AB 1521

Bill Subjects

Abstract

(1) The Planning and Zoning Law requires an owner of an assisted housing development proposing the termination of a subsidy contract or prepayment of governmental assistance, or the owner of an assisted housing development for which there will be the expiration of rental restrictions, to provide a notice of the proposed change to each affected tenant household residing in the assisted housing development, as specified, and provide a copy of any notices issued to any prospective tenant at the time he or she is interviewed for eligibility. That law provides injunctive relief for persons aggrieved by a violation of these provisions, as specified. This bill would require the owner of an assisted housing development that is within 3 years of a scheduled expiration of rental restrictions to also provide notice of the scheduled expiration of rental restrictions to any prospective tenant at the time he or she is interviewed for eligibility, and to existing tenants by posting the notice, as specified. The bill would additionally specify that injunctive relief may include, but is not limited to, the reimposition of prior restrictions, as specified, and restitution of rent increases that were collected improperly. The bill would additionally authorize the court to award attorney's fees and costs to a prevailing plaintiff bringing an action for injunctive relief pursuant to these provisions. (2) The Planning and Zoning Law prohibits an owner of an assisted housing development, as defined, from terminating a subsidy contract or prepaying the mortgage, as specified, unless the owner or its agent has first provided specified entities an offer to purchase the development. That law requires an owner of an assisted housing development in which there will be the expiration of rental restrictions to also provide specified entities an opportunity to submit an offer to purchase the development. That law also requires an owner of an assisted housing development to provide specified entities with notice, as provided, of an opportunity to submit an offer to purchase under specified circumstances. Existing law requires an opportunity to purchase the development to be provided to entities that include, among others, regional or national nonprofit organizations, regional or national public agencies, and profit-motivated organizations. This bill would limit the opportunity to purchase the development to those agencies and organizations described above that own and operate at least 3 comparable rent- and income-restricted affordable rental properties governed under a regulatory agreement with a department or agency of the State of California or the United States, either directly or by serving as the managing general partner of limited partnerships or managing member of limited liability corporations. Existing law requires, to qualify as a purchaser of an assisted housing development, specified entities to, among other things, be capable of managing the housing and related facilities for its remaining useful life, as specified. This bill would revise that requirement by instead requiring specified entities to be certified by the Department of Housing and Community Development, based on demonstrated relevant prior experience in California and current capacity, as capable of operating the housing and related facilities, as specified. The bill would require the department to establish a process for certifying these entities and to maintain a list of entities that are certified, as specified. Existing law, if a qualified entity elects to purchase an assisted housing development, requires the qualified entity to make a bona fide offer to purchase the development, as specified. Existing law authorizes the owner or the qualified entity to request the fair market value of the property be determined by an independent appraiser. Existing law, during the first 180 days from the date of an owner's bona fide notice of the opportunity to submit an offer to purchase, requires an owner to accept a bona fide offer to purchase only from a qualified entity and requires a purchase agreement to be executed when a bona fide offer to purchase has been made to an owner and the offer is accepted. This bill would revise the offer and acceptance process described above by requiring the bona fide offer to purchase made by the qualified entity to be at the market value determined by negotiation and agreement between the parties, and if the parties fail to reach an agreement regarding market value, by an appraisal process initiated by the owner's receipt of the bona fide offer, as specified. The bill would prohibit the owner, if the owner has received a bona fide offer to purchase made within 180 days of the owner's notice of the opportunity to submit an offer, from accepting offers from any other entity, and would require the owner to either accept this bona fide offer to purchase or declare to the Department of Housing and Community Development under penalty of perjury that the owner will not sell the property for at least 5 years from the date of the declaration. By expanding the definition of the crime of perjury, this bill would impose a state-mandated local program. This bill would require an owner who wishes to sell, and who has received a bona fide offer that meets these requirements, to accept the offer and execute a purchase agreement within 90 days of receipt of the offer. The bill would require the owner to take all steps reasonably required to renew any expiring housing assistance contract, or extend any available subsidies or use restrictions, as provided, once a bona fide offer is made. Existing law requires an independent appraiser determining the fair market value of the property as described above to possess qualifications equivalent to those required by the members of the Appraisers Institute. This bill would additionally require appraisers to be certified by the Department of Housing and Community Development as having sufficient experience in appraising comparable rental properties in California. Existing law requires the Department of Housing and Community Development to undertake specified responsibilities and duties with respect to the provisions described above. This bill would additionally require the department to refer violations of these provisions to the Attorney General, as specified, and monitor compliance with specified provisions by owners of assisted housing developments and to provide a report to the Legislature, as provided. Existing law authorizes the requirements described above to be enforced either in law or in equity by specified entities. This bill would additionally authorize a tenant association at the property or any affected public entity to enforce these requirements either in law or in equity. The bill would authorize the court to waive any bond requirement and award attorney's fees and costs to a prevailing plaintiff under these provisions. (3) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.