BILL ANALYSIS
AB 472
Page 1
Date of Hearing: April 4, 2001
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Alan Lowenthal, Chair
AB 472 (Cedillo) - As Introduced: February 21, 2001
SUBJECT : Substandard conditions on real property.
SUMMARY : Creates a process for receivers and tenants of any
real property subject to receivership to file a motion
requesting instructions from the court in addressing substandard
conditions or a dispute concerning the powers or duties of the
receiver. Creates the Tenant Relocation Trust Fund (TRTF) to
assist in the relocation of tenants ordered to vacate.
Specifically, this bill :
1)Requires a receiver of real property containing rental housing
to notify the court, within 30 days of the receiver's
appointment or within 15 days of the occurrence of the
substandard condition, of the existence of any order or notice
to correct a substandard condition with which the receiver
cannot comply within the time provided by the order or notice.
2)Requires a receiver to request further instructions if the
estate does not contain sufficient funds to abate the
conditions and requires the court to consider appropriate
orders or instructions to enable the receiver to correct the
substandard conditions or terminate or limit the period of the
receivership.
3)Creates the TRTF whereby cities and counties may apply for
assistance in relocating tenants of rental housing units that
are ordered vacated by the local enforcement agency.
4)Entitles tenants to receive relocation benefits from the owner
within 10 days of any order to vacate or 20 days prior to the
vacation date set forth in the order, whichever occurs later.
If there are fewer than 10 days between the order to vacate
and the date of vacation benefits shall be paid within 24
hours of the notice to vacate.
a) Requires the local enforcement agency to notify the
owner and tenants either by phone or written notice.
b) Provides payment shall be made to one tenant household
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in each residential unit and shall be a sum equal to two
months of fair market rent as established by the Department
of Housing and Urban Development (HUD) and an amount
sufficient to cover utility service deposits. See table
below for example of HUD fair market rents.
----------------------------------------------------------
|Region |One Bedroom |Two Bedroom |
|---------------+---------------------+--------------------|
|San Francisco |$1,154/month |$1,459/month |
|---------------+---------------------+--------------------|
|Salinas |$641/month |$773/month |
|---------------+---------------------+--------------------|
|San Diego |$716/month |$896/month |
----------------------------------------------------------
a) Provides any owner that does not make timely payments
shall be liable to the tenant for an amount one and
one-half times the amount established above not to exceed
$10,000.
1)No benefits shall be payable if the tenant has caused or
contributed to the condition giving rise to the order to
vacate or the unit or structure becomes unsafe or hazardous as
result of natural disaster or an act of God.
2)Provides for the voluntary payment of relocation benefits from
the local enforcement agency to tenants and subsequent
reimbursement from the TRTF to the local enforcement agency.
Those payments shall be recovered from the property owner and
deposited in the TRTF or in the case of non-payment placed as
a lien against the property.
3)Provides that nothing in the TRTF shall be construed to
deprive an owner of procedural due process rights guaranteed
by law, including, but not limited to, a right to file a
judicial action against a local enforcement agency.
4)Provides that a notice to abate may be issued by a local
enforcement agency if a building is in violation of local
ordinances relating to building standards.
EXISTING LAW
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1)Provides that a court may appoint a receiver to take
possession of property that is the subject of litigation (Code
of Civil Procedure Section 564).
2)Allows a receiver to take and keep possession of the property,
receive rents, collect debts and, as authorized by the court,
take action regarding the property (Code of Civil Procedure
Section 568).
3)Provides that, other things being equal, different liens upon
the same property have priority according to the time of their
creation (Civil Code Section 2897).
4)Provides that a mortgage or deed of trust given for the price
of real property, at the time of its conveyance, has priority
over all other liens (Civil Code Section 2898).
5)Requires public agencies, under the Relocation Assistance Act,
to provide temporary relocation benefits to any person who is
displaced when a multiple family residential property is
rehabilitated with public funds (Government Code Section
7260). Allows the tenant to relocate to another location and
accept a lump sum payment of up to $5,250 if the tenant is
displaced for more than 180 days (Government Code Section
7264).
6)Provides that if a private owner of rental property undertakes
repairs or rehabilitation as a result of being cited for
violations under the Health and Safety Code and the conditions
of the premises affect the safe and sanitary use of the
premises by the tenant, the owner shall provide relocation
benefits to each lawful tenant (Health and Safety Code Section
17980.7).
FISCAL EFFECT : Unknown.
COMMENTS : This bill seeks to address the problems that arise
when a local enforcement agency cites a property for substandard
conditions and as a result leads to a notice or order to vacate
by that agency. This happens in the case where the substandard
conditions present a threat to the safety of residents. In
these cases the property owner is required by current law to
provide relocation benefits to tenants only when the enforcement
agency has obtained a court order. This bill would establish a
process by where the tenants could receive relocation benefits
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from the state and in turn the state through the local
enforcement agency would pursue repayment by the property owner.
In the case of non-payment the local enforcement agency would
be allowed to place a lien against the property for any amounts
not recovered.
The primary objective of AB 472 as stated by the author "is to
assist tenants that reside in hazardous living conditions to
relocate to safer and healthier environments immediately." The
fund established by AB 472 in theory is a one-time
appropriation, which the author is pursuing in the 2001-02
Budget. The fund would remain self sufficient through
collection of repayments by property owners and through penalty
fees for late payment.
The committee may wish to consider what the likelihood is that a
local enforcement agency will be able to recover funds from a
property owner. Specifically,
Will property owners be encouraged by the additional penalties
in this act and the placement of a lien on their property to
abandon the property thereby reducing the likelihood that the
state will see any repayment?
Since the local enforcement agency is paid back for their
administrative costs, will the state be left holding a lien on
a property that may have several other lien holders ahead of
the state?
Will the fund remain "self sufficient" if the state cannot
collect from property owners?
The author's office identified three cities that ordered tenants
to vacate during year 2000. They are Los Angeles (60 units),
Sacramento (20 units), and San Francisco (50 units). Of these
three cities only Sacramento has a relocation program similar to
the one established by this bill. According to the author 25% of
property owners in Sacramento pay relocation benefits when so
ordered. Of those 75% that do not initially pay relocation
benefits the City of Sacramento has been able to recoup 80%-90%
of that nonpayment.
Prior Legislation : The author carried similar legislation the
previous session, AB 2270
(1999-00). According to the author they have worked "with
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various groups including apartment associations, realtors,
banking groups, title insurance industry, local governments, and
successfully addressed their concerns."
Related Legislation : AB 1112 (Goldberg) has been referred to
Assembly Housing & Community Development. It would establish a
landlord registry within HCD.
Double referred : The Assembly Committee on Rules referred AB
472 to the Housing and Community Development Committee and
Judiciary Committee. If AB 472 passes this committee, the bill
must be referred to the Assembly Committee on Judiciary.
REGISTERED SUPPORT / OPPOSITION :
Support
Bet Tzedek Legal Services, Los Angeles
California Rural Legal Assistance Foundation
City of Los Angeles
Coalition for Economic Survival, Los Angeles
Community Redevelopment Agency, Los Angeles
Congress of California Seniors
Housing California
Inquilinos Unidos, Inc., Los Angeles
Jericho
L.A. Family Housing, North Hollywood
Los Angeles Homeless Services Authority
Los Angeles Housing Law Project
Shelter Partnership, Inc., Los Angeles
Western Center on Law and Poverty
Opposition
None on file.
Analysis Prepared by : Jay Barkman / H. & C.D. / (916)
319-2085