BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 864|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 864
Author: Davis (D)
Amended: 9/4/07 in Senate
Vote: 21
SENATE TRANSPORTATION & HOUSING COMM. : 6-3, 7/3/07
AYES: Lowenthal, Cedillo, Corbett, Kehoe, Simitian,
Torlakson
NOES: McClintock, Ashburn, Harman
NO VOTE RECORDED: Dutton, Yee
SENATE APPROPRIATIONS COMMITTEE : 9-7, 8/30/07
AYES: Torlakson, Cedillo, Corbett, Florez, Kuehl, Oropeza,
Ridley-Thomas, Steinberg, Yee
NOES: Cox, Aanestad, Ashburn, Battin, Dutton, Runner,
Wyland
NO VOTE RECORDED: Simitian
ASSEMBLY FLOOR : 43-34, 6/7/07 - See last page for vote
SUBJECT : Identification of substandard building
purchasers
SOURCE : Los Angeles City Attorney Rocky Delgadillo
DIGEST : This bill requires the buyers of substandard
properties to provide identifying information and a
rehabilitation plan to the local code enforcement agency.
ANALYSIS : The California Building Standards Code
CONTINUED
AB 864
Page
2
contains building standards and regulations as adopted by
the California Building Standards Commission. Buildings
are considered substandard under state law if a violation
of building standards results in any of the following
conditions:
1.Inadequate sanitation.
2.Structural hazards.
3.Nuisances.
4.Unsafe or inoperable wiring, plumbing, mechanical
equipment.
5.Faulty weather protection.
6.Other fire, health or safety hazards.
Local building officials generally enforce building codes.
When violations are discovered, a building official sends
the owner a letter notifying him or her of the deficiency.
Except in cases of imminent danger, the officials then give
the owner at least thirty days to correct the violation.
If violations remain uncorrected, the code officials may
hold an administrative hearing and pursue fines and/or
liens on the property. In rare cases involving
recalcitrant owners, a code enforcement agency may seek a
receivership for the property or may ask the district
attorney or city attorney to file criminal charges.
Current law requires that when a property changes ownership
during the time between the issuance of a notice of
violation and the abatement of that violation, the
transferor (generally a seller, and referred to here as
such) must record a notice of conveyance and provide the
code enforcement agency with the correct name, address, and
identification number of the transferee (generally a buyer,
and referred to here as such).
This bill requires the buyers, instead of the sellers, of
substandard properties to provide identifying information
and a rehabilitation plan to the local code enforcement
agency.
Specifically, the bill:
1. Applies to any property that meets both of the
following:
AB 864
Page
3
A. An code enforcement agency has recorded a notice
of pending action, a notice of substandard
conditions, or a document stating that the building
is uninhabitable.
B. Any document from above that is recorded on or
after July 1, 2008 which contains specified
statements.
1. Requires a buyer of such a property, concurrent with the
transfer of the property, to provide the code
enforcement agency with a notarized document containing
the address of the property, the names, addresses,
telephone number, fax number, and email of all owners,
the date of the transfer.
2. Requires a buyer to also provide a government-issued
identification document that includes a picture of the
buyer.
3. Requires the buyer to submit within 30 calendar days of
the transfer of the property, a plan of correction to
the enforcement agency which includes an estimated
timeline, costs of repair, and available financial
resources, or a demolition plan that is in compliance
with local ordinances. Allows this information to be
submitted by personal service, facsimile, email, or U.S.
mail. If U.S. mail is used, the information shall be
place in the mail five days or more prior to the due
date.
4. If the buyer is a legal entity, such as a partnership or
corporation, requires the buyer to provide the
information described above for one or more officers of
the entity.
5. Requires an out-of-state buyer to designate a person
within California to manage the property and requires
that person to accept the designation in a notarized
statement.
6. Allows the enforcement agency, upon request, to share
the name and address of the buyer with a tenant or
tenant association or organization.
AB 864
Page
4
7. For occupied properties of at least 16 units, requires
that the identifying information of the buyers be posted
on the property.
