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AB-2895 Mobilehome parks: rent caps.(2019-2020)

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Date Published: 05/22/2020 09:00 PM
AB2895:v97#DOCUMENT

Amended  IN  Assembly  May 22, 2020
Amended  IN  Assembly  May 11, 2020

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 2895


Introduced by Assembly Member Members Quirk-Silva and Chiu

February 21, 2020


An act to amend Section 1946.2 of, and to add and repeal Section 798.30.5 of, the Civil Code, relating to mobilehomes.


LEGISLATIVE COUNSEL'S DIGEST


AB 2895, as amended, Quirk-Silva. Mobilehome parks: rent caps.
Existing law, the Mobilehome Residency Law, prescribes various terms and conditions of tenancies in mobilehome parks. Existing law defines “tenancy” for these purposes as the right of a homeowner to use a site within a mobilehome park on which to locate, maintain, and occupy a mobilehome for human habitation, including the use of the services and facilities of the park. Existing law, the Tenant Protection Act of 2019, prohibits, with certain exceptions, an owner of residential real property from increasing the gross rental rate for a dwelling or unit more than 5% plus the percentage change in the cost of living, as defined, or 10%, whichever is lower, of the lowest gross rental rate charged for the immediately preceding 12 months, subject to specified conditions. Existing law excludes an owner or operator of a mobilehome park and an owner of a mobilehome or their agent from these provisions.
This bill would, until January 1, 2030, prohibit the management of a mobilehome park from increasing the gross rental rate for a tenancy for a mobilehome space more than 5% plus the percentage change in the cost of living, as defined, or 10%, whichever is lower, of the lowest gross rental rate charged for the immediately preceding 12 months, as specified. The bill would prohibit management of a mobilehome park from increasing the gross rental rate for a tenancy in more than 2 increments over a 12-month period, after the tenant maintains a tenancy over a 12-month period. The bill would exempt specified mobilehome spaces from these provisions, including, among others, mobilehome spaces restricted by deed, regulatory restriction contained in an agreement with a government agency, or other recorded document as affordable for very low, low-, or moderate-income persons and families and mobilehome spaces within a resident-owned mobilehome park. The bill would specify that these provisions apply to rent increases for mobilehome spaces occurring on or after March 15, February 20, 2020. The bill would provide that in the event that management increased the rent by more than the amount specified above between March 15, February 20, 2020, and January 1, 2021, the applicable rent on January 1, 2021, shall be the rent as of March 15, February 20, 2020, plus the maximum permissible increase, and that management shall not be liable to the homeowner for any corresponding rent overpayment. The bill would authorize management who increased the rent by less than the amount specified above between March 15, February 20, 2020, and January 1, 2021, to increase the rent twice within 12 months of March 15, February 20, 2020, but not by more than the amount specified above. The bill would void any waiver of the rights under these provisions.
Existing law, the Tenant Protection Act of 2019, prohibits, until January 1, 2030, an owner of residential real property from terminating the tenancy of certain tenants without just cause, either at-fault or no-fault of the tenant. The act exempts certain types of residential real properties or residential circumstances from these provisions, including, among others, housing that has been issued a certificate of occupancy within the previous 15 years and certain housing that is not owned by specified entities, including a corporation or limited liability corporation in which at least one member is a corporation, if specified notice is provided to the tenant. The act defines the term “owner” to exclude an owner or operator of a mobilehome park and an owner of a mobilehome or their agent from these provisions.
This bill would, for purposes of these provisions, redefine the term “owner” to include an owner or operator of a mobilehome park and an owner of a mobilehome or their agent. The bill would exclude mobilehomes from the provision that exempts housing issued a certificate of occupancy within the previous 15 years from the just cause requirements. The bill would exclude certain mobilehomes from these provisions, including mobilehomes that are not owned by the management of a mobilehome park or any of the other entities specified above, if notice is provided to the tenant as specified. The bill would require an owner of a mobilehome subject to these provisions to provide written notice of these provisions to a tenant, as specified.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

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


SECTION 1.

