This summary provides only a sampling of the more significant laws affecting REALTORS®. For a more complete list, please see our “2017 New Laws” posted at car.org.
Laws Effective Immediately
Team Name Advertising, Broker’s License Number is Optional: As of August 30, 2016, on team name and agent-owned DBA advertising, only the responsible broker’s name must be displayed alongside the team name or agent-owned DBA. Under this new law the display of the responsible broker’s license number is optional. (SB 710, B&P Code §10159.7.)
Commercial Leasing Disclosure re CASp may be Required: Beginning September 17, 2016, if a commercial property has been issued an inspection report by a Certified Access Specialist (CASp), indicating that it meets applicable construction-related accessibility standards, the commercial property owner or lessor shall provide a copy within seven days of execution of the lease. If no such report has been issued, then a specific disclosure statement on the lease form would be required. Prior to signing the lease, the prospective lessee has the right to review an inspection report issued by a CASp, if one exists, and may cancel the lease within 72 hours after signing based on the report. (AB 2093, Civil Code §1938.)
Death of Occupant Law Clarified: Effective September 25, 2016, the existing law concerning disclosure of the death of an occupant on the property is clarified to provide that the death of an occupant, or the manner of death, occuring more than three years prior to an offer to purchase or rent is not a material fact which requires disclosure. Previously, the law only stated that no cause of action could arise for failing to disclose such deaths. (AB 73, Civil Code § 1710.2.)
Laws Pertaining to Licensees
Advertising Uniform Standards Effective 2018: This law reduces the complexity of the current system by implementing a relatively simple set of rules as to what information must be placed on an advertisement. Beginning 2018, a sales-agent or broker-associate will be required to include three items in their solicitation materials: name, license number, and their responsible broker’s name (the broker’s license number is optional). This law applies to any solicitation materials intended to be the first point of contact with a consumer and includes business cards; stationery; advertising flyers; advertisements on television, in print or electronic media; and “for sale,” “open house,” rent, lease and directional signs when any sales agent or broker-associate identifying information is included. There are exceptions for “for sale,” “open house,” rent, lease and directional signs when 1) no sales agent or broker-associate identifying information is included, or when 2) only the broker’s name is included. For example, under this exception you could have a completely generic directional sign or even one that includes only the broker’s name. In an effort to provide some lead time to allow agents to adjust their advertisements to this C.A.R. sponsored law, it does not go into effect until January 1, 2018. (AB 1650, B&P Code § 10140.6.)
Broker Associates Searchable Information Effective 2018: Right now, the public can, on CalBRE’s website, determine who the responsible broker is for any particular salesperson. However, there is no way for the public to search for and view similar information pertaining to broker-associates. Beginning January 1, 2018, the public licensee information on CalBRE’s website will indicate whether a licensee is an “associate licensee” and, if the associate licensee is a broker, will identify each responsible broker with whom the licensee is contractually associated. Additionally, this law requires the responsible broker to immediately notify CalBRE in writing whenever a broker-associate is hired or terminated. (AB 2330, B&P Code §§ 10083.2 and 10161.8.)
Petition Process to Remove Disciplinary Action Record from Public Profile after 10 Years Effective 2018: Beginning January 1, 2018, this C.A.R. sponsored legislation creates a process by which a licensee may petition CalBRE for removal of a disciplinary action from his or her online profile. After the passage of at least 10 years of the posting of the violation, and upon evidence of rehabilitation, CalBRE can consider and grant on a case-by-case basis the removal of the violation from their online database. All violations would continue to be maintained offline on the licensee’s permanent record. (AB 1807, B&P Code §10083.2.)
Licensing — Eliminates References to “Salesmen”; Restriction on Issuance of License for Person Previously Cited: The Real Estate Law includes outdated terminology that does not reflect both genders. Effective January 1, 2017, this C.A.R. sponsored law makes some necessary technical corrections, which include eliminating references to “salesman” and “salesmen” and instead replacing those with “salesperson” and “salespersons,” respectively. This law also prohibits issuance of a real estate license to a person who was cited for the illegal practice of real estate and either the terms of the citation have not been complied with or an unpaid fine remains outstanding. (AB 685.)
Licensing – Retired Status: Beginning January 1, 2017, this law authorizes any of the boards within the Department of Consumer Affairs, including CalBRE, to establish by regulation a system for a retired category of license for persons who are not actively engaged in the practice of their profession or vocation. This law does not require boards to offer a retired license. (AB 2859, B&P Code § 464.)
