Our legislators were busy as bees last year, enacting 50 new laws affecting your real estate practice. As a real estate advisor, you need to be able to explain how these new laws may affect your clients. Bookmark this post and refer back to it often. I have provided links to summaries and texts of each of the new laws to answer all your questions.

This is the second of two posts covering the new laws for 2020.

LANDLORD/TENANT: DISCRIMINATION ON THE BASIS OF SOURCE OF INCOME SB 329

“Discrimination” on the basis of “source of income” has been expanded to include a refusal to rent to a tenant based on the tenant’s receipt of federal, state or local housing subsidies including “Section 8. Effective 1-1-20

LANDLORD/TENANT: RELIGIOUS ITEMS MAY BE DISPLAYED ON ENTRY DOORS SB 652

This law, with certain exceptions, prohibits a residential property owner and a common interest development from enforcing or adopting a restriction that prohibits the display of religious items on an entry door or entry door frame of a dwelling. Effective 1-1-20

LANDLORD/TENANT: TENANT ALLOWING OCCUPANCY OF PROPERTY TO PERSON AT RISK OF HOMELESSNESS

SB 1188 Creates a legal framework allowing a tenant, with the written approval of the owner/landlord, to take in a “person at risk of homelessness.” Effective 1-1-20

 

LANDLORD/TENANT: STATEWIDE RENT CAPS AND JUST CAUSE EVICTION

AB 1482 Imposes statewide rent caps of 5% plus inflation and just cause eviction requirements on rental properties. Various exemptions apply including single-family homes and condos (not owned by a corporation or REIT) and properties where a certificate of occupancy has been issued within the past 15 years. Effective 1-1-20

LANDLORD/TENANT: FAMILY DAYCARE HOMES

SB 234 Requires large family daycare homes with up to 14 children to be treated as a residential use for purposes of all local ordinances. Clarifies that apartments may be used as family daycare homes. Effective 1-1-20

LANDLORD/TENANT: RENT INCREASES ABOVE 10% REQUIRES 90-DAY NOTICE AB 1110

The notice period for increasing rent above 10% in any 12-month period is 90 days. Previously, it was 60 days. Effective 1-1-20

LANDLORD/TENANT: RECYCLING BINS AB 827

This new law requires a multi-family dwelling of five or more units, among other businesses, to provide customers with a recycling bin or container for a waste stream that is visible, easily accessible, adjacent to each bin or container for trash other than that recyclable waste stream (except in restrooms) and clearly marked with educational signage. Effective 1-1-20

LANDLORD/TENANT: EXTENDS INDEFINITELY A LAW PROVIDING VARIOUS PROTECTIONS TO TENANTS IN FORECLOSED PROPERTY INCLUDING 90-DAY NOTICE TO TERMINATE A MONTH TO MONTH TENANCY SB 18

This new law extends indefinitely the requirement that a landlord of a foreclosed property provides a month to month tenant with a 90-day notice of termination and that existing leases must generally be honored. Effective 1-1-20

INSURANCE: 75-DAY NOTICE OF NONRENEWAL

AB 1816 Requires insurers to provide at least a 75-day notice of nonrenewal of a homeowner’s policy (currently 45 days) and raises the limit on a homeowner insurance claim covered by the California Insurance Guarantee Association (CIGA) to $1 million. This law also allows the insurer to be proportionately relieved of their responsibility to participate in the Fair Access to Insurance Requirements (FAIR) plan. For policies that expire on or after 7-1-20

LEAD PAINT ABATEMENT IMMUNITY

AB 206 Grants immunity to landlords or agents who voluntarily abate lead paint hazards and provides that such efforts cannot be considered evidence of uninhabitability pursuant to certain lead paint abatement programs. Effective 1-1-20

LOANS: PROHIBITS CALIFORNIA FINANCING LAW LICENSEES FROM RECEIVING CERTAIN CHARGES ON A CONSUMER LOAN

AB 539 Prohibits California Financing Law (CFL) licensees from receiving charges on a consumer loan at a rate exceeding 36% per annum plus the Federal Funds Rate for loans with a principal amount from $2,500 to $10,000. Effective 1-1-20

REAL ESTATE LAW CLEANUP: TECHNICAL CHANGES THAT CONFIRM EXISTING LAW REGARDING DELIVERY OF THE TDS, NHD AND AD AB 892

This law clarifies and confirms existing law that delivery of the TDS and NHD is generally not required for leases of any duration, but the Agency Disclosure form is required for residential leases of more than one year.

Confirms that there is no cancellation right for a buyer based upon delivery of the visual inspection when purchasing from an unrepresented seller. Effective 1-1-20

RECORDING FEES: COUNTY MAY INCREASE FEE BY $1

AB 212 Counties are authorized to increase their recording fees by $1 to defray the cost of document storage. Effective 1-1-20

TAX: NO CONFORMITY WITH OPPORTUNITY ZONE TAX BENEFITS AB 91

California did not identify Opportunity Zones (OZ) to mirror federal law which would have resulted in greater incentivization of real property investments in these areas.

