BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
SB 1047 (Correa)
As Amended April 15, 2010
Hearing Date: May 4, 2010
Fiscal: No
Urgency: No
BCP:jd
SUBJECT
Mobilehomes: Nonprofit Resident-owned Mobilehome Parks
DESCRIPTION
This bill would clarify that the tenant provisions of the
Mobilehome Residency Law apply in nonprofit resident-owned
mobilehome parks to members of the nonprofit mutual benefit
corporation that lease a space in the park.
BACKGROUND
Enacted in 1978, the Mobilehome Residency Law (MRL) governs the
relationship between park owners or managers and the residents
of the 4,800+ mobilehome parks and manufactured housing
communities in California. In most of those parks, residents
own their home but lease the land on which their home is
installed.
Over the past twenty years, residents have been increasingly
interested in various ways to purchase their parks and the space
upon which the home is installed. One method of purchasing a
park - the nonprofit mutual benefit corporation (the subject of
this bill) - is described by the Department of Real Estate as
follows:
Park residents need a legal entity to purchase their park.
A nonprofit mutual benefit corporation is well suited to
this purpose. In general, the nonprofit corporation makes
an offer of participation to the residents. Residents who
decided to participate become shareholders or members of the
corporation. As residents purchase shares or memberships in
(more)
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the corporation, cash is accumulated for the down payment
required to purchase the park. The officers of the
corporation, elected by the members and acting on their
behalf, negotiate with the seller to purchase the park and
solve problems relating to conversion. After conversion,
the corporation may manage the park.
To deal with the various facets of mobilehome parks and
manufactured housing communities, the MRL is divided into nine
different Articles. Articles 1-8 of the MRL deal with legal
rights and remedies for mobilehome parks which rent space to
residents. Article 9 of the MRL generally deals with the legal
rights and remedies of resident owned mobilehome parks. Under
existing law, residents who have shares in a nonprofit mutual
benefit corporation but lease their space from that corporation
fall under Article 9, but not Articles 1-8 of the MRL. To
address concerns that those residents should, instead, be
subject to the provisions of the MRL that deal with tenants,
this bill would clarify that Articles 1-8, but not Article 9, of
the MRL apply in that circumstance.
CHANGES TO EXISTING LAW
Existing law , the Mobilehome Residency Law (MRL), contains nine
Articles that extensively regulate the rights, responsibilities,
obligations, and relationships between mobilehome park
owners/management and park residents. Articles 1 - 8 deal with
legal rights and remedies related to the leasing of space by
tenants; Article 9 contains provisions that apply to resident
owned parks. (Civ. Code Sec. 789 et seq.)
Existing law provides that in a subdivision, cooperative, or
condominium for mobilehomes, or a resident-owned mobilehome
park, Articles 1 through 8 of the MRL apply only to residents
who do not have an ownership interest in the subdivision,
cooperative, or condominium for mobilehomes, or a resident-owned
mobilehome park. Existing law further provides that Article 9
of the MRL governs residents who do have an ownership interest
in the subdivision, cooperative, or condominium for mobilehomes,
or resident-owned mobilehome park. (Civ. Code Sec. 799.1.)
This bill would clarify that Articles 1 through 8, but not
Article 9, of the MRL apply to nonprofit resident-owned
mobilehome parks.
This bill would define a "nonprofit resident-owned mobilehome
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park" as a park owned and operated by a nonprofit mutual benefit
corporation, as specified, whose members consist of park
residents where there is no recorded condominium plan, tract,
parcel map, or declaration.
This bill would provide that a "mobilehome park," as defined in
the MRL, includes a "nonprofit resident-owned mobilehome park"
where the member leases his or her space, and make other
conforming changes.
COMMENT
1. Stated need for the bill
According to the author:
The present law treats . . . members of a mutual benefit
non-profit corporation as if they actually own the space in
which their home is sited and treats them as if the typical
CC&R provisions apply and provide governance as to their
actions in such a park. No such CC&R provisions exist and
the persons who are members lease the home site from the
Corporation in which they are members and as such these
members have neither the protection of the Civil Code
sections set forth in [Civil Code Section 798] or the
typical CC&R provisions. The Corporation also has no viable
method to enforce the members obligations outside the leases
which often refer to [Civil Code Section] 798 which per
[Civil Code Section 799] cannot apply and cannot be used to
enforce the Park leases or Rules and Regulations.
