BILL NUMBER: AB 2562 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 25, 2006
AMENDED IN ASSEMBLY APRIL 17, 2006
AMENDED IN ASSEMBLY APRIL 6, 2006
INTRODUCED BY Assembly Member Saldana
FEBRUARY 23, 2006
An act to amend Sections 66452.5, 66452.8, 66452.9, 66459,
66499.30, and 66499.37 of, to add Sections 66452.11 and 66452.12 to,
and to repeal and add Section 66427.1 of, the Government Code,
relating to housing.
LEGISLATIVE COUNSEL'S DIGEST
AB 2562, as amended, Saldana Condominium conversion: tenant
notification.
(1) The Subdivision Map Act requires a subdivider who intends to
convert residential rental property to resident ownership to provide
certain notices to the tenants and prospective tenants. A violation
of any provision of the act is a crime.
This bill would additionally require that the tenants receive
notice of the final public report from the Department of Real Estate
, the approval of a tentative subdivision map, the limited
exclusive right of tenants to contract for the purchase of their
units, reports on the impact on tenants of the proposed conversion,
and a letter explaining the conversion process and related
matters. Because a violation of these provisions would be a crime,
the bill would impose a state-mandated local program. The bill would
also increase penalties for failure to give specified notices and
would make other related changes.
(2) The Subdivision Map Act requires a subdivider who intends to
convert a rental mobilehome park to resident ownership to file a
report on the impact of the conversion on residents of the mobilehome
park, make a copy of the report available to each resident, and
obtain a survey of support of residents of the mobilehome park.
This bill would apply these requirements to a subdivider who
intends to convert residential rental property to resident ownership.
Because a violation of these provisions would be a crime, the bill
would impose a state-mandated local program.
(2) The Subdivision Map Act authorizes a subdivider or tenant of
residential real property proposed to be converted to a condominium
project, community apartment project, or stock cooperative project to
appeal any action of the advisory committee or the appeal board with
respect to a tentative map. Any interested person adversely affected
by a decision of the advisory agency or appeal board is also
authorized to appeal that decision. Existing law requires a hearing
to be held on these appeals within 30 days after the date of filing
the appeal.
This bill would require the hearings to be set within 30 days
after the date of filing the appeal and held at the first available
opportunity thereafter, as determined by the appeal board or
legislative body.
(3) Existing law prohibits a person from selling, leasing, or
financing any parcel of real property, commencing construction of any
building for sale, lease, or financing thereon, or allowing the
occupancy thereof until the final map is filed for record by the
recorder of the county.
This bill would prohibit a person from commencing rehabilitation
on any building for sale, lease, or financing thereon and from
commencing any rehabilitation relating to the conversion of
residential rental property to resident ownership. The bill would
define "rehabilitation" for purposes of this prohibition. Because a
violation of these prohibitions would be a crime, the bill would
impose a state-mandated local program.
(3)
(4) The California Constitution requires the state to
reimburse local agencies and school districts for certain costs
mandated by the state. Statutory provisions establish procedures for
making that reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 66427.1 of the Government Code is repealed.
SEC. 2. Section 66427.1 is added to the Government Code, to read:
66427.1. (a) The legislative body shall not approve a final map
for a subdivision to be created from the conversion of residential
real property into a condominium project, a community apartment
project, or a stock cooperative project unless it finds as follows:
(1) Each tenant of the proposed condominium, community apartment
project, or stock cooperative project, and each person applying for
the rental of a unit in such residential real property, has received
or will have received all applicable notices and rights now or
hereafter required by this chapter or Chapter 3 (commencing with
Section 66451).
(2) Each of the tenants of the proposed condominium, community
apartment project, or stock cooperative project has received or will
receive each of the following notices:
(A) Written notification, pursuant to Section 66452.9, of
intention to convert at least 60 days prior to the filing of a
tentative map pursuant to Section 66452.
