BILL ANALYSIS
SENATE COMMITTEE ON PUBLIC SAFETY
Senator Mark Leno, Chair A
2009-2010 Regular Session B
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AB 1800 (Ma) 0
As Amended June 14, 2010
Hearing date: June 29, 2010
Penal Code
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RENTING RESIDENCE TO ANOTHER WITHOUT CONSENT OF THE OWNER
HISTORY
Source: California State Sheriffs' Association
Prior Legislation: AB 583 (Davis) - Ch. 193, Stats. 1998
Support: Alameda County Sheriff; California Apartment
Association; California Association of Realtors;
California Correctional Supervisors Organization;
California Peace Officers' Association; California
Police Chiefs Association; Crime Victims United of
California; Mariposa County Sheriff; Mono County
Sheriff; Santa Barbara County Sheriff; Shasta County
Sheriff; San Bernardino County Sheriff; Santa Cruz
County Sheriff's Office; Western Center on Law and
Poverty; Yolo County Sheriff; Riverside County
Sheriff; Association for Los Angeles County Deputy
Sheriffs; Los Angeles Police Protective League;
Apartment Association California Southern Cities;
Riverside Sheriffs' Association; Orange County
Sheriff; El Dorado County Sheriff; Marin County
Sheriff; California District Attorneys Association;
Kern County Sheriff
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Opposition:American Civil Liberties Union; Legal Services for
Prisoners with Children
Assembly Floor Vote: Ayes 73 - Noes 1
KEY ISSUES
EXISTING LAW PROVIDES THAT IT IS A MISDEMEANOR -- PUNISHABLE BY A
MAXIMUM JAIL TERM OF SIX MONTHS, A FINE OF UP TO $1,000, OR BOTH --
FOR A PERSON TO TAKE POSSESSION OF A RESIDENTIAL DWELLING, OR TO
CLAIM OWNERSHIP OF A RESIDENTIAL DWELLING, FOR THE PURPOSE OF
RENTING THE DWELLING TO ANOTHER PERSON.
SHOULD THE MAXIMUM JAIL TERM FOR THIS OFFENSE BE RAISED TO ONE YEAR
AND THE MAXIMUM FINE RAISED TO $2,500?
SHOULD THE LEGISLATURE STATE INTENT THAT EXISTING LAW AND THIS BILL
ALLOW PROSECUTION FOR FRAUDULENT RENTAL UNDER ANY OTHER APPLICABLE
PROVISION OF LAW?
PURPOSE
The purposes of this bill are to 1) increase the penalty -- from
a misdemeanor with a maximum jail term of six months and a
maximum fine of $1,000, to a maximum of one year and jail and a
fine of up to $2,500 - for purporting to rent a residential
dwelling to another person under circumstances where the
defendant did not have the consent of the owner or the owner's
agent; 2) state that prosecution for this act can proceed under
any other applicable provision; and 3) state findings that such
prosecutions have never been prohibited.
Existing law provides that any person who, without the owner's
or owner's agent's consent, claims ownership or claims or takes
possession of a residential dwelling for the purpose of renting
that dwelling to another is guilty of a misdemeanor punishable
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by imprisonment in a county jail not exceeding six months, or by
a fine not exceeding $1,000, or by both such imprisonment and
fine. Each violation is a separate offense. (Pen. Code
602.9, subd. (a).)
Existing law states that any person who, without the owner's or
owner's agent's consent, causes another person to enter or
remain in any residential dwelling for the purpose of renting
that dwelling to another, is guilty of a misdemeanor punishable
by imprisonment in a county jail not exceeding six months, or by
a fine not exceeding $1,000, or by both such imprisonment and
fine. Each violation is a separate offense. (Pen. Code
602.9, subd. (b).)
Existing law defines "grand theft" as any theft where the money,
labor, or real or personal property taken is of a value
exceeding $400, except as specified. (Pen. Code 487, subd.
(a).)
