Starting in 2025, there are several new laws that impact real estate.
ADU Laws:
Extends the Accessory Dwelling Unit (ADU) amnesty law to unpermitted ADUs and junior accessory dwelling units (JADUs) built before 2020. Requires cities and counties to provide a clear process for homeowners to obtain permits for their unpermitted ADUs.
AB 2533 prohibits a local agency from denying a permit for an unpermitted accessory dwelling unit or junior accessory dwelling unit that was constructed before January 1, 2020, for various violations (“amnesty”), unless the local agency makes a finding that correcting the violation is necessary to comply with conditions that would otherwise deem a building substandard.
Cities and counties must inform the public about the ADU amnesty rules through public information resources, including permit checklists and the local agency’s internet website, which must include the following:
(1) A checklist of the health and safety violations for which a building would be deemed substandard and therefore the locality could deny a permit.
(2) Informing homeowners that, before submitting an application for a permit, the homeowner may obtain a confidential third-party code inspection from a licensed contractor to determine the unit’s existing condition or potential scope of building improvements before submitting an application for a permit.
A homeowner applying for a permit for a previously unpermitted accessory dwelling unit or junior accessory dwelling unit constructed before January 1, 2020, shall not be required to pay impact fees or connection or capacity charges except when utility infrastructure is required to comply with above mentioned health and safety violations.
Assembly Bill 2533 is codified as Government Code §66332. Effective January 1, 2025.
Balcony Inspections:
Extends the deadline for inspections of wooden balconies and other Elevated Elements for buildings with 3 or more multifamily dwelling units from January 1, 2025, to January 1, 2026. However, there is no extension of the deadline for wooden balcony inspections for condominium projects which remains January 1, 2025.
Current Law: If a building contains 3 or more units, and has balconies, decks, stairways or other structures extending beyond the exterior walls of the building, which are at least six feet above ground level, and supported in whole or in part by wood or wood-based products (“Elevated Elements”), current law requires that an inspection of the Elevated Elements be completed by January 1, 2025, and at least every six years thereafter.
AB 2579 provides a 12-month extension to the deadline for the inspection requirement thereby delaying the inspection deadline from January 1, 2025, to January 1, 2026.
There is a similar inspection requirement for the association of a condominium project to inspect Elevated Elements every nine years, with the deadline for completion of the initial inspection set at January 1, 2025. However, this deadline has not been extended and remains January 1, 2025.
Comment: Some cities and counties have their own codes/regulations regarding the deadline for inspection of Elevated Elements, and these may supersede the state requirement. See, for example, the City of Berkeley.
Assembly Bill 2579 is codified as Health and Safety Code§17973. Effective January 1, 2025.
Buyer Representation Agreements:
Requires a buyer representation agreement to be executed between a buyer’s agent and a buyer as soon as practicable, but no later than the execution of the buyer’s offer to purchase real property. This law applies to nearly all types of property but excludes leases and rental agreements.
Application: This law applies to:
Real property improved with 1 to 4 dwelling units including a unit in a stock cooperative, condominium or planned unit development
Multiunit residential property with more than four dwelling units
Commercial real property
Vacant land
A ground lease coupled with improvements, and
A manufactured home or a mobile home when offered for sale or sold through an agent pursuant to the authority contained in Section 10131.6 of the Business and Professions Code.
This law does not apply to:
Leases and rental agreements
Sale of state or federal land
Loan brokering services
Timing
A buyer-broker representation agreement shall be executed between a buyer’s agent and a buyer as soon as practicable, but no later than the execution of the buyer’s offer to purchase real property.
Contents of the buyer representation agreement:
The agreement must include:
Compensation of the real estate broker
Services to be rendered
When compensation is due
Contract termination
Three-month limit:
A buyer representation agreement cannot last longer than three months from the date the agreement was made, except for agreements entered into between a real estate broker and a corporation, limited liability company, or partnership.
Renewals:
A buyer representation agreement shall not renew automatically.
Any renewal shall be in writing and be dated and signed by all parties to the agreement.
Renewals cannot last longer than three months from the date the renewal was made.
Agency Disclosure
The Agency Disclosure must be provided prior to execution (C.A.R. Form AD).
Void and Unenforceable
A buyer representation agreement that is made in violation of these provisions is void and unenforceable.
