Hello and Happy New Year, everyone! I’m excited about the opportunity to serve our members this year.
We know the market will remain difficult for REALTORS® and consumers alike. For consumers, having a trusted expert by their side to navigate one of the more challenging markets we’ve seen in a long time will be essential to helping them successfully buy or sell a home.
For REALTORS®, it’s more important than ever to show your clients just how much value you bring to a real estate transaction. To help you with that, C.A.R. has prepared a list of 167 things REALTORS® do for their clients, which can be found on Smart Zone, our specially created website to help you navigate a continually changing market. If you represent buyers, you’ll find buyer’s agent resources, including legal guides, and educational resources for using the Buyer Representation and Broker Compensation Forms, as well as coaching scripts, and marketing, business and legal tools. We’re constantly adding new resources, so be sure to check it frequently.
We’re committed to helping you thrive in this real estate market. No matter what, know that there are significant resources and tools at your fingertips and a community of REALTORS® at your side as you set out to crush your 2024 goals.
2023 was a successful year for us on the legislative front. Several C.A.R.-sponsored bills were signed into law including bills that address the duration of residential listings and environmental hazard disclosures, as was another bill concerning online notarizations, which C.A.R. actively supported. Here are a few of the top new California laws impacting agents, brokers and your business:
Listings Capped at 24 months (AB 1345)
How long can a listing last? 24 months. Previously, there was no specified limit. Now, under AB 1345, exclusive listings on residential one-to-four properties that last longer than 24 months from the date the listing was signed are unlawful, unenforceable, and void. The law also makes void and unenforceable the automatic renewal, or the recordation of any exclusive residential listing regardless of duration and regardless of the number of dwelling units. An exclusive residential listing entered into with an LLC, a corporation, or a partnership is still prohibited from being recorded or automatically renewed.
Online Notarization by California Notaries Pending Secretary of State Certification (SB 696)
California notaries are not presently permitted to conduct notarization online. However, under SB 696, they will be authorized to do so once the Secretary of State certifies the necessary technology or by 2030, whichever is earlier. The technology required by SB 696 features various security and anti-fraud mechanisms with two forms of identity proofing and verification by a live commissioned notary. Online notarizations conducted by out-of-state notaries, which are already recognized de facto, received clear recognition beginning January 1, 2024, as long as the notarization is conducted in accordance with the law of the jurisdiction in which the notary is commissioned.
NHD Statement Simplifies Identification of Properties Subject to Defensible Space Disclosures (AB 1280, C.A.R. sponsored)
The Natural Hazard Disclosure Statement will now specifically identify high and very high fire hazard severity zones, simplifying the identification of properties subject to the defensible space and fire hardening disclosures. Three new sub-categories are being added to the NHD statement.
When the property is located in any of these zones, the “yes” box must be checked, and a defensible space disclosure would be required. For properties built before 2010, the fire hardening disclosure and questionnaire would also be required. Agents may use the “Fire Hardening and Defensible Space Advisory, Disclosure and Addendum” (Form FHDS) for this purpose. The three new sub-categories provide additional information as to the fire zone severity, either high or very high, and as to location, either in a state responsibility or a local responsibility area.
Environmental Hazard Booklet to be Updated (AB 225, C.A.R. sponsored)
This new law will update the state’s Homeowners Guide to Environmental Hazards booklet by adding three new chapters related to wildfires, climate change, and sea level rise, providing consumers with valuable information regarding these risks.
The update does not allocate additional expenditures but will rely on existing or private resources as they become available. This approach to funding will save money and limit wasteful government spending, but it also means that the law contains no firm deadline for completing the updated booklet.
These laws went into effect on January 1, 2024, unless stated otherwise. See all of the 2024 New Laws affecting agents, brokers and real estate in general.
We know that insurance issues continue to remain top of mind for many of you, particularly those of you in, or near, designated fire hazard areas. I happen to be one of those brokers that works in a high fire hazard market, and truly understand the frustrations our members are feeling.
Last September, California’s Insurance Commissioner announced a package of executive actions aimed at stabilizing California’s Insurance market. One of the most important parts of the announcement was the commissioner’s commitment to expedite the introduction of new rules for the review of climate catastrophe models. These models would allow insurance companies to take into account the growing risk of fire created by climate change and would recognize the benefits of wildfire safety and mitigation actions at the state, local, and parcel levels.
The use of such models has been something that insurance carriers have stated is necessary for them to write policies in higher risk areas. In order to take advantage of such models, the Insurance Commissioner said a company would be required to then actually write policies in higher risk areas.
We are aware of significant delays many of you have been experiencing in the processing of FAIR insurance applications for coverage. C.A.R.’s leadership team and policy staff met with FAIR Plan’s president and lobbyist in December to discuss these delays and the impact the delays were having on your transactions. Despite rumors, the FAIR Plan is still writing new policies.
The delays were caused primarily because FAIR Plan began implementing a much-needed new processing system, which they chose to implement at a time of year that is historically less busy for FAIR Plan applications. Instead, they were very busy because of unprecedented demand for FAIR policies due to the state’s insurance issues. FAIR Plan expects operations to return to their version of normal soon. We will continue to monitor the situation and update you as necessary.
In the meantime, to help you navigate these insurance challenges, C.A.R. has prepared a number of resources for practitioners, also available on Smart Zone.
Lastly, I want to remind you by California law, that both supervisors and employees are required to take sexual harassment prevention training every two years, and new employees must receive the training within six months of being hired. If you last took the course in 2021, now is the time to take it again. Learn more about the requirement here and sign up for the course here.
As I close out, I wish you a very happy and prosperous new year. My gratitude to all of you who serve our clients with the highest standard of care, cooperation, and collaboration with our fellow colleagues. Your professionalism is core to our current and future success. So…cheers to your success.
See you next month,
Melanie Barker
2024 C.A.R. President