 Section 798.30.5 is added to the Civil Code, to read:

798.30.5.
 (a) (1)The Legislature finds and declares all of the following:
(1) The unique circumstances of the current housing crisis requires a statewide response to address rent gouging by establishing statewide limitations on gross rental rate increases for mobilehome spaces.
(2) The Legislature recognizes that mobilehomes provide a valuable source of affordable housing for many of the state’s most economically vulnerable populations, including seniors and low-income families.
(3) Furthermore, the Legislature recognizes the importance of local rent stability ordinances, which dozens of local governments have adopted, that serve a crucial function by offering protections for mobilehome park residents. The Legislature recognizes that several local governments have ordinances that seek to preserve the long-term affordability of mobilehome spaces by regulating allowable rent increases when a mobilehome space becomes vacant.
(4) Such locally created vacancy control measures serve to preserve the affordability of mobilehome spaces in the jurisdiction, even when ownership changes hands, and protect the value of the investment that mobilehome owners have made in their home.
(5) It is, therefore, the intent of the Legislature that this section apply only for the limited time needed to address the current statewide housing crisis, as described in paragraph (1). This section is not intended to express any policy regarding the appropriate, allowable rental rate increase limitations when a local government or jurisdiction adopts an ordinance, rule, regulation, or initiative measure regulating rent.
(b) (1) Subject to subdivision (b), (c), management shall not, over the course of any 12-month period, increase the gross rental rate for a tenancy more than 5 percent plus the percentage change in the cost of living, or 10 percent, whichever is lower, of the lowest gross rental rate charged for a tenancy at any time during the 12 months prior to the effective date of the increase.
(2) If the same homeowner maintains a tenancy over any 12-month period, the gross rental rate for the tenancy shall not be increased in more than two increments over that 12-month period, subject to the other restrictions of this subdivision governing gross rental rate increase.

(b)

(c) For a new tenancy in which no homeowner from the prior tenancy remains in lawful possession of the mobilehome space, management may establish the initial rental rate not subject to subdivision (a), (b), unless the local agency or jurisdiction has adopted an ordinance, rule, regulation, or initiative measure that limits the allowable rental rate for a new tenancy, in which case that ordinance, rule, regulation, or initiative measure shall apply. Subdivision (a) (b) shall be applicable to subsequent increases after that initial rental rate has been established, except as otherwise provided in this section.

(c)

(d) A homeowner subject to this section shall not enter into a sublease that results in a total rent for the premises that exceeds the allowable rental rate authorized by subdivision (c) of Section 798.23.5. Nothing in this subdivision authorizes a homeowner to sublet or assign the homeowner’s interest where otherwise prohibited.

(d)

(e) Management shall provide notice of any increase in the rental rate, pursuant to subdivision (a) (b),, to each homeowner in accordance with Section 798.30.

(e)

(f) This section shall not apply to a tenancy for any of the following:
(1) A mobilehome space restricted by deed, regulatory restriction contained in an agreement with a government agency, or other recorded document as affordable housing for persons and families of very low, low, or moderate income, as defined in Section 50093 of the Health and Safety Code, or subject to an agreement that provides housing subsidies for affordable housing for persons and families of very low, low, or moderate income, as defined in Section 50093 of the Health and Safety Code or comparable federal statutes.
(2) A mobilehome space constructed and maintained in connection with any higher education institution within the state for use and occupancy by students in attendance at the institution.
(3) A mobilehome space subject to any ordinance, rule, regulation, or initiative measure that restricts annual increases in the rental rate to an amount less than that provided in subdivision (a). (b).
(4) A mobilehome space within a resident-owned mobilehome park, as defined in Section 799.

