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| REALTORS® from California's Region 21 (Inglewood, Palos Verdes and South Bay) on the floor of the California Assembly on April 30, 2014. |
REALTORS® from the South Bay joined others from all over California to converge upon the State Legislature on our successful Legislative Day. Thousands of REALTORS® from all over California made their voices heard in our state capitol on issues ranging from taxation to property rights and rent control.
In addition to hearing from Governor Jerry Brown, we had the opportunity to share with legislators about our concerns and questions on several key pieces of legislation. In particular, members of the California Association of REALTORS® focused on these bills that will have a major impact on families and homeowners across the state:
SB 1439 and AB 2405: Ellis Act Restrictions. C.A.R. is OPPOSING SB 1439 (Leno) which forces landlords to stay in business for at least 5 years, and AB 2405 (Ammiano) which would prevent landlords from ever going out of business. C.A.R. opposes these bills because they are an outrageous attack on private property rights and because they will discourage homeownership.
In 1985, C.A.R. successfully sponsored the “Ellis Act” which prevented local governments from passing laws restricting the ability of landlords to go out business. The Ellis Act currently provides protections in terms of advance notice to tenants, relocation assistance and extended notice protections for seniors and the disabled when a landlord elects to go out of the rental business.
SB 1439 will empower local government to restrict the ability of landlords to take rental units off the market unless every owner of that rental property has owned the property for at least FIVE consecutive years. This effectively forces landlords to remain in the rental housing business making it impossible for these owners and their families to occupy their own property.
These bills restrain and effectively prohibit the free use of private property in rent control jurisdictions, provide no exceptions or relief for property owners who have personal or financial hardships, and are fundamentally offensive to the notion of private property rights.
AB 2309: Auction Company Liability. C.A.R. is pleased to sponsor this bill, introduced by the South Bay's Assemblymember Al Muratsuchi (D-66). This bill will prevent real estate auction companies from shifting liability for their mistakes to sellers and listing agents when the lender sends short sale properties to auction to validate their value. We are grateful to Assembymember Muratsuchi for his support of this important issue.
A new practice has arisen where some lenders require homes in a short sale transaction to be put up for auction typically run by a third party auction company chosen by the lender. If the bids come in under the original offer, then the offer is accepted. If, however, a higher bid is submitted, then that bidder can purchase the home.
The lender, of course, has complete control over the auction contract. As a condition of approving the short sale and absent legislation to the contrary, the lender can include a provision in the contract requiring the homeowner to agree to defend, indemnify, and hold harmless the auction company from any costs, liabilities, and damages arising in connection with any claim resulting from the auction company’s actions.
These provisions only exclude cases of gross negligence, willful misconduct, bad faith, an unlawful act or fraud. In other words, the auction company is held harmless for mistakes it makes in the regular course of business.
SB 391: Recording Tax. C.A.R. continues to OPPOSE SB 391, which will impose a $75 tax on the recording of all non-sale documents, including refinances. C.A.R. opposes SB 391 because it unfairly singles out one segment of society to pay for something that should be the responsibility of all Californians.
C.A.R. is OPPOSING SB 391 (DeSaulnier) which imposes a recording TAX to generate funds for affordable housing programs. SB 391 creates a $75 per document recording TAX to fund the affordable housing trust. C.A.R. is opposing this measure because it unfairly adds to the cost of recording real estate documents. C.A.R. is an aggressive advocate for affordable housing, but believes it is bad policy to fund affordable housing at the expense of homeowners who need to record real estate documents. The real issue is that this TAX is imposed only on real estate document recordings. Affordable housing programs should be funded by the broadest base possible of California's citizens.
