Part 1: Enhanced Landlord and Rental Laws
Significant updates to California's landlord and tenant laws are set to take effect in 2024. Real estate agents should be aware of these changes to effectively assist their clients. We have complied a few new laws that caught our eye, though there are more that may impact your lives and businesses.
Note: This information is not legal advice.
Detailed Law Changes
"Ability to Pay" Assessment (SB 267):
Effective Date: January 1, 2024.
Context: This law focuses on tenants receiving government rent subsidies, like Section 8 vouchers. It requires landlords to consider alternative evidence of a tenant’s ability to pay, alongside or instead of traditional credit reports.
Agent Guidance: Agents should advise landlords to prepare for alternative assessments, including government benefit payments, pay records, and bank statements.
Enhanced Tenant Protection Act Enforcement:
Effective Date: April 1, 2024.
Stricter Eviction Rules: The law tightens requirements for no-fault evictions, especially for owner move-ins and substantial remodeling. This includes ensuring that the owner or their family member moves in within 90 days and occupies the unit for at least one year. If the intended occupant does not move in as required, the owner must offer the unit back to the evicted tenant at the same rent and terms.
Agent Responsibility: Ensure landlords are aware of the proper procedures and documentation required for lawful evictions to avoid legal repercussions.
Security Deposit Amount Update:
Effective Date: July 1, 2024.
Smaller Security Deposits: This law caps security deposits at one month’s rent, regardless of whether a unit is furnished or unfurnished. Owners of no more than two rental properties, comprising no more than four units, can request up to two months’ rent. AB 12 was authored by Assemblyman Haney (D-San Francisco).
Agent Responsibility: Ensure landlords are aware of the potential lower security deposit amounts.
Trepass Letters
Effective Date: July 1, 2024.
Context: This law prolongs the validity of trespass letters, also known as 602 letters, from 30 days to 12 months. With trespass letters, a property owner can alert local law enforcement that a property is uninhabited. This allows law enforcement to clear the property of any trespasser who attempts to take up residence and who claims they are a legal occupant. If a 602 letter is on file with local law enforcement, landlords need not go to court to evict an individual who claims to be a legal tenant. SB 602 was authored by Sen. Archuleta (D-Pico Rivera).
Agent Responsibility: Prompt seller to file trepassing letter when appropriate.
Part 2: Real Estate Laws Affecting Resale
2024 introduces new real estate laws impacting property resale in California. Real estate agents must adapt to these changes for successful transactions.
Expansion of Natural Hazard Disclosure Statement (AB 1280):
Effective Date: July 1, 2024.
Inclusion of Fire Hazard Zones: The NHDS now includes High Fire Hazard Severity Zones, in addition to the previously required disclosure of Very High Fire Hazard Severity Zones. This requires additional disclosures for properties in these zones.
Agent Advisory: Inform sellers about the need for defensible space disclosures and fire hardening for properties built before 2010, when a TDS is required.
Restrictions on Exclusive Listing Agreements:
Effective Date: July 1, 2024.
Duration Limitations: Exclusive listing agreements for residential properties are now limited in duration. Agents should ensure that their listing agreements are within the new limits: no longer than 24 months for initial agreements and 12 months for renewals.
Agent Compliance: Review and potentially adjust listing agreements to comply with the new durations and renewal terms.
Separate Conveyance of ADUs as Condominiums (AB 1033):
Effective Date: January 1, 2024.
New Opportunities for ADUs: Local agencies can now adopt ordinances to allow the separate conveyance of Accessory Dwelling Units (ADUs) and primary residences as condominiums.
Compliance with Regulations: The process must comply with the Davis-Stirling Common Interest Development Act and the Subdivision Map Act.
Agent Implications: Research this to help direct their clients to the best resources for establishing ADU condominiums.
Permanent Prohibition on Owner-Occupancy Requirements for ADUs (SB 976):
Effective Date: January 1, 2024.
Removal of Owner-Occupancy Mandate: Local governments can no longer require owner-occupancy for parcels with ADUs. This change makes permanent the existing prohibition.
Agent Implications: Agents should understand their clients that they are no longer required to occupy either the primary unit or the ADU, offering more flexibility in property
Remote online notarizations (RON), enhancing notarial processes with technological advancements.
Implementation Timeline: Law effective in 2024; full RON implementation by January 1, 2030.
Recognition of Out-of-State Notarizations: Starting 2024, California will recognize notarizations performed by out-of-state notaries using remote electronic procedures.
Identity Proofing and Security: RON in California requires robust identity proofing and adherence to NIST standards for data security.
Agent Implications: RON may offer agents more flexibility in document signings, especially beneficial for remote clients. Agents should understand RON's availability and advantages.
The 2024 real estate laws in California introduce transparency, safety, and modernization to property transactions. Real estate agents must stay informed and adapt their practices to these legislative changes for successful and compliant transactions.
The following information is not legal advice, we recommend that you consult with legal counsel to get a full and accurate understanding of laws.
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