(B) Ten days' written notification that an application for a
public report will be, or has been, submitted to the Department of
Real Estate, that each tenant's right to purchase period begins with
the issuance of the final public report, and that the report will be
available on request.
(C) Written notification that the subdivider has received the
public report from the Department of Real Estate. This notice shall
be provided within five days of the date that the subdivider receives
the public report from the Department of Real Estate.
(D) Written notification within 10 days of approval of a final map
for the proposed conversion.
(E) One hundred eighty days' written notice of intention to
convert prior to termination of tenancy due to the conversion or
proposed conversion pursuant to Section 66452.11, but not before the
local authority has approved a tentative map for the conversion. The
notice given pursuant to this paragraph shall not alter or abridge
the rights or obligations of the parties in performance of their
covenants, including, but not limited to, the provision of services,
payment of rent, or the obligations imposed by Sections 1941, 1941.1,
and 1941.2 of the Civil Code.
(F) Notice of an exclusive right to contract for the purchase of
his or her respective unit upon the same terms and conditions that
the unit will be initially offered to the general public or terms
more favorable to the tenant. The exclusive right to purchase shall
commence on the date the subdivision public report is issued, as
provided in Section 11018.2 of the Business and Professions Code, and
shall run for a period of not less than 90 days, unless the tenant
gives prior written notice of his or her intention not to exercise
the right.
(b) The written notices to tenants required by subparagraphs (A)
and (B) of paragraph (2) of subdivision (a) shall be deemed satisfied
if those notices comply with the legal requirements for service by
mail.
(c) This section shall not diminish, limit or expand, other than
as provided herein, the authority of any city, county, or city and
county to approve or disapprove condominium projects.
(d) If a rental agreement was negotiated in Spanish, Chinese,
Tagalog, Vietnamese, or Korean, all required written notices
regarding the conversion of residential real property into a
condominium project, a community apartment project, or a stock
cooperative project shall be issued in the tenant's primary language.
SEC. 3. Section 66452.5 of the Government Code is amended to read:
66452.5. (a) The subdivider, or any tenant of the subject
property, in the case of a proposed conversion of residential real
property to a condominium project, community apartment project, or
stock cooperative project, may appeal from any action of the advisory
agency with respect to a tentative map to the appeal board
established by local ordinance or, if none, to the legislative body.
The appeal shall be filed with the clerk of the appeal board, or
if there is none, with the clerk of the legislative body within 10
days after the action of the advisory agency from which the appeal is
being taken.
Upon the filing of an appeal, the appeal board or legislative body
shall set the matter for hearing. The hearing shall be set within 30
days after the date of filing the appeal and held at the first
available opportunity thereafter, as determined by the appeal board
or legislative body . Within 10 days following the conclusion
of the hearing, the appeal board or legislative body shall render its
decision on the appeal.
(b) The subdivider, any tenant of the subject property, in the
case of a conversion of residential real property to a condominium
project, community apartment project, or stock cooperative project,
or the advisory agency may appeal from the action of the appeal board
to the legislative body. The appeal shall be filed in writing with
the clerk of the legislative body within 10 days after the action of
the appeal board from which the appeal is being taken.
After the filing of an appeal, the legislative body shall set the
matter for hearing. The hearing shall be set within 30 days after the
date of a request therefor filed by the subdivider or the appellant
and held at the first available opportunity thereafter, as
determined by the appeal board or legislative body . Within 10
days following the conclusion of the hearing, the legislative body
shall render its decision on the appeal. The decision shall comply
with the provisions of Sections 66473, 66473.5, and 66474, and shall
include any findings required by those sections.
(c) If there is an appeal board and it fails to act upon an appeal
within the time limit specified in this chapter, the decision from
which the appeal was taken shall be deemed affirmed and an appeal
therefrom may thereupon be taken to the legislative body as provided
in subdivision (b) of this section. If no further appeal is taken,
the tentative map, insofar as it complies with applicable
requirements of this division and local ordinance, shall be deemed
approved or conditionally approved as last approved or conditionally
approved by the advisory agency, and it shall be the duty of the
clerk of the legislative body to certify or state that approval, or
if the advisory agency is one which is not authorized by local
ordinance to approve, conditionally approve, or disapprove the
tentative map, the advisory agency shall submit its report to the
legislative body as if no appeal had been taken.
