BILL ANALYSIS
SB 1149
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REPLACE - 08/23/10 Changes per consultant.
SENATE THIRD READING
SB 1149 (Corbett)
As Amended August 20, 2010
Majority vote
SENATE VOTE :21-9
JUDICIARY 7-2
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|Ayes:|Feuer, Brownley, Evans, | | |
| |Huffman, Jones, Monning, | | |
| |Saldana | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Tran, Knight | | |
| | | | |
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SUMMARY : Prohibits the release of court records in a
foreclosure-related eviction unless the plaintiff landlord
prevails, as specified, and requires that a prescribed cover
sheet, notifying a tenant of his or her rights and
responsibilities, be attached to any eviction notice that is
served within one year after a foreclosure. Specifically, this
bill :
1)Prohibits a court clerk from releasing records in an eviction
action involving a residential property that has been sold in
foreclosure unless, after 60 days have elapsed since the
complaint was filed, a judgment against all defendants has
been entered for the plaintiff, after a trial. Provides that
if judgment is not entered for the plaintiff the clerk could
only allow access to court records to parties to the action or
by order of a court, as specified.
2)Provides that in the case of any foreclosure of a residential
property, the immediate successor in interest in the property
shall attach a cover sheet, as prescribed, to any notice of
termination of tenancy served on a tenant of that property
within one year after the foreclosure sale.
3)Provides that the above cover sheet shall not be required if
any of the following apply:
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a) The tenancy is terminated due to a tenant's violation of
the terms of the tenancy pursuant to Code of Civil
Procedure Section 1161;
b) The successor in interest and the tenant have executed a
written rental agreement or lease or written
acknowledgement of a preexisting rental agreement or lease;
or,
c) The tenant receiving the notice was not a tenant at the
time of the foreclosure.
4)Specifies that the required cover sheet, in at least 12-point
type, shall advise the tenant of his or her rights and
responsibilities, including information on how to obtain legal
assistance and notification that the tenant may have the right
to stay in the unit for 90 days.
5)Provides that the cover sheet requirements in this bill shall
sunset on January 1, 2013, unless a later enacted statute
deletes or extends that date.
6)Provides that in certain unlawful detainer actions the
statutory basis of the action shall be indicated in the
caption of the complaint, as specified.
EXISTING LAW :
1)Provides, until January 1, 2013, that a tenant or subtenant in
possession of rental housing at the time the property is sold
in foreclosure shall be given 60 days' written notice to quit
before the tenant or subtenant may be removed from the
property.
2)Provides, under federal law, that a successor in interest in a
property subject to foreclosure shall provide any tenants
residing in the property with a 90-day notice to vacate, and
requires the successor in interest to honor the tenant's lease
until the end of the lease term unless the property is sold to
a person who intends to occupy it as his or her primary
residence. Specifies that these provision shall sunset on
December 31, 2012.
3)Provides that, in unlawful detainer proceedings, the court
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clerk shall only allow access to case records to the
following:
a) A party to the action, including a party's attorney;
b) Any person who provides the clerk with the names of at
least one plaintiff and one defendant and the address of
the premises, including the apartment or unit number, if
any;
c) A resident of the premises who provides the clerk with
the name of one of the parties or the case number and shows
proof of residency;
d) To any person by order of the court on a showing of good
cause, as defined; or,
e) To any other person 60 days after the complaint has been
filed, unless a defendant prevails in the action within 60
days of the filing of the complaint, in which case the
clerk may not allow access to any courts records in the
action, except to a party to the action or by court order,
as specified.
FISCAL EFFECT : None
COMMENTS : One of the lesser known aspects of the foreclosure
crisis in California and the nation is the impact on tenants,
who often face eviction when their rental property is foreclosed
upon by an acquiring bank or a new owner. What makes these
evictions so inequitable is that tenants are not evicted through
any fault of their own, but only because the property owner has
failed to make payments. According to a March 2009 report by
Tenants Together entitled, "Hidden Impact: California Renters in
the Foreclosure Crisis," as many as one-third of foreclosures in
2008 involved rental units.
The impact of the foreclosure crisis - both in general and
regarding tenants in particular - has been the subject of both
state and federal legislation. Most notably, SB 1137 (Chapter
69, Stats. of 2008) required, among other things, that tenants
receive at least 60-days notice if the property in which they
were living was subject to foreclosure. Less than a year after
SB 1137 went into effect, President Obama signed the "Protecting
Tenants at Foreclosure Act of 2009." Among other things, this
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Act required the successor in interest to a foreclosed property
to provide tenants with at least 90-days notice to vacate and to
generally honor the tenant's existing lease for the remaining
term of the lease.
This bill simply seeks to ensure that tenants are aware of their
rights under both state and federal law. Specifically, this
bill would require that, in regard to any rental property
subject to foreclosure, a notice to terminate tenancy must be
accompanied with a cover sheet that informs the tenant that the
property was recently sold in foreclosure and spells out the
tenant's rights and responsibilities, including the tenant's
right to stay in a foreclosed rental unit for up to 90 days. In
addition, the cover sheet would advise tenants to talk to a
lawyer and stresses the importance of responding to notices in a
timely manner. The cover sheet would be required for any notice
that is served up to one year after the foreclosure sale. The
cover sheet provisions of the bill would sunset as of January 1,
2013. This bill also seeks to protect victims of foreclosure
evictions from suffering permanent harm to their credit reports
and rental histories by only permitting the release of court
records relating to a foreclosure eviction if the landlord
actually prevails in the action. The masking provisions would
not be subject to the sunset, which applies only to the cover
sheet provision.
Despite enactment of state and federal laws designed to protect
tenants who are evicted as a result of a foreclosure, the author
contends that "many innocent tenants have received notices to
vacate that are unclear and contain different timeframes in
which the tenant must vacate the property." In other instances,
the author states, notices to vacate have been addressed to the
home owner, but not to the tenant. Moreover, the author
believes that too many tenants who receive a three-day notice to
quit take this at face value, not realizing that in the case of
eviction due to foreclosure, they may have 90 days after receipt
of the notice to vacate. The author believes that "SB 1149 will
help to protect tenants and ensure that they receive the full
benefits of the important protections that have been enacted
over the last few years."
The co-sponsors of this legislation - the Western Center on Law
& Poverty, California Rural Legal Assistance Foundation, and the
California Reinvestment Coalition - stress that this measure is
designed primarily to "protect tenants caught up in a
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foreclosure through no fault of their own." Western Center adds
that even when tenants know their rights, some are reluctant to
contest an eviction notice because they do not want to put a
negative mark on their rental history. For this reason, the
co-sponsors especially stress the importance of the masking
provisions of this bill. Although existing law allows the
masking of unlawful detainer records when the tenant prevails,
the co-sponsors contend that in the foreclosure context, where
the unlawful detainer may be dropped due to a variety of factors
beyond the tenant's control, the tenant never technically
"prevails" and thus the records can be released.
Analysis Prepared by : Thomas Clark / JUD. / (916) 319-2334
FN:
0006622