New year, new laws! The start of 2025 also marks the start of new California laws that may affect your real estate practice. Here are some of the highlights for 2025: 

1. Written Buyer Representation Agreements: Starting January 1, 2025, a buyer and buyer’s agent must enter into a written buyer-broker representation agreement as soon as practicable, but no later than the signing of the buyer’s offer to buy real property. This new law is C.A.R.-sponsored legislation, which applies to all properties, including, but not limited to, single family homes, condos, mobilehomes, multiunit properties, commercial, vacant land, and ground leases with improvements, but not regular leases. AB 2992.

• NAR Settlement Agreement Also in Effect: Agents must comply with both AB 2992 and the requirements dictated by the NAR Settlement Agreement, as adopted by local MLSs. The NAR Settlement only pertains to MLS participants, whereas AB 2992 applies to all buyer brokers. The NAR Settlement requires a written buyer-broker agreement before touring a property, whereas AB 2992 requires such agreement as soon as practicable before the signing of a buyer’s offer.
• Maximum 3 Months Representation Period: Under AB 2992, “a buyer broker representation agreement shall not last longer than three months from the date the agreement was made.” An exception to the 3-month rule is available if the buyer is a corporation, LLC, or partnership.
• Restrictions on Renewals: Under AB 2992, any renewals to a buyer-broker agreement cannot last longer than 3 months from the date of renewal. Automatic renewals are not allowed.
• Serious Legal Consequences of Noncompliance: Any buyer-broker agreement made in violation of AB 2992 is void and unenforceable. Any agent who violates this law is subject to DRE disciplinary sanctions.
• New Timing Requirement for Agency Disclosure Statement (Form AD): AB 2992 requires an AD between a buyer’s agent and buyer to be signed as soon as practicable, before the signing of the buyer-broker representation agreement and the buyer’s offer to purchase.

2. Handyman Can Charge Up to $999: Starting January 1, 2025, a handyman without a contractor’s license can do a project that costs less than $1,000. The previous limit was $500. The aggregate contract price for the handyman’s work or operation must be less than $1,000, including labor, materials, and all other items. The work or operation by the handyman cannot require a building permit. It cannot be part of a larger operation. The handyman cannot employ another person to perform the work, or assist in performing the work. AB 2622.

3. Postponing a Foreclosure Sale By Listing and Selling Property: Beginning on January 1, 2025, an owner of a one-to-four residential unit property can postpone a foreclosure sale for 45 days by entering into a listing agreement to sell, and another 45 days by subsequently entering into a contract to sell. AB 2424.

• First Postponement Upon Listing: To obtain the first 45-day postponement, the borrower in foreclosure must send to the foreclosure sale trustee a listing agreement with a California licensed real estate broker that will be placed in a publicly-available marketing platform. The listing agreement must be sent to the trustee by certified or overnight mail with tracking info confirming receipt. If the trustee receives the listing agreement at least 5 business days before the scheduled trustee’s sale, the trustee must postpone the sale for at least 45 days after the scheduled trustee’s sale. This postponement can only be used one time.
• Second Postponement Upon Selling: A borrower who got the first postponement as outlined above can subsequently get a second postponement by sending to the foreclosure sale trustee a copy of a purchase agreement by certified or overnight mail with tracking info confirming receipt. If the trustee receives the purchase agreement at least 5 business days before the scheduled trustee’s sale, the trustee must postpone the sale for at least 45 days after receipt of the purchase agreement. The purchase agreement must be a bona fide and fully-executed contract accepted by the designated escrow agent, with a purchase price of at least the amount of all unpaid liens (i.e., no short sales). This postponement can only be used one time.
• Foreclosure Sales Price Must Be At Least 67% of FMV: For any property with one-to-four residential units, the first trust deed mortgage lender must provide the foreclosure sale trustee with the “fair market value” of the property as defined. The foreclosure sale trustee cannot sell the property at the initially scheduled date of sale for less than 67% of that fair market value. If the property is unsold after the initial trustee’s sale, the trustee must postpone the sale for at least 7 days, and the property may then be sold to the highest bidder.

4. Disclosure of Domestic Water Storage Tank Assistance: Effective January 1, 2025, sellers subject to the TDS law must disclose to their buyer if they have received “domestic water storage tank assistance” from the county or local community. Certain households with a private water well that has gone dry or becomes nonfunctioning may receive such assistance, which might not convey with the real property. The required disclosure is set forth in paragraph 9B of the Seller Property Questionnaire (SPQ), which includes an advisory for the buyer to get an inspection concerning the availability of water to the property. SB 1366.

5. Wooden Balcony Inspection Requirements: There are 2 different balcony inspection laws. One pertains to buildings with 3 or more multifamily dwelling units, and the other pertains to condominium projects. The first law concerning 3+ units was originally scheduled to begin on January 1, 2025, but has been postponed to January 1, 2026 (under AB 2579). This law will apply to 3+ unit buildings with “exterior elevated elements,” which are wood or wood-based balconies, decks, stairways, or other structures, with a walking surface, that extend beyond the building’s exterior walls, and are elevated over 6 feet above ground level. Starting in 2026, the exterior elevated elements for 3+ unit buildings must be inspected every 6 years by a licensed professional for safety and adequate working order. Also starting 2026, the reports from 2 inspection cycles must be disclosed to any buyer of the building (see C.A.R.’s Wooden Balconies and Stairs Addendum). The second law concerning condo projects came into effect on January 1, 2025. The effective date for condo projects was not postponed. Starting January 1, 2025, an HOA must have the condominium project’s exterior elevated elements inspected every 9 years (under Calif. Civ. Code section 5551(b)).

6. Restrictions on Tenant Screening Fees: Starting January 1, 2025, a residential landlord cannot charge a prospective tenant with an application screening fee, unless a rental unit is available or will be available within a reasonable time. Additionally, a landlord only has 2 options for charging application screening fees. Under Option #1, the landlord must return the screening fee to any applicant who is not selected for tenancy. The money must be returned within 7 days after selecting an applicant, or 30 days after the application was submitted, whichever occurs first. Under Option #2, the landlord must adopt and provide applicants with a written screening criteria. The landlord must consider completed applications in the order they are received, and approve the first applicant who meets the landlord’s established screening criteria. The landlord under Option #2 is not required to return the screening fee to applicants who were considered. However, the landlord must refund within 7 days any screening fee collected from an applicant who was not considered. Also, if an application screening fee has been paid (under either Option #1 or 2), the landlord must provide a copy of the consumer credit report to the applicant within 7 days of receiving the report. AB 2493.

Sources: These new laws and other new laws that may affect your real estate practice are available on C.A.R.’s 2025 New Laws webpage (password-protected for C.A.R. members only). The full text of each new law is available at the California Legislature website.

Copyright© 2025 Shared Success Center, LLC (serving HomeServices of America companies). All rights reserved. Any unauthorized reproduction or use of this material is strictly prohibited. This information is believed to be accurate as of January 6, 2025. It is not intended as a substitute for legal advice in individual situations, and is not intended to nor does it create a standard of care for real estate professionals. Written by Stella Ling, Esq.