(f)

(g) (1) (A) This section shall apply to all rent increases occurring on or after March 15, February 20, 2020.
(B) This section shall become operative January 1, 2021.
(2) In the event that management has increased the rent by more than the amount permissible under subdivision (a) (b) between March 15, February 20, 2020, and January 1, 2021, both of the following shall apply:
(A) The applicable rent on January 1, 2021, shall be the rent as of March 15, February 20, 2020, plus the maximum permissible increase under subdivision (a). (b).
(B) Management shall not be liable to a homeowner for any corresponding rent overpayment.
(3) Management subject to subdivision (a) (b) who increased the rental rate for a tenancy on or after March 15, February 20, 2020, but prior to January 1, 2021, by an amount less than the rental rate increase permitted by subdivision (a) (b) shall be allowed to increase the rental rate twice, as provided in paragraph (2) of subdivision (a), (b), within 12 months of March 15, February 20, 2020, but in no event shall that rental rate increase exceed the maximum rental rate increase permitted by subdivision (a). (b).

(g)

(h) Any waiver of the rights under this section shall be void as contrary to public policy.

(h)

(i) For the purposes of this section:
(1) “Management” means the same as defined in Section 798.2, but may also include a predecessor in interest to management. 798.2.
(2) “Percentage change in the cost of living” means the percentage change from April 1 of the prior year to April 1 of the current year in the regional Consumer Price Index for the region where the mobilehome park is located, as published by the United States Bureau of Labor Statistics. If a regional index is not available, the California Consumer Price Index for All Urban Consumers for all items, as determined by the Department of Industrial Relations, shall apply.

(i)

(j) (1) Nothing in this section affects the authority of a local government to adopt or maintain an ordinance, rule, regulation, or initiative measure that establishes a maximum amount that may be charged for rent. However, if a local ordinance, rule, regulation, or initiative measure allows for a rental rate increase greater than that provided in subdivision (a), (b), this section shall apply.
(2) Nothing in this section alters the application of Sections 798.17, 798.45, or 798.49 to any ordinance, rule, regulation, or initiative measure that establishes a maximum amount that may be charged for rent.

(j)The Legislature finds and declares all of the following:

(1)The unique circumstances of the current housing crisis require a statewide response to address rent gouging by establishing statewide limitations on gross rental rate increases for mobilehome spaces.

(2)The Legislature recognizes that mobilehomes provide a valuable source of affordable housing for many of the state’s most economically vulnerable populations, including seniors and low-income families.

(3)Furthermore, the Legislature recognizes the importance of local rent stability ordinances, which dozens of local governments have adopted, that serve a crucial function by offering protections for mobilehome park residents. The Legislature recognizes that several local governments have ordinances which seek to preserve the long-term affordability of mobilehome spaces by regulating allowable rent increases when a mobilehome space becomes vacant.

(4)Such locally created vacancy control measures serve to preserve the affordability of mobilehome spaces in the jurisdiction, even when ownership changes hands, and protect the value of the investment that mobilehome owners have made in their home.

(5)It is, therefore, the intent of the Legislature that this section apply only for the limited time needed to address the current statewide housing crisis, as described in paragraph (1). This section is not intended to express any policy regarding the appropriate, allowable rental rate increase limitations when a local government or jurisdiction adopts an ordinance, rule, regulation, or initiative measure regulating rent.

(k) This section shall remain in effect only until January 1, 2030, and as of that date is repealed.

SEC. 2.

 Section 1946.2 of the Civil Code is amended to read:

