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California Real Estate Laws

Real Estate Attorney in San Francisco, California

Real estate can include any land, property, building, air rights above the land, and underground rights below the land. It might be owned by the government, a private party, or a business entity. Real estate can be classified as residential, industrial, commercial, or raw land. Generally, you can directly invest in real estate by purchasing a home or a rental property or indirectly through a real estate investment trust (REIT).

California Real Estate Laws

Real estate laws may vary from state to state. In California, the most recent legislative session concluded with the passage of several new laws concerning real estate properties of the state. Most of the real estate-related statutory amendments and additions will have significant implications to landlords, homeowner associations, tenants, home buyers, and property owners. A knowledgeable San Francisco real estate attorney can guide you with these real estate law amendments. At Steven Adair MacDonald & Partners, P.C., our legal team has been committed to providing legal services to clients who are facing landlord-tenant disputes and other real estate issues for decades. Our California real estate law firm works diligently to protect your rights and achieve your goals. Schedule a free legal consultation and discuss your California real estate legal needs.

What are the new amendments in California Real Estate Laws and Regulations?

Whether you’re looking to sell or buy a real estate property, it is vital to know the California real estate laws that apply to both buyers and homeowners. Aside from protecting the rights of tenants and homeowners, real estate laws can help in preserving the regulations regarding housing, tenancy, and zoning. These real estate laws may be subject to change from time to time. Therefore, it is advisable to consult a reliable real estate lawyer in San Francisco CA to keep you updated with the latest real estate laws. Knowing the new laws and statutes can help you deal with various real estate transactions.

Assembly Bill 1885 (Homestead Exemption)

California real estate laws aim to protect its residents and their properties. The homestead exemption protects the value of a homeowner’s primary residence in the event of bankruptcy. It means that a specified portion of the equity in a homestead is exempt from execution to satisfy a judgment debt. According to the existing state law under Section 704.730 of the California Code of Civil Procedure, the amount of homestead exemption is $75,000 for single homeowners, $100,000 for married homeowners, or $175,000 for homeowners who are seniors and/or disabled. Under the new AB 1885, the amount of the homestead exemption is now increased to $300,000 or the countywide median sale price of a single-family home in the calendar year before the year in which the judgment debtor claims the exemption, up to a maximum of $600,000. The new law also states that the amount may be subject to change annually for inflation. In addition, this amendment allows Chapter 7 debtors to protect more of the equity in their primary residences and for Chapter 13 debtors to exempt more equity when calculating their creditor payments.

California Proposition 19 (Assessment Values)

In California Proposition 19, people who are aged 55 and above, whose homes were destroyed by natural calamities, and individuals with qualifying disabilities are now allowed to carry their home’s assessed property tax value to a replacement home of any value. This amendment means that an individual can purchase a more expensive home and blend their new property’s taxable value with that of their former residence. Proposition 19 increases the number of times that certain people may transfer their tax assessments. For example, if you are aged 55 or above with severe disabilities, or lost a home in a wildfire, you may now transfer your tax assessment up to three times. The newly passed Proposition 19 will have potentially severe financial consequences for children inheriting property from their parents. Before this change, parents could transfer a primary residence to children without any new fair-market reassessment, regardless of how the children chose to use the real property. Now, a child who inherits a parental home must reside in the property to realize any tax savings. If a child chooses to keep the real property and use it as the primary residence, then up to $1 million of the reassessed value will be excluded from the new property-tax basis. Furthermore, if the child chooses to keep the property as a second home, vacation home, or rental property, then there will be no $1 million exclusion and the child will face a significant increase in property taxes.

Assembly Bill 3182 (Rental Availability)

With the passage of Assembly Bill 3182 (AB 3182), homeowner association (HOA) laws must now allow at least 25 percent of common interest developments (CIDs) to lease out their units. Before the change in the law, HOAs could restrict CID rentals as much as they chose. This change will have a very rapid and significant effect on the enforcement of rental restrictions in many common interest developments. In general terms, the new law allows associations to prohibit short-term rentals of thirty days or less, and to enforce a cap on rentals of twenty-five percent or more of the units in the association. As for the timing, all associations are required to fully comply with AB 3182 as of January 1, 2021, and to add further burden, any associations with conflicting provisions in their governing documents are required to amend those documents by no later than December 31, 2021. Failure to amend could result in the imposition of a $1,000.00 civil penalty.

Senate Bill 1079 (Foreclosure Properties)

Originally, foreclosed properties went to auction and were sold to the highest bidder. Under SB 1079 effective January 1, 2021, “Eligible Bidders” and “Eligible Tenant Buyers” are now allowed to bid on foreclosed properties containing 1 to 4 single-family residences after a property’s foreclosure sale. In this case, if an auction buyer has no plans of living in the property, an eligible tenant bidder can get it back from the buyer by submitting a qualifying bid after the sale. These provisions in SB 1079 are set to end on January 1, 2026. Furthermore, SB 1079 also requires property owners to maintain foreclosure properties. If you fail to comply with this bill, you can be fined up to $2000 per day for the first 30 days and up to $5000 per day for each day thereafter.

 Under SB 1079:

  • The law prohibits a trustee from bundling properties for sale unless the deed of trust or mortgage provides otherwise.
  • Tenants must be served with a notice regarding their potential right to buy a property.
  • A tenant buyer will be given fifteen days after the sale to deliver a written notice to the trustee of their intent to bid on the foreclosed property.
  • The bid of the tenant buyer should match the last and highest auction price to outbid the auction buyer.
  • Same procedures can be followed by eligible bidders, except members of this group must exceed the last and highest auction bid.
  • The outbidding party shall pay for or use a mortgage to secure the foreclosed property within 45 days after the trustee’s sale.

Speak to an Experienced San Francisco Real Estate Attorney Now!

Managing a real estate business can be complicated. As a real estate owner, it is important to ensure that you follow the applicable California real estate laws. Therefore, it is highly advisable to consult our competent San Francisco real estate attorneys at Steven Adair MacDonald & Partners, P.C. Our San Francisco real estate law firm has decades of experience in representing clients in a wide range of real estate transactions. We have the knowledge and expertise to protect your real estate interests and rights. We can ensure your compliance with critical new statutes and regulations.
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