Real Estate Legislation December 7, 2022

Legislative Update- Summary of New California Real Estate Laws for 2023

Several new real estate laws take effect on January 1, 2023 that I wanted to share with consumers.  Whether you own a primary residence, rent or have investment property, this is good information to be aware of.  Discussions of homeowners associations on social media, tenant screening reports and seller disclosure requirements may be of particular interest.  As I always say, information is free, knowledge is power.  All information courtesy of the California Division of Real Estate. You can click on the link of each bill to read the full text and details behind each one.

Assembly Bill (AB) 1410 disallows the governing documents of a homeowner’s association (HOA) from prohibiting members and residents from discussing their common interest development (CID) on social media, including discussions that are critical of the association or governance. It also makes unenforceable any provisions of HOA governing documents that prohibit owners from renting a portion of the owner-occupied space for a period of more than 30 days. Lastly, it prevents an HOA from pursuing enforcement actions for violations during a declared emergency, if that emergency makes it unsafe to fix the violation; this will not apply in cases of nonpayment of assessments.

 

AB 1837 makes changes to the process established by Senate Bill 1079 in 2020, which allows existing tenants, prospective owner-occupants, nonprofit organizations, and local governments, among others, up to 45 days after a home foreclosure auction to make an offer that meets the winning bid. It modifies the types of nonprofit entities that qualify as eligible bidders and disallows certain limited liability companies, and all limited partnerships, from bidding. It also subjects homes purchased by certain eligible bidders to a recorded affordability covenant and creates an enforcement mechanism for the SB 1079 process through the Attorney General.

 

AB 2170 provides an initial 30-day window for eligible bidders to purchase properties acquired by lending institutions through foreclosure, also known as “real estate owned” (REO) properties. The bill requires institutions that foreclose on 175 or more properties per year to only accept offers from prospective owneroccupants, qualified non-profits, government entities, and other affordable housing providers for the first 30 days that an REO property is listed for sale. It also requires institutions to respond to each offer in writing and prohibits institutions from completing a bundled sale of more than one foreclosed property.

 

AB 2503 requires the California Law Revision Commission, by December 31, 2024, to deliver a study to the Legislature examining the establishment of consistent terminology in California law to describe the parties to an agreement, lease, or contract for the rental of residential real estate property, including mobile homes.

 

AB 2559 defines and specifies the elements that must be included in a reusable tenant screening report. If a landlord accepts a reusable screening report, the bill prohibits them from charging an application screening fee or a fee to access the reusable report. The bill does not require that landlords accept a reusable tenant screening report and any local rule that provides more protection to the applicant prevails.

 

AB 2960 specifies that the real estate disclosure statement requirements in effect on the date the parties entered into contract shall be the requirements that apply to that sales contract. Any subsequent changes to the disclosure requirement statute after the parties enter into the sales contract will not apply to that contract unless the statute specifies otherwise.

 

Senate Bill (SB) 1005 clarifies the current Probate Code regarding how a guardian or conservator may bring an action to partition a property if the property is the conservatee’s present or former personal residence. Partition actions involve one party of a jointly owned property who wants to sell their ownership rights.

 

SB1017 clarifies current law about the tenancy protections for victims of domestic violence or abuse, their household members, and their immediate family members. This includes protections that allow victims to terminate their tenancy without penalty and protection from eviction based solely on those acts of violence or abuse. It also expands existing eviction protections to tenants whose family members are victims and to tenants who are victims of gun violence or other crimes causing bodily injury. Further, it expands the evidence a court can consider as proof of abuse or violence in eviction proceedings and establishes new court procedures to grant a partial eviction when the perpetrator of violence resides in the same unit as the victim. Lastly, the bill makes landlords liable in a civil action to the tenant for actual damages and for a fine of up to $5,000 if they do not allow a victim, who follows proper noticing requirements, to terminate their tenancy without penalty.

The California state legislature’s page is a great resource to stay on top of the latest legislative activity.
As of early December 2022, interest rates have started to ease a bit and the market remains flexible which has created some nice opportunities. Sellers are still able to realize a healthy amount of equity when selling and buyers are able to benefit from a more patient market.
If I can be of assistance, please let me know.
Warm Regards,
Cara