1946.2.
 (a) Notwithstanding any other law, after a tenant has continuously and lawfully occupied a residential real property for 12 months, the owner of the residential real property shall not terminate the tenancy without just cause, which shall be stated in the written notice to terminate tenancy. If any additional adult tenants are added to the lease before an existing tenant has continuously and lawfully occupied the residential real property for 24 months, then this subdivision shall only apply if either of the following are satisfied:
(1) All of the tenants have continuously and lawfully occupied the residential real property for 12 months or more.
(2) One or more tenants have continuously and lawfully occupied the residential real property for 24 months or more.
(b) For purposes of this section, “just cause” includes either of the following:
(1) At-fault just cause, which is any of the following:
(A) Default in the payment of rent.
(B) A breach of a material term of the lease, as described in paragraph (3) of Section 1161 of the Code of Civil Procedure, including, but not limited to, violation of a provision of the lease after being issued a written notice to correct the violation.
(C) Maintaining, committing, or permitting the maintenance or commission of a nuisance as described in paragraph (4) of Section 1161 of the Code of Civil Procedure.
(D) Committing waste as described in paragraph (4) of Section 1161 of the Code of Civil Procedure.
(E) The tenant had a written lease that terminated on or after January 1, 2020, or January 1, 2021, if the lease is for a tenancy in a mobilehome, and after a written request or demand from the owner, the tenant has refused to execute a written extension or renewal of the lease for an additional term of similar duration with similar provisions, provided that those terms do not violate this section or any other provision of law.
(F) Criminal activity by the tenant on the residential real property, including any common areas, or any criminal activity or criminal threat, as defined in subdivision (a) of Section 422 of the Penal Code, on or off the residential real property, that is directed at any owner or agent of the owner of the residential real property.
(G) Assigning or subletting the premises in violation of the tenant’s lease, as described in paragraph (4) of Section 1161 of the Code of Civil Procedure.
(H) The tenant’s refusal to allow the owner to enter the residential real property as authorized by Sections 1101.5 and 1954 of this code, and Sections 13113.7 and 17926.1 of the Health and Safety Code.
(I) Using the premises for an unlawful purpose as described in paragraph (4) of Section 1161 of the Code of Civil Procedure.
(J) The employee, agent, or licensee’s failure to vacate after their termination as an employee, agent, or a licensee as described in paragraph (1) of Section 1161 of the Code of Civil Procedure.
(K) When the tenant fails to deliver possession of the residential real property after providing the owner written notice as provided in Section 1946 of the tenant’s intention to terminate the hiring of the real property, or makes a written offer to surrender that is accepted in writing by the landlord, but fails to deliver possession at the time specified in that written notice as described in paragraph (5) of Section 1161 of the Code of Civil Procedure.
(2) No-fault just cause, which includes any of the following:
(A) (i) Intent to occupy the residential real property by the owner or their spouse, domestic partner, children, grandchildren, parents, or grandparents.
(ii) For leases entered into on or after July 1, 2020, or July 1, 2021, if the lease is for a tenancy in a mobilehome, clause (i) shall apply only if the tenant agrees, in writing, to the termination, or if a provision of the lease allows the owner to terminate the lease if the owner, or their spouse, domestic partner, children, grandchildren, parents, or grandparents, unilaterally decides to occupy the residential real property. Addition of a provision allowing the owner to terminate the lease as described in this clause to a new or renewed rental agreement or fixed-term lease constitutes a similar provision for the purposes of subparagraph (E) of paragraph (1).
(B) Withdrawal of the residential real property from the rental market.
(C) (i) The owner complying with any of the following:
(I) An order issued by a government agency or court relating to habitability that necessitates vacating the residential real property.
(II) An order issued by a government agency or court to vacate the residential real property.
(III) A local ordinance that necessitates vacating the residential real property.
(ii) If it is determined by any government agency or court that the tenant is at fault for the condition or conditions triggering the order or need to vacate under clause (i), the tenant shall not be entitled to relocation assistance as outlined in paragraph (3) of subdivision (d).
(D) (i) Intent to demolish or to substantially remodel the residential real property.
