2- Agenda Summary - Property Management Committee
Agenda Summary – Property Management CommitteeHyatt Regency Hotel, Regency Room A
Sacramento, California
June 7, 2007
7:00am – 9:00amPresiding:
Cynthia Wood, Chair
Ilse Cordoni, Vice Chair
Ruth Hayles, Vice Chair
Frank Nelson, Committee LiaisonC.A.R. Staff:
Natalie CardenasI. Opening CommentsII. 2007 LegislationA. AB 410 (Adams and Price) Abandoned Property– This bill, sponsored by the Apartment Association of Greater Los Angeles, would increase the valuethreshold from $300 to $650 for abandoned property left by a vacating tenant before landlords are required to hold a noticed public auction. The bill has no opposition and has been successfully passed out of the Assembly without a single “no” vote. AB 410 is now in the Senate, awaiting hearing in the Judiciary Committee. C.A.R. Position – SupportB. AB481 (Tran) Unlawful Detainer, Habitability – This bill, sponsored by the California Apartment Association, as introduced required a pre-trial rent deposit by tenants who file a response to an unlawful detainer. However, the sponsors amendedthe bill to require tenants who plead an affirmative defense against an unlawful detainer for nonpayment of rent based upon a breach of the warranty of habitability to do the following: describe each particular violation alleged; state whether the tenantinformed the landlord, landlord’s agent, or any public officer/employee responsible for housing law enforcement of the alleged breach either in writing or verbally; and require the tenant to declare under penalty of perjury that the past due rent is available for immediate transmittal. The bill is currently being held in the Assembly Judiciary Committee. It has become a 2-year bill. C.A.R. Position – SupportC. AB 548 (Levine) Recycling in Multifamily Housing – This bill would require that on or after July 1, 2008 all owners of multifamily dwellings with 5 or more units in California shall provide recycling services that are appropriatefor the multifamily dwelling. This requirement shall be in accordance with the local agency’s recycling plan and any other applicable local agency requirements governing solid waste agreements and services. Theauthor has pledged to work with the property management industry to make this a workable mandate for all rental property. The bill has been passed by the Assembly Natural Resources and Assembly Local Government Committees. C.A.R. Position – Not FavorD. AB 763 (Saldana) condominium conversions –This bill would amend disclosure requirements for owners who chose to convert their units to condominiums and require owners to provide translations of required disclosures to tenants whose rental agreements/lease contracts were negotiated in Spanish, Chinese, Korean, Tagalog, or Vietnamese. As introduced, the bill would have created burdensome delays inthe local government approval process for conversions. However, that language was amended out of the bill. This bill passed out of the Assembly Housing and Community Development Committee on May 9, 2007. The bill is currently on the Assembly floor. C.A.R. Position – WatchE. AB 864 (Davis) Substandard Buildings – This bill, sponsored by the Los Angeles City Attorney’s Office, requires persons or corporations who purchase substandard properties to provide contact information and a plan for correction of the substandard conditions, including dates and amounts, as well as proof of insurance. The bill also prohibits landlords from collecting rent, serving 3-day notices, or unlawful detainers from any tenant if any units are deemed substandard on the property. As introduced, the bill would also have required purchasers to deposit into an escrow account an amount sufficient to fund the correction of the substandard conditions. However, this provision was removed from the bill. Even as amended, the bill discourages investment in residential properties in need of rehabilitation or renovation. Those wishing to put “sweat equity” into a property, either for personal use or to “flip” it will be discouraged from doing so. AB 864 isscheduled to be heard in the Assembly Appropriations Committee. C.A.R. Position –Oppose unless AmendedF. AB 976 (Calderon) Tenancy Characteristics – This bill, sponsored by the Apartment Association, California Southern Cities, attempts to prohibit cities and counties from adopting local ordinances to prohibit landlords from renting to illegal immigrants. This is in response to an ordinance adopted and later abandoned by the City of Escondido. As introduced, the bill added “citizenship” and “immigration” status to the list of protected classes in the California Fair Employment and Housing Act. It hassince been amended to prohibit cities and counties from requiring that landlords or agents to compile, disclose, report, provide, or otherwise take action regarding a tenant or prospective tenant’s citizenship or immigration status. Recent amendments to the bill ensure that a landlord has the right to request information to verify a tenant or prospective tenant’s identity or financial qualifications. These amendments removed C.A.R. opposition. The bill passed out of the Assembly Judiciary Committee on April 17, 2007. It is currently on the Assembly floor. C.A.R. Position – WatchG. AB 1013 (Krekorian) Unlawful Detainer, Nuisance – This bill, sponsored by the Los Angeles City Attorney’s Office, would state that illegal possession of weapons or ammunition on rental property is a nuisance and thus grounds for an unlawful detainer. The bill would permit a landlord to assign the right to bring an unlawful detainer action to a city attorney or prosecutor against a tenant who illegally possesses firearms or ammunition on the rental property if the landlord has a safety –related reason for not seeking the unlawful detainer himself or herself. The city attorney can charge the landlord up to $600 to cover the unlawful detainer expenses. Provisions of this bill would be applicable Los Angeles, San Diego, Alameda, and