Assembly Standing Committee on Housing and Community Development

Yes. All right. We are going to call this hearing to order. Welcome to the Assembly Housing and Community Development Committee hearing. We have four items on our agenda today. One item on consent, AB391 to facilitate the goals of the hearing.

Within the time we have, each Bill can have two main witnesses in support and opposition and each main witness gets two minutes each. Feel free to submit written testimony through the position portal on the Committee's website and become a part of the official record.

We will not permit conduct that disrupts, disturbs or otherwise impedes the orderly conduct of today's legislative proceedings. This morning we are in room 437 at the Capitol. This hearing room will be open for in person testimony, attendance of this hearing and all are encouraged to watch the hearing from its live stream on the Assembly's website.

Thank you for your patience and understanding. We are going to start as a Subcommitee. We don't yet have quorum, but I am going to proceed with the agenda and we will call item number two, AB760. Mr. Ta.

Good afternoon, Chair and members of the committee. I want to start by thanking the committee staff and accepting the committee amendments.

AB 760 will allow mobile home park to offer home owned by park management for rent in the city or county declared to be under a state of emergency due to a national disaster for six months as a man.

Specifically, this bill allowed a mobile home park in the City of Cowdee under a declaration of emergency called by the governor caused by natural disaster like fire, flood as well as cities and county adjacent to the impact area to rent out park old homes to people who lost their home in the disaster.

The committee amendment clarified intent of AB 760 only to extend this opportunity to people impacted by disasters like fire, flood and earthquake, not to emergency like Covid or bug flu. AB 760 suspends the current law and allow a park or home to be rented without trickling the current law to require a park to allow ship leasing.

This would immediately make more housing available to people in dire need. People whose home burned down and have lost everything need help and that's what AB 760 does. I respectfully ask for your I vote. With me today to testify and support of AB 760, Chris Wysocki of the Western Manufacturing Housing Committees Association.

Thank you Mr. Chair, Assemblyman. My name is Chris Wysocki with WMA and first I want to thank the author for introducing this important measure that will help provide immediate housing relief to people whose homes are destroyed in a natural disaster.

I also want to thank the committee consultant for working with WMA and the author to help increase the housing supply after disasters like the fires that raged in LA in January. Mobile home parks often have homes that are owned by the park that are put up for sale.

These homes are usually new and are purchased by a park to resell after an old home with significant health and safety issues that is abandoned by an owner or is removed by park management. This bill will temporarily allow park owners to rent out homes they own in parks to people who lost everything because of a natural disaster.

By temporarily suspending AB 861 in counties and cities under a declared state of emergency resulting from events from like what happened in the LA fires, more rental housing will become available to help people who lost their homes find a place to live while their homes are rebuilt.

By extending the reach of this bill to counties and cities adjacent to the ones under a declared state of emergency, more housing will be made available to people who need it now. Like a lot of bills, this one comes from a real world experience.

One of WMA's members had five homes it owns in a park in Norwalk, not far from the areas destroyed by the Palisades and Eaton fires. The owner wanted to rent these homes out to people who lost their own homes.

But he learned that he could not do so without allowing every other person in the park to lease out their own home, something not allowed in the park.

On behalf of WMA and our more than 1700 mobile home parks and who are members, we thank the author for helping increase the supply of housing in this great time of need. We are tonight vote on AB 760.

Great, thank you. Are there other folks who are here in support of this bill? Not seeing any. Do we have anyone here in opposition? Not seeing anybody. I will bring it back to, to the committee. Mr. Kalra, welcome.

Thank you, Mr. Chair. Thank you, Assembly Member, for bringing this forward. I appreciate your work on this and I think the committee amendments appropriately narrow it to when you know, there's actually housing loss.

But I think that there are obviously situations as we've seen in Southern California, unfortunately this year and, and it's all too often now over the years where there are limited circumstances where this can make sense.

And as I've said before and you've heard both heard me say before, I really do think that mobile homes and mobile home parks are such a critical aspect of our housing solution and that there's an opportunity for them to provide some relief during emergencies. I think we should create that opportunity. So thank you.

Great. Thank you. Well, I'll give you the opportunity to close.

Yeah, I really appreciate the comment from and I respectfully ask for your I vote.

Great. Well, thank you again for working with the committee and I do appreciate the effort to find ways to provide housing opportunities to displaced people. And I think this is a smart way to do it and also has some appropriate limitations on it, which I think make it work. We will.

We don't have quorum yet, but at the right time we will. We will move the bill. But thank you.

All right, so up next we have our Chair Haney with AB 1445.

Thank you so much. AB 1445 is a way to help our downtowns recover more quickly and rebound stronger after the COVID 19 pandemic. Downtowns matter to the economic recovery of our cities as a whole and while the average downtowns make up just 3% of a city's land, they deliver a disproportionate amount of city property, hotel and sales tax revenue.

However, as a result of the sharp decline in return to office rates during the pandemic, office vacancy rates in cities across the state continue to hover around 30% while commercial property values are in a sharp decline. But we'd all like to see more office buildings converted into mixed use housing throughout.

