Your Rights Bytes #21

By Bruce Stanton, GSMOL Corporate Counsel

Assembly Bill 2782 and the Civil Code sec. 798.17 Long-Term Lease Exemption

Assembly Bill 2782, sponsored by GSMOL, took effect January 1, 2020.  It contains a important changes in the law that greatly benefit mobilehome residents, including to both the park closure/conversion laws and the long-term lease exemption from mobilehome rent stabilization ordinances (RSO) contained in Civil Code 798.17.  These are important to note and remember, and are summarized as follows:

 

Park Closure/Conversion Law

 

Q:  How did AB 2782 change park closure/conversion laws?

A:  Prior law stated local governments may require a park owner to mitigate the impact of a park conversion/closure by purchasing the resident’s home via a fair market value “buyout” when the resident cannot be relocated to new housing (which is common).  AB2782 amended the Government Code to require park owners to compensate displaced residents by paying fair market value for their homes where the resident(s) cannot be relocated.  The right to be compensated for home value is thus made a guaranteed provision in State law, which pre-empts any local government conversion ordinance to the contrary.

 

Q:  What did AB 2782 newly add to the park closure/conversion law?

A:  Two important provisions were added:

 

1.    Prohibits a local jurisdiction (City or County) from approving a change of use of the park unless there is a finding that the closure or conversion will not result in a shortage of affordable housing within the local jurisdiction;

 

AND

 

2.    Requires the park owner to pay for, and include in any Conversion Impact Report (CIR), an appraisal of the resident’s mobilehome prepared by a state-certified appraiser that determines its market value for purposes of calculating the fair market value “buy out”.

 

Q:  Can local governments adopt more stringent protections for homeowners who are being displaced if they wish to do so?    

A:  YES they can.

Long-Term Lease Exemption from Local Rent Stabilization Ordinances (RSO)

 

Q:  How did AB2782 change the law re: long-term lease exemption from local RSO?

A:  Civil Code 798.17 provides that leases which exceed 12 months in length are exempt from local RSO protection.  AB 2782 ends this exemption as follows:

 

1.    All leases of any length signed on or after February 13, 2020 are not exempt from local RSO, and local RSO rent limitations will apply to protect those residents regardless of what the lease financial provisions might say.  The local RSO will effectively pre-empt those lease provisions.

2.    All leases with a term 12 months or longer signed prior to February 13, 2020 will remain exempt from RSO until they expire, or until January 1, 2025, whichever occurs first.

 

Q:  When did AB 2782 take effect?

A:  The law took January 1, 2021, which meant that leases signed on or after February 13, 2020 were still be exempt from local RSO rent protection until that date.  But after January 1, 2021 any leases first signed on or after February 13, 2020 are now exempt.

 

PRACTICE POINTERS:

I have recently been informed some parks have not been honoring the phase out of the 798.17 exemption as explained above.  Residents should check their documents to ensure that they are being properly billed for rent.

Another key point:  The above described law does not specify that the exemption ends if a lease is voluntarily renewed or extended after February 13, 2020.  Thus, if a resident signed a lease prior to February 13, 2020, and then voluntarily chooses to renew or extend it after February 13, 2020, their space could remain exempt from any local RSO until January 1, 2025.  This could be an issue for the courts to resolve, so better to avoid it.

IMPORTANT:  In order to avoid a situation where the RSO exemption would continue until January 1, 20205, homeowners should consider NOT agreeing to any renewal or extension of their pre-February 13, 2020 lease. 

REMEMBER:  No homeowner is EVER under an obligation to sign a new rental agreement or lease once they are an existing homeowner.  They are only obligated to do so when they first purchase the home.