Laws Affecting Property Managers
Unlawful Detainer Masking Law: Under this law there is generally no public access to unlawful detainer records permitted unless the plaintiff/landlord prevails within 60 days of filing. This reverses the previous rule where it was the defendant/tenant who had to prevail within 60 days of filing to bar such access. Landlord/Tenant attorneys believe that the practical effect of this law will be to compromise the ability of property managers to know which prospective tenants have been sued for unlawful detainer. (AB 2819, Code of Civil Procedure §§ 1161.2 and 1167.1. Effective January 1, 2017.)
Bed Bugs New Disclosure Requirement Beginning July 1, 2017 for New Tenants and 2018 for Existing Tenants: This law creates a disclosure requirement regarding bed bugs beginning July 1, 2017 for new tenants, and beginning 2018 for existing tenants. Additionally, this law requires Landlords to provide copies of pest control reports to tenants whose units have been inspected and other tenants if infestation in a common area is confirmed. A landlord is prohibited from showing or renting vacant units if the landlord “knows” it has a current bed bug infestation. However, there is no duty on a landlord to inspect a dwelling unit or the common areas of the premises for bed bugs if the landlord has no notice of a suspected or actual bed bug infestation. (AB 551, Civil Code §§ 1942.5, 1954.1 and 1954.600 et seq.)
Water Submetering Effective 2018: This law requires any new construction multi-unit property built after January 1, 2018 to have submeters. For such properties, the landlord is required to bill incrementally for water usage with a fairly detailed set of rules governing how a landlord goes about that. This law also impacts multi-unit residential properties built prior to January 1, 2018 where the property has a submeter, and the landlord bills separately for water using the submeter. If so, then the landlord will be required to follow that same detailed set of rules, commencing 2018. (SB 7, Civil Code §§ 1954.201 et seq., Health and Safety §17922.14, and Water Code §§ 517 and 537 et seq.)
Disclosures Liability Protections of the Environmental Hazards Booklet Extended to Landlords: Beginning January 1, 2017, this C.A.R. sponsored bill extends liability protections for delivery of the Residential Environmental Hazards booklet to include leases of more than one year. The delivery of this booklet is deemed legally adequate to inform the lessee regarding common environmental hazards such as asbestos, formaldehyde, hazardous waste, household hazardous waste, lead, mold and radon, and additional general information on these issues is not required (unless the broker or landlord has actual knowledge). The delivery of this booklet remains optional. (AB 1750, Civil Code § 2079.13.)
Other New California Laws Affecting Real Property – Effective January 1, 2017
PACE Liens Detailed Financial Disclosure and 3-Day Rescission Right: This consumer protection law requires delivery of a detailed financial disclosure document to a property owner participating in a Property Assessed Clean Energy (PACE) lien program. The disclosure document contains a variety of notices and warnings including a notice that the property owner may not be able to refinance or sell without paying off the PACE obligation. The property owner also retains a 3-day rescission right detailed in a statutory form. Statements as to increased value of the property cannot be made unless based on an appraisal, a broker price opinion or an “automated valuation model.” (AB 2693, Government Code § 53328.1 and Streets and Highways Code §§5898.15, 5898.16 and 5898.17.)
Housing Second Units Eases Barriers to Development and Clarifies Standards: These two laws rename “Second Units” as “Accessory Dwelling Units” (ADUs). They reorganize existing law to apply a clear standard for the ADU permit review process regardless of whether a local government has adopted an ordinance or not. Additionally, they ease some of the barriers to the development of ADUs including utility hook-up fees and parking standards. Requires “ministerial” approval of an application for a building permit to create one ADU within the existing space of a single-family residence or accessory structure. (AB 2299, Government Code 65852.2. SB 1069, Government Code §§ 65582.1, 65583.1, 65589.4, 65852.150, 65852.2 and 66412.2.)
Water Use Fines may be Imposed for “Excessive Water Use”: SB 814 requires each public/private urban retail water supplier to define “excessive water use” by a residential customer. The law permits these water suppliers to fine residential customers up to $500 per 748 gallons (100 cubic feet) of water used above the defined local standard for excessive water use during a drought emergency. (Water Code §§ 365, 366 and 367.)
Mobile Homes — Three Year Temporary Waiver Program for Taxes and HCD Charges: AB 587 requires waiver of all vehicle license registration fees (VLF) by the Department of Housing and Community Development (HCD) against a person who is not currently the registered owner of a manufactured home or mobilehome prior to transfer of title. If the manufactured home or mobile home is subject to local property taxation then HCD must issue a conditional transfer of title and a county tax collector would be required to issue a tax liability certificate for payment of the taxes owed from the date of sale only. This window for waiver of charges and taxes expires at the end of 2019. (Civil Code § 798.15, Health and Safety Code §§ 18092.7, 181161.1, 18550 and 18550.1 and Revenue and Taxation Code § 5832.)