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SR-407-000-02 (2) '/P1--tJtJ() -~ ~ CC: DF: KKS : dvm City Council Meeting 4/19/88 APR 1 q 19B~ Santa Monica, California ... TO: Mayor and city council FROM: Council Member David B. Finkel SUBJECT: Discussion of 5B 1784 It is requested that Council discuss opposition to SB 1784 (Royce). Under current law, an owner wishing to go out of business under the Ellis Act must withdraw all rental units from the rental market at the same time. This bill would permit an owner seeking to occupy a unit to withdraw a single unit from the rental market pursuant to the Ellis Act. This bill undermines the owner occupancy restrictions in the Rent Control Law. If enacted, the bill would pre-empt Section 1806 (h) of the Charter, which restricts owner-occupancy eviction to owners with more than fifty percent interests, among other restrictions. The bill would also prohibit the City from restricting the use of agents or delegation of authority in connection with the withdrawal of units from rental use under the Act. Because a withdrawal binds all owners to restrictions on the subsequent use of the property, most cities require the signatures ot all owners on an application to withdraw. Further, the proponents of the original Ellis bill made a firm commitment to Santa Monica representatives, when the Ellis bill language was being negotiated, not to seek withdrawal of less - 1 - 5 APR 1 9 1988 . than all the units of a building from the rental market if the owner chose to go out of the rental business. Hence sa 1784 is, in effect, a breach of that promise. (SB1784) - 2 - I LEGISLATIVE BILL TEXT <C}1984 BILLTRAK-CIM ELECTRONIC DATA SYSTEMS 5 E N Ft T E B ILL f 784 AMENDED IN SENATE MARCH 10, 1988 Introduced by Senator <EllIs> (ROYCE) January 19, 1988 An ect to 8Mend SectIon 7060.7 of, and to add SectIon 7060.8 to, the Govern~ent Code, relatIng to real property. LEGISLATIVE COUNSEL'S DIGEST S8 1784, as aMended, <EllIS> {ROYCE]. ReSIdential real property: regulatIon. EXi~tlnQ law, with certaIn ey.ceptions, prohIbIts publIC entItles frOM COMpelling owners of reSIdential real property to offer or contInue to offer the property for rent or lease. However, eXIsting Jaw perMits a publIC entIty with rent controls 1n effect to restrIct the right of 6 landlord to WIthdraw reSldentJal aCCOMModatIons frOM the rental Market In accordance with statutory conditions. Existing law perMIts these restrIctions to include a requireMent that all of the rental aCCOMModatIons, as defined, be WIthdrawn fro~ the rental ~arket in order to Withdraw any of the rental ecco~~odation5 at a particular location. ThiS bIll would preclude these restrictions frOM reqUIrIng WIthdrawal of all the rental aCCOMModatIons at a particular locatIon fro~ the rental Market 1n order to per~lt ~lthdrawing a partIcular unIt for occupancy by an owner of the property. The bIll would also prohIbIt publIC entItles fro~ restrIctIng the use of agents or delegation of authorIty, as aMong coowner! of reSIdentIal real property, in connection with exerci!lng any rIQht or perfOrMIng obligations under the above-descrIbed statutory prOVISIons. Vote: MaJorIty. ~pproprlatlon: no. FIscal COMMIttee: no. State-Mandated local prograM: no. The people of the State of California do enact as follows: , SECTION I. Section 70S0.7 of the Govern~ent Code 15 a~ended to read: 7060.7. It 15 the Intent of the Legislature 1n enacting thiS chapter to supersede any holding or portIon of any holding 1n Nash v. C1ty of Santa Monlca. 37 Cal. 3d 97 to the extent thai REPORT DATE: 04/11/88 581784 PAGE 2 the holding, or portion of the hold1ng. conflicts ~lth thiS chapter, so as to per~lt landlords to go out of bus1ness. However, thiS chapter is not otherwise Intended to do any of the follow1ng: < < 1 )} [<A)] Interfere with local govern~ental authority over land use, including regulation of the conversion of eXisting hous1ng to condo~ln1u~s or other subdiVided Interests. {<2>) [es>] Override procedural protect1ons des1Qned to prevent abuse of the right to eVict tenants. <<3>> [(C)] Per~it an owner to withdraw fro~ rent or lease less than all of the accol'lModatlons, as def1ned by paragraph (I) or <2> of aubdlvlsion (b) of Sectlon 7060, except for the purpose of cO~Menclng occupancy of a reSldent1al rental unlt by an owner of the reSidential real property. (<4)) [(0)] Grant to any publiC entity any power which 1t does not possess independent of thIS chapter to control or establish a 'yste~ of control on the price at whIch acco~~odatlon5 ~ay be offered for rent or lease, or to dl~lnish any such power whlch that publ1C entIty ~ay possess. except as speCIfically prOVided in thls chapter. (<5)) [<E)] Alter In any way either Section 65863.7 relatlng to the withdrawal of acco~~odatlons which COMprise a ~ob1lehoMe park frOM rent or lease or subd1vision <f) of Section 798.56 of the CIVIl Code relatinQ to a change of u~e of a ~oblleho~e park. SEC. 2. Sect10n 7060.8 15 added to the 6overn~ent Code, to re/lld: 70S0.S. No publIC entIty, as defJned In SectIon 811.2. shall li~lt the use of agents or restrlct delegatlon of author1ty as a~onQ owners of Interests 1n reSIdential real property speCIfIed In Sect10n 682 of the C1V1I Code, for purposes of exerclsIng any rlQht or perfor~lng any oblIgatIon under thiS chapter. LEGEND: <Deleted text> rNEW TEXT] END OF BILL TEXT