(ii) For purposes of this subparagraph, “substantially remodel” means the replacement or substantial modification of any structural, electrical, plumbing, or mechanical system that requires a permit from a governmental agency, or the abatement of hazardous materials, including lead-based paint, mold, or asbestos, in accordance with applicable federal, state, and local laws, that cannot be reasonably accomplished in a safe manner with the tenant in place and that requires the tenant to vacate the residential real property for at least 30 days. Cosmetic improvements alone, including painting, decorating, and minor repairs, or other work that can be performed safely without having the residential real property vacated, do not qualify as substantial rehabilitation.
(c) Before an owner of residential real property issues a notice to terminate a tenancy for just cause that is a curable lease violation, the owner shall first give notice of the violation to the tenant with an opportunity to cure the violation pursuant to paragraph (3) of Section 1161 of the Code of Civil Procedure. If the violation is not cured within the time period set forth in the notice, a three-day notice to quit without an opportunity to cure may thereafter be served to terminate the tenancy.
(d) (1) For a tenancy for which just cause is required to terminate the tenancy under subdivision (a), if an owner of residential real property issues a termination notice based on a no-fault just cause described in paragraph (2) of subdivision (b), the owner shall, regardless of the tenant’s income, at the owner’s option, do one of the following:
(A) Assist the tenant to relocate by providing a direct payment to the tenant as described in paragraph (3).
(B) Waive in writing the payment of rent for the final month of the tenancy, prior to the rent becoming due.
(2) If an owner issues a notice to terminate a tenancy for no-fault just cause, the owner shall notify the tenant of the tenant’s right to relocation assistance or rent waiver pursuant to this section. If the owner elects to waive the rent for the final month of the tenancy as provided in subparagraph (B) of paragraph (1), the notice shall state the amount of rent waived and that no rent is due for the final month of the tenancy.
(3) (A) The amount of relocation assistance or rent waiver shall be equal to one month of the tenant’s rent that was in effect when the owner issued the notice to terminate the tenancy. Any relocation assistance shall be provided within 15 calendar days of service of the notice.
(B) If a tenant fails to vacate after the expiration of the notice to terminate the tenancy, the actual amount of any relocation assistance or rent waiver provided pursuant to this subdivision shall be recoverable as damages in an action to recover possession.
(C) The relocation assistance or rent waiver required by this subdivision shall be credited against any other relocation assistance required by any other law.
(4) An owner’s failure to strictly comply with this subdivision shall render the notice of termination void.
(e) This section shall not apply to the following types of residential real properties or residential circumstances:
(1) Transient and tourist hotel occupancy as defined in subdivision (b) of Section 1940.
(2) Housing accommodations in a nonprofit hospital, religious facility, extended care facility, licensed residential care facility for the elderly, as defined in Section 1569.2 of the Health and Safety Code, or an adult residential facility, as defined in Chapter 6 of Division 6 of Title 22 of the Manual of Policies and Procedures published by the State Department of Social Services.
(3) Dormitories owned and operated by an institution of higher education or a kindergarten and grades 1 to 12, inclusive, school.
(4) Housing accommodations in which the tenant shares bathroom or kitchen facilities with the owner who maintains their principal residence at the residential real property.
(5) Single-family owner-occupied residences, including both of the following:
(A) A residence in which the owner-occupant rents or leases no more than two units or bedrooms, including, but not limited to, an accessory dwelling unit or a junior accessory dwelling unit.
(B) A mobilehome.
(6) A duplex in which the owner occupied one of the units as the owner’s principal place of residence at the beginning of the tenancy, so long as the owner continues in occupancy.
(7) Housing that has been issued a certificate of occupancy within the previous 15 years, unless the housing is a mobilehome.
(8) Residential real property, including a mobilehome, that is alienable separate from the title to any other dwelling unit, provided that both of the following apply:
(A) The owner is not any of the following:
(i) A real estate investment trust, as defined in Section 856 of the Internal Revenue Code.
(ii) A corporation.
(iii) A limited liability company in which at least one member is a corporation.
(iv) Management of a mobilehome park, as defined in Section 798.2.
(B) (i) The tenants have been provided written notice that the residential property is exempt from this section using the following statement:

