2- Agenda Summary - Property Management Committee
Agenda Summary – Property Management CommitteeHyatt Grand Champions Hotel
Desert Vista Ballroom, Bighorn Conference Center
Indian Wells, California
January 24, 2008
7:00am – 9:00amPresiding:
Kevin Brown, Chair
Ruth Hayles, Vice Chair
Frank Nelson, Vice Chair
Jeannette Way, Committee LiaisonC.A.R. Staff:
NatalieCardenasI. Opening CommentsII. 2008 2-Year Legislation Update (these bills must pass out of their house of origin by January 31, 2008)A. AB 481 (Tran) Unlawful Detainer – Sponsored by the California Apartment Association, AB 481 requires tenants who plead an affirmative defense against an unlawful detainer for nonpayment of rent based upon a breach of the warranty of habitability to dothe following: Describe each particular violation alleged; state whether the tenant informed 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. AB 481 failed passage in the Assembly Judiciary Committee in 2007 and was granted reconsideration. It has become a 2-year bill. C.A.R. Position – Support. Bill Status – Assembly Judiciary CommitteeB. 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 for which construction permits are issued as of January 1, 2010. In addition, AB 1173 would require 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. Last year, the bill passed out of the Assembly Water, Parks, and Wildlife Committee on a unanimous vote. However, it stalled in the Assembly Appropriations Committee. With a $14 billion structural deficit in the State Budget and the Legislative Leadership discouraging members from pursuing legislation that costs money to the state, it is unclear whether this bill can pass in 2008. C.A.R. Position – Support. Bill Status –In Assembly Appropriations CommitteeC. AB 1197 (Aghazarian) Megan’s Law – This bill, also sponsored by the California Apartment Association, would amend 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 in 2007. C.A.R. Position – Support. Bill Status – Assembly Public Safety CommitteeD. SB 464 (Kuehl) Ellis Act, 3-year minimum ownership requirement – This bill, sponsored by the Western Centeron 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 3 years after they purchase rental property. Also, SB 464 requires landlords give ALL tenants a one year notice of termination of tenancy if a disabled or a senior citizen (62 years of age or older) resides within their rental units. C.A.R. strongly opposes SB 464 because it discourages investmentin 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 but stalled on the Senate Floor in 2007. Senator Kuehl offered to further amend the bill to a 2-year requirement for landlords to stay in business to secure votes. This proved unsuccessful last year. However, Senator Kuehl has pledged to bring SB 464 up for a vote on the Senate Floor in January. C.A.R. Position– Oppose. Bill Status – Senate FloorE. 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 fromthe tenants’ lobby, the author and sponsor accepted amendments to make clear that participation in the program was completely voluntary for tenants. The sponsor and their lobbyists have attempted to remove tenant opposition by offering further amendments during the Legislative interim recess. It is unclear whether these amendments are sufficient to remove tenant opposition which may continue to hinder the bill’s passage. If SB 482 failsto pass out of the Senate by the January 31st deadline, it is likely the sponsors will find another vehicle for the bill language. C.A.R. Position – Watch. Bill Status – Assembly Judiciary CommitteeIII. 2008 LegislationA. C.A.R. sponsored Legislation regarding Sex Offenders in Rental Housing – The California Association of REALTORS® is sponsoringlegislation to require local jurisdictions with a “just cause eviction” ordinance to permit landlords to evict a registered sex offender in order to protect a person at risk, as is permitted by Megan’s Law. Landlordsin jurisdictions with eviction controls cannot simply serve such a tenant with a 30 or 60 day notice to vacate, as they can under state law. They must state the reason for eviction and prove it in an administrative tribunal or court. Unless a tenant fits neatly within one of the listed “just cause” categories, the rule effectively precludes evicting the problem tenant. This bill provides landlords with a method to protect their tenants if they are at risk from a registered sex offender. The bill simply creates a new “just cause” item for eviction in jurisdictions with such ordinances.B. Domestic Violence Victims in Rental Housing – Assembly member Ted Lieu has expressed interest in authoring legislation to authorize courts to terminate a lease/rental agreement for domestic violence victims with protective orders against their attackers who can demonstrate they are in substantial risk of physical or emotional harm if they remain in their dwelling. The bill will be modeled after a recently enacted ordinance in New York. The committee will need to discuss this legislativeproposal to determine a policy position for C.A.R. C. Statutory Damages for Landlords in Unlawful Detainer cases – Assembly member Shirley Horton will author legislation in 2008 to raisethe statutory damage award from $600 to $900 when a landlord can demonstrate malice in an unlawful detainer case.D. Smoking Prohibitions in Residential Rental Housing – Assembly member Mike Eng will introduce legislation in 2008 to mandate landlords designate smoking and non-smoking apartments within their apartment communities. According to the author, the bill will obligate landlords to enforce non-smoking rules on their tenants through fines. Apartment communities that choose to operate at 100% smoke free would be allowed to continue that rule but would be subject to enforcement of that rule amongst their tenants.E. Notice Requirements and New Rules for Terminating Tenancies in Foreclosed Properties –Several news reports in California have highlighted the plight of tenants who are forced to move because of foreclosure. Given the attention in the media on the foreclosure crisis in California and the rest of the nation, there will be several bills introduced in 2008 to address the issue. Among the proposals that may be introduced is legislation to extend notice obligations for tenants forced to move due to foreclosure.F. Recycling in Multi-family Housing – Last year, Governor Schwarzenegger vetoed AB 548 (Levine) which would have required rental housing providers on properties with 5 or more unitsto provide recycling services. The sponsors of AB 548 have pledged to try again to pass legislation to require landlords to provide recycling services on their properties.IV. Eminent Domain Initiatives on the June 2008 ballot – An Issues Briefing Paper has been prepared for these initiatives and is included in your meeting materials.V. Medicinal Marijuana Users/Distributors in Rental Housing – At the October 2007 Property Management Committee meeting, REALTOR® members discussed the issues property managers face when renting to a tenant who possesses a medical marijuana prescription. C.A.R. staff was instructed to determine what options are available for property managers who discover marijuana growing/distributing in their portfolio. Staff is consulting with C.A.R. Legal to determine what options are currently available to property managers who discover medicinal marijuana growth in their rental units.VI. Delay Tactics in Unlawful Detainers – At the October 2007 Property Management Committee meeting, REALTOR® members inquired what position, if any, C.A.R. has on legislation introduced in 2006 (SB 1386 (Morrow)) that would permit parties to agree in advance to forgo trial by jury rights should a complaint arise. The legislation failed passage in the Senate Judiciary Committee in 2006. Similar legislation introduced in the Assembly (AB 2258 (Villines)) also failed to pass in 2006. Both bills were strongly opposed by tenants advocates, the Consumer Attorneys of California and the California Applicant Attorneys Association who argued that the right to trial by jury is a core value of the judicial system and tenants should not be forced to waive their rights to a jury trial as a condition of renting an apartment. C.A.R. staff met with the legislative staff on these bills in 2006 but both measures failed passage early in the legislative year. The sponsors, Cal Chamber and the Civil Justice Association of California, have not attempted to reintroduce similar legislation in this session. It is unknown whether they will attempt to pursue such legislation in 2008.VII. OtherVIII. Adjournment
