- APPRAISERS & APPRAISAL REPORTS: AB 948 modifies several sections of the Business and Professions Code, to Civil Code §1102.6(g) and Government Code §12955. These changes go into effect in two stages:
Effective January 1, 2022, this law prohibits an appraiser from basing their appraisal of the market value of a Property on the race, color, religion, gender, gender expression, age, national origin, disability, marital status, source of income, sexual orientation, familial status, employment status, or military status of either the present or prospective owners or occupants of the Property, or the present owners or occupants of the properties in the vicinity of the Property, or on any other basis prohibited by the federal Fair Housing Act.
Effective July 1, 2022, this law requires that every contract for the sale of real property contain a notice stating that any appraisal of the property is required to be unbiased, objective, and not influenced by improper or illegal considerations. The language for that notice must state the following:
“Any appraisal of the property is required to be unbiased, objective, and not influenced by improper or illegal considerations, including, but not limited to, any of the following: race, color, religion (including religious dress, grooming practices, or both), gender including, but not limited to, pregnancy, childbirth, breastfeeding, and related conditions, and gender identity and gender expression), sexual orientation, marital status, medical condition, military or veteran status, national origin (including language use and possession of a driver’s license issued to persons unable to provide their presence in the United States is authorized under federal law), source of income, ancestry, disability (mental and physical including, but not limited to, HIV/AIDS status, cancer diagnosis, and genetic characteristics), genetic information, or age. If a buyer or seller believes that the appraisal has been influenced by any of the above factors, the seller or buyer can report this information to the lender or mortgage broker that retained the appraiser and may also file a complaint with the Bureau of Real Estate Appraisers at: https://www2.brea.ca.gov/complaint/ or call (916) 552-9000 for further information on how to file a complaint.”
Buyers who believe that the Appraiser was biased should be encouraged to not only follow the steps detailed in the above notice but should also consult with their own qualified California real estate attorney. CAR and SFAR are exploring how and when to address this new requirement; PRDS will have the required Notice in its 12/2021 version of the REPC noting the date this law goes into effect.
2. FIRE HAZARD ZONES, HOME HARDENING & DEFENSIBLE SPACE: SB 63 modifies several sections of the Government Code, Health & Safety Code and Public Resources Code.
Effective January 1, 2022, this law expands the fire hazard zones which necessitate the home hardening and defensible space disclosures. Of great significance is that the NHD statement MAY no longer be relied upon to determine if the Property is in such a zone because the NHD statements do not generally disclose high fire hazard severity zones in local responsibility areas.
Cal Fire is now required to designate within local responsibility areas moderate, high, and very high fire hazard zones, as opposed to just very high fire hazard zones. These new designations will require home hardening disclosures and defensible space compliance within both very high and high fire hazard severity zones that are within a local responsibility area. These changes will create confusion until Cal Fire has fully complied with this new law. Sellers should be encouraged to go online and check the CalFire “Fire Hazard Severity Zone Viewer” at: https://gis.data.ca.gov/datasets/ which may be used to determine if a property is in a fire hazard zone.
- IMPLICIT BIAS TRAINING: SB 263 modifies Business & Professions Code §§ 10151, 10153.2 & 10170.5 which add implicit bias training to the mandatory course work for licensing and license renewal.
Effective January 1, 2023, this new law is aimed at eliminating implicit bias (which is a person’s relatively unconscious ideas and attitudes regarding personal characteristics of other people) by requiring additional specific training to obtain or renew a real estate license. Agents who need to renew their license immediately after January 1, 2023 should consider obtaining that new training during the month of December, 2022.
- REAL ESTATE LICENSEE’S PRIOR SURNAME: AB 44 modifies Business & Professions Code §10149.5 to allow a real estate licensee to use their prior surname in conducting real estate business.
Effective January 1, 2022, a real estate licensee who is a natural person who has legally changed their surname in which their license was originally issued may continue to use their former surname for the purpose of conducting licensee activities as long as both names are filed with the DRE. This will enable people who, after getting married, change their last name to continue to do business in their pre-marital name but the DRE must be notified that the licensee uses both of these names.