If the legislative body fails to act upon an appeal within the
time limit specified in this chapter, the tentative map, insofar as
it complies with applicable requirements of this division and local
ordinance, shall be deemed to be approved or conditionally approved
as last approved or conditionally approved, and it shall be the duty
of the clerk of the legislative body to certify or state that
approval.
(d) Any interested person adversely affected by a decision of the
advisory agency or appeal board may file an appeal with the governing
body concerning any decision of the advisory agency or appeal board.
The appeal shall be filed with the clerk of the governing body
within 10 days after the action of the advisory agency or appeal
board which is the subject of the appeal. Upon the filing of the
appeal, the governing body shall set the matter for hearing. The
hearing shall be held set within 30
days after the filing of the appeal and held at the first
available opportunity thereafter, as determined by the appeal board
or legislative body . The hearing may be a public hearing for
which notice shall be given in the time and manner provided.
Upon conclusion of the hearing, the governing body shall, within
10 days, declare its findings based upon the testimony and documents
produced before it or before the advisory board or the appeal board.
It may sustain, modify, reject, or overrule any recommendations or
rulings of the advisory board or the appeal board and may make any
findings which are not inconsistent with the provisions of this
chapter or local ordinance adopted pursuant to this chapter.
(e) Notice of each hearing provided for in this section shall be
sent by United States mail to each tenant of the subject property, in
the case of a conversion of residential real property to a
condominium project, community apartment project, or stock
cooperative project, at least three days prior to the hearing. The
notice requirement of this subdivision shall be deemed satisfied if
the notice complies with the legal requirements for service by mail.
Pursuant to Section 66451.2, fees may be collected from the
subdivider or from persons appealing or filing an appeal for expenses
incurred under this section.
SEC. 4. Section 66452.8 of the Government Code is amended to read:
66452.8. (a) Commencing at a date not less than 60 days prior to
the filing of a tentative map pursuant to Section 66452, the
subdivider or his or her agent shall give notice of such filing, in
the form outlined in subdivision (b), to each person applying after
such date for rental of a unit of the subject property immediately
prior to the acceptance of any rent or deposit from the prospective
tenant by the subdivider.
(b) The notice shall be as follows:
"To the prospective occupant(s) of
_______________________________________________:
(address)
The owner(s) of this building, at (address), has filed or plans to
file a tentative map with the (city, county, or city and county) to
convert this building to a (condominium, community apartment, or
stock cooperative project). No units may be sold in this building
unless the conversion is approved by the (city, county, or city and
county) and until after a public report is issued by the Department
of Real Estate. If you become a tenant of this building, you shall be
given notice of each hearing for which notice is required pursuant
to Sections 66451.3 and 66452.5 of the Government Code, and you have
the right to appear and the right to be heard at any such hearing.
_______________________________
(signature of owner or owner's
agent)
_______________________________
(dated)
I have received this notice on_________________.
(date)
_______________________________
(prospective tenant's
signature)"
(c) Failure by a subdivider or his or her agent to give the notice
required in subdivision (a) shall not be grounds to deny the
conversion. However, if the subdivider or his or her agent fails to
give notice pursuant to this section, he or she shall pay to each
prospective tenant who becomes a tenant and who was entitled to such
notice, and who does not purchase his or her unit pursuant to
subdivision (d) of Section 66427.1, an amount equal to the sum of the
following:
(1) Actual moving expenses incurred when moving from the subject
property, but not to exceed one thousand dollars ($1,000).
(2) The first month's rent on the tenant's new rental unit, if
any, immediately after moving from the subject property, but not to
exceed one thousand five hundred dollars ($1,500).