Existing law generally defines "trespass" as entering any lands,
whether unenclosed or enclosed by fence, for the purpose of
injuring any property or property rights or with the intention
of interfering with, obstructing, or injuring any lawful
business or occupation carried on by the owner of the land, the
owner's agent or by the person in lawful possession. (Pen. Code
602, subd. (k).)
This bill increases the misdemeanor penalty for unlawful rental
of a residential dwelling under claim of ownership or authority,
from a misdemeanor punishable by six months in the county jail,
a fine of up to $1,000, or both such imprisonment, to a maximum
jail term of one year, a fine of up to $2,500, or both.
This bill states that a person subject to prosecution under this
bill can be prosecuted under any other provision of law.
This bill states legislative "intent" that prosecution for
fraudulent leasing of a residence, as defined in the statute
amended by this bill, shall not preclude, and has never
precluded, prosecution of a person for grand theft or fraud for
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fraudulent leasing of a residence.
RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION
The severe prison overcrowding problem California has
experienced for the last several years has not been solved. In
December of 2006 plaintiffs in two federal lawsuits against the
Department of Corrections and Rehabilitation sought a
court-ordered limit on the prison population pursuant to the
federal Prison Litigation Reform Act. On January 12, 2010, a
federal three-judge panel issued an order requiring the state to
reduce its inmate population to 137.5 percent of design capacity
-- a reduction of roughly 40,000 inmates -- within two years.
In a prior, related 184-page Opinion and Order dated August 4,
2009, that court stated in part:
"California's correctional system is in a tailspin,"
the state's independent oversight agency has reported.
. . . (Jan. 2007 Little Hoover Commission Report,
"Solving California's Corrections Crisis: Time Is
Running Out"). Tough-on-crime politics have increased
the population of California's prisons dramatically
while making necessary reforms impossible. . . . As a
result, the state's prisons have become places "of
extreme peril to the safety of persons" they house . .
. (Governor Schwarzenegger's Oct. 4, 2006 Prison
Overcrowding State of Emergency Declaration), while
contributing little to the safety of California's
residents . . . California "spends more on
corrections than most countries in the world," but the
state "reaps fewer public safety benefits." . . . .
Although California's existing prison system serves
neither the public nor the inmates well, the state has
for years been unable or unwilling to implement the
reforms necessary to reverse its continuing
deterioration. (Some citations omitted.)
. . .
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The massive 750% increase in the California prison
population since the mid-1970s is the result of
political decisions made over three decades, including
the shift to inflexible determinate sentencing and the
passage of harsh mandatory minimum and three-strikes
laws, as well as the state's counterproductive parole
system. Unfortunately, as California's prison
population has grown, California's political
decision-makers have failed to provide the resources
and facilities required to meet the additional need
for space and for other necessities of prison
existence. Likewise, although state-appointed experts
have repeatedly provided numerous methods by which the
state could safely reduce its prison population, their
recommendations have been ignored, underfunded, or
postponed indefinitely. The convergence of
tough-on-crime policies and an unwillingness to expend
the necessary funds to support the population growth
has brought California's prisons to the breaking
point. The state of emergency declared by Governor
Schwarzenegger almost three years ago continues to
this day, California's prisons remain severely
overcrowded, and inmates in the California prison
system continue to languish without constitutionally
adequate medical and mental health care.<1>
The court stayed implementation of its January 12, 2010, ruling
pending the state's appeal of the decision to the U.S. Supreme
Court. On Monday, June 14, 2010, the U.S. Supreme Court agreed
to hear the state's appeal in this case.
This bill does not appear to aggravate the prison overcrowding
crisis described above.
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<1> Three Judge Court Opinion and Order, Coleman v.
Schwarzenegger, Plata v. Schwarzenegger, in the United States
District Courts for the Eastern District of California and the
Northern District of California United States District Court
composed of three judges pursuant to Section 2284, Title 28
United States Code (August 4, 2009).