“This property is not subject to the rent limits imposed by Section 1947.12 of the Civil Code and is not subject to the just cause requirements of Section 1946.2 of the Civil Code. This property meets the requirements of Sections 1947.12 (d)(5) and 1946.2 (e)(8) of the Civil Code and the owner is not any of the following: (1) a real estate investment trust, as defined by Section 856 of the Internal Revenue Code; (2) a corporation; or (3) a limited liability company in which at least one member is a corporation.”

(ii) (I) Except as provided in subclause (II), for a tenancy existing before July 1, 2020, the notice required under clause (i) may, but is not required to, be provided in the rental agreement.
(II) For a tenancy in a mobilehome existing before July 1, 2021, the notice required under clause (i) may, but is not required to, be provided in the rental agreement.
(iii) (I) Except as provided in subclause (II), for any tenancy commenced or renewed on or after July 1, 2020, the notice required under clause (i) shall be provided in the rental agreement.
(II) For any tenancy in a mobilehome commenced or renewed on or after July 1, 2021, the notice required under clause (i) shall be provided in the rental agreement.
(iv) Addition of a provision containing the notice required under clause (i) to any new or renewed rental agreement or fixed-term lease constitutes a similar provision for the purposes of subparagraph (E) of paragraph (1) of subdivision (b).
(9) Housing restricted by deed, regulatory restriction contained in an agreement with a government agency, or other recorded document as affordable housing for persons and families of very low, low, or moderate income, as defined in Section 50093 of the Health and Safety Code, or subject to an agreement that provides housing subsidies for affordable housing for persons and families of very low, low, or moderate income, as defined in Section 50093 of the Health and Safety Code or comparable federal statutes.
(f) An owner of residential real property subject to this section shall provide notice to the tenant as follows:
(1) (A) Except as provided in subparagraph (B), for any tenancy commenced or renewed on or after July 1, 2020, as an addendum to the lease or rental agreement, or as a written notice signed by the tenant, with a copy provided to the tenant.
(B) For a tenancy in a mobilehome commenced or renewed on or after July 1, 2021, as an addendum to the lease or rental agreement, or as a written notice signed by the tenant, with a copy provided to the tenant.
(2) (A) Except as provided in subparagraph (B), for a tenancy existing prior to July 1, 2020, by written notice to the tenant no later than August 1, 2020, or as an addendum to the lease or rental agreement.
(B) For a tenancy in a mobilehome existing prior to July 1, 2021, by written notice to the tenant no later than August 1, 2021, or as an addendum to the lease or rental agreement.
(3) The notification or lease provision shall be in no less than 12-point type, and shall include the following:

“California law limits the amount your rent can be increased. See Section 1947.12 of the Civil Code for more information. California law also provides that after all of the tenants have continuously and lawfully occupied the property for 12 months or more or at least one of the tenants has continuously and lawfully occupied the property for 24 months or more, a landlord must provide a statement of cause in any notice to terminate a tenancy. See Section 1946.2 of the Civil Code for more information.”

The provision of the notice shall be subject to Section 1632.
(g) (1) This section does not apply to the following residential real property:
(A) Residential real property subject to a local ordinance requiring just cause for termination of a residential tenancy adopted on or before September 1, 2019, in which case the local ordinance shall apply.
(B) Residential real property subject to a local ordinance requiring just cause for termination of a residential tenancy adopted or amended after September 1, 2019, that is more protective than this section, in which case the local ordinance shall apply. For purposes of this subparagraph, an ordinance is “more protective” if it meets all of the following criteria:
(i) The just cause for termination of a residential tenancy under the local ordinance is consistent with this section.
(ii) The ordinance further limits the reasons for termination of a residential tenancy, provides for higher relocation assistance amounts, or provides additional tenant protections that are not prohibited by any other provision of law.
(iii) The local government has made a binding finding within their local ordinance that the ordinance is more protective than the provisions of this section.
(2) A residential real property shall not be subject to both a local ordinance requiring just cause for termination of a residential tenancy and this section.
(3) A local ordinance adopted after September 1, 2019, that is less protective than this section shall not be enforced unless this section is repealed.
(h) Any waiver of the rights under this section shall be void as contrary to public policy.
(i) For the purposes of this section, the following definitions shall apply:
(1) “Owner” includes any person, acting as principal or through an agent, having the right to offer residential real property for rent, and includes a predecessor in interest to the owner.
(2) “Residential real property” means any dwelling or unit that is intended for human habitation, including any dwelling or unit in a mobilehome park.
(3) “Tenancy” means the lawful occupation of residential real property and includes a lease or sublease.
(j) This section shall remain in effect only until January 1, 2030, and as of that date is repealed.