TAX: EXEMPTIONS FROM REASSESSMENT: NARROW EXCLUSION FOR CERTAIN PARENT-CHILD TRANSFERS OF PROPERTY THROUGH A CORPORATION

AB 872 Creates a property tax change in ownership exclusion in the case of a parent to child transfer of stock in a qualified corporation following the last surviving parent’s death limited in scope to the parents’ residence and the parcel of land upon which the home is located provided that among other things: 1) the residence has continuously served as the child’s home, and 2) the property’s assessed value does not exceed $1 million. Effective 10-9-19

UTILITIES: COSTS FOR EXTENSION OF WATER AND SEWER SERVICES SB 646

This law requires the estimated reasonable costs of labor and materials for installation of facilities associated with a water or sewer connection to bear a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the water connection or sewer connection. Effective 10-9-19

APPRAISAL REQUIREMENTS INCREASES FROM $250,000 TO $400,000 FOR CERTAIN HOME SALES

Certain home sales of $400,000 no longer require an appraisal as federal regulators increase the threshold at which residential home sales require an appraisal from $250,000 to $400,000. The rule will not apply to loans sold to or guaranteed to the VA, FHA, HUD, Fannie Mae or Freddie Mac. The final rule has yet to be published. Once published the rule will be effective

MOBILE HOMES: APPLICATION PROCESS; RIGHTS OF BUYER AND SELLER WHEN SELLING A MOBILE HOME THAT WILL REMAIN IN THE PARK; RIGHT OF FIRST REFUSAL AFTER DISASTER; AND RIGHT TO A COMPANION SB 274

Park Management must respond within 15 days to a seller and the prospective purchaser by providing application standards for the park where the mobile home being sold is located and a list of the necessary documentation. If a buyer is rejected for financial reasons, they have a right to supply additional financial information which the park must consider. A park that fails to comply is liable for damages to the seller.

Additionally, a homeowner has a first right of refusal when a park elects to rebuild after a disaster. A homeowner that lives alone has the right to designate one companion at a time to live with them free of charge, up to three a year. Effective 1-1-20

Our legislators were busy as bees last year, enacting 50 new laws affecting your real estate practice. As a real estate advisor, you need to be able to explain how these new laws may affect your clients. Bookmark this post and refer back to it often. I have provided links to summaries and texts of each of the new laws to answer all your questions.

This is the first of two posts covering the new laws for 2020.

APPRAISERS: APPRAISERS AND HOME INSPECTORS

AB 1018 Home inspectors are prohibited from giving an opinion of valuation on a property. Effective 1-1-20

ARBITRATION AGREEMENTS WITH CONSUMERS AND EMPLOYEES SB 707

This law provides that the drafting party of a consumer or employment-related arbitration agreement is in material breach of the arbitration agreement if the drafting party fails to pay, as required by existing law, specified costs and fees associated with the arbitration proceeding. Effective 1-1-20

CONSUMER PRIVACY: CHANGES TO THE CONSUMER PRIVACY PROTECTION ACT AND OTHER PRIVACY LAWS

• Exempts from the CCPA information collected from employees and independent contractors for one year. AB 25

• Broadens the public information exemption for personal information (PI). AB 874

• Creates a new category and registration requirement for “data brokers.” AB 1202

• SB 1355 excludes consumer information that is de-identified or aggregate consumer information from PI definition.

• Rescinds requirement for a business that operates exclusively online and has a direct relationship with the consumer to provide multiple means for consumers to submit information requests. AB 1564

• Expands the type of data subject to the Information Practices Act of 1977. AB 1130

DISCLOSURE: DISCLOSURE AND POINT-OF-SALE COMPLIANCE RE WILDFIRE DEFENSIBLE SPACE AND VEGETATION MANAGEMENT LAWS, AND HOME HARDENING

AB 38 Requires delivery of a statutory disclosure re home hardening for homes in designated high fire areas built before 2010, and that seller list specified retrofits. Effective dates of the disclosure requirements will be 1-1-20; 1-1-21; 7-1-21; and 7-1-25; depending on the disclosure

EMPLOYMENT: ARBITRATION AGREEMENTS AS CONDITION OF EMPLOYMENT PROHIBITED

AB 51 Prohibits employers from requiring employees or applicants for employment to waive a right, forum, or procedure for a violation of the Fair Employment and Housing Act or the Labor Code as a condition of employment or an employment-related benefit. It also prohibits employers from threatening, retaliating discriminating against, or terminating employees or applicants because they refused to waive any such right, forum, or procedure. Existing contracts for employment entered into, modified or extended on or after January 1, 2020, are exempt.