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COMMENTS
1. Need for This Bill
According to the author:
As the State grapples with record foreclosures, more
and more families are struggling to keep a roof over
their heads. As more families look at rental options,
a wake of housing-related crimes has erupted
throughout California. Scam artists, hoping to prey
on potential renters, pose as landlords or as owners
of a property, and post attractive rental listings of
abandoned homes on the internet. An unsuspecting
renter meets with the imposter, is handed keys, and is
asked to pay large cash deposit, completely unaware
that he or she is about to become a victim of real
estate fraud. Bank agents, realtors, or the true
property owner later arrive at the residence, and the
renter is forced to leave the property, losing
possibly thousands of dollars of savings, and left
with nowhere else to live.
Under current law, individuals posing as landlords are
subject to a fine of no more than $1000, a jail term
of up to 6 months of jail. Under Penal Code 602.9, a
thief could walk away with a slap on the wrist, and
leave a family homeless. With the State's record
foreclosures and economic downturn, more and more
scammers are taking advantage of innocent people
during these difficult times. AB 1800 will simply
enhance the current misdemeanor penalties for the
crime of posing as a landlord.
2. Adverse Possession - a Doctrine Under Which a Person can
Obtain Title to Property by Possessing and Using Land
Adverse possession is a method of acquiring title to real
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property by possession for a set period of time under certain
conditions such as a non-permissive use of the land with a claim
of right when that use is continuous, exclusive, hostile, open
and notorious. A person may establish actual possession of a
parcel of land under a claim of right if the property has been
protected by a substantial enclosure or cultivated or improved
in the usual manner. Only the land that is actually possessed
by means of enclosure, cultivation, or improvement may be
claimed by adverse possession. (Code of Civ. Proc. 324; Gray
v. Walker (1910) 157 Cal. 381, 384.)
Prior to 1998, the adverse claimant need not have personally
occupied or resided on the property. An adverse claimant in
possession of a structure, who thereafter rents and manages the
structure for five years, has been held to adequately possess
the property to perfect title by adverse possession. (People v.
Lapcheske (1999) 73 Cal.App.4th 571, 573.) However, as noted
above, AB 538 prohibited renting property without the owner's
consent, meaning that the adverse possessor would have to
acquire good title before he or she could rent the property.
Also, the defendant may be charged with theft if he or she
receives money for rent where the defendant misrepresents
his ownership. If the rent received is more than $400, the
defendant may be charged with grand theft which is
punishable as an alternate felony/misdemeanor.
3. The Statute Amended by This Bill -- Penal Code Section 602.9
-- in Large Part Concerns the Use of Adverse Possession
Schemes
Penal Code Section 602.9 - the section amended by this bill -
was passed by the Legislature in 1998 and has not been amended
since. (AB 583 (Davis) Ch. 193, Stats. 1998.)
At the time the bill was under consideration in the Legislature,
the author of AB 538 explained:
Existing law does not explicitly outlaw phony adverse
possession schemes. Therefore, rental companies are
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fraudulently renting out unoccupied houses belonging
to others. These schemes work as follows: an
unscrupulous rental company breaks in and changes the
locks on a house that is temporarily vacant because of
pending foreclosure action. The rental company then
advertises for 'house-sitters' to rent the house. The
rental company uses the pretext of claiming the house
under the state's obscure 1872 adverse possession
statute - which permits unused real property to be
claimed by a willing user through squatters' rights -
to convince the unwitting house-sitters to pay rent
under suspicious circumstances. The phony rental
company skims all the rent for itself, paying nothing
to the true owner or the lender with a lien interest.
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Despite the state's economic recovery, there are still
thousands of homes subject to foreclosure action. As
reported in the December 2, 1997, edition of the
Sacramento Bee, foreclosures are expected to reach
record levels throughout the state this year and the
next. As a result, the phony adverse possession
scheme, which has been a growing problem affecting Los
Angeles and Orange Counties, is expected to move to
San Diego. Law enforcement agencies generally are
reluctant to intervene under present trespass laws
because they view adverse possession claims as a civil
issue rather than a criminal activity that can be
prosecuted under the State's unlawful trespass laws.
