BILL ANALYSIS
SB 290
Page 1
Date of Hearing: June 23, 2009
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
SB 290 (Leno) - As Introduced: February 24, 2009
SENATE VOTE : 21-15
SUBJECT : Tenancy: Notices
KEY ISSUE : Should the requirement that landlords give tenants a
60-day notice prior to terminating a residential tenancy, if the
tenant has been living in the unit at least one year, be made
permanent by eliminating the existing sunset?
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
SYNOPSIS
This bill would delete the sunset on an existing law that
requires landlords to provide a 60-day notice to terminate a
residential tenancy if the tenant has lived in the premises for
a year or more, and a 30-day notice if the tenant has lived in
the premises for less than one year. If the sunset is not
removed, the provision will expire on January 1, 2010, and the
law will revert to a 30-day notice regardless of how long the
tenant has resided in the property. The 60-day notice provision
for long-term tenants was first enacted as a pilot project in
2001 and extended statewide in 2002 with a three-year sunset
date. In 2006 AB 1169 re-enacted the law with a three-year
sunset. This bill would essentially, and seemingly reasonably,
make the 60-day notice provision permanent for tenants who have
resided in the premises for a year or more while retaining the
30-day notice for tenants who have lived in the premises for
less than one year. Landlords would still have the ability to
issue a 3-day notice to quit for cause, such as where a tenant
does not pay rent, violates a term of the lease, or engages in
some unlawful activity or otherwise creates a nuisance.
According to the author and supporters, this bill is necessary
because it is often extremely difficult for low and moderate
income families to amass first and last months rent and a
security deposit within 30 days, and at least one study has
shown that the 60-day notice period, by giving the tenant a more
reasonable time to move, reduces the need for costly and
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time-consuming unlawful detainer actions. Opponents, mostly
landlord associations, generally argue that the 60-day notice is
no longer needed given high vacancy rates and that the
requirement makes it difficult for landlords to remove "problem
tenants," short of issuing a 3-day notice to quit and the costly
and time-consuming process of bringing an unlawful detainer
action.
SUMMARY : Deletes the sunset date on the law requiring a
landlord to provide 60-day prior notice to terminate a
residential tenancy if the tenant has resided in the unit for a
year or more, thereby extending the required 60-day notice
requirement indefinitely.
EXISTING LAW :
1)Requires, until January 1, 2010, an owner of residential
property to provide 60-day notice of the owner's intent to
terminate a periodic residential tenancy if the tenant has
resided in the unit for more than one-year, and to provide
30-day notice of intent to terminate the tenancy if the tenant
has resided in the unit for less than one year. (Civil Code
Section 1946.1 (b)-(c).)
2)Notwithstanding the above provisions, permits the owner to
provide 30-day notice of intent to terminate a residential
tenancy if the owner has contracted to sell the residential
unit to a bona fide purchaser, as specified. (Civil Code
Section 1946.1 (d).)
3)Notwithstanding the above provisions, requires, until January
1, 2013, an owner who has acquired residential rental property
as a result of foreclosure to provide the tenant with a 60-day
prior notice of intent to terminate the tenancy. (Civil Code
Section 1161b.)
4)Provides, under the federal "Protecting Tenants at Foreclosure
Act of 2009," signed by President Obama on May 20, 2009, that,
in the case of foreclose on a federally-backed mortgage loan,
the successor in interest shall give any bona fide tenant on
the affected property at least 90 days notice to vacate. This
provision will sunset on December 31, 2012. (S. 896, Public
Law No. 111-22.)
COMMENTS : Historically, landlords in California could terminate
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a residential periodic tenancy by providing the tenant with only
30-days notice and, outside of certain "just cause"
jurisdictions, this notice can be given without cause. In 2001,
recognizing the extreme difficulty that displaced tenants
sometimes have in finding suitable housing within 30 days, SB
985 (Chapter 729, Stats. of 2001) created a pilot project that
increased the notice period to 60 days for a tenant who had
resided in the property for one year or longer. This
requirement was extended state-wide in 2002, albeit with a
three-year sunset provision. In 2006, AB 1169 (Chapter 842,
Stats. of 2006) re-enacted the 60-day provision with a sunset
date of January 1, 2010. This bill would eliminate the sunset
provision altogether, making the 60-day notice period for
long-term tenants a permanent part of California landlord-tenant
law.
A study drawn from the earlier pilot project area suggested that
increasing the notice period not only made it easier for the
tenant; it apparently had the added benefit of reducing the
burden on the courts as well, as landlord lawsuits against
tenants for "holding over" decreased by 69% after the law went
into effect. The author points to this study as evidence that
given adequate time to move tenants will do so, and the need for
an unlawful detainer action is eliminated.
