January 10, 2023
With each new year comes new and revised evolutions to existing real estate laws. Similar to our article updating the new real estate forms, which have gone into use in December 2022, this article will examine some of the new laws the State of California has passed that affect membership. The changes noted are important for practitioners and consumers. This article intends to provide a brief overview of some of the changes taking place in the laws governing California Real Estate.
Note: information about the changes noted in this newsletter comes directly from C.A.R.
AB 1410 will modify California Civil Code section 4750, and add to sections 4739, 4754, 5101, 5870, 5875, 5880 to the Civil Code. The changes to this law addresses some concerns brought about by social media. For example, governing documents for a homeowner’s association (“HOA”) can no longer prohibit members of the HOA from discussing their common interest development (“CID”) on social media, including critical discussion and speech of the association or its governance. Additionally, AB 1410 will render unenforceable any provisions of HOA documents that limit owners of an owner-occupied space from renting that space for more than 30 days. Finally, considering the COVID-19 pandemic, the new law also bans enforcement actions brought by the association against non-compliant members during a declared emergency, if that emergency makes it unsafe to comply. Importantly, this new law does not apply to the non-payment of assessments.
This new law changes parts of the process defined in Senate Bill (“SB”) 1079 in 2020. The older versions of the law allowed existing tenants, prospective owner-occupants, non-profit organizations, and local governments, to name a few, up to 45 days after a home foreclosure auction to make an offer that meets the winning bid. Specifically, the new law modifies the types of non-profit entities that qualify and excludes certain limited liability companies (“LLC”s) and all limited partnerships from bidding. There is also a provision that allows certain eligible bidders to create affordability covenants. The new law also creates a new enforcement mechanism for the SB 1079 process through the Attorney General, county counsels, city attorneys, or district attorneys, which enables the enforcement of the provisions of the AB 1087 through specific performance or any other remedies that law and equity provide.
Under AB 2170, there will be an initial 30-day window for eligible bidders to purchase properties acquired by lending institutions through foreclosure. The new law will require institutions that foreclose on 175 or more properties per year to accept offers from prospective owner-occupants, qualified non-profits, government entities, and other affordable housing providers for the first 30 days after a real estate owned (“REO”) property is listed for sale. REO meaning properties that are acquired by lending institutions through foreclosure auction sales. Further, under the law, lenders must respond to all offers in writing and they cannot bundle more than one foreclosure in single sale. Under AB 2170, a “bundle” is defined as, “the sale of two or more parcels of real property containing one to four residential dwelling units, inclusive, at least two of which have been acquired through foreclosure under a mortgage or deed of trust.” (Civ. Code, § 2924p(b)(1))
This new law will charge the California Law Revision Commission with delivering a study to the California Legislature, which examines the establishment of consistent terms used in California law to describe parties to an agreement, lease, or contract for the rental of residential real property. This law will also apply to language and terminology used in contracts and agreements for lease or rental of mobile homes.
New AB 2559 defines the elements that reusable tenant screening reports must contain. Under the new law, “reusable screening report” is defined to mean a report that:
Was prepared within the previous 30 days by a consumer reporting agency at the request and expense of an applicant[;] [i]s made directly available to a landlord for use in the rental application process or is provided through a third-party website that regularly engages in the business of providing a reusable tenant screening report and complies with all state and federal laws pertaining to use and disclosure of information contained in a consumer report by a consumer reporting agency[; and] [i]s available to the landlord at no cost to access or use. (Civ. Code, 1950.1(e)(6)(A)-(C).)
Additionally, landlords will be prohibited from charging fees if they accept a reusable screening report; although, it does not require them to accept a reusable screening report. Further, any local rules that provide more protection to the applicant will prevail.
This bill changes the experience requirement for sitting for the real estate broker’s exam. Under the new rule, any general, non-licensed real estate experience used by the candidate to qualify for the exam must occur within five years of the examination application date.
AB 2960 clarifies that any real estate disclosure statement requirements effective on the date the sales contract is entered into will control the contract through its completion. This is the case even when real estate disclosure requirements are changed by statute after the contract is entered into but before complete performance is rendered.
This Senate Bill clarifies the Probate code regarding how a conservator or guardian may bring a partition action when the property is the conservatee’s present or former personal residence.
SB 1017 clarifies tenancy protections for victims of domestic violence or abuse. Included in the protections is a provision, which allows tenant victims to terminate their tenancy without penalty, and protection from eviction based solely on the acts of violence or abuse against them. Further, it extends eviction protection to tenants whose family members are the victims and to victims of crimes involving bodily injury or guns. Additionally, under the new law, landlords can be liable in civil actions to the tenant for actual damages and a fine up to $5,000 for not allowing a victim, who followed proper notice requirements under the law, to terminate their tenancy without penalty. Finally, changes to evidence release dates concerning eviction proceedings by expanding the evidence, courts can properly consider as proof of abuse or violence in eviction proceedings. It also establishes new court procedures for granting a partial eviction when the perpetrator of the abuse or violence resides in the same unit as the victim.
This law changes the substance of the real estate practice course, which is required for all applicants to the real estate salesperson or broker examinations. There are two new additions to the practice course. First, the practice course will now include specific training and education for implicit bias, including but not limited to training on: explicit bias; systemic bias; historical and social impacts of bias; and steps students can take to address their own biases. Second, the practice course will now include training on state and federal fair housing laws and their practical application to practice of real estate. This second component includes a section where there is a role-play in which the student acts as both consumer and real estate professional. Finally, one minor change included in SB 1495 is the extension of the deadline for a licensee to publish a statement in their local newspaper that they will be using a fictitious business name. The deadline is increased from 30 to 45 days under the new bill. Note: this law will not take effect until January 1, 2024.
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