New laws that may impact REALTORS® are now in effect or will be this year.
Here are a few of the top new laws:
Proposition 19 (Statewide Tax Basis Portability)
As of Feb. 16, Prop 19 changes the rules on exemptions from reassessment for intergenerational (family) transfers by limiting the exemption to the transfer of a primary residence. Also, a homeowner who is 55 years of age or older, severely disabled or whose home has been substantially damaged by wildfire or natural disaster may transfer the taxable value of their primary residence to:
• A replacement primary residence • Anywhere in the state • Regardless of the value of the replacement primary residence (with adjustments if “greater” in value) • Within two years of the sale • Up to three times (but without limitation for those whose houses were destroyed by fire)
More details to come on Prop 19 in next week’s CVAR Connect.
Fire Area Disclosure: AB 38 (Home Hardening Disclosure) This law requires delivery of a statutory disclosure for homes in designated high fire areas built before 2010. In it, the seller will disclose specified home hardening retrofits that the property lacks. The disclosure will apply to any property in which the Transfer Disclosure Statement must be delivered, and the standard TDS exemptions and cancellation rights apply.
This law was passed in 2019, but it applies to transactions as of Jan. 1, 2021. C.A.R.’s new form “Home Fire Hardening Disclosure and Advisory” (HHDA) may be used to comply with this disclosure.
HOA Rentals: AB 3182 (The Right to Rent out Your Unit in a Common Interest Development) This new law requires common interest developments (CIDs) to allow at least 25% of owners to rent or lease out their units starting Jan. 1, 2021, regardless of whether the HOA has formally amended their governing documents. If the owner actually occupies their own unit then renting out a space within the unit, an ADU or junior ADU must be permitted. No matter what, the existing rights that owners currently enjoy to rent out their units cannot be changed.
No Bundling: SB 1079 (Tenant, Prospective Owner and Non-Profit Right of First Refusal to Purchase Residential Property after Foreclosure) This law grants tenants, prospective owner-occupants, nonprofit affordable housing providers, and other entities a 45-day window to purchase residential property through foreclosure if they can match (in the case of tenants) or exceed (in the case of other purchasers) the last and highest bid made on residential one to four single-family homes at the foreclosure auction. To ensure that residential properties are available to potential consumer purchasers, this law prohibits a trustee at a foreclosure sale from bundling the sale of one to four single-family homes. Each one must be sold as a single sale.
Rent Moratorium: AB 3088 The “COVID-19 Tenant Protection Act of 2020” created a statewide rent moratorium effective from March 1, 2020 through Jan. 31, 2021, for when a tenant cannot meet the rent due to a COVID related financial hardship. Under this law, rent owed during this period may be collected at the owner’s option through small claims court beginning March 1, 2020, for any amount, but cannot be collected in connection with an action for possession. Not only is a rent moratorium put in place but the just cause eviction rules under the statewide just cause eviction laws are extended temporarily to all properties even if previously exempt from the just cause eviction rules. However, a homeowner of a single-family home can still evict a tenant for no cause if the owner is in contract to sell to a buyer who will take occupancy.
Moratorium Extensions: SB 91, a bill that includes an eviction moratorium extension and $2.6 billion in rental relief overwhelmingly passed both chambers of California’s legislature last Thursday (Jan. 28), and the Governor signed it, extending the moratorium on evictions to June 30. Newsom’s office supported the legislation during last-minute negotiations among legislative leaders, tenant associations and the powerful California Apartment Association.
The Los Angeles County Board of Supervisors also approved two motions to update the county’srent relief programs, in the wake of the recent COVID-19 relief package passed by Congress that includes $25 billion in emergency rental assistance.
FHAMoratorium Extension: The FHA extended the foreclosure and eviction moratorium for single family FHA-insured mortgages through Feb. 28, 2021. Also, the same deadline applies for single family borrowers with FHA-insured mortgages to request an initial COVID-19 forbearance from their mortgage servicer to defer or reduce their mortgage payments for up to six months, which can be extended for an additional six months. In addition, the FHA also extended multiple temporary provisions for lenders and servicers to allow them to continue doing FHA business despite social distancing considerations. (HUD)