EMPLOYMENT: INDEPENDENT CONTRACTOR STATUS OF AGENTS RECONFIRMED AB 5

The right of real estate agents to be treated as independent contractors has been explicitly reconfirmed. Effective 1-1-20

EMPLOYMENT: SEXUAL HARASSMENT TRAINING SB 778

The sexual harassment training deadline required for employers with five or more “employees” has been postponed. Deadline extended until 1-1-21 – Effective 8-30-19

FIRE MITIGATION: BEST PRACTICES FOR DEVELOPING RESILIENCE AGAINST WILDFIRES BY HOME HARDENING DEFENSIVE SPACES AND OTHER MEASURES SB 190

Defines the specific requirement to develop best models for defensible space and additional standards for home hardening and construction materials to increase the resilience of communities. Effective 1-1-20

FIRE INSURANCE: FOR TOTAL LOSS, INSURED IS ENTITLED TO REPLACEMENT COST LESS DEPRECIATION AB 188

This law provides that the measure of cash recovery, less depreciation, for a structure or its contents, lost under an “open” policy is the cost to repair, replace, or rebuild the structure or contents. Effective 1-1-20

HOUSING: ALLOWS FOR CONSTRUCTION AND RENTAL OF ACCESSORY DWELLING UNITS IN HOA’S AB 670

Any provision in a CC&R that prohibits or unreasonably restricts the construction, use or rental of an accessory dwelling unit or junior accessory dwelling unit on a lot zoned for single-family residential use is void and unenforceable. Effective 1-1-20

HOUSING: STREAMLINES HOUSING PERMITTING AND APPROVAL PROCESS SB 330

Establishes the Housing Crisis Act of 2019, which will accelerate housing production in California by streamlining permitting and approval processes, ensuring no net loss in zoning capacity (“Down zoning”) and limiting fees after projects are approved.

HOUSING: TRANSPORTATION – MAJOR STOPS AB 1560

This law redefines “major transit stop” under CEQA to include “bus rapid transit”. Effective 1-1-20

HOUSING: DECLARATION OF STATE OF EMERGENCY: BUILDING STANDARDS FOR SOLAR AB 178

This exemption will allow low-income homeowners to rebuild their homes with the requirement that was in effect at the time their home was originally constructed. Effective 1-1-20

HOUSING: CEQA: COMMUNITY PLANS AB 1515

This law seeks to bring greater certainty to developers by allowing updates to community plans without the threat of noncompliance based on the environmental impact report and will help with housing production. Effective 1-1-20

HOUSING: STREAMLINED APPROVAL PROCESS AND REMOVES BARRIERS TO CONSTRUCTION FOR ACCESSORY DWELLING UNITS

This group of three laws removes impediments to ADU construction by restricting local jurisdictions’ permitting criteria.

• AB 68 makes major changes to facilitate the development of more ADUs and address barriers to building. It expands the categories of ADUs that cities must approve without applying any local development standards to include an 800 sq. ft. detached ADU. The bill also requires cities to allow “junior ADUs,” which in some instances can be developed in addition to a conventional ADU.
• AB 881 removes impediments to ADU construction by restricting local jurisdictions’ permitting criteria, clarifying that ADUs must receive streamlined approval if constructed in existing spaces and eliminating minimum lot size requirements. It also prohibits jurisdictions from establishing a maximum square footage requirement for an ADU that is less than 850 sq. ft., or 1,000 sq. ft. if the ADU contains more than one bedroom. This will allow future ADUs in various cities to be a few hundred feet larger.
• SB 13 eliminates local agencies’ ability to require owner-occupancy for five years and eliminates impact fees for ADUs under 750 sq. ft. For larger ADUs, it creates a tiered fee structure based on size. The Bill also addresses other barriers by shortening the application approval time frame, creating an avenue to get unpermitted ADUs up to code, and enhancing an enforcement mechanism allowing the state to ensure that localities are following ADU statutes. Effective 1-1-20

LANDLORD/TENANT: $20 MILLION BUDGETED TOWARD LEGAL SERVICES FOR EVICTION DEFENSE AB 74

The budget provides $20 million for legal services for renters facing eviction. Effective 1-1-20

LANDLORD/TENANT: ELLIS ACT AB 1399

Makes changes to the Ellis Act to 1) clarify that owners may not pay prior tenants liquidated damages in lieu of offering them the opportunity to re-rent their former unit; and, 2) clarify that the date on which the accommodations are deemed to have been withdrawn from the rental market is the date on which the final tenancy among all tenants is terminated. Effective 1-1-20

LANDLORD/TENANT: REDUCED SECURITY DEPOSIT FOR SERVICE MEMBERS SB 644

A landlord may only collect one month security for an unfurnished unit, or two months for furnished units, from a service member who resides on the property. Effective 1-1-20

LANDLORD/TENANT: DISCRIMINATION ON THE BASIS OF MILITARY OR VETERAN STATUS SB 222

Discrimination in housing on the basis of veteran or military status is now unlawful under the Fair Employment and Housing Act.