BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 419


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          SENATE THIRD READING


          SB  
          419 (McGuire)


          As Amended  July 6, 2015


          Majority vote


          SENATE VOTE:  38-0


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          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Housing         |7-0  |Chau, Steinorth,      |                    |
          |                |     |Burke, Chiu, Beth     |                    |
          |                |     |Gaines, Lopez, Mullin |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
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          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.








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          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.


          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.


          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  








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          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 homes 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  
          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.


          Purpose of this 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.








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          "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 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 strike 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.










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          Taken together, the above three provisions of this 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  
          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.  This bill further promotes  
          transparency in the sales process by providing that a selling or  
          prospective homeowner may request, in writing, both 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, this 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.




          Analysis Prepared by:                                             
                          Rebecca Rabovsky / H. & C.D. / (916) 319-2085     
                                                                  FN:  
          0001297
















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