Conversions are often more costly than ground up construction due to the need for structural upgrades to the change in a building's floor plate, potential remediation for aging buildings, and major health and safety upgrades to meet seismic fire safety or indoor air quality standards.

AB 1445 would provide necessary tools to support the creation of affordable mixed use housing on former commercial spaces in downtowns across California by providing the much needed financing to make these projects work.

Specifically, the Bill would allow cities to create a downtown Recovery District district that will help finance office to housing conversion projects funded by increases of property tax revenues generated by properties within the district.

This is another tool in the toolbox for cities to close the funding gap for projects that will help our downtowns become mixed use neighborhoods for everyone to live, work and visit.

Currently only my city and county has this tool due to a Bill that passed recently, but this is one that many other cities can could utilize and an opportunity that we should take advantage of. With me in support today is Emellia Zamani from the California Travel Association.

Good morning Chair and Members. As the Assemblymember said, my name is Emellia Zamani. I'm with the California Travel Association, the advocacy organization representing the travel and tourism industry in California. We represent over 230 Member organizations, including Destinations, Lodging, attractions, and other organizations for whom travel and tourism is important.

According to our partners at Visit California, Travelers infused $157.3 billion into California's economy last year, which exceeds spending in 2019. Before the pandemic devastated the industry, the spending supported over 1 million jobs and generated $12.6 billion in local and state revenue.

Unfortunately, the industry is facing headwinds from inflation and the continued slow return of business meetings and international travel. From the difficulty of forecasting future trends to alarming dips across sectors and global headlines casting doubt on travel to the U.S. the industry is at a precarious point.

Not since the pandemic has the travel industry faced this level of uncertainty, and we're anticipating a 1% decline in visitor volume this year because of this. Caltravel is supportive of any legislation that will allow our industry to continue innovating and growing our economy.

At a time when cities across the state face budget shortfalls, we cannot afford to allow our downtowns, the main cultural, economic and revenue generating districts of California's gateway cities, to further deteriorate. This Bill will help Fund key projects that will revitalize California's downtowns by capturing property tax increases in areas that are most in need of economic support.

This Bill would provide cities with the necessary tools to support the creation of downtown revitalization and economic financing districts which would create affordable mixed use housing. When more residents live in the hearts of our cities, we see more vibrancy and a fast track to downtown recovery.

247 downtowns, increase tourist visitation, create jobs, increase tax revenues and benefit our entire economy. For these reasons and more, we urge your support of AB 1445. Thank you.

Thank you. Is there anyone else here in support of AB 1445?

Good morning. Brandon Knapp representing Housing Action Coalition in support.

Thank you.

Good morning. Yereli Magayon with Political Solutions on behalf of Ikea in support.

Thank you. Good morning. Raymond Contreras with Lighthouse Public Affairs on behalf of SPUR Abundant Housing and Circulate San Diego in support. Thank you.

Thank you. Guess IKEA might send us more furniture. Is there anyone here in opposition to AB 1445? Any questions or comments from Members?

I thank the Chair for pulling this Bill forward. It makes a lot of sense and I'm excited to see now not just apply to SF but also to cities back down in the South Bay and other places that want to revitalize their downtowns.

And I want to work with you to see how we can expand that use in even smaller cities. Love to be as co author if possible. And I'll move the Bill when we have quorum.

Yeah. Oh, sorry. Did you want to thank you, Chair Haney, for bringing this forward. I'd also like to be added as a co-author at the appropriate time. And I do like the kind of guardrails around the commercial to residential conversion.

It really focuses on the type of housing you want built in and around these types of unique kind of districts you'd be creating with this type of financing. And so I think it's just really smart how that's been developed. And I think to Summer Lee's point, it's something. I think that all the downtowns.

I know it's been good to travel some of them with you and see what we can do. And I know this comes from that journey that you've taken to talk to folks about what would be helpful. And so it's always good to see the results of these Select Committees that we do come into fruition. This is a perfect example would you like to close?

Respectfully ask for an aye vote. Thank you. Thank you.

[Background]

Okay, here we go. Why don't we take the role? This is exciting.

[Roll Call]

We have quorum. Great. Let's take a few votes. How about the consent? Calendar moved and seconded by Wicks and Kalra.

[Roll Call]

Great. Let's take a vote on nine to zero. All right. How about. Let's take some votes on item number three. AB760 Ta. Moved by Kalra. Seconded by Wicks.

[Roll Call]

Okay, eight to zero. We'll keep that open. Item number four. AB 1445.

[Roll Call]

8-0. All right. We'll keep that open. All right, Mr. Connolly. Item number one. AB 456. Connolly.

Thank you Mr. Chair, Members. Good morning everyone. I want to begin by thanking the Committee for their work on this Bill. I will be accepting the Committee's amendments. I want to start by saying that AB456 does not change any current health or safety requirements, nor does a Bill prohibit exterior inspections.

