Welcome to our latest law blog post where we delve into the substantial changes in California’s real estate laws set to take effect in 2024. As the real estate landscape continually evolves, staying informed about legislative updates is crucial for professionals in the industry. This year brings a myriad of significant modifications ranging from enhanced advertising requirements to new stipulations in vacation rental management. Whether you’re a seasoned REALTOR®, a new agent, or just interested in the intricacies of California real estate, our post offers an essential overview of these changes. We aim to equip you with the knowledge you need to navigate these new regulations successfully and continue to thrive in California’s dynamic real estate market.
New California Real Estate Laws in 2024
- Enhanced Advertising Transparency
SB 478: Introduces strict requirements for full disclosure of all mandatory fees in advertisements for real estate goods and services. Specifically targets deceptive practices like “drip pricing,” ensuring consumers receive complete pricing information upfront.
- Commercial Financing Disclosures
SB 33: Extends the requirement for commercial financiers to disclose the cost of financing transactions as an annualized rate indefinitely, enhancing transparency in commercial real estate transactions.
- Updates in Environmental Hazard Information
AB 225 (C.A.R. Sponsored): Significantly updates the state’s Homeowners Guide to Environmental Hazards. Adds comprehensive chapters on wildfires, climate change, and sea level rise, providing crucial information for property buyers about these escalating risks.
- Mandatory Disclosures for Property Flipping
AB 968: Targets the property flipping sector by mandating detailed disclosure of all recent repairs, renovations, and alterations for properties resold within 18 months. This aims to increase transparency and protect buyers from undisclosed property issues.
- Fire Hazard Severity Zones Disclosure Expansion
AB 1280 (C.A.R. Sponsored): Expands the Natural Hazard Disclosure Statement to include detailed subcategories under “HIGH or VERY HIGH FIRE HAZARD SEVERITY ZONE”. Enhances buyer awareness about potential fire risks and related obligations.
- Workplace Violence Prevention in Real Estate Offices
SB 553: Requires all employers, including real estate offices, to implement a comprehensive Workplace Violence Prevention Plan (WVPP). Small real estate offices have simplified requirements but must adhere to basic safety protocols.
- Broad Housing Legislation Updates
A series of bills (AB 1033, SB 986, AB 434, SB 469, etc.) this new law introduces various changes in housing laws, covering aspects like separate conveyance of ADUs, owner occupancy requirements in ADUs, enhanced enforcement of housing laws, and expansions to low-rent housing project exclusions.
- Insurance Adaptations for Commercial Properties
SB 505: Broadens the FAIR Plan to include commercial properties, providing greater insurance coverage options for commercial real estate.
- Revised Landlord-Tenant Regulations
A collection of bills (AB 1620, AB 1764, SB 267, SB 712, etc.) address diverse landlord-tenant issues like disability accommodation in rent-controlled units, digital receipts for tenant screening fees, “ability to pay” assessments for tenants with government rent subsidies, and rules around storing personal micromobility devices.
- Limitations on Exclusive Listing Agreements
AB 1345: Imposes a maximum duration of 24 months for exclusive listing agreements on residential properties, including condos and manufactured homes. Also bans automatic renewals and recording of such agreements to protect homeowners from predatory practices.
- Noncompetition Agreement Restrictions
SB 699 & AB 1076: Further solidify the unenforceability of noncompetition agreements in California, even if signed out of state, and introduce damages for violations.
- Remote Online Notarization Authorization
SB 696: Authorizes remote online notarization by California notaries, setting standards for identity verification and data security.
- Increase in Small Claims Court Limits
SB 71: Raises the financial limit for small claims court cases, allowing natural persons to claim up to $12,500, up from the previous $10,000 limit.
- Vacation Rental Regulations
AB 537 & SB 644: Introduce new law for short-term vacation rentals. AB 537 requires full disclosure of all mandatory fees in rental advertising, effective from July 2024. SB 644 mandates a 24-hour cancellation policy for bookings made at least 72 hours before check-in, ensuring consumer flexibility and protection.
- Clarification and Expansion of Proposition 19
Senate Bill 890: Applies the modified rules of Prop 19 to subsequent transfers of ownership in mobile home parks and floating home marinas. This law views such transfers as pro rata changes in ownership, subject to reassessment unless exempted by other statutes.
- Trespassing Regulation Updates
Senate Bill 602: Allows property owners to file a “no trespass” letter with law enforcement for up to one year, an increase from the previous 30-day limit. This change aims to provide property owners with more robust tools to manage unauthorized access to their properties.
- Prohibition on Long-term Exclusive Listing Agreements
Assembly Bill 1345: Limits exclusive listing agreements on residential properties to no more than two years and prohibits their recording, aiming to protect homeowners from predatory real estate practices.
- Noncompetition Agreement Legality
SB 699 & AB 1076: Strengthen and clarify the illegality of non-competition agreements in employment contracts in California, regardless of where they were signed.
- Remote Online Notarization
Senate Bill 696: Authorizes California notaries to perform remote online notarizations, aligning with evolving digital transaction trends.
- Small Claims Court Limit Increase
Senate Bill 71: Increases the small claims court limit for natural persons and other entities, broadening access to judicial remedies for smaller financial disputes.
- Vacation Rental Fees and Cancellation Policies
Assembly Bill 537 & Senate Bill 644: Enforce clear disclosure of all mandatory fees in vacation rental advertisements and establish a 24-hour cancellation policy for certain bookings, enhancing consumer protection in the vacation rental market.