date: May 12, 2015
          Fiscal: No
          Urgency: No
          TH   


                                        SUBJECT
                                           
                            Mobilehomes: Homeowners: Sale

                                      DESCRIPTION  

          Existing law, the Mobilehome Residency Law, regulates the  
          advertisement, rental, and sale of mobilehomes in a mobilehome  
          park.  This bill would amend the Mobilehome Residency Law to  
          authorize the seller of a mobilehome to display a "for sale"  
          sign of a generally accepted yard-arm type design or L-frame  
          design, would allow for the display of an "open house" sign and  
          the holding of an open house in accordance with park rules,  
          would require the management of a mobilehome park, upon request,  
          to provide in writing the information and standards management  
          will use to review a prospective homeowner, and would specify  
          that park management may withhold approval of a prospective  
          homeowner for reasons based upon fraud, deceit, or concealment  
          of material facts.

                                      BACKGROUND  

          Enacted in 1978, the Mobilehome Residency Law (MRL) governs the  
          relationship between park owners or managers and the residents  
          of the 4,800+ mobilehome parks and manufactured housing  
          communities in California.  In most of those parks, residents  
          own their home but lease the land on which their home is  
          installed.  Although they have historically been called  
          "mobilehomes," it is very difficult to actually move a  
          mobilehome once it has been installed in a park.

          Mobilehome parks generally offer two types of tenancy; the first  








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          being where the park rents a plot of land and associated  
          services to the owner of a mobilehome; and the second being  
          where the park itself owns the mobilehome and rents it to  
          tenants.  For park tenants who own their own mobilehome, the  
          sale of the home is more complicated than the sale of an  
          "ordinary" home because the prospective purchaser must also  
          reach agreement with park management on a tenancy agreement  
          before purchasing the mobilehome.  To prevent park management  
          from taking unfair advantage of its power to approve new  
          tenants, the MRL significantly regulates park management's  
          conduct during a pending sale.

          This bill would make minor changes to the MRL as follows:
           authorizes sellers to hold an "open house," and clarifies that  
            a park may establish by rule or regulation reasonable rules  
            governing how an open house may be conducted, including rules  
            regarding hours and parking;
           authorizes sellers to display L-frame or generally accepted  
            yard-arm type design signs indicating that a mobilehome is for  
            sale;
           requires the management of the park, upon request, to provide  
            in writing the information and standards that will be used to  
            determine if a prospective homeowner will be acceptable as a  
            homeowner in the park;
           specifies that management approval of a prospective homeowner  
            may be withheld for reasons based upon fraud, deceit, or  
            concealment of material facts by the prospective purchaser  
            without liability; and 
           makes other technical changes to existing law.

                                CHANGES TO EXISTING LAW
           
           1.Existing law  , the Mobilehome Residency Law (MRL), governs the  
            relationship between park owners or managers and the residents  
            in mobilehome parks and manufactured housing communities.  
            (Civ. Code Sec. 798 et seq.)

             Existing law  provides that a homeowner, an heir, joint tenant,  
            or personal representative of the estate who gains ownership  
            of a mobilehome in the mobilehome park through the death of  
            the owner, or the agent of any such person, may advertise the  
            sale or exchange of his or her mobilehome, or, if not  
            prohibited by the terms of an agreement with the management,  
            may advertise the rental of his or her mobilehome, by  
            displaying a sign in the window of the mobilehome, or by a  







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            sign posted on the side of the mobilehome facing the street,  
            or by a sign in front of the mobilehome facing the street.   
            Existing law provides that any such person also may display a  
            sign conforming to these requirements indicating that the  
            mobilehome is on display for an "open house," unless the park  
            rules prohibit the display of an open house sign.  (Civ. Code  
            Sec. 798.70.)

             This bill  would strike the provision allowing a park to  
            prohibit the display of an open house sign, and would instead  
            provide that a park may establish by rule or regulation  
            reasonable rules governing how an open house may be conducted,  
            including rules regarding hours and parking.

           2.Existing law  specifies that signs posted in front of a  
            mobilehome pursuant to the MRL may be of an H-frame or A-frame  
            design with the sign face perpendicular to, but not extending  
            into, the street.  (Civ. Code Sec. 798.70.)