Instead, AB456 would empower mobile homeowners selling their home with the same protections and standards provided to traditional homeowners. Mobile home owners often receive multiple delayed responses from park management and sometimes no response at all. As a result, sales are delayed or miss closing deadlines, resulting in significant financial damage to the parties involved.

AB456 will prohibit a park manager from acquiring repairs or improvements to to the interior of the seller's mobile home, closing a loophole used by park managers across the state.

The Bill also requires park managers to provide a mobile homeowner with a written summary of repairs or improvements no later than 15 business days following receipt of a request. This is five additional business days than is what is required in current law.

These changes will ensure mobile homeowners are given the same protections as traditional homeowners and make selling mobile homes faster and more straightforward. I will now pass to my witness, Jody Johnson, one of my constituents and a mobile homeowner, and Bruce Stanton, both on behalf of GSMOL.

Great. You have two minutes each.

Jody Johnson, on behalf of GSMOL in support. Interference with the sale of a home is not legal anywhere in California. AB456 ensures that it is also true for the sale of mobile homes.

There continues to be frequent instances when park managers interfere with and sometimes obstruct the sale of our mobile homes, often the only asset we own. Despite making requests of park management to produce exterior list of repairs needed, which is a condition of the sale, selling homeowners often receive delayed responses and sometimes no response at all.

As a result, sales transactions are delayed and are unable to close on time. This results in significant damage to the parties. Park management is known to disrupt home sales to allow management to buy the home at a much lower price and then turn around and rent it at a significantly higher price.

The Bill addresses sales interference for our mobile homes. We ask for your consideration. Thank you.

Yes, good morning, Mr. Chairman, Committee Members, Bruce Stanton, corporate counsel for GSMOL, in support. This is a subject matter that I am well acquainted with. According to complaints that I see in the field, if you will.

The mobile home residency law provides vital protections in Article 7 of that law to allow homeowners to sell their homes in place in the park. And the Bill clarifies those protections and strengthens the ability to encourage compliance with the existing law.

It's important to know that the current law allows the park to require exterior repairs or upgrades to the home, but not interior. The Bill continues to allow management to require those repairs or upgrades to the exterior upon request of the selling homeowner.

The existing law allows or provides that management must give a timely response so that the park parties know what those repairs or upgrades are. But sellers often receive delayed or no response in violation of this section. And so the buyers feel lied to because they say nobody told us that you were going to require these other changes.

The seller and the broker feel like they're at risk of false advertising or non-disclosure and on the cusp of closing escrow, the parties feel pressure to perform whatever the park is asking of them or else lose the transaction.

So managers are also requiring the inspections of the interior of the home, even though the statute specifies exterior only as a condition of sale. Kind of intruding, really intruding into an area that they don't have any basis for being involved with. That's the province of the parties to the transaction.

And lastly, once the contract is finalized, we're in escrow, then park approval of the buyer is required by law. But we're seeing delayed or no responses to applications for tenancy. So the Bill preserves and protects the right of homeowners to sell their homes by enforcing existing timelines for management responses in the law.

So we respectfully ask for your aye vote. Thank you.

Thank you. Are there other folks who are here in support of this Bill? You can state your name, your position and your affiliation.

Good morning. I'm Janice Barker, and I'm here on behalf of the residents of Youngstown Senior Mobile Home Park in Petaluma. Thank you and we strongly support this Bill.

Good morning. My name is Debbie Vitelli, and I live in the Senior Park in Youngstown Mobile Home, and I strongly support this Bill.

Thank you.

Hello. My name is Lorraine Grumberger. I'm an owner and a resident of Youngstown Mobile Home Park, and I'm support of this Bill.

Hello, I'm Marie Cuneo, a resident in Youngstown Mobile Home Park, and I also strongly support this Bill.

Good morning. I'm Jennifer Boyle and I'm also an owner and resident of mobile home park, of Youngstown Mobile Home Park in Sonoma County, and I strongly support this Bill, too.

Hello, I'm Maria Moraga and I also support this Bill. I live at Petaluma Park Homes there. I do support this Bill. Thank you.

Good morning. Ann Kolaches, mobile home owner in the City of Sonoma. And today, on behalf of the nearly 1,000, 1 million members of CARA, the California Alliance of Retired Americans, in strong support.

Good morning. John Kyle, President of and on behalf of the Sonoma County Mobile Home Owners Association, we strongly support this Bill.

Malcolm Sibley, mobile homeowner in Petaluma, California, Member of GSMOL and Sonoma County Mobile Home Owners Association, I strongly support this Bill.

Tara Clancy, mobile homeowner in Alameda County, I support this Bill.

Morning. Susan Krause from Avalon Mobile Home in Alameda County, and I strongly support.

Good morning. Nancy Nicholas, I'm an owner and resident of Fircrest Mobile Home Park in Sebastopol. Sonoma County, and I strongly support this Bill.

My name is Tim Porteus, Youngstown MP-, MHP. Strongly in support from in Petaluma, Sonoma County. Please make this happen for us.

