BILL ANALYSIS �
SB 1472
Page 1
SENATE THIRD READING
SB 1472 (Pavley, et al.)
As Amended June 28, 2012
Majority vote
SENATE VOTE :36-0
HOUSING 7-0 JUDICIARY 10-0
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|Ayes:|Torres, |Ayes:|Feuer, Wagner, Atkins, |
| |Atkins,Bradford, Cedillo | |Dickinson, |
| |Beth Gaines, Hueso, | |Gorell, Huber, Jones, |
| |Jeffries | |Monning, |
| | | |Wieckowski, Bonnie |
| | | |Lowenthal |
| | | | |
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SUMMARY : Removes the sunset on a statute that permits local
governments to fine property owners for failure to maintain
certain property and makes other changes relating to the ability
of a local enforcement agency to abate nuisances and correct
substandard building violations. Specifically, this bill :
1)Removes the sunset on, and thereby makes permanent, a statute
that requires a legal owner to maintain vacant residential
property purchased or acquired at foreclose.
2)Provides that if a person has purchased, and is in the process
of abating a violation at a residential property that has been
foreclosed upon on or after January 1, 2008, then a local
enforcement agency shall not commence any action or proceeding
until at least 60 days after the person takes title to the
property, unless a shorter period of time is deemed necessary
by the enforcement agency to prevent or remedy an immediate
threat to the health and safety of the public or occupants of
the structure.
3)Requires an entity, that releases a lien securing a deed of
trust or mortgage on a property for which a notice of
pendency of action has been recorded by an enforcement agency,
to notify the enforcement agency within 30 days of releasing
the lien.
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4)Provides that where a receiver has been appointed to take
possession of a substandard building, a court may, upon the
request of either the receiver or an enforcement agency, order
the owner of the property to pay all unrecovered costs
associated with the receivership.
FISCAL EFFECT : None
COMMENTS : This bill is part of a package of bills sponsored by
the California Attorney General in response to the foreclosure
crisis. According to the author, communities throughout the
state are being inundated with foreclosed homes which often fall
into disrepair. Public health and safety are implicated by
vacant foreclosed homes because they attract gangs,
prostitution, drug users, squatters, and unattended property can
create a mosquito abatement problem.
As a result of the foreclosure crisis, blight remains a
significant problem in communities throughout California. A
number of foreclosed properties are left vacant leaving them
open to stagnant swimming pools that spawn mosquitoes. Empty
rooms lure squatters and vandals and brown lawns and overgrown
vegetation are creating eyesores and fire hazards.
Background: Existing law requires a local enforcement entity to
enforce the State Building Standards Code and any other
specified rules and regulations. If the local enforcement
agency identifies a violation, it must issue an order to abate
the nuisance and if the nuisance is not abated within 30 days or
less depending on the degree of violation, the enforcement
agency must take some action to abate. This bill would give a
person who purchases a property that was foreclosed on or after
January 1, 2008, and who is in the process of abating the
violation 60 days to correct the violation. An enforcement
agency can give a shorter time period to correct a violation if
it determines that is necessary to protect the health and safety
of the occupants of the property or the public.
In 2008, SB 1137 (Perata, et al.), Chapter 69, Statutes of 2008,
required that the owner maintain a vacant property or face a
$1,000 per day fine. It also gave the owner 30 days to correct
a violation once notification has been received from the local
government. Without an extension this provision would sunset at
the end of this year, this bill deletes the sunset date and
extends this provision indefinitely.
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Local governments have used this provision to varying degrees.
Some have developed robust ordinances that produced significant
revenue, the majority have not. One challenge reported by local
enforcement agencies in enforcing local ordinances is
identifying the owner of the property when the owner is a
lender. Lenders are not required to record the deed of trust at
the time of foreclosure and this is the mechanism enforcement
agencies use to recover fines. Another challenge to enforcing
local ordinances is man power. Many cities do not have the
financial resources in the current climate to devote to code
enforcement.
This bill would require a lienholder who releases a lien on any
property on which the enforcement agency has recorded a lis
pendens to notify the enforcement agency within 30 days of
releasing the lien. According to the sponsor, when an
enforcement agency must make a determination as to the
appropriate enforcement action, if any, to take against a
substandard property, it is often helpful to know whether or not
any liens have been recorded against the property and if and
when the lien is released. This would create an efficient means
for the enforcement agency to know when a lien has been
released.
This bill would allow for the recovery of certain costs
associated with a health and safety receivership. Such
receiverships are typically used as a last resort. But where a
property owner refuses to take any action, even after receiving
notice and given adequate time to correct a violation, the
enforcement may seek, and the court may appoint, a receiver to
take possession of the property. Existing law sets forth the
conditions for establishing the receivership and lists certain
powers that a court may grant to the receiver. The receiver's
primary function in taking possession of the property is to do
whatever is necessary to correct the conditions that gave rise
to the receivership. For example, the receiver typically hires
contractors to make needed repairs. In order to pay these
contractors, the receiver might be empowered to collect rents on
the property or to obtain loans that are secured by a lien upon
the property. This bill does not change any of the statutory
requirements for establishing a receivership or affect the
receiver's statutory powers; it would, however, once a
receivership has been established, permit either the receiver or
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the enforcement agency to seek a court order requiring the owner
of the property to pay any "unrecovered costs" of the
receivership (i.e., presumably those costs not covered by the
loans, rents, or other revenue sources). This would ensure that
costs associated with rehabilitating the property are borne by
the responsible party: the recalcitrant owner who refuses to
correct conditions even after being placed on notice. Arguably,
existing receivership statutes, which grant courts considerable
discretion, would permit such a requirement in the initial court
order creating the receivership. This bill, however, would
expressly state that the receiver or the enforcement agency
could request such an order if one is not initially provided.
The bill specifies that the court "may" grant such an order;
discretion will ultimately remain, consistent with existing law,
with the court.
Related legislation: AB 2314 (Carter) is identical to this bill
and passed out of the Assembly Housing and Community Development
Committee, 7-0.
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085
FN: 0004409