             This bill  would provide, in addition to the above, that signs  
            posted in front of a mobilehome pursuant to the (MRL) may be  
            of an L-frame or generally accepted yard-arm type design.

           3.Existing law  specifies that the management of a mobilehome  
            park shall prohibit neither the listing nor the sale of a  
            manufactured home or mobilehome within the park by the  
            homeowner, an heir, joint tenant, or personal representative  
            of the estate who gains ownership of a manufactured home or  
            mobilehome in the mobilehome park through the death of the  
            owner, or the agent of any such person other than the  
            management.  (Civ. Code Sec. 798.71(b).)

             This bill  would specify that for purposes of the above  
            section, "listing" includes advertising the address of the  
            home to the general public.

           4.Existing law  states that upon request of any prospective  
            homeowner who proposes to purchase a mobilehome that will  
            remain in the park, management shall inform that person of the  
            information management will require in order to determine if  
            the person will be acceptable as a homeowner in the park.   
            (Civ. Code Sec. 798.74.)

             This bill  would provide that a selling homeowner may also  
            request information pursuant to the section above, that  







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            management's response to such a request must be in writing,  
            and, in addition to the information specified above,  
            management shall also inform the requesting party of the  
            standards that will be utilized in determining if the person  
            will be acceptable as a homeowner in the park.

           5.Existing law  provides that within 15 business days of  
            receiving all of the information requested from a prospective  
            homeowner, the management shall notify the seller and the  
            prospective homeowner, in writing, of either acceptance or  
            rejection of the application, and the reason if rejected.   
            Existing law provides that if the approval of a prospective  
            homeowner is withheld for any reason other than those stated  
            in the MRL, the management or owner may be held liable for all  
            damages proximately resulting therefrom.

             This bill  would state that the approval of a prospective  
            homeowner may also be withheld for reasons based upon fraud,  
            deceit, or concealment of material facts by the prospective  
            purchaser without the management or owner being held liable  
            for damages proximately resulting therefrom.

             This bill  would also make technical and conforming changes to  
            the MRL.





                                        COMMENT
           
           1.Stated need for the bill
           
          The author writes:

            Mobilehome and manufactured home owners have an inherent  
            disadvantage when it comes to selling their home.  Unlike  
            traditional [homeowners], who have the ability to line the  
            street with for sale signs, mobilehome owners must actively  
            court additional attention from buyers. The Mobilehome  
            Residency Law needs to be updated to give sellers a more broad  
            ability to advertise- both on site and publicly.   
            Additionally, the process of allowing mobilehome park owners  
            and management to decide whether the prospective owner has  
            been cleared for residency in the final phase of a transaction  







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            lacks transparency and can seem arbitrary to both the seller  
            and purchaser.

            SB 419 will do four things.  First, it would modernize  
            California's Mobilehome Residency Law to allow a seller to  
            advertise the sale of a home in a manner consistent with  
            generally accepted yard sign designs, rather than be limited  
            to only an "A" or "H" frame design.  For example, this bill  
            would allow, but not limit sellers to, an "A", "H", or "L"  
            shaped sign.  Current law already allows these signs to  
            contain the name, address, and telephone number of the owner  
            of the mobilehome or his or her agent, so long as the sign  
            face does not exceed 24 inches in width and 36 inches in  
            height, and this bill would keep those requirements the same.   
            Second, this bill would guarantee the seller's ability to  
            advertise an open house, with appropriate limits.  Third, SB  
            419 would require management to notify the seller in writing  
            what their standards are and what additional information they  
            require to accept the new resident into the mobilehome park.   
            Finally, this bill makes non-substantive clean up changes to  
            the Mobilehome Residency Law, including clarifying what  
            constitutes a "listing" . . .

           2.Improving Sale Efficiency and Transparency
           
          This bill would make a series of minor changes to the Mobilehome  
          Residency Law (MRL) regarding the sale and purchase of  
          mobilehomes in a mobilehome park.  As noted in the Background,  
          the MRL strictly regulates the sale of mobilehomes in an effort  
          to prevent park management from taking unfair advantage of its  
          power to approve new tenants.  Unlike traditional home sales,  
          the sale of a mobilehome is often a three-party transaction.   
          Not only do the buyer and seller have to agree to the terms of  
          the sale of the home, but mobilehome park management must also  
          approve the buyer for residency in the park.

