BILL ANALYSIS Ó
SB 419
Page 1
SENATE THIRD READING
SB
419 (McGuire)
As Amended August 17, 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: Amends the Mobilehome Residency Law (MRL) in relation
to mobilehome sales. Specifically, this bill:
1)Provides that a mobilehome park may allow open houses and may
establish reasonable rules or regulations governing how an
open house may be conducted, including rules regarding the
number of houses allowed to be open at one time, hours, and
parking.
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2)Provides that, if a park allows open houses, a seller may
display an open house sign, as specified.
3)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.
4)Specifies, for purposes of the MRL, that "listing" includes
advertising the address of the home to the general public.
5)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.
6)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.
7)Makes other technical and conforming changes to the MRL.
FISCAL EFFECT: None
COMMENTS:
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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 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
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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 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 provide that a park may allow
open houses and may establish reasonable rules or regulations
governing how an open house may be conducted, including rules
regarding the number of houses allowed to be open at one time,
hours, and parking. If a park allows open houses, a seller may
display an open house sign, subject to certain specifications.
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.
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Management may require the use of a step-in L-frame sign, which
protects utility systems because it does not require digging.
This 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
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, 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.
Analysis Prepared by:
Rebecca Rabovsky / H. & C.D. / (916) 319-2085
FN:
0001326
SB 419
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