Licensing law violation
Any person licensed under the Real Estate Law who violates the provisions related to buyer representation agreements is deemed to have violated the licensing law.
Notice re negotiability of commissions
Statutory notice that compensation is not fixed by law and is negotiable must be included in all form buyer representation agreements.
Assembly Bill 2992is codified as Business and Professions Code § 10147.5, Civil Code §§ 2079.13, 2079.14, and 2079.16, and Code of Civil Procedure § 1298. Effective January 1, 2025.
Landlord/Tenant: Expands Landlord's Duty to Change the Locks Upon Request by Victim of Abuse
Under existing law when a tenant is a victim of abuse, the landlord must change the locks upon written request within 24 hours after receiving appropriate documentation. If the person alleged to have committed the abuse is a tenant in the same dwelling unit, then a court order excluding that person from the dwelling would be necessary. If not, then various types of supporting documentation would be acceptable.
This new law clarifies that the landlord is responsible for the cost of changing the locks; extends the lock change protection to immediate family or household members of a tenant; expands the acceptable supporting documentation of abuse or violence triggering the lock change protection; and prohibits a landlord from taking adverse action against a prospective tenant because of their use of the lock change protection.
Senate Bill 1051 adds to the existing duty of the landlord to change locks upon request as follows:
Landlord to bear costs: Clarifies that a landlord is responsible for paying the cost of changing the locks which must be done within 24 hours of receiving appropriate documentation. If the landlord does not change the locks within 24 hours, the tenant may do so without the landlord’s permission, regardless of any lease term to the contrary, and the landlord is to reimburse the tenant for that cost within 21 days.
Immediate family or other household members are protected: Expands the category of eligible tenants to include an immediate family or household member of a tenant so that an immediate family or household member of a tenant, who is the victim of abuse or violence, is entitled to the lock-change protections.
Expands range of documentation that qualifies: Expands the acceptable supporting documentation substantiating the lock-change request to include documentation from a qualified third party acting in their professional capacity. A form template is written into the law that may be used for this purpose. Additionally, acceptable supporting documentation substantiating the lock-change request includes any other form of documentation that reasonably verifies that the abuse or violence occurred, including, but not limited to, a signed statement from the eligible tenant.
Tenant Screening: Prohibits a landlord or a landlord’s agent, when screening a prospective tenant, from taking an adverse action (such as denying the rental application) based on the following: a) An allegation that the prospective tenant breached a lease stemming from an act of abuse or violence against the tenant. b) The prospective tenant having previously requested to have their locks changed because of abuse or violence. c) The prospective tenant having been a victim of abuse or violence. d) The prospective tenant, or a guest of the prospective tenant, having previously summoned law enforcement assistance or emergency assistance, as, or on behalf of a victim of abuse, a victim of crime, or an individual in an emergency. Penalties: If a landlord or their agent makes a prohibited adverse action when screening a prospective tenant, they are liable for actual damages, statutory damages between $100 and $5,000, and any other remedy provided by law.
Senate Bill 1051is codified as Civil Code§§1941.6 and 1946.9. Effective January 1, 2025.
Landlord/Tenant: Security deposit; Move-in and move-out photos
Requires residential landlords to take move-in, move-out and post-repair and cleaning photos demonstrating deductions.
Deductions for cleaning and damages must be “reasonably necessary” to return property back to its initial condition. Professional carpet cleaning, and the cost of materials and charges for work performed for repairs is specifically cited as subject to this rule.
Move-in, Move-out and post-repair and cleaning photos required:
Beginning April 1, 2025, the landlord is required to take photographs of the unit within a reasonable time after the possession of the unit is returned to the landlord, but prior to any repairs or cleaning for which the landlord will make a deduction from or claim against the security deposit pursuant to this section and The landlord is also required to take photographs of the unit within a reasonable time after such repairs or cleanings are completed.
For tenancies that begin on or after July 1, 2025, the landlord is required to take photographs of the unit immediately before, or at the inception of, the tenancy. In returning the itemized statement of deductions, if a deduction is made for repairs or cleaning, the landlord shall provide the photographs including the move-in, move-out and post repair and cleaning photos, along with a written explanation of the cost of the allowable repairs or cleanings.
