Amended in Assembly May 23, 2014

Amended in Assembly May 5, 2014

Amended in Assembly April 21, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2026

Introduced by Assembly Member Stone

February 20, 2014

An act to amend Section 798.74 of the Civil Code, relating to mobilehome parks.

LEGISLATIVE COUNSEL’S DIGEST

AB 2026, as amended, Stone. Mobilehome parks: sales.

Existing law authorizes the management of a mobilehome park to require prior approval of a purchaser of a mobilehome that will remain in the park. Existing law also prohibits management from withholding approval if the purchaser has the ability to pay the rent and charges of the park, except as specified. Existing law authorizes management to require the purchaser to document the amount and source of his or her gross monthly income or other means of support but prohibits management from requiring personal income tax returns as evidence. Existing law requires management, upon request of any prospective homeowner who proposes to purchase a mobilehome that will remain in the park, to inform that person of the information that management will require to determine if the person will be acceptable as a homeowner in the park. Existing law permits the management or owner to be held liable for all damages if the approval of a prospective homeowner is withheld for any unauthorized reason.

This bill would require the purchaser to be presumed to have the financial ability to pay the rent and charges of the park if he or she has been approved for a loan to purchase the mobilehome that the purchaser intends to occupy, or if the purchaser has not been approved for a loan, based upon consideration of all information provided by the purchaser regarding his or her assets and ability to generate income demonstrating sufficient monthly income that meets or exceeds the income standard disclosed by management. The bill would prohibit that income standard from exceeding a multiplier of 3 times the purchaser’s income over the projected housing-related expenses to be paid by the purchaser in connection with the proposed mobilehome tenancy. begin delete The bill would prohibit management from withholding approval on the basis that the prospective purchaser will not comply with the rules and regulations of the park unless the prospective purchaser has been evicted from the same park where he or she is applying for residency or the determination is reasonably based upon the prospective purchaser’s prior tenancies within the 3 years preceding the purchaser’s application. end delete The bill would also prohibit management from withholding approval solely because the purchaser owns another mobilehome or real property residence and from requiring that the mobilehome being purchased be the sole residence of the purchaser. The bill would require management, upon request, to provide a prospective purchaser with a list of information that management will require in order to determine if the person will be acceptable as a homeowner in the park and a copy of the current written procedures, standards, or requirements that will be used by management to evaluate the purchaser’s application. The bill would require the management, if a prospective homeowner is denied approval and if requested, to meet with the purchaser or homeowner at which time the management would be required to reconsider the denial, including any additional information relevant to the application provided by the prospective homeowner.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 798.74 of the Civil Code is amended to
read:

798.74.  

(a) The management may require the right of prior
approval of a purchaser of a mobilehome that will remain in the
park and that the selling homeowner or his or her agent give notice
of the sale to the management before the close of the sale. Approval
shall not be withheld if the purchaser has the financial ability to
pay the rent and charges of the park unless the management
reasonably determines that, based on the purchaser’s prior
tenancies, he or she will not comply with the rules and regulations
of the park. In determining whether the purchaser has the financial
ability to pay the rent and charges of the park, the management
shall not require the purchaser to submit copies of any personal
income tax returns in order to obtain approval for residency in the
park. However, management may require the purchaser to
document the amount and source of his or her gross monthly
income or means of financial support, but in no event shall the
income standard exceed a multiplier of three times the purchaser’s
income over the projected housing-related expenses to be paid by
the purchaser in connection with the proposed mobile home
tenancy.

(b) For purposes of determining the prior approval of a purchaser
pursuant to this section, all of the following shall apply:

(1) A purchaser shall be presumed to have the financial ability
to pay the rent and charges of the park if the purchaser has been
approved by a state or federally chartered financial institution for
a loan to purchase the mobilehome that the purchaser intends to
occupy and written documentation confirming this fact has been
provided to management.

(2) If the purchaser has not been approved for a loan to purchase
the mobilehome pursuant to paragraph (1), the management shall
determine the purchaser’s financial ability to pay the rent and
charges of the park based upon consideration of all information
provided by the purchaser regarding his or her assets and ability
to generate income, including, but not limited to, savings accounts,
certificates of deposit, stock portfolios, trust interests of which the
purchaser is the beneficiary, real property, and similar financial
assets that can be liquidated or sold. A purchaser who demonstrates
sufficient monthly income from all sources that meets or exceeds
the income standard established pursuant to subdivision (a) shall
be presumed to have the financial ability to pay the rent and charges
of the park.

begin delete

(3) Management shall not withhold approval on the basis that
the purchaser will not comply with the rules and regulations of the
park unless either of the following apply:

(A) The prospective purchaser has been evicted from the same
park where he or she is applying for residency at any time
preceding the purchaser’s application for tenancy.

(B) Management reasonably determines, based upon the
prospective purchaser’s prior tenancies within the three years
preceding the purchaser’s application, that the prospective
purchaser will not comply with the rules and regulations of the
park. If management withholds approval on this basis, it shall
provide the prospective purchaser with documentary evidence
supporting this determination in the written rejection of the
purchaser’s application pursuant to subdivision (e).

end delete

(c) Management shall not withhold approval solely because the
purchaser owns another mobilehome or real property residence.
Management shall not require that the mobilehome that is the
subject of the purchase be the sole residence of the purchaser as a
condition of granting approval.

(d) Upon request of any prospective homeowner who proposes
to purchase a mobilehome that will remain in the park, management
shall provide that person with a list of the information management
will require in order to determine if the person will be acceptable
as a homeowner in the park, and a copy of the current written
procedures, standards, or requirements that will be used by
management to evaluate the purchaser’s application, including,
but not limited to, minimum income standards that will be used
to determine the purchaser’s financial ability to pay the rent and
charges of the park pursuant to paragraph (2) of subdivision (b).

(e) Within 15 business days of receiving all of the information
requested from the prospective homeowner, the management shall
notify the seller and the prospective homeowner, in writing, of
either acceptance or rejection of the begin delete application, and end delete begin insert application.
If the application is rejected, the management shall provide the
prospective homeowner, in writing, end insert the specific reason or begin delete reasons,
if rejected. end delete begin insert reasons for rejection with reference to the applicable
standard or requirement disclosed pursuant to subdivision (d)
upon which the rejection was based. end insert During this 15-day period
the prospective homeowner shall comply with the management’s
request, if any, for a personal interview. If a prospective
homeowner is denied approval, within five business days of
receiving the denial, the selling homeowner and the prospective
homeowner may request begin delete an in-person end delete begin insert a end insert meeting with management.
If requested, the meeting shall take place within 10 business days,
at which time the management shall reconsider its denial, including
the consideration of any additional information relevant to the
application provided by the prospective homeowner. If the approval
of a prospective homeowner is withheld for any reason other than
those stated in this article, the management or owner may be held
liable for all damages proximately resulting therefrom.

(f) If the management collects a fee or charge from a prospective
purchaser of a mobilehome in order to obtain a financial report or
credit rating, the full amount of the fee or charge shall be credited
toward payment of the first month’s rent for that mobilehome
purchaser. If, for whatever reason, the prospective purchaser is
rejected by the management, the management shall refund to the
prospective purchaser the full amount of that fee or charge within
30 days from the date of rejection. If the prospective purchaser is
approved by the management, but, for whatever reason, the
prospective purchaser elects not to purchase the mobilehome, the
management may retain the fee, or a portion thereof, to defray its
administrative costs under this section.