BILL ANALYSIS �
AB 2026
Page 1
ASSEMBLY THIRD READING
AB 2026 (Stone)
As Amended May 5, 2014
Majority vote
HOUSING 4-2
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|Ayes:|Chau, Gordon, Brown, | | |
| |Yamada | | |
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|-----+--------------------------+-----+--------------------------|
|Nays:|Beth Gaines, Maienschein | | |
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SUMMARY : Creates a standard that mobilehome park owners must
use in determining a prospective mobilehome purchaser's
financial ability to pay the rent and park charges and the
likelihood a purchaser will comply with park rules and
regulations. Specifically, this bill :
1)Requires that, upon request of a prospective purchaser of a
mobilehome that will remain in the park, management must
provide a list of the information it requires in order to
determine if the person will be acceptable as a homeowner in
the park, together with a copy of the current written
procedures, standards or requirements that management will use
to evaluate the purchaser's application.
2)Requires that, for purposes of approving a mobilehome
purchaser, a purchaser is presumed to have the financial
ability to pay the rent and park charges if he or she 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 of this
approval has been provided to park management.
3)Provides that, where the purchaser has not been approved for a
loan to purchase the mobilehome, management must determine the
purchaser's financial ability to pay the rent and charges of
the park based upon consideration of all asset and income
producing information provided by the purchaser.
4)Provides that management's income standard for a prospective
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purchaser must not exceed a multiplier of three times the
purchaser's income over the projected housing-related expenses
of the proposed mobilehome tenancy.
5)Provides that a purchaser who demonstrates sufficient monthly
income from all sources that meets or exceeds the income
standard disclosed by management is presumed to have the
financial ability to pay the rent and charges of the park.
6)Prohibits park management from withholding approval of a
purchaser 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; or
b) Management reasonably determines, based on the
purchaser's prior tenancies within the three years
preceding the purchaser's application, that the purchaser
will not comply with the rules and regulations of the park.
If management withholds approval on this basis, it must
provide the purchaser with documentary evidence supporting
this determination.
7)Prohibits park management from withholding approval of a
mobilehome purchaser solely because the purchaser owns another
mobilehome or real property residence, and prohibits
management from requiring that the mobilehome be the sole
residence of the purchaser.
8)Clarifies that, if a purchaser's application is denied,
management must notify the purchaser in writing of the
specific reason or reasons for the denial.
9)Provides that, if a purchaser's application is denied, the
selling homeowner and the purchaser may, within five business
days of receiving the denial, request an in-person meeting
with management. This meeting must take place within ten
business days, at which time management must reconsider its
denial, including the consideration of any additional relevant
information provided by the purchaser.
AB 2026
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FISCAL EFFECT : None
COMMENTS : More than 700,000 people live in California's
approximately 4,700 mobilehome parks. The cost to move a
mobilehome ranges from $2,000 to upwards of $20,000 depending on
the size of the home and the distance traveled. A mobilehome
owner whose home is located in a mobilehome park does not own
the land the unit sits on, and he or she must pay rent and fees
for the land and any community spaces. In order to sell a
mobilehome located in a park, potential buyers must be approved
by park management. Homeowners trying to sell their home are
therefore reliant on park management to approve the buyer so
that the sale can be completed.
Purpose of the bill: According to the author, park management
is not limited in the number of potential buyers they can
reject, which places pressure on homeowners to find a buyer that
qualifies under the standards set in place by management. The
author explains that "most standards are not set or regulated by
the state and can vary widely from park to park. As a result,
responsible and trustworthy potential buyers can be unfairly
turned away." This bill "seeks to protect home owners from
unreasonable standards set by mobilehome park owners" by
standardizing certain aspects of the approval process for a
potential buyer, including defining the phrase "financial
ability to pay."