- RESTRICTIVE COVENANTS MODIFICATION PROCESS: AB 1466 modifies multiple sections of the Government Code to force county recorder’s offices to streamline their restrictive covenant modification process and requires anyone who knowingly provides an owner or buyer with CC&Rs or other recorded documents that contain unlawful discriminatory language to disclose the ability of an owner or future owner to remove the offending language.
Effective July 1, 2022, if a real estate broker or agent (or county recorder, title company, or escrow company) has actual knowledge that a declaration, governing document, or deed that is being directly delivered to an owner or buyer that includes a possible unlawfully restrictive covenant, they shall notify the person of the existence of that covenant and their ability to have it removed through the restrictive covenant modification process.
Although the statute states that there is “no presumption” that a party providing a document has read the document or has actual knowledge of its content, it is arguable that any real estate licensee who passes on an important document, such as CC&Rs s to their clients without reading those documents has violated their fiduciary duties to that client.
In addition to creating this new disclosure requirement, beginning July 1, 2022, if the title company or escrow company that is directly involved in the pending transaction receives a request before the close of escrow regarding any restrictive covenant, then the title or escrow company must assist in the preparation of a Restrictive Covenant Modification, a new statutory form that has been created to facilitate the process.
- SINGLE-FAMILY ZONING: SB 9 modifies multiple sections of the Government Code to increase housing development of no more than 2 units in a single-family zone and the potential subdivision of such lots into two parcels.
Effective January 1, 2022, local governmental planning entities must approve a housing development of no more than 2 units in a single-family zone, and/or the subdivision of a parcel zone for residential use into 2 parcels. This much discussed new law contains a significant number of rules, conditions and exceptions (such as the Property cannot be in a certain fire or earthquake zones without complying with significant mitigation requirements) which may make it impractical for many property owners to take advantage of this new process.
NOTE: Agents should not give any opinions about the ability of any owner or buyer to take advantage of SB 9 or any other legislation designed to facilitate the building of more residences in single-family zones; the “potential” of an owner to use new state laws to develop a Property should not be included in any real estate advertisements or promotional material. Clients with questions about the applicability of new laws to any specific Property should be encouraged to consult with their own local land use experts and/or a qualified California real estate attorney.
- TAXES – PROPOSITION 19 IMPLEMENTATION LEGISLATION: SB 539 modifies Revenue and Tax Code §§ 63.2 and 69.6
Effective September 30, 3021, this new law clarifies the implementation of Prop 19 (which went into effect earlier this year) so that it is now clear that the purchase and sale of a homeowner’s principal residence may qualify for the tax savings even if one leg of the transaction took place prior to April 1, 2021 as long as the subsequent sale or purchase takes place within two years and on or after April 1, 2021.
CAR has an excellent Q&A which provides a complete explanation of Prop. 19 and the latest implementation rules entitled “Property Tax Exemptions from Reassessment and Prop 19 Implementing Legislation” on its website at: HTTP://WWW.CAR.ORG/RISKMANAGEMENT/QA/PROPERTY-TAX-FOLDER
- HOA RENTAL RESTRICTIONS: AB 3182 creates new Civil Code §§4740 and 4741, and amends Government Code Section 65852.2
Effective 1/1/21, HOAs must modify governing documents before 1/1/22. This law authorizes a Common Interest Development (“CID”) to impose reasonable rental restrictions that have the effect of limiting the total number of rentals to 25% or higher of the individual dwelling units in the CID. For example, if the CID has 100 units, there can be no restriction that would limit rentals such that only 24% or fewer units could be rented.
It further provides that ADUs and junior accessory dwelling units (JADUs) must not be counted toward this cap; and further that such a cap must not change the right of an individual owner who was renting their unit out prior to the effective date of this law to continue renting out their unit.
This law applied to CIDs as of January 1, 2021, and CIDs were required to have their governing documents amended by the end of 2021. Whether or not the governing documents are amended by that deadline, the CIDs must nevertheless comply with this law.
NEW LAWS IMPACTING LANDLORD-TENANT RELATIONSHIPS IN 2022
- EMOTIONAL SUPPORT ANIMAL DOCUMENTATION: AB 468 modifies Health & Safety Code §§ 122317 et seq.
