January 2nd, 2023 at 2:05 pm
Compliance With TDS Law in Effect at Time of Contract
Starting on January 1, 2023, this new law clarifies that a seller and buyer must comply with the TDS and TDS-related disclosure laws that are in effect at the time the parties enter into a sales contract. The parties need not worry about any subsequent revisions to the TDS law that may come into effect at a later date, unless otherwise specified in the revised law. Assembly Bill 2960.
Property Tax Deferment for Pending Prop 19 Claims
Homeowners claiming property tax relief under Proposition 19, who have not yet received a determination from their County Assessor, may generally apply for a property tax deferment. As background, starting in April 2021, certain homeowners who are 55 years of age or older, severely disabled, or disaster victims, can generally transfer their property tax base over to a replacement primary residence. Unfortunately, however, the Los Angeles County Assessor has been experiencing significant processing delays, and has even billed such homeowners based on the purchase price of their replacement properties. This new law came into effect back on September 28, 2022 as an urgency bill for large California counties with more than 4 million people, such as Los Angeles County. The new law allows a homeowner, who has not yet received a determination of eligibility under Prop 19, to request a property tax deferment without penalty or interest. The deferment request must be submitted within one calendar year of receiving the first property tax bill, and before January 1, 2024 at the latest. The deferment shall be in effect until the County Assessor has sent a corrected tax bill (or a determination of ineligibility). The County Assessor for large counties must also provide homeowners with information on their first tax bill about Proposition 19 and the deferment procedures. This law will sunset on January 1, 2026. Senate Bill 989.
Court to Appoint a Listing Broker as Part of a Standardized TIC Partition Action
The new Partition of Real Property Act (PRPA) sets forth standardized procedures for certain tenants-in-common (TIC) “partition action” lawsuits, including the hiring of a real estate broker. As background, when co-owners cannot agree on what to do with a piece of real property, an owner may file a partition action to get the court to force a sale, buyout, or other relief. The new PRPA pertains to partition actions filed after January 1, 2023 involving tenants in common (but not joint tenants), who have no binding contract concerning the partitioning of their property. The court ordering a sale of the TIC property must generally require such sale to be conducted through an open-market sale, absent a finding that selling by sealed bids or auction would be better. For any such open-market sale, the parties have 10 days to agree on a real estate broker to list the property for sale. If the parties agree, the court will appoint that broker and establish a reasonable broker commission. If the parties do not agree, the court will appoint a disinterested real estate broker as the listing agent, and establish a reasonable broker commission. Assembly Bill 2245.
Condo Owners Have a Right to Rent to a Roommate
Effective January 1, 2023, a homeowners’ association (HOA) cannot prohibit a condo owner of an owner-occupied unit from renting or leasing a portion of that unit for a lease term of more than 30 days. As background, another California law already allows HOAs to prohibit transient or short-term rentals for 30 days or less (Cal. Civ. Code section 4741(c)). On a separate note, this new law also prohibits HOAs from banning the use of social media to discuss HOA living, association elections, and other issues of concern to HOA members and residents. Assembly Bill 1410.
Landlord May Accept a Reusable Tenant Screening Report
Effective January 1, 2023, a landlord may voluntarily accept a rental applicant’s reusable tenant screening report (RTSR). An RTSR contains standardized information, such as the applicant’s name, contact information, employment verification, and eviction history. With an RTSR, the lease applicant will only have to pay once for the RTSR report, and be able to use and reuse it over a 30-day period. A landlord who voluntarily accepts an RTSR may not charge the applicant any fee for accessing the RTSR or for any other pre-screening costs. Assembly Bill 2559.
Large REO Institutions Must Give “First Look” to Owner-Occupying Buyers
This new law pertains to large real estate owned (REO) institutions that foreclosed on more than 175 residential properties in the preceding year. It is patterned after the federal “First Look” program. Effective January 1, 2023, the new California law requires the large REO institutions selling foreclosed-upon properties with one-to-four residential units to only accept, within the first 30 days, an offer from a prospective owner-occupying buyer (or non-profit or public entity). The REO lender must respond in writing to any offer made by such bidders, but the REO lender is not required to accept any offer. Additionally, this new law prohibits large REO institutions from conducting any bundled sales of 2 or more of such properties. Assembly Bill 2170.
Facilitating the Construction of ADUs
Starting January 1, 2023, the requisite 60-day timeframe for processing an application for an accessory dwelling unit (ADU) or junior accessory dwelling unit (JADU) is broader in scope. It now includes not only the decision by the applicable building and planning department to grant a permit, but also the decision by utilities and special districts to provide utility services. Also, if a permit is not approved, the permitting agency must give the applicant a full list of deficient items with an explanation on how to rectify them. This law also prohibits the local government from imposing front setback standards that make it impossible to build a new ADU. It also facilitates the construction of a taller ADU in an area near a major transit stop or otherwise amenable to that height as specified. Assembly Bill 2221 and Senate Bill 897.
Facilitating Bedroom Additions to a House
Effective January 1, 2023, a city or county is prohibited from requiring a public hearing when a homeowner applies for a permit to add up to 2 more bedrooms to an existing dwelling unit. Assembly Bill 916.
Various Laws Facilitating New Housing Projects
First, the new Middle Class Housing Act of 2022 (Senate Bill 6) will allow, starting on July 1, 2023, new housing development projects on parcels zoned for office, retail, or parking use. Certain density, site location, size, procedural, and other requirements must be met. This law shall sunset on January 1, 2033. Second, under the new Affordable Housing and High Road Jobs Act of 2022 (Assembly Bill 2011) also effective on July 1, 2023, certain affordable multiunit housing projects may be “built by right” on parcels zoned for office, retail, or parking use. The projects are subject to deed restrictions and specified objective standards, but only a streamlined, ministerial review process. Third, under Assembly Bill 2097, effective January 1, 2023, a local government is prohibited from imposing any minimum automobile parking requirement on certain residential, commercial, and other development projects located within a half mile of a major transit stop. An exception may be available for a housing development with 20 or more units if such prohibition will have a substantially negative impact on parking.
Sources: These new laws and other new laws that may affect your real estate practice are available at C.A.R.’s 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.
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