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AB-2364 Rental control: withdraw from accommodation.(2017-2018)

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Date Published: 05/09/2018 09:00 PM
AB2364:v95#DOCUMENT

Amended  IN  Assembly  May 09, 2018
Amended  IN  Assembly  May 03, 2018
Amended  IN  Assembly  April 30, 2018
Amended  IN  Assembly  March 22, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 2364


Introduced by Assembly Members Bloom and Chiu

February 14, 2018


An act to amend Sections 7060.2, 7060.4, and 7060.7 of the Government Code, relating to housing.


LEGISLATIVE COUNSEL'S DIGEST


AB 2364, as amended, Bloom. Rental control: withdraw from accommodation.
Existing law, commonly known as the Ellis Act, generally prohibits public entities from adopting any statute, ordinance, or regulation, or taking any administrative action, to compel the owner of residential real property to offer or to continue to offer accommodations, as defined, in the property for rent or lease. Existing law qualifies this prohibition by, among other things, permitting a public entity for which rent control is in effect to require an owner who offers accommodations for rent or lease again within 10 years after they are withdrawn to first offer them to a tenant or lessee displaced by that withdrawal if that tenant or lessee makes a request in writing within 30 days after the owner has notified the public entity of an intention to offer the accommodations again. Existing law, for tenancies commenced during either the 5-year period after any notice of intent to withdraw accommodations is filed or within the 5-year period after the accommodations are withdrawn, requires accommodations to be offered and rented or leased at the lawful rent in effect at the time any notice of intent to withdraw the accommodations is filed, plus annual adjustments, as specified. Existing law sets forth various provisions that govern an owner who offers an accommodation for rent or lease again within 2 years of the date the accommodations were withdrawn from rent or lease. An owner who fails to comply with these requirements is liable for punitive damages not to exceed an amount equal to 6 months of rent.
This bill would revise the circumstances under which an owner may be required to offer accommodations to displaced tenants and lessees to eliminate the requirement that the request be made in writing within 30 days of notification, as described above, and would instead make the offer contingent on the tenant or lessee advising the owner of a desire to consider an offer. The bill also would require that the rental agreement or lease to be offered be the same as that in effect at the time of the displacement. The bill would extend the time period during which the various provisions govern an owner who offers an accommodation for rent or lease again after the accommodations were withdrawn from rent or lease from 2 years to 5 years, and would reduce the time that an action may be brought under these provisions to one year from 3 years of the date when the withdrawn accommodations are offered again for rent or lease. The bill would eliminate the limit on punitive damages.
Existing law declares the intent of the Legislature, in enacting the Ellis Act, to supersede any holding or portion of any holding in Nash v. City of Santa Monica (37 Cal.3d 97) to the extent that the holding, or a portion of the holding, conflicts with the act by permitting landlords to go out of business, but provides specified instances where its provisions are not intended to apply, including not allowing an owner to withdraw from rent or lease less than all of the accommodations, as specified.
This bill would additionally include permitting an owner to return less than all of the accommodations to the rental market within the items these provisions are not intended to allow.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

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


SECTION 1.

 Section 7060.2 of the Government Code is amended to read:

7060.2.
 If a public entity, by valid exercise of its police power, has in effect any control or system of control on the price at which accommodations may be offered for rent or lease, that entity may, notwithstanding any provision of this chapter, provide by statute or ordinance, or by regulation as specified in Section 7060.5, that any accommodations which have been offered for rent or lease and which were subject to that control or system of control at the time the accommodations were withdrawn from rent or lease, shall be subject to the following:
(a) (1) For all tenancies commenced during the time periods described in paragraph (2), the accommodations shall be offered and rented or leased at the lawful rent in effect at the time any notice of intent to withdraw the accommodations is filed with the public entity, plus annual adjustments available under the system of control.
(2) The provisions of paragraph (1) shall apply to all tenancies commenced during either of the following time periods:
(A) The five-year period after any notice of intent to withdraw the accommodations is filed with the public entity, whether or not the notice of intent is rescinded or the withdrawal of the accommodations is completed pursuant to the notice of intent.
(B) The five-year period after the accommodations are withdrawn.
(3) This subdivision shall prevail over any conflicting provision of law authorizing the landlord to establish the rental rate upon the initial hiring of the accommodations.
(b) If the accommodations are offered again for rent or lease for residential purposes within five years of the date the accommodations were withdrawn from rent or lease, the following provisions shall govern:
(1) The owner of the accommodations shall be liable to any tenant or lessee who was displaced from the property by that action for actual and exemplary damages. Any action by a tenant or lessee pursuant to this paragraph shall be brought within one year of the date when the withdrawn accommodations are offered again for rent or lease.
(2) A public entity which has acted pursuant to this section may institute a civil proceeding against any owner who has again offered accommodations for rent or lease subject to this subdivision, for exemplary damages for displacement of tenants or lessees. Any action by a public entity pursuant to this paragraph shall be brought within three years of the withdrawal of the accommodations from rent or lease.
(3) Any owner who offers accommodations again for rent or lease shall first offer the unit for rent or lease to the tenant or lessee displaced from that unit by the withdrawal pursuant to this chapter, if the tenant has advised the owner in writing within 30 days of the displacement of his or her desire to consider an offer to renew the tenancy and has furnished the owner with an address to which that offer is to be directed. That tenant, lessee, or former tenant or lessee may advise the owner at any time during the eligibility of a change of address to which an offer is to be directed.
If the owner again offers the accommodations for rent or lease pursuant to this subdivision, and the tenant or lessee has advised the owner pursuant to this subdivision of a desire to consider an offer to renew the tenancy, then the owner shall offer to reinstitute a rental agreement or lease on terms permitted by law to that displaced tenant or lessee.
This offer shall be deposited in the United States mail, by registered or certified mail with postage prepaid, addressed to the displaced tenant or lessee at the address furnished to the owner as provided in this subdivision, and shall describe the terms of the offer. The displaced tenant or lessee shall have 30 days from the deposit of the offer in the mail to accept the offer by personal delivery of that acceptance or by deposit of the acceptance in the United States mail by registered or certified mail with postage prepaid.