The requirements of this subdivision constitute a minimum state
standard. However, nothing in this subdivision shall be construed to
prohibit any city, county, or city and county from requiring, by
ordinance or charter provision, a subdivider to compensate any
tenant, whose tenancy is terminated as the result of a condominium,
community apartment project, or stock cooperative conversion, in
amounts or by services which exceed those set forth in paragraphs (1)
and (2) of this subdivision. In the case of such a requirement by
any city, county, or city and county, a subdivider who meets the
compensation requirements of the local ordinance or charter provision
shall be deemed to satisfy the requirements of this subdivision.
SEC. 5. Section 66452.9 of the Government Code is amended to read:
66452.9. (a) Pursuant to the provisions of subparagraph (A) of
paragraph (2) of subdivision (a) of Section 66427.1, the subdivider
shall give notice 60 days prior to the filing of a tentative map
pursuant to Section 66452 in the form outlined in subdivision (b), to
each tenant of the subject property. The subdivider shall also give
to each tenant a letter explaining the conversion process, the
notices he or she will be receiving and when the notices will be
received, the rights and benefits tenants are entitled to during the
process, and whom to contact for more information.
(b) The notice shall be as follows:
"To the occupant(s) of
_______________________________________________:
(address)
The owner(s) of this building, at (address), plans to file a
tentative map with the (city, county, or city and county) to convert
this building to a (condominium, community apartment, or stock
cooperative project). You shall be given notice of each hearing for
which notice is required pursuant to Sections 66451.3 and 66452.5 of
the Government Code, and you have the right to appear and the right
to be heard at any such hearing.
_______________________________
(signature of owner or owner's
agent)
_______________________________
(date)"
The written notices to tenants required by this section shall be
deemed satisfied if such notices comply with the legal requirements
for service by mail.
SEC. 6. Section 66452.11 is added to the Government Code, to read:
66452.11. (a) Pursuant to the provisions of subparagraph (E) of
paragraph (2) of subdivision (a) of Section 66427.1, the subdivider
shall give written notice of the intent to convert 180 days prior to
the termination of tenancy in the form outlined in subdivision (b),
to each tenant of the subject property.
(b) The notice shall be as follows:
"To the occupant(s) of
_______________________________________________:
(address)
The owner(s) of this building, at (address), plans to convert this
building to a (condominium, community apartment, or stock
cooperative project). This is a notice of the owner's intention to
convert the building to a (condominium, community apartment, or stock
cooperative project).
A tentative map to convert the building to a (condominium,
community apartment, or stock cooperative project) was approved by
the City on _________. If the City approves a final map, you may be
required to vacate the premises, but that cannot happen for at least
180 days from the date this notice was served upon you.
Any future notice given to you to terminate your tenancy because
of the conversion cannot be effective for at least 180 days from the
date this notice was served upon you. This present notice is not a
notice to terminate your tenancy; it is not a notice that you must
now vacate the premises.
_______________________________
(signature of owner or owner's
agent)
_______________________________
(date)"
The written notices to tenants required by this section shall be
deemed satisfied if such notices comply with the legal requirements
for service by mail.
SEC. 7. Section 66452.12 is added to the Government Code, to read:
66452.12. (a) Pursuant to the provisions of subdivision (d) of
Section 66427.1, the subdivider shall give written notice on the date
of issuance of the subdivision public report to each tenant of his
or her exclusive right for at least 90 days to contract for the
purchase of his or her respective unit in the form outlined in
subdivision (b).
(b) The notice shall be as follows:
"To the occupant(s) of
_______________________________________________:
(address)
The owner(s) of this building, at (address), have received the
final subdivision report on the proposed conversion of this building
to a (condominium, community apartment, or stock cooperative
project). Commencing on this date you have the exclusive right for 90
days to contract for the purchase of your rental unit upon the same
or more favorable terms and conditions than the unit will initially
be offered to the general public.
