New California Real Estate Laws Now in Effect

 Posted on September 17,2021 in Estate Planning

Every July 1st, there are usually a handful of new laws that California lawmakers have passed that go into effect. Included in the list this year were several real estate laws. The following is a brief overview of each of these new statutes. If you have questions about how any of these new laws may affect your situation, a California real estate attorney can help.

New Buyer Fire Notice

AB 38 was passed to protect new home buyers from purchasing a property without being aware the home is located in a high fire risk area. It requires a seller to provide a list of all items that are not fire-resistant and that could be at risk in the event of a wildfire. This specific document must now be part of the closing package that a buyer must sign to confirm they have been informed of the risk. The form also provides information on how a buyer can prepare their home for wildfires. This is referred to as fire hardening.

Homeowner Association Rentals

AB 3182 requires homeowner associations (HOAs) to allow a minimum of 25 percent of their property to be rented. Prior to the law’s passage, an association could severely limit the number of rentals or prevent them entirely. This new law also prevents an HOA rule that an owner must live in a property for at least one year before they can rent it out; however, it does not stop an HOA from having a rule blocking short-term rentals.

Right of First Refusal in Foreclosures

Lawmakers passed this law in order to prevent investors from purchasing up large numbers of foreclosed properties. SB 1079 creates a way for renters who live in the property to try to purchase the property for themselves.

When a foreclosed home goes up for auction, if an investor who does not plan on living in the property has the winning bid, any tenant who lives in the property has 15 days following the auction to submit their intent to purchase. They then have 45 days from the date of the foreclosure auction to come up with the funds that match the winning bid amount and the home is theirs.

If the renter does not want to put in an offer, any other individuals who plan on living in the home have 45 days to make a bid on the property. If the bid is higher than the amount of the investor’s winning bid, they will gain ownership of the property.

Homestead Exemption

When a person purchases a home that will be their primary residence, they declare the property as their homestead. Homestead exemptions protect owners from losing their property to creditors or if the homeowner files for bankruptcy. AB 1885 raises the amount of home equity that can be protected from a judgment or lien.

Prior to the new law, the limit that was protected from a lien was $75,000 for a single-owner property and $100,000 for a home that had more than one owner. The new law significantly raises those amounts to $300,000 and $600,000, respectively.

Contact a California Real Estate Attorney

If you are purchasing or selling a new home or have other real estate needs, a seasoned California real estate attorney can help ensure you are protected in any transaction you are considering engaging in. Call the Law Office of David Schechet today at 800-282-4731 to schedule a free consultation.

Sources:

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB1885

https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200SB1079

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB38

https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200AB3182