Similar to the circumstances in 1998, California currently faces
record real estate foreclosures. It appears that the intent of
the original legislation was to criminalize the process of
adverse possession by occupancy in which the adverse possessor
enters the property and attempts to acquire ownership by placing
tenants in the home.
4. Trespass and Adverse Possession
"Trespass" is generally defined as entering any lands, whether
unenclosed or enclosed by fence, for the purpose of injuring any
property or property rights or with the intention of interfering
with, obstructing, or injuring any lawful business or occupation
carried on by the owner of the land, the owner's agent or by the
person in lawful possession. (Pen. Code 602, subd. (k).)
Although adverse possession may be a lawful manner of acquiring
ownership, it is trespassing and may be punished accordingly.
(People v. Lapcheske, supra, 73 Cal.App.4th at 575.)
5. Prosecution for Fraudulent Rental as Grand Theft or Fraud
The author's office has explained that many prosecutors charge
fraudulent rental of residential property through a false claim
of ownership or agency as grand theft or fraud. Fraud involves
the obtaining of services, money or other property from another
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through the making of false representations. (Pen Code 532.)
Fraud can be committed under a very wide range of circumstances.
Obtaining purported rental payments by falsely claiming to own
a residence clearly constitutes fraud, and thus theft.
The statute amended by this bill does not include an element
that the defendant actually received money in the purported
rental transaction. The statute amended by this bill defines a
crime that is complete where the defendant takes possession of
property, or claims ownership of the property, with the intent
to rent the property to another person. It appears that no
fraudulent statement need be made to a prospective tenant,
although the defendant's criminal intent would typically be
shown through a statement to prospective tenants. Further, the
defendant need not be paid any money in the scheme. As noted in
the explanation of the bill that enacted this statute, the harm
this statute is intended to prevent or punish is the use of an
unauthorized rental to assist a person in obtaining title
through adverse possession while not actually living in the
residence.
This bill includes two provisions specifically stating that
nothing in Section 602.9 shall prevent prosecution under any
other provision of law. Such a provision is included in a law
to eliminate any argument that the Legislature intended that a
person should be prosecuted under a specific statute that covers
the defendant's conduct rather than a more general statute that
covers the same conduct and that may subject a defendant to
greater punishment than the specific statute. Committee counsel
is unaware of any arguments, successful or not, that a defendant
who fraudulently obtained money for the purported rental of
property cannot be prosecuted for fraud. As noted above, the
author's legislative intent in enacting 602.9 concerned adverse
possession schemes. The provision in this bill concerning fraud
or grand theft prosecutions makes this intent explicit.
It is, however, suggested that the provision stating legislative
intent concerning prosecution under any other provision of law
should be clarified. This provision states: "It is the intent
of the Legislature that this section shall not preclude, and has
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never precluded, the prosecution of a person [for] grand theft
or fraud "
It is clear that this Legislature can intend that defendants who
take possession of a residence in order to rent it to another
person can be prosecuted for fraud. However, it appears that
this Legislature cannot intend something for a prior
Legislature. The Legislature could find that Section 602.9 has
never prevented prosecution of a defendant for fraud where the
elements of that crime are present. This Legislature cannot
intend that something has or has not happened in the past.
SHOULD THE PROVISIONS CONCERNING PROSECUTION OF A PERSON FOR
FRAUDULENTLY PURPORTING TO RENT A RESIDENCE STATE A LEGISLATIVE
FINDING THAT PENAL CODE SECTION 602.9 HAS NEVER PRECLUDED
PROSECUTION FOR FRAUD OR GRAND THEFT, RATHER THAN A STATEMENT OF
LEGISLATIVE INTENT IN THIS REGARD?
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