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Navigating New Real Estate Laws in California for 2024

Posted by William O. London | Sep 26, 2024 | 0 Comments

Real estate judgement in California over new laws

Navigating California's complex real estate laws requires a deep understanding of both current regulations and evolving legislation. From mandatory disclosure requirements to the latest legal developments surrounding accessory dwelling units (ADUs), staying informed is not just advisable—it's essential for both buyers and sellers to avoid costly mistakes.

Compliance with these laws ensures not only the smooth execution of real estate property transactions but also the protection of your legal and financial interests. Let's explore key legal obligations and offer actionable insights to help you make informed, strategic decisions in California's market.

Table of Contents:

New and Updated Real Estate Laws in California

California consistently ranks among the top states with the most complex real estate laws. Let's look at some recent changes, exploring their implications for anyone involved with property in California.

Changes to Exclusive Listing Agreements (AB-1345)

Historically, California real estate agents enjoyed more autonomy when securing clients, sometimes leading to extended contracts. AB-1345 shifts the dynamics of residential exclusive listing agreements in California, aiming to offer homeowners greater control and make the process less intimidating for first-time sellers.

Under AB-1345, exclusive listing agreements have a maximum term limit. This act prevents lengthy lock-in periods, granting sellers the flexibility to switch agents or explore other sales avenues. This fosters a fairer marketplace, encouraging competition amongst agents. This added flexibility encourages sellers to enter the market without being locked into long-term contracts.

Disclosure Responsibilities for Residential Flippers (AB-968)

California real estate laws emphasize transparency. With house flipping gaining traction, especially in California's competitive market, ensuring buyers know a property's history is paramount. This led to AB-968.

AB-968 introduces new disclosure requirements. Individuals or entities that resell a residential property within a short timeframe, typically within a year, must disclose repairs or renovations made during their ownership. This law safeguards buyers, empowering them to make informed decisions, particularly in homes that were recently flipped.

With California's increasing demand for affordable housing, accessory dwelling units (ADUs) have surged in popularity. They offer homeowners rental income opportunities and ways to create multi-generational living arrangements. Recent adjustments to California real estate law signal a commitment to promoting these secondary units.

AB-1033 allows California ADU owners to sell their accessory dwelling unit separately from the main house. This offers homeowners a new source of income while adding to the availability of affordable housing options. However, the changes under AB-1033 are conditional.

The ADU and primary residence must be separate condominiums, governed by an association that may have additional rules. Property owners should engage with legal counsel for clarification before listing. Complementing AB-1033, SB-976 increases the supply of rentable units. This law makes permanent the ban that restricted local governments from requiring owner-occupancy on properties with ADUs. This allows property owners to rent both units without living on-site. This will likely lead to a more diverse and accessible housing market, potentially alleviating the state's housing shortage.

The Use of Remote Online Notarizations (SB-696)

Notary signing agents play a critical role, traditionally requiring in-person meetings. With Senate Bill 696, notarization has entered the digital age.

The bill authorizes remote online notarizations (RON) (SB-696), offering unparalleled convenience for individuals, especially those working with international buyers. It facilitates faster closings and proves helpful in scenarios requiring signatures from multiple parties, such as loan agreements. This is also convenient for elderly individuals or people with disabilities who may not be physically present.

However, remote online notarization comes with conditions. All parties, including the notary and signatories, must meet identity verification requirements to minimize fraud risks. This highlights the state's commitment to digital security. California's move towards digitalization in emphasizes a forward-thinking approach, improving efficiency without jeopardizing legal authenticity.

Mandatory Fire Hazard Disclosures Expand (AB-1280)

Real estate transactions demand transparency. The California DRE safeguards those engaged in these transactions. AB-1280 expands the scope of necessary disclosures related to fire hazards for California properties.

AB-1280 ensures sellers disclose specific data about a fire hazard severity zone. This gives prospective buyers a clearer understanding of potential risks. It equips them with the information needed to determine suitability and potential insurance implications. This amendment aligns with earlier legislation, such as AB-38, passed in 2019, which mandated fire-related disclosures.

By intensifying the focus on disclosures related to fire risk, California shows its commitment to fire safety. By enacting laws such as AB-1280, the state aims to protect both buyers and sellers. Providing clarity during the transaction can also help reduce post-purchase disputes.

Conclusion

Staying informed about these real estate laws in California is critical in such a dynamic market. New legislation emphasizes transparency, efficiency, and equity. Consulting a knowledgeable real estate attorney can make the process smoother, providing insights to help navigate complexities. They can offer support through every stage of your transaction.

About the Author

William O. London

William “Bill” London is a founding partner of Kimura London & White LLP and focuses his practice on business, real estate, trusts & estates law, family law and mediation services. Mr. London has counseled high-profile clients on multi-million dollar projects, closely collaborating with them to achieve their goals. Above all, clients value Mr. London for his responsibility, loyalty, and integrity.

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