Effective January 1, 2022, this new law requires that if a health care practitioner is providing documentation relating to an individual’s need for an emotional support dog, that practitioner must comply with specified requirements including: (1) holding a valid health care license; (2) having a client-provider relationship for at least 30 days prior to providing the documentation and (3) complete a clinical evaluation of the individual’s need for an emotional support dog. The provider of an emotional support dog must also give notice to the person buying the animal that the dog does have the special training required to be a service dog and thus does not entitle the dog to the rights and privileges afforded to a guide, signal, or service dog.
Although this new law specifies that it is not to be construed to restrict or change existing federal and state laws related to a person’s right for reasonable accommodation and equal access in housing, it does, in fact, change how a landlord treats a tenant who is requesting a reasonable accommodation for an emotional support animal and the type of documentation that the landlord may demand in order to verify the request. Property owners who have any questions regarding the impact that this new law will have on their ability to legally deal with tenant requests for accommodations should be advised to consult with their own local landlord-tenant attorney.
- GOVERNMENT INSPECTIONS FOR LEAD HAZARDS OR SUBSTANDARD BUILDINGS: AB 838 modifies Health & Safety Code § 17970.5.
Effective July 1, 2022, if a city or county receives a complaint of a substandard building or a lead hazard violation from a tenant, resident, or occupant (or their agent) that city or county is required to inspect the building, document the lead hazard violations that can be discovered based upon a reasonably competent and diligent visual inspection of the Property, and identify any aspect of the Property that is determined to be “substandard” (generally defined as being synonymous with “typical uninhabitability standards.” The governmental entity is not required to conduct an inspection if (1) the complaint does not specifically allege one or more substandard conditions and/or (2) the same person submitted a complaint within the past 180 days which was deemed to be frivolous or unfounded.
- MOBILE HOME PARK RENTALS SUBJECT TO RENT CAP & JUST CAUSE EVICTION:
AB 978 modifies Civil Code §§ 1946.2 and 1947.12
ive January 1, 2022, mobile home parks that rent mobile homes will be subject to the Tenant Protection Act of 2019, but the rent cap will be calculated to include all rent increases from February 18, 2021. If the rent increase since that time exceeds the maximum allowable rent increase, rents will be automatically rolled back to whatever the maximum allowable rent is under the law.
- NEW REQUIRED DISCLOSURE PAMPHLET Health & Safety Code § 26148(b)
Effective January 1, 2022, as a result of certain laws passed in 2015, residential landlords must provide prospective tenants with a consumer-oriented booklet entitled “Information on Dampness and Mold for Renters in California” addressing the potential health risks associated with mold exposure. This booklet must be given to prospective tenants before entering into a rental or lease agreement. There are no remediation requirements for residential landlords in the Mold Act because despite the existence of this law for 6 years, the CDPH has yet to establish the necessary guidelines. Once those guidelines are established, additional landlord disclosures will be required.
This booklet will come as a pre-checked attachment to CAR’s Residential Lease Agreement in 2022 and will be a pre-checked attachment to the PRDS Landlord Residential Questionnaire (rev. 12/2021)
- SHORT TERM RENTALS: SB 60 modifies Government Code §§ 25132 and 36900
Effective immediately, there will be steeper fines when short-term rentals threaten the health and safety of anyone on the Property or in the neighborhood. Although the author of this bill noted that short-term rentals offer a way to improve tourism and earn owners some extra money, certain bad actors created problems such as large gatherings that lead to underage drinking, brawls, noise complaints and even violence. “Short-term rental” is defined as a “residential dwelling,” or any portion of a residential dwelling, which is rented to a person or persons for 30 consecutive days or less.
However, the penalty limits set by this bill apply only to infractions that pose a threat to public health and safety, and do not apply to a first-time offense of failure to register or pay a business license fee. This law provides that the violation of a short-term rental ordinance that is an infraction is punishable by the following:
- a) A fine not exceeding $1,500 for a first violation;
- b) A fine not exceeding $3,000 for a second violation of the same ordinance within one year; and,
- c) A fine not exceeding $5,000 for each additional violation of the same ordinance within one year of the first violation.
This Weekly Practice Tip is an attorney-client privileged document for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.
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