Thank you. Thank you all. Are there witnesses in opposition? A motion and a second.

Thank you, Mr. Chair and Members. Assemblyman, good to see you again. My name is Chris Wysocki, with WMA, and I'm here to urge a "No" vote on AB 456. Currently, there's no legal authority for park management to enter the interior of a home.

So, there is no way to make sure the home is safe for a future buyer, or that any work done inside the home has been permitted, unlike a traditional home sale where lenders require an inspection.

HCV is already short staffed, and it doesn't have enough inspectors to go out to every home up for sale to determine if any work has been done inside has been permitted.

Currently, for older homes, park owners require residents to obtain in its—an inspection—from an independent inspector of the homeowner's choice.

And if a home has a safety hazard, like an unauthorized water heater, for a mobile home use that is not correctly installed, which is detailed in a report that we dropped by your offices, the buyer and the park itself are put into jeopardy.

Shouldn't buyers be aware of clear and blatant safety violations that should be fixed or negotiated? If no inspections are done, then buyers will simply move into a potentially dangerous living condition.

And we have instances of people moving into homes only to find out that they need so much work that they have to scrap the home and buy a new one. Further, mobile home parks already have a problem obtaining adequate insurance coverage, and AB 456 will make it even harder and more costly for park residents to obtain that, if we can't ensure the homes are not a danger.

When a mobile home is sold for $100,000, $200,000, or more, a $500 home inspection seems reasonable to make sure the buyer and the park are protected, and buyers know actually what they're buying.

Finally, WMA believes AB 456 is denying the park owner's right to run a safe mobile home park for everyone and make sure the home doesn't present a danger to the health and safety of a future buyer and other residents of the park.

For these reasons and others listed in our letter, WMA urges a "No" vote on AB 456, to make sure the buyer is purchasing a home that is safe to live in. Thank you.

Are there other folks who are here in the room in opposition? Not seeing anyone. I will bring it back to the Committee. Mr. Patterson.

Thanks. I have mixed feelings on this one. I sort of understand what the author's going for, you know, kind of, you know, maybe I'm just a little bitter because I'm warring with my HOA right now. So, you know, I have, there was a time where.

I think we heard about that.

Yeah, it's coming. Where HOA requested to see the inside of everybody's garage, to make sure that we could fit enough cars in there, so as to not park on the street, and that really bothered me. And hell ensued in the neighborhood. But at the same time—so, I, I get where you're going with this.

At the same time, I do understand the unique liability that the property owners have, in terms of, or the landowners, in terms of, you know, making sure that common interest is safe, and if something like the water heater—that was actually a really great example.

I also commend you guys for putting in your letter, I think some improvements that could be made in the law, you know, like ensuring that the notice goes to the potential buyers, things like that. So, I think there's some workable things there.

I think right now I'm going to lay off and kind of reserve to see kind of how this moves forward on the process, but, you know, it is a tough one because I kind of, you know, the right to privacy is pretty important to me and feel free to respond.

Well, yeah, and to respond, interestingly, because I see where you're going as well, your analogy or your situation is not really analogous to what we're talking about. This does not change health and safety regulations. This is literally relating to a sale transaction between a buyer and seller.

And just as I think you would be aghast if a third party, essentially your HOA, interfered with that transaction, that's what we're trying to close the loophole on here. A buyer is going to want to know the condition of a mobile home park that they are buying, just as someone buying your home would.

There will be necessary exchanges of information. So, that's really what we're focused on. We're reinforcing existing law, frankly, that's being misinterpreted here, and it's causing delays in the transaction, unacceptably. So, I don't know if that clarifies things, but it, it doesn't really kind of address your situation.

Yeah, I mean, I, well, I think if, you know, the HOA was just me blabbering, but, but on—in terms of the, the safety within the unit that could potentially impact outside the unit, I do think they offer legitimate things to improve on this, to make sure people, when they sell their house, or the buyers are doing inspections, or at least know they can get inspections, you know, so they sell.

I, by the way, I am a Real Estate Broker, but I don't do it for a living.

But I mean, I couldn't imagine, I've never done it for a living, I just happen to have a license and waste all my money for it. But, but I could imagine a situation in which, or I could never, in which, like if I'm representing a buyer where I would say don't do, you know, you don't need an inspection.

I think that that's, that's crazy. You know, you should always tell your clients to.

Common sense. Yeah.

And basically, so that, picture that here. I mean, sure, if, if, if the, the park wanted to tell buyers, hey, by the way, in case you didn't figure this out on your own, you should inspect something you're about to buy. I'm not sure that really adds a lot, but.

Yeah, but I think that's not really what they're requesting here. They're actually asking to, by law, which is a—not even consistent with current law—going in at the time of the sale transaction and requiring an inspection of the interior. Picture that in your own case.

Nobody's looking inside my house. Anyway, did you want—did you have any thoughts on that?