_______________________________
(signature of owner or owner's
agent)
_______________________________
(date)"
The written notices to tenants required by this section shall be
deemed satisfied if the notices comply with the legal requirements
for service by mail.
SEC. 8. Section 66459 of the Government Code is amended to read:
66459. (a) If a final map has been approved for a condominium
project, community apartment project, or stock cooperative project,
and the subdivider or subsequent owner of the project, on or after
January 1, 1993, rents a dwelling in that project, he or she shall,
prior to offering the separate interest for sale to the general
public, deliver the following notice, printed in at least 14-point
bold print, prior to the execution of the rental agreement: TO THE
PROSPECTIVE TENANTS OF
_______________________________
(address)
THE UNIT YOU MAY RENT HAS BEEN APPROVED FOR SALE TO THE PUBLIC AS
A CONDOMINIUM PROJECT, COMMUNITY APARTMENT PROJECT, OR STOCK
COOPERATIVE PROJECT (WHICHEVER APPLIES). THE RENTAL UNIT MAY BE SOLD
TO THE PUBLIC, AND, IF IT IS OFFERED FOR SALE, YOUR LEASE MAY BE
TERMINATED. YOU WILL BE NOTIFIED AT LEAST 90 DAYS PRIOR TO ANY
OFFERING TO SELL. IF YOU STILL LAWFULLY RESIDE IN THE UNIT, YOU WILL
BE GIVEN A RIGHT OF FIRST REFUSAL TO PURCHASE THE UNIT.
________________________________
(signature of owner or owner's
agent)
________________________________
(dated)
(b) The condominium project, community apartment project, or stock
cooperative project shall not be referred to in a lease or rental
agreement as an "apartment" or "apartments" on or after the date of
the approval by the local agency of the final map for the condominium
project, community apartment project, or stock cooperative project
in which the final map was approved on or after January 1, 1993.
(c) Any tenant of a condominium project, community apartment
project, or stock cooperative project pursuant to this section shall
be given at least 90 days' written notice of the intention to sell
the rental unit to the general public. This subdivision shall not
alter or abridge the rights or obligations of the parties in
performance of their covenants, including, but not limited to, the
provision of services, payment of rent, or other obligations imposed
by Sections 1941, 1941.1, and 1941.2 of the Civil Code.
(d) Any tenant who lawfully resides in a condominium project,
community apartment project, or stock cooperative project pursuant to
this section shall be given a right of first refusal by the
subdivider or subsequent owner of the project for the purchase of his
or her rental unit upon the same terms and conditions that the unit
will be initially offered to the general public or terms and
conditions more favorable to the tenant. This right to purchase shall
run for a period of 90 days from the date of the notice, unless the
tenant gives written notice within the 90-day period of his or her
intention not to exercise that right.
(e) Failure to comply with this section shall not invalidate the
transfer of title to real property.
(f) Failure by a subdivider or his or her agent to give the notice
required in subdivision (a) shall not be grounds to deny the
conversion. However, if the subdivider or his or her agent fails to
give notice pursuant to this section, he or she shall pay to each
prospective tenant who becomes a tenant and who was entitled to that
notice, and who does not purchase his or her unit pursuant to
subdivision (d) of Section 66427.1, an amount equal to the sum of the
following:
(1) Actual moving expenses incurred when moving from the subject
property, but not to exceed one thousand dollars ($1,000).
(2) The first month's rent on the tenant's new rental unit, if
any, immediately after moving from the subject property, but not to
exceed one thousand five hundred dollars ($1,500).
(g) This section shall not apply to any of the following:
(1) An owner of four dwelling units or less.
(2) Transfers pursuant to court order, including, but not limited
to, transfers ordered by a probate court in the administration of an
estate, transfers by any foreclosure sale after default, transfers by
any foreclosure sale after default in an obligation secured by a
mortgage, or transfers by a sale under a power of sale after a
default in an obligation secured by a deed of trust or secured by any
other instrument containing a power of sale, and any subsequent
transfer by a mortgagor or beneficiary of a deed of trust who accepts
a deed in lieu of foreclosure or purchases the property at a
foreclosure sale.
