BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 2025|
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THIRD READING
Bill No: AB 2025
Author: Silva (R)
Amended: 6/9/08 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE : 5-0, 6/10/08
AYES: Corbett, Harman, Ackerman, Kuehl, Steinberg
ASSEMBLY FLOOR : 76-0, 4/14/08 - See last page for vote
SUBJECT : Commercial real property: termination of
tenancy:
disposition of personal property
SOURCE : California Business Properties Association
DIGEST : This bill increases the monetary threshold
amount for determining whether a commercial landlord must
dispose of a departed tenants unclaimed property via a
public sale, or dispose of the property themselves, from
$300 to the lesser of $750, or $1 per square foot of the
premises occupied by the commercial tenant.
ANALYSIS : Existing law requires a landlord to provide
written notice to a former tenant of the tenant's right to
reclaim personal property left behind when the tenancy was
terminated. The notice must inform the tenant whether the
landlord intends to hold a public sale for the property or
to keep, sell, or destroy the property without further
notice because the landlord believes the property to be
CONTINUED
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worth less than $300.
Existing law provides the tenant at least 15 days to claim
the property if the notice is personally delivered, and at
least 18 days if the notice is mailed. If mailed, the
notice must be sent by first-class mail to the tenant at
his or her last known address and, if that mailing address
is reasonably believed to be deficient, to another address
known by the landlord where the tenant may reasonably be
expected to receive the notice.
Existing law authorizes a landlord to retain or dispose of
personal property left on the premises and
unclaimed by the former tenant if the landlord reasonably
believes that the property has a total resale value of less
than $300.
Existing law requires the landlord to hold a public sale
with competitive bidding for unclaimed personal property
left by a former tenant if the value of the property is
believed to be worth $300 or more.
Existing law generally defines "reasonable belief" as the
actual knowledge or belief a prudent person would have
without making an investigation.
This bill increases the monetary threshold value for
tenancies of commercial real property from $300 to the
lesser of $750 or $1 per square foot of the premises
occupied by the tenant, thereby allowing a commercial
landlord to retain or dispose of that property if they
reasonably believe that the total resale value is less than
that amount. This bill does not change the requirement for
the tenant to receive either 15 or 18 days notice of their
right to claim the property prior to sale or disposal.
This bill provides that that notice to inform commercial
tenants of their unclaimed property shall include, when
applicable, that their property is believed to be worth the
lesser of $750 or $1 per square foot of the premises and
that it may be kept, sold, or destroyed if the property is
not reclaimed within the indicated timeframe.
This bill places the above changes to existing law in a
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separate code section, thus, separating those provisions
from sections relating to residential tenancies.
This bill states that "commercial real property" has the
meaning specified in the Civil Code for commercial rent
control, thus, defining that property as any part, portion,
or unit thereof, and any related facilities, space, or
services except (1) any dwelling or dwelling unit, as
specified, (2) certain accommodations in hotels, or (3) any
space or dwelling unit in any mobilehome park, as
specified. This bill exempts self-storage units from the
definition of commercial real property.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 6/12/08)
California Business Properties Association (source)
Building Owners and Managers Association of California
ARGUMENTS IN SUPPORT : According to the bill's sponsor,
the California Business Properties Association:
"Current law provides a process for a building owner to
hold a public auction to dispose of abandoned property
deemed to be worth more than $300 and treats residential
personal property in the same manner as non-residential
commercial property, even though the residential setting
is very different from the business setting and have very
different scenarios under which the property is left
behind. This bill would create a separate process for
property that is left behind in a commercial setting but
would not change current law for residential property.
"Additionally, the $300 'threshold' amount may be
reasonable for personal property in a residential
setting, this threshold in unreasonably low in the
commercial setting. Many times after deducting the costs
of storage, advertising, and sale, it ends up costing a
building owner more to get rid of items that are many
times left behind intentionally, than they would receive
through an auction. Under the $300 limit, one obsolete
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laptop, a single desk and chair, or even just a bunch of
moving boxes and pallets, can compel a commercial
building owner to hold a public auction.
"Many building owners are small businesses that cannot
afford to take the risk of being sued so they are forced
into a public auction situation in which they may, or may
not, recoup the costs of disposing of abandoned property.
By updating the threshold for a commercial setting,
which has not been changed since 1984, AB 2025 simply
provides a more reasonable value amount to trigger the
public auction process to dispose of abandoned commercial
property."
ASSEMBLY FLOOR :
AYES: Adams, Aghazarian, Anderson, Arambula, Bass, Beall,
Benoit, Berg, Berryhill, Blakeslee, Brownley, Charles
Calderon, Carter, Cook, Coto, Davis, De La Torre, De
Leon, DeSaulnier, DeVore, Duvall, Dymally, Emmerson, Eng,
Evans, Feuer, Fuentes, Furutani, Gaines, Galgiani,
Garcia, Garrick, Hancock, Hayashi, Hernandez, Horton,
Houston, Huff, Huffman, Jeffries, Jones, Karnette, Keene,
Krekorian, La Malfa, Laird, Leno, Levine, Lieu, Ma, Maze,
Mendoza, Mullin, Nakanishi, Nava, Niello, Parra, Plescia,
Portantino, Price, Sharon Runner, Ruskin, Salas, Saldana,
Silva, Smyth, Solorio, Spitzer, Strickland, Swanson,
Torrico, Tran, Villines, Walters, Wolk, Nunez
NO VOTE RECORDED: Caballero, Fuller, Lieber, Soto
RJG:mw 6/12/08 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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