Mobilehome parks' right of prior approval: There is a delicate
balance between a mobilehome park's interest in who resides in
the park and a homeowner's right to sell his or her own
property. Mobilehomes are not truly mobile, in that it is often
cost prohibitive to relocate them. Selling a mobilehome is a
three-party transaction, as the park owns the land under the
mobilehome and has an interest in who will purchase the home and
live in the park. If a park resident is unable to find a
purchaser that meets the park's requirements, that resident most
often either sells the home to the park owner at below fair
market rates or incurs the high expense of moving the home to
another park.
Existing law authorizes parks to require the right of prior
approval of a purchaser of a mobilehome that will remain in the
park. Approval may be withheld if management determines that
the purchaser does not have the financial ability to pay the
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rent and charges of the park, or if management reasonably
determines, based on the purchaser's prior tenancies, that he or
she will not comply with the park's rules and regulations. This
bill clarifies and standardizes the framework for management's
right of prior approval of a purchaser, making the process more
predictable for buyers and sellers.
A purchaser's financial ability to pay rent and park charges:
This bill requires that, upon request of any prospective
homeowner that will remain in the park, management must provide
a list of the information they will require to determine if the
person will be acceptable as a homeowner in the park. Any
income standard set by the park cannot exceed a multiplier of
three times the purchaser's income over the projected
housing-related expenses in connection with the proposed
tenancy. Management must consider all income and asset
information provided by the purchaser in considering his or her
financial ability to pay.
This bill also shifts the burden, in two specific circumstances,
to the park to demonstrate why a purchaser does not financially
qualify to live in the park. First, it creates a presumption of
a purchaser's financial ability to pay if the purchaser provides
documentation that he or she has been approved by a state or
federally chartered financial institution for a loan to purchase
the mobilehome that the purchaser intends to occupy. Second, in
the event that a purchaser has not been approved for a loan to
purchase a mobilehome, a purchaser who demonstrates sufficient
monthly income from all sources that meets or exceeds the park's
income standard is presumed to have the financial ability to pay
the rent and charges of the park. However, these presumptions
do not mandate that a park accept a purchaser that meets these
specifications. Rather, it shifts the burden to the park to
demonstrate why the purchaser does not financially qualify.
Management is still authorized to require the purchaser to
document the amount and source of his or her gross monthly
income or other means of support.
A purchaser's compliance with rules and regulations of the park:
Under existing law, management may deny a purchaser's
application if it reasonably determines, based on the
purchaser's prior tenancies, that he or she will not comply with
the park's rules and regulations. This bill narrows this
provision by prohibiting park management from withholding
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approval of a mobilehome purchaser on this basis unless one of
two situations apply. First, if management reasonably
determines, based on the purchaser's prior tenancies within the
three years preceding the application, that the purchaser will
not comply with the rules and regulations of the park. If
management withholds approval on this basis, it must provide the
purchaser with documentary evidence supporting this
determination. Second, management may also withhold approval if
the 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.
Post-denial procedure: This bill also makes changes to the law
relating to a prospective purchaser's rights if his or her
application is denied. Under existing law, there is no right to
a post-denial meeting. This bill clarifies that management must
notify the prospective purchaser in writing of the specific
reason or reasons for the denial. The bill also provides that,
if a prospective purchaser is denied, the selling homeowner and
the purchaser may, within five business days of receiving the
denial, request an in-person meeting with management. This
meeting must take place within 10 business days, and management
must reconsider its denial, including the consideration of any
additional relevant information provided by the purchaser.
Sole residence requirement: This bill prohibits park management
from withholding approval of a mobilehome purchaser solely
because the purchaser owns another mobilehome or real property
residence, and prohibits management from requiring that the
mobilehome that is the subject of the purchase be the sole
residence of the purchaser as a condition of granting approval.
This would apply to, for example, a situation where a purchaser
is in the process of selling his or her previous home while
purchasing a mobilehome. This bill would not affect the
existing provision of the Mobilehome Residency Law that provides
an exemption to rent control for mobilehomes that are not the
principal residence of the homeowner.
Analysis Prepared by : Rebecca Rabovsky / H. & C.D. / (916)
319-2085
FN: 0003428
AB 2026
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