(3) Transfers by a fiduciary in the course of the administration
of a decedent's estate, guardianship, conservatorship, or trust. For
purposes of this paragraph, a "fiduciary" means a state- or
federally-chartered federally chartered bank,
trust company, savings association, savings bank, credit union, or
industrial loan company.
SEC. 9. Section 66499.30 of the Government Code is amended to
read:
66499.30. (a) (1) No person shall sell,
lease, or finance any parcel or parcels of real property or commence
construction or major rehabilitation of any
building for sale, lease , or financing thereon, except
for model homes, allow occupancy thereof, or commence any
material rehabilitation relating to the conversion of
residential rental property to resident ownership for which a final
map is required by this division or local ordinance, until the final
map thereof in full compliance with this division and any local
ordinance has been filed for record by the recorder of the county in
which any portion of the subdivision is located.
(2) For purposes of paragraph (1), "rehabilitation" does not
include repairs or improvements necessary to maintain compliance with
state or local housing, building, or safety standards that
materially affect the health and safety of tenants or to otherwise
maintain the rental property in accordance with the implied warranty
of habitability.
(b) No person shall sell, lease or finance any parcel or parcels
of real property or commence construction of any building for sale,
lease or financing thereon, except for model homes, or allow
occupancy thereof, for which a parcel map is required by this
division or local ordinance, until the parcel map thereof in full
compliance with this division and any local ordinance has been filed
for record by the recorder of the county in which any portion of the
subdivision is located.
(c) Conveyances of any part of a division of real property for
which a final or parcel map is required by this division or local
ordinance shall not be made by parcel or block number, initial or
other designation, unless and until the final or parcel map has been
filed for record by the recorder of the county in which any portion
of the subdivision is located.
(d) Subdivisions (a), (b), and (c) do not apply to any parcel or
parcels of a subdivision offered for sale or lease, contracted for
sale or lease, or sold or leased in compliance with or exempt from
any law (including a local ordinance), regulating the design and
improvement of subdivisions in effect at the time the subdivision was
established.
(e) Nothing contained in subdivisions (a) and (b) shall be deemed
to prohibit an offer or contract to sell, lease, or finance real
property or to construct improvements, not including major
rehabilitation, thereon where the sale, lease, or financing, or the
commencement of construction, is expressly conditioned upon the
approval and filing of a final subdivision map or parcel map, as
required under this division.
(f) Nothing in subdivisions (a) to (e), inclusive, shall in any
way modify or affect Section 11018.2 of the Business and Professions
Code.
(g) For purposes of this section, the limitation period for
commencing an action, either civil or criminal, against the
subdivider or an owner of record at the time of a violation of this
division or of a local ordinance enacted pursuant to this division,
shall be tolled for any time period during which there is no
constructive notice of the transaction constituting the violation,
because the owner of record, at the time of the violation or at any
time thereafter, failed to record a deed, lease, or financing
document with the county recorder.
SEC. 10. Section 66499.37 of the Government Code is amended to
read:
66499.37. Any action or proceeding to attack, review, set aside,
void or annul the decision of an advisory agency, appeal board or
legislative body concerning a subdivision, or of any of the
proceedings, acts or determinations taken, including the approval of
a tentative map or a final map, done or made prior to the decision,
or to determine the reasonableness, legality or validity of any
condition attached thereto, shall not be maintained by any person
unless the action or proceeding is commenced and service of summons
effected within 90 days after the date of the decision. Thereafter
all persons are barred from any action or proceeding or any defense
of invalidity or unreasonableness of the decision or of the
proceedings, acts or determinations. Any such proceeding shall take
precedence over all matters of the calendar of the court except
criminal, probate, eminent domain and forcible entry and unlawful
detainer proceedings.
SEC. 11. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or
changes the definition of a crime within the meaning of Section 6 of
Article XIII B of the California Constitution.