          Many of the changes proposed in this bill would modernize the  
          MRL's sale provisions so that they track existing practices for  
          selling other real property, such as authorizing sellers to hold  
          an "open house" or display a yard-arm type sign in front of  
          their property.  Additionally, this bill would improve  
          transparency for both buyers and sellers by requiring park  
          management, upon request, to disclose the criteria by which new  
          tenants are deemed acceptable become homeowners in a park.  The  
          Ranch Club Mobile Estates Homeowners Association, in support,  







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          states that this bill "would increase transparency for both  
          buyers and sellers regarding park admission standards for new  
          buyers by requiring the clear disclosure of income and  
          eligibility requirements."

           3.Clarifying Amendment
           
          This bill would provide that upon the request of any selling  
          homeowner or prospective homeowner who proposes to purchase a  
          mobilehome that will remain in a mobilehome park, management  
          shall inform that person, in writing, of the information  
          management will require and the standards that it will use to  
          determine if a person will be acceptable as a homeowner in the  
          park.  The author offers the following amendment to clarify that  
          such a request must also be made in writing.

             Author's Amendment  :

            On page 7, line 31, following "upon" insert: "written"


           Support  :  El Toro Mobile Estates GSMOL Chapter 999; GSMOL  
          Chapter 708; GSMOL Chapter 1128; GSMOL Homeowners Association,  
          San Joaquin Village Mobile Home Park; Northern Santa Barbara  
          County Manufactured Homeowners Team; Oceanside Manufactured  
          Homeowners Alliance; Orcutt Ranch Home Owners Association;  
          Prothero Mobile Estates Homeowners' Association; Ranch Club  
          Mobile Estates Homeowners Association; Sandpiper Homeowner's  
          Association; Santa Cruz County Manufactured/Mobile Homeowners  
          Association; Santee Mobilehome Owner's Action Committee; Sonoma  
          Valley GSMOL; Trico Mobile Estates Homeowners Association;  
          multiple individuals

           Opposition  :  None Known

                                        HISTORY
           
           Source  :  Golden State Manufactured Home Owners League (GSMOL)

           Related Pending Legislation  :

          SB 244 (Vidak, 2015) would extend indefinitely the authority of  
          the management of a mobilehome park to file a motion petition  
          for an order to enjoin violations of a reasonable rule or  
          regulation of the mobilehome park within the limited  







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          jurisdiction of the superior court.  This bill is pending  
          referral in the Assembly Rules Committee.

          AB 999 (Daly, 2015) would you authorize the management of a  
          mobilehome park to sell or dispose of a mobilehome left upon the  
          premises by a tenant or lienholder under specified  
          circumstances. This bill would require the landlord, prior to  
          disposing of the mobilehome, to provide written notice to the  
          tenant and owner, and would specify that the management of a  
          mobile home park need not obtain a tax clearance certificate to  
          dispose of an abandoned mobilehome.  This bill is pending in the  
          Assembly Appropriations Committee.

           Prior Legislation  :

          SB 804 (Leno, Ch. 66, Stats. 2009) prohibited the management of  
          a mobilehome park from requiring a homeowner to use a specific  
          broker, dealer, or other person as an agent in the purchase or  
          installation of a replacement home.

          SB 1090 (Dunn, Ch. 567, Stats. 2004) prohibited the management  
          of a mobilehome park from requiring a homeowner, or an heir,  
          joint tenant, or personal representative of a mobilehome to use  
          a specified agent of the management in the sale of the home as a  
          condition of resale.

          AB 2026 (Stone, 2014) would have, among other things required  
          the management of a mobilehome park to provide a prospective  
          purchaser with a list of information that management will  
          require in order to determine if the person will be acceptable  
          as a homeowner in the park and a copy of the current written  
          procedures, standards, or requirements that will be used by  
          management to evaluate the purchaser's application. This bill  
          would have also required the management, if a prospective  
          homeowner is denied approval and if requested, to meet with the  
          purchaser or homeowner at which time the management would be  
          required to reconsider the denial, including any additional  
          information relevant to the application provided by the  
          prospective homeowner.  This bill died on the Assembly Floor.

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