Yeah, thank you, Assemblyman, and thank, thank you for your comments on that. But you know, respectfully, we believe that currently, it's not happening all that often. I shouldn't say not all that often. It happens quite often that sellers and buyers don't have that type of information exchange.

And this often involves, you know, homes that are low price and people who have limited English proficiency, often, and it's an all cash deal. So, what we want to make sure is happening is that Title 25 is protected, is protecting the future buyers of the home.

And by requiring an inspection to go through, and we don't want entry to the home, as park management. I mean, I want to be very clear about that. We do not want to go inside of these homes and have liability associated with any of that activity.

But we do think it's important to have an outside, independent third-party inspector that's qualified and able to determine whether or not the home is safe for the future resident and the future and the park as a whole. We think it's important that the buyer understand what they're actually getting.

And in many cases, that's not happening right now, because these are all cash deals. You can go in and buy a home for $30,000 worth of—$30,000 cash—and the buyer may not even know that they have a right to an inspection.

And those are the types of things that we believe could put the park, as a whole, in danger, especially when we, and we've got real world examples. We had one instance where, you know, we didn't go inside the home, but a toilet fell through the floor. So, then it became visible.

So, then it became an exterior issue that we were made aware of. But had that not—had that toilet not fallen through the floor of the mobile home, then there's no way we would have known that there was a substandard structural issue with the home in itself. So, I mean, I just kind of point that out.

Ms. Wilson.

Thank you. I have a few questions, and one is a follow up. I want to start with the follow up question, because something was said and I didn't quite understand it, because I thought I heard two different things from you, the author, and what the opposition was saying.

You were saying that there's a misinterpretation of the law and this reinforces existing law, and it sounds like you were saying existing law says that you can do this, and so, can you clarify where you were going with that?

Yeah, and I'll, I'll turn to counsel on this, as well. Existing law expressly states, let's get it here, the repair improvement relates to the exterior of the mobile home—it's appurtenances or an accessory structure that is not owned, installed by the management.

So, we want to make it crystal clear that it does not grant the right to inspect internally.

So, even a third party? So, you're saying that right now, by law, you shouldn't be able to require, through the sale, an inspection of the interior portion of the home, only the exterior?

Vis a vis the park owner. Correct.

Right, from the park owner's point of view, not the seller's point. From the park owner's point of view.

With all due respect, we're giving a little bit more credence, I think, to common sense, in a buy sell transaction that it's between the buyer and seller, because in all of our cases.

But when you were using—when you made the comment reinforcing existing law and that you wanted to clear up that misinterpretation, you were talking about, that you believe by current law.

It says exterior only.

That they—that's where the park owner's ability to inspect ends today.

Correct.

And so, your goal with this is.

In a sale transaction, in health and safety code, enables, if there is something that comes, becomes aware, there is obviously a way to take the issue to HCD, which provides inspectors, etc. But you may want to clarify that.

Sure. I mean, the way that it works now, because it is specific in the upgrade repair provision that it's exterior-only, in terms of what the management's authority is.

The way that it works now is once the notice of intent to sell is provided, typically in that same document, the agent will—or the seller will—ask the park, give us the list of exterior repairs and upgrades. Management will come out, actually do a physical inspection of the outside of the home and give that list.

What's happening now, pretty, pretty frequently, is management is saying as a condition of us approving the buyer, we require a full Title 25 inspection. That's what they're calling it. That means interior and exterior, and we have situations where management is saying, here's the inspector that you have to use to do it.

We have situations that, where management says if there's anything wrong on the inside of the home, you must hire a C 47 contractor to do the work. You can't use anybody else. And so, what's happening is there's increased expense and when you couple that with the delay in responding, now we're very close to escrow close.

Now, suddenly, the park is saying, oh well, we have this inspection.

And I'd like to, for the sake of time, I'd like to be very narrow because I do have some follow up questions, but I just wanted to make sure I understood clearly what the author was saying in his testimony. And so, let's see if I have this right, without being interrupted.

Is that when you talked about reinforcing existing law, you're saying currently, we're not talking about health and safety, we're just talking about at a sale, that the park owner has the ability to require an inspection of the exterior home. They could do it themselves.

They can have somebody else, whatever that they, that they can do that by current law, not inside. However, the park owners have taken upon themselves to not only require an exterior, but also require an interior, a Title 25.

And then, that's the issue that you're trying to solve, is make it really clear that they, the authority that they're doing, that, they never had that authority. And so, you're explicitly banning it in language, versus it just leaving where the current law stands.

Yes.

Great summary. And then that's part one, and then part two is like the notice lane.

Okay

Right, right, for exterior. That's all, that's all related to exterior, which you guys are continuing—is allowed by law today. And so, you're saying, and even in the part that's allowed by law, we want to tighten that.

And the reason why you're not tightening it, related to interior, is because you believe it's not allowed by law today, shouldn't be required between the sale.

