BILL ANALYSIS
AB 864
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Date of Hearing: May 16, 2007
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mark Leno, Chair
AB 864 (Davis) - As Amended: May 1, 2007
Policy Committee: HousingVote:6-1
Urgency: No State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill requires a person or entity acquiring a property that
is uninhabitable or otherwise substandard to register with the
local building code enforcement agency. Specifically, this bill:
1)Requires the registration to include:
a) Filing the name, address, phone number, fax number, and
email address, of the owner or owners of the acquired
property, as well as a government-issued identification
document, the date of transfer and a plan of correction for
the substandard conditions.
b) Requires the owner to verify under penalty of perjury
that all of the above information is true and correct, and
requires the owner to post the information on any such
property with more than 16 dwelling units.
2)Enumerates the persons to be identified for registration for
an entity that is a corporation, limited liability company,
partnership, limited partnership, trust, or real estate
investment trust.
3)Requires an owner residing outside California to identify a
person who resides in state and who manages the property.
4)Allows the enforcement agency to disclose to the tenants, upon
request, the name and address of the person or entity that
acquires the property.
5)Makes failure to comply with any of the above a misdemeanor,
punishable by a fine of up to $10,000 and/or imprisonment in
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county jail for up to one year.
6)Prohibits a person out of compliance with the above from
demanding, collecting, or increasing rent.
FISCAL EFFECT
1)Potential significant reimbursable costs statewide for local
building code enforcement agencies to establish and maintain
the required registry. If the first-year costs averaged only
$1,000 for each city and county, the statewide cost would
exceed $500,000.
2)Potential nonreimbursable costs to local government for
enforcement and incarceration, offset to some extent by fine
revenues.
COMMENTS
1)Purpose . According to the author, it is common for
unscrupulous owners of substandard properties to transfer
ownership to escape responsibility for fixing or maintaining
rental properties. There is no requirement for a buyer to
record anything except the deed, so that even if the new
"owner" is located, he or she is easily able to disclaim
ownership stating that the grant deed was never accepted.
Without the new buyer acknowledging ownership and providing a
plan for correction, the repair of substandard properties may
be indefinitely delayed. This bill requires the buyer or
transferee of substandard property to similarly register, just
as the seller is required under existing law.
2)Prior Legislation . AB 1112 (Goldberg)/Chapter 487 of 2001,
established a similar real property registration requirement
as provided under AB 864 to apply as a pilot program in Los
Angeles County. AB 1112 created a residential rental property
registry, allowing local code enforcement entities to locate
the owner of a property in the event of an emergency or code
violation.
AB 1034 (Mullin), Chapter 474, Statutes of 2003, applied the
registration requirement statewide to sellers of substandard
properties, whereas AB 864 focuses on buyers of such
properties.
AB 864
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Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081