The landlord may provide such photographs to the tenant by mail, email, computer flash drive, or by providing a link where the tenant may view the photographs online. The landlord shall not be entitled to claim any amount of the security if the landlord, in bad faith, fails to comply with these requirements. Permissible charges for repairs and carpet cleaning if “reasonably necessary”: The landlord may not claim deductions from the security for damage or defective conditions that preexisted the tenancy or for ordinary wear and tear.
Claims for materials or supplies and for work performed by a contractor, the landlord, or the landlord’s employee shall be limited to a reasonable amount necessary to restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear.
The landlord shall not require a tenant to pay for or assert a claim against the tenant or the security for, professional carpet cleaning or other professional cleaning services, unless reasonably necessary to return the premises to the condition it was in at the inception of tenancy, exclusive of ordinary wear and tear.
Comment: The security deposit law already included the prohibition against making deductions from the security deposit unless “reasonably necessary” for the purposes specified in the law. These provisions reiterate the “reasonably necessary” prohibition but are now more specific in regard to charges for materials and work and claims for professional carpet cleaning or other professional cleaning services.
Assembly Bill 2801 is codified as Civil Code§1950.5. Effective January 1, 2025.
Landlord/Tenant: Unlawful detainer answer time periods extended
Extends the time for a defendant to file a response, such as an answer, from five business days to ten business days after an unlawful detainer complaint and summons is served.
At the same time, this law also shortens the timeline that applies to a type of motion a tenant attorney often files to delay the eviction, called a demurrer, which is a specific category of motion to dismiss the case. AB 2347 will change the timeline for these motions, subjecting them to the same expedited timeline that other motions in unlawful detainer cases follow, which will help reduce delays in the eviction process.
Comment: In 2018, the unlawful detainer law was amended to exclude Saturdays, Sundays and other judicial holidays in counting a three-day notice to pay rent or quit (AB 2343). That same bill also excluded Saturdays and Sundays in counting the five-day answer period after service of an unlawful detainer complaint and summons. That five-day answer period is now 10 days under AB 2347.
Assembly Bill 2347 is codified as Code of Civil Procedure 1167 and 1170. Effective January 1, 2025.
Landlord/Tenant: Certain tenant rights extended to small commercial tenants
This law extends to small businesses (“qualified commercial tenants”) certain tenancy rights currently applicable to residential tenancies as follows:
30 and 90-day notice to increase rent
30 and 60-day notice to terminate tenancy and
Translated copy of the lease if negotiated in specified languages
Additionally, transparency and proportionality are required for fees a landlord may charge a qualified commercial tenant to recover building operating costs.
Application to “qualified commercial tenants”
This law applies to a qualified commercial tenant defined as a tenant of commercial real property that meets both of the following requirements:
The tenant is a microenterprise (which generally means that the business has 5 or fewer employees); a restaurant with fewer than 10 employees; or a nonprofit organization with fewer than 20 employees AND
For month-to-month periodic tenancies or shorter, the tenant has provided the landlord, within the previous 12 months:
A written notice that the tenant is a qualified commercial tenant and
A self-attestation regarding the number of employees
For leases or longer periodic tenancies, the tenant has provided the notice and self-attestation before or upon execution of the lease, and annually thereafter.
Rent Increases: 30 and 90-day notice
For a qualified commercial tenant, for month-to-month tenancies (or a shorter period), rent increases of 10% or less require a 30-day notice. Rent increases of more than 10%, counting all increases within the previous 12 months, require a 90-day notice.
Additionally, landlords of “commercial real property” must include in the notice to increase rent information on the provisions of Civil Code§827(b) re rent increases and qualified commercial tenants.
Translated copy of the lease or rental agreement
For qualified commercial tenants, a translated copy of the lease or rental agreement must be delivered before signing when: The agreement is negotiated primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean.
Entering into a lease or rental agreement on or after January 1, 2025, and
Covering a non-residential zoned commercial space
The “own interpreter” exemption does NOT apply
If a translated copy is not provided, the qualified commercial tenant may rescind the lease or rental agreement. Waivers of these rights are void and unenforceable.
Presumption of month-to-month renewal
After expiration of the lease, qualified commercial tenancies are presumed to be renewed on a month-to-month basis when the lessor accepts rent from the tenant while the tenant remains in possession when rent is payable monthly.
30 and 60-day notices to terminate tenancy without fault
A 30-day notice (at a minimum) to terminate a month-to-month rental without fault is required when a qualified commercial tenant has occupied the property for less than one year. Otherwise, a 60-day notice (at a minimum) is required.