And so, my question, and it could be to the author or to opposition, is, is there any safety issues related to the interior that should be addressed at a time of a sale, given that it's not someone who owns land and house, it's that someone owns the land and someone owns the house, is there any safety issue that would happen interior—in an interior—that should be something that's under inspection, maybe not the whole house, but something that is in the interior, beyond water heater?

Because I think water heater was used.

Yes, I would say between the parties there certainly is, and I would also indicate.

No, no, I'm asking—so, so from the, from, from a buyer and seller point of view, that's a completely different relationship, and I think that they should be, as a buyer, you should be allowed to ask for whatever you want to from the seller. The seller should be allowed to give you whatever they want to.

And you guys can decide whether you still have a thing. I'm talking from the person who owns the land and the park, who is in charge of not just that person, but keeping everyone safe, right.

Like, you know, there's rules about living in apartments, about having inspections for, you know, infestations and, you know, there's all these other things that happen.

So, I'm just saying is there anything within a mobile home unit, inside of it, that you would say that it, a park owner who is in charge, it should have some visibility to, at some point, to the interior of our home, or is it your position that they should not ever?

I'm going to turn it over. I think you just changed your question. You're now saying ever, versus point of sale. Ever is already covered by law.

Okay, so let me, let me back up. Thank you for making sure that I'm being very precise in my language.

And then I'll turn it over.

So, during a point of sale, and the reason why I use the word "ever" is because sometimes there's visibility points, like coming into a park, putting a new one into the park, of course, you could probably decline somebody from coming into your park. So, that's why I was using the language "ever."

But to the author's point, at the time of sale, is there any reason why the park—is there anything within the interior of the home that you think a park owner should be able to assess, as it relates, at that point in time?

I don't think there's anything they should be able to assess, in those words, I think that they would.

Or inspect. My apologies.

Well and not even inspect, but they'd be interested in knowing, I think, water heater and electrical are two things that I would think of right away.

But they can rely upon the fact that there is a TDS 14 requirement in the Mobile Home Residency Law that the seller must disclose all of that. They can rely upon the fact that the parties choose their own inspector, as was pointed out. It would be irresponsible and probably malpractice for agents to not advise for inspections.

Inspections are routinely done and escrow can't close until the park then says, we have an approved buyer. That's a requirement for closing escrow, so that we don't have these, you know, kitchen table mobile home sales anymore where people don't use escrow and somebody pays cash, and they write it on the back of an envelope that can't happen.

Somebody moves in. So, can I stop you and go back a little bit? You talked about, is it TD 14?

There's a TDS 14.

TDS 14.

Requirement. Yeah. Just like in real—fixed real estate.

Yeah, yeah. So, you talked about a heater and electrical. And so, that they are required to disclose to the property owner, that the—where?

To the, to the buyer.

But not to the property owner?

But, but often, and upon request, the parties, when they've got their own inspection in hand, could certainly supply that inspection copy to the park, upon request. That would be eminently reasonable.

The problem is when the park says we're not gonna approve your buyer unless you do these things in that report, or unless you get the report that we want you to get.

Thank you. So, I'll close out with this. So, my question when I was assessing this Bill was, whose responsibility it is to keep people safe, right, in this regard? And there are points of entry, at times of sale, that I think is different on a day-to-day basis.

It's certain things like when you're doing a sale for a home, for instance, when there's—when you've done unpermitted things that's you might have been living it with where you've made improvements that were not permitted, but at the time that it went to sell, then there's some type of inspection, and then you might have to like go permit things or undo things and all that kind of stuff.

And so, I think about this now from a lens of mobile home parks. And so, I do think that the abuses, that were described as a part of testimony, as it relates to requiring a certain inspection, who's going to do the inspection?

Fixing and all that stuff is—there should be some control around that and there should be some freedom, because to your point, it is between a buyer and a seller.

It is not between the property owner, but the property owner has a vested interest in, or the park owner has a vested interest in the sell of the mobile home, as it relates to, is that to a condition where if that person just brought that in today, would I let that in my park? Right?

Based on it is. And so, I would, I would argue that there are some aspects and I—you noted the TDS 14, aspects as relate to heating and electrical, that I think the author should consider, saying that no, you don't have to do inspection, but they can deny, without getting daylight into those types of things that are critical to the safety and wellbeing of the person who lives next door to them.

And so, to say they should not be involved at all, to the interior, I think is a bridge too far. I think you do have to go.

Well, only on requiring inspection. There is disclosure under current law.

But I thought you could not, they could not deny over that. I thought that was the testimony. So, here's the deal because I don't want to keep it too long for everyone. So, I'm just telling you what my concerns are. You can take them or leave it.

I can decide to bring it on the floor, you know, all those kind of things. So, I'm saying that there are some things, internally, that the park owner should be aware of, be disclosed to, at the time of sale, and can reject a sale if those things are not addressed because they impact the neighboring person.

That's where my position is. I will vote for this, to continue that conversation. I will—if, if that's not addressed adequately, I'll vehemently oppose it. With that, I give it back to the Chair. Thank you.

Thank you.

Mr. Tangipa.

