Legislative Report

Sacramento Weekly Update
Updated on 3-25-2008

Coming Up at the Capitol March 24 to March 28

C.A.R. will oppose unless amended AB 2052 (Lieu) Termination of Tenancy for Domestic Violence, which is scheduled to be heard by the Assembly Judiciary Committee on March 25. AB 2052 provides that a tenant or household member who was a victim of domestic violence, sexual assault, or stalking may terminate tenancy and be discharged from payment of rent if they provide the landlord with written proof of a valid protective order or proof that they have reported the event to a qualified third party. A “qualified third party” is defined as a peace officer, health care practitioner or the employee of an organization that provides social or legal services. AB 2052 only allows tenants to terminate tenancy within 90 days of the assault or the date that written documentation is provided by the qualified third party and provides that tenants terminating rental agreements due to domestic violence are entitled to return of the full deposit. Finally, AB 2052 does not release any other tenant from their obligations under the rental agreement. The author has agreed to eliminate the provision that requires return of the security deposit even if the unit is not vacated by all parties, as well as to add a provision that requires the payment of rent for 30 days from the notice to quit the tenancy. C.A.R. will oppose this bill until it is amended to allow the landlord to terminate tenancy of the individual who committed the domestic violence, sexual assault or stalking, and limit terminations to ones where there’s a valid protective order.   

C.A.R. supports AB 2509 (Galgiani) Mortgage Guarantee Program, which is scheduled to be heard by the Assembly Banking and Finance Committee on March 24. This bill would require the California Housing Finance Agency to establish and administer the Homeownership Preservation Mortgage Guarantee Program, funded by the state, to allow redevelopment agencies, nonprofit community lenders, and small business financial development corporations to accept and approve applications for loan guarantees from borrowers and to issue a loan guarantee to back the issuance to the borrower of a new or refinanced loan in lieu of an original loan. The bill would prohibit an administrator from issuing a loan guarantee for an amount that is more than 20% of the outstanding principal of the original loan or for a term exceeding 5 years and requires that a restrictive covenant be recorded on the property for the term of the loan guarantee. C.A.R. supports AB 2509 because it will allow the loans available to renovate homes to also be used to “renovate” mortgages that put deserving homeowners at risk.

C.A.R. opposes SB 1137 (Perata) Foreclosure Proceedings, which is scheduled to be heard by the Senate Judiciary Committee on March 25. This bill would require lenders who made loans on or before December 31, 2007 to conduct an in-person meeting with borrowers to explore their options for avoiding foreclosure. The bill does provide a “due diligence” definition for seeking such a meeting in order to address those situations when the borrower refuses to meet with the lender. SB 1137 would restrict lenders from filing a notice of default until 30 days after the in-person meeting or, if a meeting was not arranged, 30 days after satisfying due diligence requirements. The measure also requires vacant residential property purchased at a foreclosure sale to be to maintained and authorizes a governmental entity to impose civil fines up to $1,000 per day for failure to maintain that property after having provided a notice of the violation giving the owner 14 days to abate the nuisance. This bill also proposes to require that a separate notice be mailed to the property resident notifying them that the foreclosure process has begun and that any tenant on the property may be given a 60 day notice of termination of tenancy. The provisions established by SB 1137 would sunset January 1, 2013. C.A.R. opposes SB 1137 because it would result in the micromanagement of the lending industry and an ill-conceived creation of a one-size-fits-all approach to a very complicated situation. This bill would undoubtedly create a further chilling effect on future mortgage lending in California and impose significant new costs for prospective borrowers attempting to finance the purchase of a home.

C.A.R. would support if amended SB 1448 (Scott) Real Estate Commissioner Citations, which is scheduled to be heard by the Senate Business, Professions and Economic Development Committee on March 24. SB 1448 would authorize the Department of Real Estate (DRE) to issue citations containing a maximum fine of $5,000 or an order of abatement to unlicensed individuals acting as a real estate licensee. While C.A.R. is concerned that unlicensed real estate practice presents a real financial risk to homeowners, C.A.R. suggests an alternative for providing adequate remedies to prevent this practice that begins with the elimination of the new proposed fining authority within the DRE. C.A.R. would support this measure if it were amended to increase the existing penalties and fines to be sought by the District Attorney when unlicensed practice occurs and to require a mandatory disclosure of real estate license numbers on consumer “first contact” materials.

C.A.R. supports SB 1518 (Correa) Water Charges in Multiunit Residential Housing, which is scheduled to be heard by the Senate Natural Resources and Water Committee on March 25. This bill, sponsored by the California Apartment Association, would require all newly constructed multi-family rental housing to have water submeters or individual meters installed after January 1, 2012 as a condition of new water service to that property. The bill also authorizes landlords to charge tenants based upon the actual volume of water used and provides multiunit residential structures without water submeters an alternative to charge tenants for water service based upon an allocation formula that reflects the square footage of the unit or the number of tenants residing in the unit. Finally, the bill prohibits landlords from charging tenants for water usage in common areas of the property. C.A.R. supports shifting the burden of water use charges to individual tenants to encourage greater water conservation in apartment complexes and to legitimately allocate water use costs to users.