Is There Any Evidence That A 60-day Notice Makes It More
Difficult For Landlords To Evict A "Problem Tenant?" Since the
time that the original pilot project went into effect, the
opponents of an extended notice period - typically landlord
associations - claimed that the 60-day notice would make it much
more difficult to remove "problem tenants" who not only create a
problem for landlords, but who also potentially become a
nuisance to neighbors and other tenants. It is unclear,
however, whether the expanded notice would necessarily have this
effect; indeed the Committee is not aware of any evidence that
the prior landlord associations' concerns have actually arisen.
On the one hand, if a tenant is truly creating a nuisance or
disturbing the quiet enjoyment of other tenants, existing law
already provides means for removing that tenant. (See e.g.
Civil Code Section 1161.) On the other hand, it appears that
landlords sometimes use the 30-day notice provision to remove
tenants that could conceivably be evicted for cause by issuing a
3-day notice to quit. But because the 3-day notice to quit is
necessarily more contentious and often leads to the time and
expense of an unlawful detainer action, the 30-day notice is not
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only better for the landlord, but sometimes for the targeted
tenant and other tenants as well.
Yet, the existing 60-day notice provision arguably already takes
into account the "problem tenant," insofar as it only applies to
tenants who have resided in the property for one year or more,
while still permitting the standard 30-day notice for tenants
who have resided in the property for less than one year.
Indeed, the legislative history of prior legislation suggests
that limiting the 60-day notice requirement to tenants who had
resided in the units for a year or more was precisely to address
this issue: that is, because problematic behavior will usually
manifest itself in the first year, the distinction creates what
is in effect a "one year probationary period" before a tenant is
entitled to the 60-day notice. (See e.g. Senate Judiciary
Committee, Analysis of AB 1169. June 13, 2006.) It is also
important to stress that the 60-day notice requirement only
applies where all of the tenants have resided in the premises
for one year or more; the 30-day requirement applies "if any
tenant or resident has resided in the dwelling for less than a
year." (Page 2, lines 10-11; emphasis added.) In short, if a
new tenant or roommate moves into the unit, the 30-day notice
would apply to the entire unit for another full year. Because
of this provision, the California Apartment Association has
taken a neutral position on the bill.
Finally, the opponents' repeated assertions that a 60-day notice
will make it difficult to remove "problem tenants" are not
backed up with any evidence - even of the anecdotal variety.
This policy has been in effect for about eight years, and if
there were a problem one would think that it would have
manifested itself by this time. Indeed, the only study cited by
either side suggests, as noted above, that the 60-day notice has
actually led to fewer contentious evictions. The original
three-year sunset on the statewide bill has been extended once
already. The purpose of a sunset provision is to permit the
Legislature to revisit the policy and to determine if there have
been unwanted, unintended consequences. The Committee has not
been provided with any evidence that any such unwanted,
unintended consequences have come to pass; thus, the Committee
may conclude it is reasonable to remove the sunset.
ARGUMENTS IN SUPPORT : According to the author, current law
already "recognizes the near impossibility of finding another
rental in 30 days." Many tenants, the author contends, must
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"work several jobs and must search for rentals at night or on
weekends [to] find replacement housing." In addition, because
most landlords require two months rent and/or a security
deposit, low-income tenants in particular need more time to
amass the funds needed to secure replacement housing.
This measure is supported by a broad coalition of housing
advocates, senior citizen groups, labor organizations,
non-profit community organizations, and groups representing
persons with disabilities. The Western Center on Law & Poverty
(WCLP), the sponsor of this bill, writes that "legal aid
organizations throughout the state have reported that the
extended notice period remains a vital tenant protection, for
the simple reason that 30 days is simply not enough time to move
in today's society." One major reason that 30 days is not
enough is the high costs created by the typical requirement of
"first and last" month rent and a security deposit. As the San
Francisco Tenants Union notes in support of this bill, this
amounts to the equivalent of three months rent in advance, which
in San Francisco's expensive rental market typically "requires
at least $8000 for a 2 bedroom apartment." While San Francisco
may have exceptionally high housing costs, the difficulty of
obtaining the equivalent of three months rent is a problem
throughout the state. Moreover, the difficulty in raising this
much money for low- to moderate-income families is made worse by
the fact that landlords typically are not required to return a
security deposit until 21 days after the tenant has vacated.
The American Federation of State, County, and Municipal
Employees (AFSCME) agues that achieving housing stability is
especially crucial during "the current economic climate," when
foreclosures are forcing tenants out of their homes and working
families face heightened anxiety and economic insecurity. "This
bill," AFSCME contends, "would allow two months warning for most
renters, allowing them to prepare and find a new dwelling before
they are forced out of their home."
Tenants Together, a statewide coalition of tenants and tenant
organizations, contends that this proven policy is a matter of
"basic fairness." Not only does it allow families more time to
find replacement housing, Tenants Together contend, it will also
obviate the need for eviction proceedings when tenants are
unable to find replacement housing within 30 days: "To force
tenants in this situation to spend time and resources on
litigation, rather on their efforts to secure new housing, makes
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little sense."