I'll be quick. Chris, I had a couple of questions. So, when does a park have liability, or are they legally required to make sure the health and safety of the park is taken into approach?

Yeah, I mean, our fundamental responsibility is to make sure that the park is health—is in compliance with, you know, all local rules and regulations. So, it's, it's an absolute critical function of mobile home park owners to make sure that this park is, is safe.

Are there any cases where park owners were sued because of dilapidation, or the interior of one mobile home caused other issues, because they physically could see on the exterior that it was fine or maybe they were boarded up windows, or something else that park owners have had liability on?

Well, I think the biggest issue is, park owners have been subjected to failure to maintain lawsuits, on a number of cases.

So, there are failure to maintain lawsuits out there.

There are, but it's not really relevant to this Bill. It's, it's, it's.

We're not really even arguing about that.

Yeah, yeah, we're, we're not. That's—the exposure that parks have for enforcing Title 25 is if we do see a problem that's, that's on—in—the exterior of a home that isn't fixed, ultimately, if that problem isn't fixed and addressed by the resident, we can have our permit to operate pulled by HCD. So, that's, you know, so we actually.

But again, that's not really—what we're talking about here is the health Title 25 inspections to make sure that the home is safe and secure and does not jeopardize the park as a whole.

And that can happen, you know, these, these are tight units, you know, and I kind of point out to the, you know, the example of the pre-1976 home where you've got electrical wiring that's all aluminum and doesn't have GFI circuits installed. If that park is sold as is to an unsuspecting buyer and they're unaware, the home could go up in a fire trap.

And because of the proximity to that home, to other homes in the, in the community, you know, you could have a whole park burned down.

Which, which is why I'm asking the question, because that's where I was trying to see, you know, does the park become liable for those issues?

Because that's where I'm trying to understand why the park is also, in addition to wanting to come in on the transaction, because I, unlike my colleague from Rockland, my money spent on my real estate license has done fairly well, and I actually have the contract here.

And when I read it, it states that sellers not using a licensed real estate agent or licensed manufactured home dealer are prohibited from selling a personal property manufactured home, as is, unless the manufactured home meets applicable and the requirements of HCD and the national manufacturing housing construction, so.

Correct.

Which is where I was trying to figure out if it was—why there's opposition to the Bill, mainly because it seems like there are protections in some of the contract. And I have actually done a couple deals myself on this. I think we talked. My brother's in one off of Antelope and what avenue.

So, not too far from here. And I do understand the contract is significantly different than the residential purchase agreement, as well. 17-page document, comparative to an 11-page document. Also, the type of transaction on the loan is very different. When we did the manufactured home, it was a lot closer to like a car loan.

It's a, it's a chattel loan.

Yeah. It was a lot closer.

Because it's personal property.

Yeah, personal property that can move.

Yeah.

And so—and that's where I was trying to figure out, is it, is it a liability issue for the park ownership on that, or when it comes to, you know, somebody willing to—and then the question of individual rights and liberties of your own property on that.

Because I do understand it's a quasi-agreement. You have a personal property on a land lease agreement. So, that's where I'm trying to figure out, where is it liability, that comes with the opposition, or what, where, what, what's the direction?

Well, I would argue that the liability issue is real on the part of the park owner because if we knowingly, or fail to exercise proper measures to ensure health and safety in Title 25 is filed, and the park burns down, I could envision a case real quick where the other park owners, or the other mobile homeowners, you know, sue the park owner for dereliction.

And that's, that's part where, for me, I would feel comfortable if there were some protections for the park owners and managers that way. I think they would feel comfortable if it removes some of that liability on different things.

Because while they're trying to protect and look after the entire park, I understand the individual transaction and I have deep respect for that, as well. So, I'm just going to lay off this Bill. I hope that the author would actually—would think about that one from the liability end on that and hopefully we can work together.

Yeah, we're obviously always willing to continue discussion. I'll tell you, as a lawyer, one way to guarantee liability is to require inspections. So, it's the reverse of what you argued. So, basically, you kind of read why liability is limited. If you were to argue that there should be required inspections that's imposing—that will be liability.

And you're saying just because of the knowledge that if the park figures it out, that there is something wrong, and they don't take action, that they could be sued?

Sure. Yeah.

Well, I, I would agree that if a park did know that, and that's where when we talked about sharing the disclosures, park ownership, they, they could ask for the disclosure, but there's no guarantee to legally give it to them, that if there was a transaction between the buyer and the seller, that park ownership is required to receive one of those documents.

And so, that's the part where I'm just, I'm looking at it from the lens of one, the individual transaction, but two, the park ownership, that I believe that is the largest worry—is that part on health and safety.

Well, it's health and safety, but it's also protecting our interests in, in the, in the greater scheme of things, when it comes to—we do not want a substandard home to be sold in the community. If it's a fire trap, it's a risk, it's got to be fixed.

And there's no way for us to know what's on the interior right now. But when a sale of a home takes place, that's why we believe it's important that an interior inspection take place, to ensure that the home is safe and is not a danger to the future buyer.