Additionally, a landlord of “commercial real property” must include in the termination notice information on the provisions of Civil Code§1946.1 explaining the above rules.
Transparency and proportionality are required for fees a landlord may charge a qualified commercial tenant to recover building operating costs.
SB 1103 prohibits a landlord of a commercial real property from charging a qualified commercial tenant a fee to recover building operating costs unless the costs are allocated proportionately per tenant and the qualified commercial tenant is provided supporting documentation (along with several other conditions that must be met).
A violation of these provisions may be an affirmative defense in an action to recover possession based on a failure to pay the fee. A landlord of a commercial real property who violates these provisions would be liable to a qualified commercial tenant for specified damages including actual, punitive, triple and attorney fees. A waiver of these protections is void and unenforceable.
The district attorney, city attorney, or county counsel are authorized to seek injunctive relief.
Senate Bill 1103 is codified as Civil Code§§ 827, 1632, 1946.1 and 1950.9. Effective January 1, 2025.
Listing Agreements and Foreclosure: Delivery of listing agreement extends foreclosure sale by 45 days.
When foreclosing on residential 1 to 4 property, this law requires an additional 45 days beyond the scheduled date of sale if the trustee receives a listing agreement from the trustor at least 5 business days before the scheduled date of sale. There is an additional postponement right based on obtaining an executed purchase agreement.
Prohibits the trustee from selling the property at the initial trustee’s sale for less than 67% of the amount of the fair market value of the property.
45- day postponement based on listing
For residential 1 to 4 properties subject to a power of sale contained in any deed of trust or mortgage, the sale shall not be conducted until the expiration of an additional 45 days following the scheduled date of sale when:
The trustee receives five business days prior to the scheduled date of sale
A listing agreement
With a California licensed real estate broker
To be placed in a publicly available marketing platform
Sent by certified mail with USPS or other overnight mail courier service
With tracking information that confirms the recipient’s signature and date and time of receipt and delivery
This postponement may be used only one time
45- day postponement based on receipt of executed purchase agreement
If the scheduled date of sale has been postponed in the above manner the trustee shall postpone the scheduled date of sale for 45 days following receipt of an executed purchase agreement when:
The trustee receives five business days before the scheduled date of sale
A copy of a purchase agreement for sale of the property
Purchase agreement must be bona fide and fully executed
Must include name of buyer, sales price, closing date and acceptance by the designated escrow agent
Purchase price must be equal to or greater than the amount of the unpaid balance of all obligations of record secured by the property
Sent by certified mail with USPS or other overnight mail courier service
With tracking information that confirms the recipient’s signature and date and time of receipt and delivery
This postponement may be used only one time
Requirement of fair market value
With respect to residential real property containing no more than four dwelling units that is subject to a power of sale contained in a first lien deed of trust or mortgage, the trustee is prohibited from selling the property at the initial trustee’s sale for less than 67% of the amount of the fair market value of the property. If the property remains unsold after the initial trustee’s sale, it is required that the trustee postpone the sale for at least 7 days and authorizes that the property to be sold thereafter to the highest bidder. The beneficiary, or authorized agent shall provide to the trustee a fair market value of the property at least 10 days prior to the initially scheduled date of sale.
Comment: Under California law, the time from when a Notice of Default is recorded to the scheduled trustee’s sale is approximately 110 days. Since 2021, for properties subject to the Real Estate Settlement Procedures Act (RESPA) the earliest a Notice of Default can be filed is 120 days after the loan becomes delinquent. With this latter requirement, the total time a borrower has from default to the date of sale is 230 days for properties subject to RESPA.
In addition to the 230-day timeline indicated above, AB 2424 may add up to 85 more days to the foreclosure process as follows: Delivery of a listing to the trustee five business days prior to date of sale will give the borrower 45 more days beyond the scheduled date of sale. And delivery of an executed purchase agreement five business days prior to the date of sale may effectively add another 40 days (not 45 days since the second postponement is calculated from the time the trustee receives the purchase agreement). See our Foreclosure Timeline chart.
Assembly Bill 2424 is codified as Civil Code§§2923.5, 2923.55, 2924f and 2932.2. Effective January 1, 2025.
If you have questions about any of these new laws, please contact us at Sara Naheedy Law APC to schedule a free consultation.