Finally some supporters, including California Rural Legal
Assistance and the California Alliance for Retired Americans,
point out that the existing law has been extremely helpful to
their respective clients, while at the same time noting that
there is no indication that the extended notice has caused any
great harm to landlords. By removing the sunset, they contend,
low-income and elderly persons will continue to have a better
chance of finding decent and affordable replacement housing.
ARGUMENTS IN OPPOSITION (UNLESS AMENDED) : Although the
California Apartment Association, as noted above, has taken a
neutral position on this bill, three other associations of
apartment owners and the California Association of Realtors
(CAR) oppose this bill unless amended, albeit their requested
amendments differ from each other. CAR opposes this measure
unless it is amended to make the 60-notice period apply to both
landlord and tenant. CAR claims that the one-way application of
the 60-day notice "creates an unequal environment at a time when
the number of vacancies in rental properties is on the rise."
The Apartment Association of California Southern Cities (AACSC)
opposes this measure unless it is amended to provide that
"tenants that have not paid the rent on time as contractually
agreed to would not be eligible for the 60-day notice to
terminate a tenancy." AACSC claims that vacancy rates are much
higher than they were when the Legislature first enacted this
60-day notice requirement. AACSC also disputes supporters'
claims that an owner can always remove a "problem tenant" by
using existing law, pointing out that the existing process is
"expensive, difficult, lengthy, and contentious."
The Apartment Association of Greater Los Angeles (AAGLA) and the
Santa Barbara Rental Property Association (SBRPA) oppose this
bill unless it is amended to extend the sunset date another
three years, instead of making the law permanent. These two
groups contend that the 60-day notice requirement "unduly limits
the rights of owners in their management of rental property to
the detriment of good tenants." AAGLA and SBRPA argue that it
is highly unusual for a landlord to evict good, long-term,
rent-paying tenants. They argue that "60 days is far too long
if the goal, as it is in many if not most cases of these types
of terminations, is to rid the property of a nuisance tenant who
is disrupting the community or engaging in drug or gang
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activity." AAGLA and SBRPA further claim that during the
extended 60-day period, "the tenant will cease paying rent as
soon as the notice is given causing the owner to lose money that
will be made up by good tenants in the form of higher rents."
As with other opponents, AAGLA and SBRPA contend the alternative
of using the existing process to get rid of problem tenants is
"difficult, expensive and lengthy," and that fellow tenants are
often reluctant to testify "especially if there are personal
safety issues."
Do the Amendments Suggested by Opponents Actually Address Their
Concerns ? Regarding the amendments proposed by the opposition,
it is not clear how those amendments would address the major
problems cited by the opposition. For example, it is not clear
how imposing the 60-day notice requirement on tenants will make
it any easier for a landlord to remove a problem tenant. CAR's
contention that it is only fair to apply the 60-day provision
both ways appears to ignore that the 60-day notice was meant to
be a tenant protection measure that addressed the problem that
many tenants face in coming up with the equivalent of three
months rent. Landlords do not face this same situation.
Similarly, it is not entirely clear how amending the bill so
that the 60-day requirement does not apply to tenants who have
not paid their rent will address concerns about the "problem
tenant," as described by the opponents. First, existing law
already makes non-payment of rent a valid reason to issue a
3-day notice to "quit or pay," even in just cause jurisdictions.
Second, this amendment would only help in the case of the
tenant who fails to pay rent, and not the problem tenant who is
a "nuisance" to other tenants or is engaged in illegal activity.
Finally the recommendation of AABLA and SBRPA that the sunset
be extended another three years would arguably undermine the
very purpose of sunset provisions: that is, after there has been
ample time to consider the effect of the law, the Legislature
should either remove the sunset if the law is working, or let
the statute expire if it is not working. Generally this
Committee has determined over the years that repeatedly
extending sunsets is inefficient public policy absent evidence
to the contrary.
REGISTERED SUPPORT / OPPOSITION :
Support
Western Center on Law and Poverty (sponsor)
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AFSCME
Area Agency on Aging of Lake & Mendocino Counties
Asian Americans For Civil Rights & Equality
California Alliance for Retired Americans
California Communities United Institute
California Rural Legal Assistance Foundation
California Senior Legislature
Community Resources for Independent Living
Disability Rights, California
Families First
Housing Rights Center
Inner City Law Center
Resources for Independent Living
San Francisco Tenants Union
Santa Monicans for Renters' Rights
Shelter Partnership
Stone Soup
Tenants Together
Opposition
Apartment Association, California Southern Cities
Apartment Association of Greater Los Angeles
California Association of Realtors
Santa Barbara Rental Property Association
Analysis Prepared by : Thomas Clark / JUD. / (916) 319-2334