Which is, which is what I see why it's so different than, you know, I'm not the biggest fan of HOAs either. But this is a different agreement because the park ownership owns the land. The property, chattel property, is owned by the, the buyer of that.

So, there's a different layer of agreement, where your safety is the entire side of things. We're looking at it. So, I'm going to lay off of it. I hope that, again, that in more engaged dialogue because it seems like both ends want to focus on the health and safety and individual rights and liberties, as well.

Thank you. Ms. Avila Farias.

Thank you, Chair. First, want to thank the author for bringing this forward. Always admire people that want to fix spaces that, you know, sometimes rolled out not so perfect, or we haven't gone back and tweaked, and I know you do a lot of work in the space, so thank you for that.

Just had one question and then a few follow ups. One, was HCD consulted any of the staff on the housing quality standards' inspections and was there any dialogue there with HCD?

I'm not understanding the question.

So, this fall, mobile home parks fall under the preview of HCD and you're trying to change legislation that falls under their umbrella.

So, if we're trying to fix something, I'd like to understand, from their perspective or consultation of, you know, is there really what—the unintended consequences of playing with legislation around housing, when the main player in the space is HCD, is pretty critical for me.

And so, it sounds like.

I'll again turn to legal counsel, but the current state of the law, in our view, under, by law, there is no requirement for, at the point of sale, internal inspection, so that's where I'm a little bit confused.

No, no, I understand. But HCD overall, for mobile homes. We're dealing with.

Are you asking, have I asked?

Can I finish my question?

That there should be.

Well, the law right now, HCD has the oversight of housing quality standards for this, and you're trying to deal with the housing quality standard issue, through adding a law that requires an inspection, thinking that we're trying to solve a housing quality standard issue.

So, my question is, have we had discussions with them and if so, what was the spirit and dialogue with them? And if not, that's okay. I'm just inquiring about that because they pay—they play—a role into the space that you're trying to legislate in.

So, just so I'm crystal clear on your question, are you asking if we have consulted with HCD, as to whether there should be internal inspections of the unit, at the point of sale?

Not consulted, but more—I'm trying to create this legislation and curious of thoughts of if this would—is there capacity at the state? Does this help? They'll have an arsenal of questions back to you as well. So, does that—that was more.

We have not done that yet, but happy to.

HCD doesn't do resale inspections. They don't do.

No, I understand. But they are also the umbrella of, overall, that space, so.

Title 25.

Yes. So, I would think that would be an entity that we would want to connect with, as we're trying to change legislation. The other space is, you know, when we want to change policies, we have to think of the overall housing umbrella.

And this is a unique space, you know, from mobile home parks. I mean, there's different types of affordability of housing. And the inceptions of these, you know, it's a different inventory of different housing stock and they're inspected differently, whether they're a homeownership or a rental.

And as someone who spent over 20 years on the housing quality standard side of units, I think we're trying to apply a process in an environment that was not created to adopt this, and there is already a mechanism for an independent person to get an inspection privately.

What it sounds like we need is more first time homebuyer education. Regardless, if you're buying a single family home, you know, whatever your purchase choice is of the market available in California, we need to educate homebuyers of their rights and how to protect themselves.

And I don't feel that this policy that we're trying to move forward is really addressing the overall diverse housing stock and need that is very different from the single-family market. And so, I have more questions. This Bill presents more unintended consequences to a very fragile housing ecosystem right now.

So, I really can't get behind this, and I don't think I can support it in its form today. But I understand what you're trying to do and I'm happy to collaborate and figure out how we deal with deferred maintenance of interior units.

The State of California, we're dealing with it even on single family. There's no funding mechanism for people to go to a private or public bank to finance rehabilitation. We have an aging housing stock on all the inventory throughout the State of California. So, we have to think about it from that lens—is how do people improve interiors and exteriors and what is the financing tool?

And we can apply the laws without thinking of the whole holistic umbrella of where all this falls. So, I'm sorry, but I think at this moment, it's not ready. Thank you.

All right, seeing no more comments, I'll give the opportunity to close.

Thank you for the really thoughtful conversation. Kind of raised some broader issues that we'll carefully consider. We will have follow up discussions with staff, with opposition. We will certainly endeavor to drill down on a couple of the key points that were raised. Appreciate that. With that, I would respectfully ask for an "Aye" vote.

Great. Thank you again for your work with our Committee on this and for your leadership and your continued work on the issues raised by the Committee. And we will have a "Do pass as amended" roll call vote.

[Roll Call]

All right, if we can go back through, what was the. Thank you. Eight to one, I think. Eight to one. Yes, eight to one. All right, if we can go back through. Yep, we're all set. Thank you. And go back to call the absent Members on item number three Ta AB760.

[Roll Call]

All right. AB item number four, AB 1445. Haney.

[Roll Call]

All right. And the consent calendar.

[Roll Call]

All right, I think we are done. Thank you all, meetings adjourned.