BILL ANALYSIS Ó
SB 419
Page 1
Date of Hearing: July 15, 2015
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Ed Chau, Chair
SB
419 (McGuire) - As Amended July 6, 2015
SENATE VOTE: 38-0
SUBJECT: Mobilehomes: homeowners: sale
SUMMARY: This bill amends the Mobilehome Residency Law (MRL) in
relation to mobilehome sales. Specifically, this bill:
1)Strikes the provision in the MRL allowing a mobilehome park to
prohibit the display of an open house sign, and instead
provides 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)Provides, in addition to other authorized signs, 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.
Management may require the use of a step-in L-frame sign.
3)Specifies, for purposes of the MRL, that "listing" includes
advertising the address of the home to the general public.
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4)Provides that a selling or prospective homeowner may request,
in writing, the information management will require and the
standards that will be utilized in order to determine if a
prospective purchaser will be acceptable as a homeowner in the
park, and that management's response to such a request must be
in writing.
5)States that the approval of a prospective homeowner may 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.
6)Makes other technical and conforming changes to the MRL.
EXISTING LAW:
1)Governs, under the MRL, the relationship between mobilehome
park owners or managers and the residents in mobilehome parks
and manufactured housing communities (Civil Code Section 798
et seq.).
2)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 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
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requirements indicating that the mobilehome is on display for
an "open house," unless the park rules prohibit the display of
an open house sign (Civil Code Section 798.70).
3)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
(Civil Code Section 798.70).
4)Specifies that the management of a mobilehome park shall
prohibit neither the listing nor the sale of a mobilehome
within the park by the 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 other than the
management (Civil Code Section 798.71).
5)Provides that the management of a mobilehome park may require
prior approval of a purchaser of a mobilehome that will remain
in the park (Civil Code Section 798.74).
6)Provides that management cannot withhold approval of a
purchaser's application for residency if the purchaser has the
financial ability to pay the rent and charges of the park,
unless management reasonably determines that the purchaser,
based on his or her prior tenancies, will not comply with the
rules and regulations of the park (Civil Code Section 798.74).
7)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 (Civil Code
Section 798.74).
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8)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 (Civil Code Section 798.74).
FISCAL EFFECT: None.
COMMENTS:
Background: Enacted in 1978, the MRL governs the relationship
between park owners or managers and the residents of the 4,800+
mobilehome parks and manufactured housing communities in
California. A mobilehome owner whose home is located in a
mobilehome park does not own the land the unit sits on, and he
or she must pay rent and fees for the land and any community
spaces. In order to sell a mobilehome located in a park,
potential buyers must be approved by park management. Homeowners
trying to sell their home are therefore reliant on park
management to approve the buyer so that the sale can be
completed.
There is a delicate balance between a mobilehome park's interest
in who resides in the park and a homeowner's right to sell his
or her own property. Mobilehomes are not truly mobile, in that
it is often cost prohibitive to relocate them. The cost to move
a mobilehome ranges from $2,000 to upwards of $20,000 depending
on the size of the home and the distance traveled. If a park
resident is unable to find a purchaser who meets the park's
requirements, that resident most often either sells the home to
the park owner at below fair market rates or incurs the high
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expense of moving the home to another park. 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.
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|Purpose of the bill: According to the author, "mobilehome and |
|manufactured home owners have an inherent disadvantage when it |
|comes to selling their homes. Unlike traditional houses, where |
|owners have the ability to line the street with for sale |
|signs, mobilehome owners must actively court additional |
|attention from buyers. The MRL 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 |
|lacks transparency and can seem arbitrary to both the seller |
|and purchaser. |
| |
| |
|---------------------------------------------------------------|
|"This bill would make a series of minor changes to the MRL |
|regarding the sale and purchase of mobilehomes in a mobilehome |
|park. 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 |
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|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 to become homeowners in a |
|park." |
| |
| |
|Efficiency in the sales process: This bill would promote |
|efficiency in the mobilehome sales process by striking the |
|provision in the MRL allowing a park to prohibit the display |
|of an open house sign, and instead providing 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. It also provides that, in addition to other |
|authorized signs, signs posted in front of a mobilehome |
|pursuant to the MRL may be of an L-frame or generally accepted |
|yard-arm type design. Management may require the use of a |
|step-in L-frame sign, which protects utility systems because |
|it does not require digging. The bill also specifies, for |
|purposes of the MRL, that "listing" includes advertising the |
|address of the home to the general public. |
| |
| |
| |
| |
| |
|Taken together, the above three provisions of the bill promote |
|efficiency in the sales process by permitting a seller to |
|reach a broader group of potential buyers and expedite the |
|sales process. |
| |
| |
| |
| |
| |
|Transparency in the sales process: Existing law states that |
|upon request of any prospective homeowner who proposes to |
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|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. SB 419 further improves |
|transparency in the sales process by providing that a selling |
|or prospective homeowner may also request, in writing, the |
|information management will require and the standards that |
|will be utilized in order to determine if a prospective |
|purchaser will be acceptable as a homeowner in the park, and |
|that management's response to such a request must be in |
|writing. To protect park management, the bill also provides |
|that the approval of a prospective homeowner may 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. |
| |
| |
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Related legislation:
SB 244 (Vidak, 2015): Extends indefinitely the authority of the
management of a mobilehome park to file a motion petitioning for
an order to enjoin violations of a reasonable rule or regulation
of the mobilehome park within the limited jurisdiction of the
superior court. This bill is pending in Engrossing and
Enrolling.
AB 999 (Daly, 2015): Authorizes 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. The
bill requires the landlord, prior to disposing of the
mobilehome, to provide written notice to the tenant and owner,
and specifies that the management of a mobilehome park need not
obtain a tax clearance certificate to dispose of an abandoned
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mobilehome. This bill is pending in the Senate Committee on
Appropriations.
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. The 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. The bill died on the Assembly Floor.
SB 804 (Leno, Chapter 66, Statutes of 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, Chapter 567, Statutes of 2004): Prohibited the
management of a mobilehome park from requiring a homeowner, or
an heir, joint tenant, or personal representative of the estate
who gains ownership of a mobilehome to use a specified agent of
the management in the sale of the home as a condition of resale.
REGISTERED SUPPORT / OPPOSITION:
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Support
Golden State Manufactured-Home Owners League (GSMOL) (Sponsor)
California Association of Realtors
Northern Santa Barbara County Manufactured Homeowners Team
Orcutt Ranch Home Owners Association (ORHOA)
Prothero Homeowners Association
San Luis Obispo Mobilehome Residents Assistance Panel
Santa Cruz County Manufactured/Mobile Homeowners Association
Santee Mobilehome Owner's Action Committee
Trico Mobile Estates HOA
Individuals (184)
Opposition
SB 419
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None on file
Analysis Prepared by:Rebecca Rabovsky / H. & C.D. / (916)
319-2085