Sacramento Report

Over thirty bills were introduced this year in the Legislature directly affecting residential investment property. The volume, diversity and scope of the measures are unparalleled.

The key issues:

AB 781 (Leno) proposes to destroy a landlords right to go out of business became a two year bill last week due to heavy opposition. As amended, it would have required landlords in rent control communities to provide a 5-year notice to go out of business to senior and disabled tenants (currently one year notice is required). It would have also affirmatively stated that only landlords in rent control jurisdictions have the right to go out of business! More than 500 non rent control cities and counties could have enacted extremely punitive requirements for any landlord to go out of business.
AACSC position: OPPOSE

SB 540 (Kehoe) proposes to permit tenants to display non-commercial signs of any size and number on the rented premises and grounds. Landlords would have lost control over the appearance of their property. Due to clear opposition to the bill, the author decided to make it a two-year bill.
AACSC position: OPPOSE

AB 1574 (Jones) proposes to create a demonstration project for the city and county of Sacramento. The governments would be authorized to enact and enforce anti discrimination laws. As proposed to be amended the city and county would have to adopt an identical law to the California Fair Housing and Employment Act and interpret and enforce the laws in the shoes of the Dept. of Fair Employment and Housing. Last Tuesday, the Administration announced it would OPPOSE the bill. Before the author proposed to amend the bill, OPPOSITION from the industry was very clear: persons must file complaints with one local government not two and the laws, interpretation, administration, determinations and enforcement of law must be identical to the state.
AACSC position: OPPOSE (review of the amendments may change the association's position)

AB 399 (Montanez) proposes to substantially change the manner in which landlords recycle solid waste. The Assembly policy committee clearly heard the opposition: the bill authorizes local government to impose new and substantial fees on all landlords owning 5 units or more to fully pay for the costs of adopting implementing and enforcing recycling solid waste programs;
the proposed new disclosure requirement of landlords would be burdensome, confusing and invite litigation, and the measure did not recognizing the plethora of recycling programs. The Assembly policy committee directed the author to work with the industry to resolve the substantive issues. As of this moment, expect significant amendments.
AACSC position: OPPOSE (amendments will require the association to re-examine its position)

AB 1078 (Keene) is the most significant and comprehensive bill in the country to address meth labs. The author accepted over two hundred amendments. As amended: it will preempt local government remediation and inspection programs, will require government to evict (NOT landlords) tenants in all of the AFFECTED units, it will not address relocation costs, will only permit a "cost recovery lien" to be placed on the property during the pendency of the hazardous condition, will only permit government action if the property is ACTUALLY contaminated, government is to approve and oversee clean-up efforts (this is an important legal feature).
AACSC position: FAVOR

SB 735 (Torlakson) was heard last week in the Senate Judiciary Committee. As introduced it would have required all landlords to provide a copy of a deed to tenants indicating a change in ownership. Landlords would have been required to provide a copy of a notarized statement when a change in management occurs. Tenants would not have been liable to pay rent if landlords did not follow the precise requirements of law. The next time the bill was amended, the author dropped the notion of providing tenants with copies of deeds and notarized statements and determined that a minimum notice period of 30-days should be required prior to a change in ownership or management could occur. Significant OPPOSITION mounted on the change. Finally, the sponsors dropped the whole concept of additional notice to tenants. The final amended version of the bill deals with a minor tweak in landlord and tenant law.
AACSC position: Watch (as amended)

SB 277 (Battin) was just gutted concerning Megan's Law. At one time, the bill would have heavily burdened landlords to determine if any tenant and prospective tenant name appears on the Megan's Law database.
AACSC position: Watch (as recently amended)

AB 438 (Parra) became a two-year bill a few weeks ago. CAA is the sponsor of the measure. It attempts to address how landlords and property managers may refuse to rent and/or evict a tenant that is a registered sex offender. While the language of the bill needs work, it is highly problematic if the Legislature is poised to do anything this year to more precisely define how landlords may reasonably deny tenancy to registered sex offenders.
AACSC position: AMEND (due to amendments that are needed in the bill that will not add additional civil liability)

AB 304 (Hancock) would have permitted local governments to mandate all "soft sided" buildings to be retrofitted for seismic safety. The bill was opposed in the Assembly policy committee and as a consequence the author agreed to work the bill to the satisfaction of the OPPOSITION. The amendments that were agreed to: it will make minor modifications to the long standing law allowing local government to only require buildings to be subject to seismic safety retrofit requirements ONLY if the condition of the building poses a significant life safety issue. Perhaps the most important amendment to the bill which should be considered a WIN in any circle, is that the bill will prohibit locals from requiring any additional retrofit requirements for at least 15 years once a property owner completes the necessary safety upgrades. The policy will read: LEAVE MY BUILDING ALONE.
AACSC position: ??

AB 1259 (Daucher) was a bill that would have provided significant incentives for local governments to enact inclusionary zoning and rent control ordinances became a two-year bill due to OPPOSITION.
AACSC position: OPPOSE

AB 1367 (Evans) would have encouraged ballot box planning at the expense of the housing needs for ALL low and moderate-income households. Due to OPPOSITION, the measure became a two-year bill.
AACSC position: OPPOSE

AB 1528 (Jones) is a bill that relates to agency relationships that landlords have with their management is now a two-year bill.
AACSC position: Not rated due to the sponsors (Western Center on Law and Poverty) statement that the bill is undergo massive change later this year.

SB 51 (Kuehl) is a bill that would remove the sunset clause in law that requires landlords to give a 30-day notice to terminate a tenancy of less than 1 year in duration and a 60-day notice to terminate for tenancies that are one year or more in duration is pending in the Assembly Judiciary Committee. AACSC position: OPPOSE

AB 1400 (Laird). The Unruh Civil Rights Act prohibits landlords and other businesses from discriminating on the basis of sex, race, color, religion, ancestry, national origin, disability, or medical condition, sexual orientation, marital status, thus mirroring the CA Fair Housing and Employment Act. At one time the bill proposed to state that the particular bases of discrimination as herein enumerated, would have been illustrative;. The result for landlords would be chaotic. Felons, registered sex offenders, households with limited income would have been encouraged to file discrimination complaints against landlords. Due to heavy opposition the bill was amended to delete the objectionable provision.
AACSC position: NOT FAVOR (the bill still contains legislative findings that encourages most anyone to file a discrimination complaint against landlords)

AB 769 (Horton) is a bill sponsored by CAA. As amended it requires slumlords to attend a "slumlordology" class. In other words, slumlords would be taught how to be responsible owners of property, in a similar or identical manner such as programs offered in LA and Long Beach. Amendments are being considered that would require the State Consumer Affairs Agency to post on their website a list of all landlord and tenant laws. Of great concern would be: the Agency could not include interpretation or advice for tenants such as rent withholding, tenant strikes etc.
AACSC position: Amend

The Attorney General solicited comments from interested parties on the following matter: Are persons who are required to register as sex offenders considered a protected class under the California Fair Employment and Housing Act based upon the language of Penal Code section 290.46, subdivision (j) (2)? The conclusion of the industry is that registrants are not a protected class under CalFEHA and that the Penal Code does not create a protected class for sex offender registrants under any other federal or state law. An opinion of the Attorney Genera may be released late this year.
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