2. Bill would clarify the application of the MRL to nonprofit
resident-owned mobilehome parks
Under existing law, residents of a mobilehome park may form a
nonprofit mutual benefit corporation for the purpose of
purchasing the park. The residents must then obtain permission
from the Department of Corporations to issues shares - the
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corporation owns the park but each resident may purchase a
share. This bill seeks to clarify the application of the MRL to
residents who are both members of the corporation and lease
their space from that corporation.
The provisions of the MRL are separated into nine different
articles - the first eight deal with residents who rent their
space from the park, including requirements regarding the rental
agreement, rules and regulations, fees, utilities, rent control,
homeowner communications and meeting, termination of tenancy,
and transfer of mobilehomes. Article 9 (the last article)
applies to residents who have an ownership interest in a
subdivision, cooperative, or condominium for mobilehomes, or a
resident-owned mobilehome park. That article further states
that in a subdivision, cooperative, condominium, or
resident-owned park, Articles 1 through 8 (the provisions
governing the landlord tenant relationship) only apply to
residents without an ownership interest. Given that residents
who do have a share in a nonprofit mutual benefit corporation
but lease their space arguably do have an ownership interest in
the park, that provision removes the protections contained in
the tenant provisions of Articles 1 through 8.
As a result, the author notes that those members, and the
corporation, do not have the protection of the provisions of the
MRL that typically govern residents who rent their space in the
park. In response to those concerns, this bill would
specifically provide that Articles 1 through 8 (the tenant
provisions), not Article 9, apply to nonprofit resident-owned
mobilehome parks where the member of the corporation leases
their space from the park. That application ensures that even
though those residents do have an ownership interest in the
nonprofit mutual benefit corporation, they still have the
protections of the tenant portions of the MRL when they lease
their space from that corporation.
Committee staff further notes that that the application of
Articles 1 through 8, but not Article 9, is consistent with the
structure of the MRL - the MRL is generally written to make
those two sets of Articles exclusive.
3. Definition of "nonprofit resident-owned mobilehome park"
This bill would define "nonprofit resident-owned mobilehome
park" as a park owned and operated by a nonprofit mutual benefit
corporation whose members consist of park residents where there
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is no recorded condominium plan, tract, parcel map, or
declaration. Staff notes that the lack of recordation of those
documents ensures that the bill addresses the narrow situation
where a nonprofit mutual benefit corporation has been formed,
but the property has not been formally subdivided. If the park
is subdivided, Article 9 would apply to residents with an
ownership interest while Articles 1 through 8 continues to apply
to residents without that interest.
4. Opposition by the Western Manufactured Housing Communities
Association (WMA) to be removed by clarifying amendment
WMA, in opposition to the April 15, 2010 version of this bill,
states that while there are legitimate concerns that the author
is looking to address, the bill is not clear and could have
potential unintended consequences. To address those concerns,
WMA "respectfully request[s] that no changes be made in the 798
portion of the Mobilehome Residency Law (MRL) and that the bill
only make changes to the 799 portion."
Consistent with that request, the clarifying amendment in
Comment 5 would, in fact, strike the proposed changes to Section
798. The author has agreed to accept that amendment, and, based
upon that proposed amendment, WMA has removed their opposition.
5. Clarifying amendment
The author has agreed to accept the following amendment to
clarify the provisions of this bill:
Strike entire contents of the bill and insert:
SECTION 1. Section 799.1 of the Civil Code is amended to
read:
799.1 (a) This article shall govern the rights of a
resident who has an ownership interest in the subdivision,
cooperative, or condominium for mobilehomes, or a resident-owned
mobilehome park in which his or her mobilehome is located or
installed. In a subdivision, cooperative, or condominium for
mobilehomes, or a resident-owned mobilehome park, Articles 1
(commencing with Section 798) to 8 (commencing with Section
798.84), inclusive, shall apply only to a resident who does not
have an ownership interest in the subdivision, cooperative, or
condominium for mobilehomes, or the resident-owned mobilehome
park, in which his or her mobilehome is located or installed.
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(b) Notwithstanding subdivision (a), in a mobilehome park
owned and operated by a nonprofit mutual benefit corporation,
established pursuant to Section 11010.8 of the Business and
Professions Code, whose members consist of park residents where
there is no recorded condominium plan, tract, parcel map, or
declaration, Articles 1 (Commencing with Section 798) to 8
(commencing with Section 798.84), inclusive, shall govern the
rights of members who are residents that have a rental agreement
with the corporation.
Support : None Known
Opposition : Western Manufactured Housing Communities
Association (removed upon acceptance of the amendment in Comment
5)
HISTORY
Source : Author
Related Pending Legislation : None Known
Prior Legislation : None Known
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