Introduction
Navigating the complex world of California real estate can be challenging for both newcomers and seasoned investors alike. The Golden State has a unique set of regulations governing property ownership, rental, and management. In this article, we’ll explore 20 California real estate laws you need to know, whether you’re a buyer, seller, landlord, or tenant.
20 California Real Estate Laws
- Transfer Disclosure Statement (TDS)
California requires sellers to provide buyers with a Transfer Disclosure Statement (TDS), which discloses information about the property’s condition and any known defects. This document must be completed and signed by the seller, buyer, and real estate agents involved in the transaction.
- Natural Hazard Disclosure (NHD) Report
Sellers must also provide a Natural Hazard Disclosure (NHD) Report, which reveals if the property is located in a flood, earthquake, or fire hazard zone. This report is typically prepared by a third-party disclosure company.
- Megan’s Law Disclosure
California law mandates that sellers and landlords must disclose the existence of the state’s Megan’s Law database, which contains information about registered sex offenders. This disclosure is typically included in the purchase contract or rental agreement.
- Proposition 13
Proposition 13, passed in 1978, caps property tax increases at 2% per year based on the assessed value of the property at the time of purchase. This law keeps property taxes relatively stable for long-time homeowners.
- Proposition 60 and 90
These propositions allow qualifying homeowners over the age of 55 to transfer their property tax base to a replacement property within specific California counties, provided that the new property is of equal or lesser value.
- Rent Control
Many cities in California have rent control ordinances that limit how much landlords can increase rent for existing tenants. If you own or plan to buy rental property in California, familiarize yourself with local rent control laws.
- Just Cause Eviction
Some California cities with rent control also require “just cause” for eviction, which means landlords must have a valid reason, such as non-payment of rent or violation of lease terms, to evict a tenant.
- Security Deposit Limits
California law limits security deposits to two months’ rent for unfurnished units and three months’ rent for furnished units. Landlords must return the deposit, minus any allowable deductions, within 21 days of the tenant moving out.
- Notice of Entry
Landlords must provide at least 24 hours’ written notice before entering a tenant’s unit for non-emergency reasons, such as inspections or repairs.
- Landlord’s Responsibility for Repairs
Landlords are responsible for maintaining a habitable living environment for their tenants, including addressing maintenance and repair issues in a timely manner.
- Smoke and Carbon Monoxide Detectors
California requires landlords to install and maintain smoke and carbon monoxide detectors in rental properties.
- Bed Bug Disclosure
Landlords must provide tenants with a written disclosure about bed bugs and their prevention before entering into a rental agreement.
- Water-Conserving Plumbing Fixtures
California law requires that properties built before January 1, 1994, be equipped with water-conserving plumbing fixtures by January 1, 2024.
- Solar Rights Act
The Solar Rights Act protects homeowners’ rights to install solar energy systems on their properties and limits the restrictions that homeowners’ associations (HOAs) can place on such installations.
- Homeowners’ Association (HOA) Disclosures
Sellers must provide buyers with a comprehensive set of HOA documents, including financial statements, bylaws, and meeting minutes, if the property is governed by an HOA.
- Real Estate Withholding Tax
In certain situations, California requires a withholding tax on the sale of real estate by non-resident sellers. Be aware of the applicable tax requirements and consult with a tax professional to ensure compliance.
- Earthquake Brace and Bolt (EBB) Program
The Earthquake Brace and Bolt (EBB) program provides eligible California homeowners with grants to retrofit their homes to better withstand earthquakes. Familiarize yourself with the program if you own or plan to buy property in an earthquake-prone area.
- Fair Housing Laws
California has strict fair housing laws that prohibit discrimination based on race, color, religion, sex, gender, sexual orientation, marital status, national origin, ancestry, familial status, disability, or source of income. Landlords must follow these laws when renting their properties.
- California Homeowner Bill of Rights
The California Homeowner Bill of Rights provides protections for homeowners facing foreclosure, including a requirement for mortgage servicers to provide a single point of contact and a prohibition on dual tracking (foreclosing while a loan modification is pending).
- Mandatory Retrofitting
In some California cities, such as Los Angeles, certain types of buildings are subject to mandatory retrofitting requirements to improve their seismic safety. If you own or plan to buy property in California, research local retrofitting ordinances.
Conclusion
Understanding and complying with California’s unique real estate laws is essential for anyone involved in property transactions within the state. By familiarizing yourself with these 20 key laws, you’ll be better equipped to navigate the California real estate market and protect your interests, whether you’re buying, selling, renting, or managing property. Always consult with a licensed real estate professional or attorney for guidance on specific legal matters
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