8. Allows local governments to adopt and enforce local
ordinances that duplicate or supplement these
requirements.
9. Provides that a person who fails to provide the
information or who provides false information is subject
to a civil fine of at least $2,500 and not more than
$25,000, and allows for the penalty to be brought by any
public prosecutor in the name of the State of
California. Specifies that any penalty imposed shall be
a lien on the property and enforceable as a civil
action.
10. Prohibits a person who is not in compliance with these
requirements from collecting rent, issuing a notice of
rent increase, or issuing a three-day eviction notice,
for a unit that has been deemed substandard or a unit
that is part of a building that has been deemed
substandard.
11. Exempts property owned by a governmental entity or by
a financial institution, as defined, that has acquired
the property through foreclosure.
12. Exempts a lender, as defined, for 60 calendar days
from the bill's provisions.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2007-08 2008-09
2009-10 Fund
Mandate /data mgmt. reimbursable
local mandate, probably General
less than $150 annually
AB 864
Page
5
Penalty revenue gain
unknown, potentially substantial penalty
Local
revenue gain due to new fines
SUPPORT : (Verified 7/3/07)(Unable to reverify)
Los Angeles City Attorney Rocky Delgadillo (source)
Bet Tzedek Legal Services
California Rural Legal Assistance Foundation
Habitat for Humanity
Oakland City Attorney John Russo
Western Center on Law and Poverty
OPPOSITION : (Verified 7/3/07)(Unable to reverify)
Apartment Association of California Southern Cities
California Apartment Association
California Association of Realtors
California Land Title Association
California Mortgage Association
United Trustees Association
ARGUMENTS IN SUPPORT : According to the author's office,
substandard properties cause blight and increased crime in
our neighborhoods. These properties are particularly
susceptible to being transferred to sham transferees who
have no intention of fixing up the properties and who are
difficult to locate. Whereas current law requires the
seller to provide information on the buyer to the
enforcement agency, this bill requires the buyer to confirm
this identification information as well as provide a plan
of correction. This will help enforcement agencies track
down new owners and get them to repair substandard
properties.
ARGUMENTS IN OPPOSITION : The Apartment Association of
Southern Cities states in opposition, "The bill will
severely cripple legitimate transfers of property where a
recorded notice of a substandard building condition exists.
AB 864 requires that the new owner shall file a 'plan of
correction for the substandard conditions that includes
estimates of a timeline, costs of repair and available
AB 864
Page
6
financial resources, or a demolition plan that is in
compliance with local law, and includes estimates of a
timeline and, if applicable, relocation of tenants.' New
owners will never be able to meet this unrealistic demand
because they will not be able to identify the
contractor(s), designers, engineers, architects and all of
the other professionals that the new owner must contract
with to make necessary repairs in this time frame (assuming
the building well be repaired and not demolished)."
ASSEMBLY FLOOR :
AYES: Arambula, Bass, Beall, Berg, Brownley, Caballero,
Charles Calderon, Carter, Coto, Davis, De La Torre, De
Leon, DeSaulnier, Dymally, Eng, Evans, Feuer, Fuentes,
Garcia, Hancock, Hernandez, Huffman, Jones, Karnette,
Krekorian, Laird, Leno, Levine, Lieber, Lieu, Ma,
Mendoza, Mullin, Nava, Portantino, Price, Salas, Saldana,
Solorio, Swanson, Torrico, Wolk, Nunez
NOES: Adams, Aghazarian, Anderson, Benoit, Berryhill,
Blakeslee, Cook, DeVore, Duvall, Emmerson, Fuller,
Gaines, Garrick, Hayashi, Horton, Houston, Huff,
Jeffries, Keene, La Malfa, Maze, Nakanishi, Niello,
Parra, Plescia, Sharon Runner, Ruskin, Silva, Smyth,
Spitzer, Strickland, Tran, Villines, Walters
NO VOTE RECORDED: Galgiani, Richardson, Soto
JJA:nl 9/4/07 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****