Sacramento counties as a pilot program. This bill passed out of the Assembly Judiciary Committee on April 17, 2007 and is now awaiting hearing in the Assembly Appropriations Committee. C.A.R. Position – SupportH. AB1126 (Eng) Discovery time limits for Unlawful Detainers – The bill, sponsored by the California Law Revision Commission, would make non-controversial changes to the unlawful detainer time limits for discovery. Currently, the law provides for the expeditious processing of an unlawful detainer (UD) case so landlords can recover possession when a tenant wrongfully refuses to vacate. The law that establishes a special time limit for UD cases is mixed in with the laws for other types of civil litigation. AB 1126 amends existing law to provide separate code sections stating the special time limits for UD cases. The bill also establishes a shortened 5-day notice requirement for discover motion in a UD case. The proposal would also amend existing law to state that the 20-day requirement for deposition involving the production of records would apply to UD cases. Originally, there was concern that this change would delay processing of UD cases. However, a survey of Property Management Committee members and their attorneys indicated that such changes would not affect their businessor delay their cases. The bill is currently in the Senate, awaiting committee assignment. C.A.R. Position - WatchI. AB 1173 (Keene) Resident Utility Billing Services– This bill, sponsored by the California Apartment Association, would mandate either water submeters or individual meters for all newly constructed multi-family rental housing permitted for construction as of January 1, 2010. In addition, AB 1173 requires landlords who use a Residential Utility Billing Service (RUBS) to provide disclosure to tenants of water billing procedures where no meters or submeters exist on the individual apartment unit. The disclosure must specify whether the RUBS allocation is based on square footage of the unit or number of bedrooms. Finally, the bill prohibits landlords from charging tenants for water usage in common areas of the property. The bill is opposed by tenants groups who do not want tenants to pay for water services. Also, the Apartment Association, California Southern Cities oppose AB 1173 due to concerns over the costs for RUBS programs to small property owners. The bill passed out of the Assembly Water, Parks, and Wildlife Committee on a unanimous vote. The bill is now headed to the Assembly Appropriations Committee. The Property Management Committee may want to consider whether C.A.R. should take an active position on the bill. C.A.R. Position - WatchJ. AB1197 (Aghazarian) Megan’s Law – This bill, sponsored by the California Apartment Association, amends the Evidence Code to create a rebuttable presumption that landlords who deny tenancy or evict persons who are registered sex offenders are doing so to protect a person at risk. The bill failed passage in the Assembly Public Safety Committee, but was granted reconsideration. The author and sponsor will make AB 1197 a 2-year bill. C.A.R. Position – SupportK. SB 464 (Kuehl) Ellis Act, 5-year minimum ownership requirement – This bill, sponsored by the Western Center on Law and Poverty, would grant local governments the authority to require landlords of all rental property, including single family dwellings, to stay in the rental business for a minimum of 5 years after the purchase of that rental property. This provision will only apply to properties purchased on or after March 27, 2007. Furthermore, SB 464requires that landlords give ALL tenants a one year notice of termination of tenancy if a disabled or a senior citizen that is 62 years of age or older reside within their rental units. C.A.R. strongly opposes SB 464 because it discourages investment in rental housing by placing a substantial limitation on a property owner's right to legitimately go out of business. SB 464 passed out of the Senate Judiciary Committee on a 3 to 2 vote. SB 464is now on the Senate Floor. C.A.R has issued a targeted Red Alert on SB 464, asking local REALTORS® to urge their Senator to vote “no” on the bill. C.A.R. Position– OpposeL. SB 482 (Yee) Security Deposit Guarantee – This bill, sponsored by SureDeposit (a surety bond provider), would create an optional program that allows a tenant to purchase a surety bond in lieu of posting a security deposit with the landlord. In an effort to remove opposition from the tenants’ lobby, the author and sponsor accepted amendments to make clear that participation in the program was completely voluntary for tenants. In addition, amendments were taken to compel purchasers of rental property to honor surety bonds purchased by tenants and accepted by previous landlords. The committee may want to consider whether to seek amendmentsto the bill to provide purchasers of residential rental property with existing surety bonds a provision to buy-out the surety bonds should they want to collect security deposits. The bill is currently being held in the Senate JudiciaryCommittee. C.A.R. Position – WatchIII. Report from the Megan’s Law Working Group* – At the January 2007 Board of Directors Meeting, the Property Management Committee created the Megan’s Law Working Group. The Working Group has developed a recommendation for the committee to consider to address the issue of registered sex offenders living in apartments subject to a locally enacted Just Cause Eviction Ordinance. An Issues Briefing Paper has been prepared on this subject and is included in your meeting materials.IV. Standard Form for Security Deposit Refund – The C.A.R. Standard FormsAdvisory Committee is considering a request to create a new Standard Form for landlords and property managers to use when refunding a security deposit to tenants and the end of their tenancies. The Property Management Committee has beenasked to consider whether such a form is needed and would be useful to REALTORS®.V. OtherVI. Adjournment