(4)Nothing in this section precludes a tenant or public entity from pursuing any alternative remedy available under the law.

(c) A public entity which has acted pursuant to this section, may require by statute or ordinance, or by regulation as specified in Section 7060.5, that an owner who offers accommodations again for rent or lease within a period not exceeding 10 years from the date on which they are withdrawn, and which are subject to this subdivision, shall first offer the unit to the tenant or lessee displaced from that unit by the withdrawal, if that tenant or lessee has advised the owner pursuant to paragraph (3) of subdivision (b) of a desire to consider an offer to renew the tenancy. The owner shall offer to reinstitute the agreement or lease on the same terms and at the same rent in effect at the time of displacement to that displaced tenant or lessee. The owner of the accommodations shall be liable to any tenant or lessee who was displaced by that action for failure to comply with this paragraph, for punitive damages. Nothing in this subdivision precludes a tenant or public entity from pursuing any alternative remedy available under the law.
(d) If the accommodations are demolished, and new accommodations are constructed on the same property, and offered for rent or lease within five years of the date the accommodations were withdrawn from rent or lease, the newly constructed accommodations shall be subject to any system of controls on the price at which they would be offered on the basis of a fair and reasonable return on the newly constructed accommodations, notwithstanding any exemption from the system of controls for newly constructed accommodations.
(e) The amendments to this section enacted by the act adding this subdivision shall apply to all new tenancies created after December 31, 2002. If a new tenancy was lawfully created prior to January 1, 2003, after a lawful withdrawal of the unit under this chapter, the amendments to this section enacted by the act adding this subdivision may not apply to new tenancies created after that date.
(f) Any amended local ordinances, regulations, or rules implementing this chapter shall be prospective only and shall have no effect on a withdrawal for which the notice of intent to withdraw the accommodation has been filed with the public entity prior to July 1, 2018. January 1, 2019.
(g) Nothing in this section precludes a tenant or public entity from pursuing any alternative remedy available under law.

SEC. 2.

 Section 7060.4 of the Government Code is amended to read:

7060.4.
 (a) Any public entity which, by a valid exercise of its police power, has in effect any control or system of control on the price at which accommodations are offered for rent or lease, may require by statute or ordinance, or by regulation as specified in Section 7060.5, that the owner notify the entity of an intention to withdraw those accommodations from rent or lease and may require that the notice contain statements, under penalty of perjury, providing information on the number of accommodations, the address or location of those accommodations, the name or names of the tenants or lessees of the accommodations, and the rent applicable to each residential rental unit.
Information respecting the name or names of the tenants, the rent applicable to any residential rental unit, or the total number of accommodations, is confidential information and for purposes of this chapter shall be treated as confidential information by any public entity for purposes of the Information Practices Act of 1977 (Chapter 1 (commencing with Section 1798) of Title 1.8 of Part 4 of Division 3 of the Civil Code). A public entity shall, to the extent required by the preceding sentence, be considered an “agency,” as defined by subdivision (d) of Section 1798.3 of the Civil Code.
(b) The statute, ordinance, or regulation of the public entity may require that the owner record with the county recorder a memorandum summarizing the provisions, other than the confidential provisions, of the notice in a form which shall be prescribed by the statute, ordinance, or regulation, and require a certification with that notice that actions have been initiated as required by law to terminate any existing tenancies. In that situation, the date on which the accommodations are withdrawn from rent or lease for purposes of this chapter is 120 days from the delivery in person or by first-class mail of that notice to the public entity. However, if the tenant or lessee is at least 62 years of age or disabled, and has lived in his or her rental unit for at least one year prior to the date of delivery to the public entity of the notice of intent to withdraw pursuant to subdivision (a), then the tenancy of that tenant or lessee shall be extended to one year after the date of delivery of that notice to the public entity, provided that the tenant or lessee gives written notice of his or her entitlement to an extension to the owner within 60 days of the date of delivery to the public entity of the notice of intent to withdraw. In that situation, the following provisions shall apply:
(1) The tenancy shall be continued on the same terms and conditions as existed on the date of delivery to the public entity of the notice of intent to withdraw, subject to any adjustments otherwise available under the system of control.
(2) No party shall be relieved of the duty to perform any obligation under the lease or rental agreement.
(3) The owner may elect to extend the tenancy on any other rental unit up to one year after date of delivery to the public entity of the notice of intent to withdraw, subject to paragraphs (1) and (2).
(4) Within 30 days of the notification by the tenant or lessee to the owner of his or her entitlement to an extension, the owner shall give written notice to the public entity of the claim that the tenant or lessee is entitled to stay in their rental unit for one year after date of delivery to the public entity of the notice of intent to withdraw.
(5) Within 90 days of date of delivery to the public entity of the notice of intent to withdraw, the owner shall give written notice to the public entity and the affected tenant or lessee of the owner’s election to extend the tenancy and the new date of withdrawal under paragraph (3).
(6) The date of withdrawal for the accommodations as a whole for the purposes of calculating the time periods in Section 7060.2 shall be the last date of withdrawal of any extended tenancy.
(c) The statute, ordinance, or regulation of the public entity adopted pursuant to subdivision (a) may also require the owner to notify any tenant or lessee displaced pursuant to this chapter of the following:
(1) That the public entity has been notified pursuant to subdivision (a).
(2) That the notice to the public entity specified the name and the amount of rent paid by the tenant or lessee as an occupant of the accommodations.
(3) The amount of rent the owner specified in the notice to the public entity.
(4) Notice to the tenant or lessee of his or her rights under paragraph (3) of subdivision (b) of Section 7060.2.
(5) Notice to the tenant or lessee of the following:
(A) If the tenant or lessee is at least 62 years of age or disabled, and has lived in his or her accommodations for at least one year prior to the date of delivery to the public entity of the notice of intent to withdraw, then tenancy shall be extended to one year after date of delivery to the public entity of the notice of intent to withdraw, provided that the tenant or lessee gives written notice of his or her entitlement to the owner within 60 days of date of delivery to the public entity of the notice of intent to withdraw.
(B) The extended tenancy shall be continued on the same terms and conditions as existed on date of delivery to the public entity of the notice of intent to withdraw, subject to any adjustments otherwise available under the system of control.
(C) No party shall be relieved of the duty to perform any obligation under the lease or rental agreement during the extended tenancy.
(d) The statute, ordinance, or regulation of the public entity adopted pursuant to subdivision (a) may also require the owner to notify the public entity in writing of an intention to again offer the accommodations for rent or lease.

SEC. 3.

 Section 7060.7 of the Government Code is amended to read:

7060.7.
 It is the intent of the Legislature in enacting this chapter to supersede any holding or portion of any holding in Nash v. City of Santa Monica, 37 Cal.3d 97 to the extent that the holding, or portion of the holding, conflicts with this chapter, so as to permit landlords to go out of business. However, this act is not otherwise intended to do any of the following:
(a) Interfere with local governmental authority over land use, including regulation of the conversion of existing housing to condominiums or other subdivided interests or to other nonresidential use following its withdrawal from rent or lease under this chapter.
(b) Preempt local or municipal environmental or land use regulations, procedures, or controls that govern the demolition and redevelopment of residential property.
(c) Override procedural protections designed to prevent abuse of the right to evict tenants.
(d) Permit an owner to withdraw from rent or lease, or a return to the rental market, less than all of the accommodations, as defined by paragraph (1) or (2) of subdivision (b) of Section 7060.
(e) Grant to any public entity any power which it does not possess independent of this chapter to control or establish a system of control on the price at which accommodations may be offered for rent or lease, or to diminish any such power which that public entity may possess, except as specifically provided in this chapter.
(f) Alter in any way either Section 65863.7 relating to the withdrawal of accommodations which comprise a mobilehome park from rent or lease or subdivision (f) of Section 798.56 of the Civil Code relating to a change of use of a mobilehome park.