New California Real Estate Laws You Should Know in 2022

The California legislature passed a number of new laws that Real Estate Brokers and Agents should be aware of as the industry moves into the new year. Unless otherwise noted, these laws became effective January 1, 2022.  It will be important to quickly assess your practices to determine if you are complying with the new laws. These laws are briefly addressed below for purposes of providing an overview of some of the important laws for the coming year.

The California legislature passed a number of new laws that Real Estate Brokers and Agents should be aware of as the industry moves into the new year. Unless otherwise noted, these laws became effective January 1, 2022.  It will be important to quickly assess your practices to determine if you are complying with the new laws. These laws are briefly addressed below for purposes of providing an overview of some of the important laws for the coming year.

27 New Real Estate Laws in 2022

1. Consumer Protection: Pace Liens and Seniors – AB 790

This law clarifies that relief under the Consumer Legal Remedies Act (CLRA) is applicable to seniors who have fallen victim to predatory Property Assessed Clean Energy (PACE) assessments via home solicitations. Newly enacted AB 790 will prevent PACE lenders from using technical arguments to evade obligations when a senior whose home has been put at risk because of a PACE loan seeks relief under the CLRA.

2. Continuing Education: Implicit Bias Training – SB 263

Implicit bias training is added to the mandatory course work for real estate licensee licensing and license renewals. An applicant for a broker or sales license must take courses on implicit bias before sitting for the license exam. These rules apply beginning January 1, 2023. If a license is set to expire on or after that date, the new continuing education requirements must be met.

3. Disclosures: Appraisal Discrimination and Purchase Agreement Notice – AB 948

This law requires every contract for the sale of real property contain a notice that states that any appraisal of the property is required to be unbiased, objective, and not influenced by improper or illegal considerations. The notice also must provide contact information for filing a complaint if the buyer or seller believes the appraisal is low based on illegal considerations.

The new statutory notice is required after July 1, 2022. The effective date of other requirements is January 1, 2022, except for new continuing education requirements which is required beginning January 1, 2023.  The California Associations of Realtors® will issue a new form with their June revisions to provide to clients and will make necessary revisions to the Purchase Agreements.

4. Disclosures: Discriminatory Restrictions Restrictive Covenants: Modification Process- AB 1466

This law requires real estate brokers or agents who have actual knowledge of a possible unlawfully restrictive covenant in a declaration, governing document or deed that is being directly delivered to notify the owner or buyer of it and the ability of the owner or buyer to have it removed through the Restrictive Covenant Modification process. This new law will create a program that requires each county recorder to establish a program to proactively redact unlawfully restrictive covenants. Disclosure obligations, inter alia, effective July 1, 2022

5. Escrows - SB 360

This is an extension of the law enacted in 2013 until January 1, 2027, that grants escrow agents important safeguards vis-à-vis credit reporting companies, such as the right to receive a copy of any report produced by an escrow rating service, and the right to dispute and correct inaccurate information.

6. Fire Hazard Zones: Home Hardening and Defensible Space Areas Expanded – SB 63

This law expands the fire hazard zones which home hardening and defensible space disclosure laws apply within a local responsibility area. Also, the NHD statement can no longer be relied upon to determine if the property is in such a zone.

7. Foreclosure Sales (trustee's) for residential one to four properties: Owner Occupant Right of First Refusal Clean-up Bill – AB 175

This bill closes loopholes in previous legislation passed last year that created a category of priority bidders at a foreclosure sale of residential one to four properties. The eligible bidders with the highest priority include the “owner occupant” bidder. The mortgagor or trustor’ or the child, spouse or parent of the mortgagor or trustor were excluded from the highest bidder. The loopholes closed include disallowing an owner’s related entity or other persons to purchase at a trustee’s sale as a priority “owner occupant”.

8. Homeowner's Associations Owners: Notices and delivery of documents – SB 392

This bill requires a homeowner association to communicate with homeowners via email if that is the homeowner’s preferred method of communication. The portion of the law mandating email delivery of notices at the option of the homeowner becomes effective January 1, 2023.

9. Home Inspectors: Sewer lateral – SB 484

This bill allows plumbers to both inspect and perform repairs if the consumer is provided a specified disclosure before authorizing the home inspection.

10. Housing: The California Surplus Land Unit – SB 791

This bill establishes the California Surplus Land Unit with the primary purpose of facilitating the development and construction of residential housing on local surplus land.

11. Housing: CEQA Exemption – SB 10

This bill allows local governments to adopt voluntarily zoning process with CEQA exemption for certain areas.

12. Housing: Development Fee Nexus Study – AB 602

This bill requires special district and local jurisdictions’ nexus studies to: 1) state their existing level of service, 2) provide a capital facility plan for proposed expenditures and 3) comply with public notice and meeting requirements.

13. Housing: Duplexes and Lot Splits Permitted in Single-Family Zoning – SB 9

This law requires ministerial approval in a housing development of no more than two units in a single-family zone, and the subdivision of a parcel zoned for residential use into two parcels, or both. Other requirements apply for both duplex and lot split approval.  This is a very complex legislation with many exceptions and conditions.

14. Housing: Equal Access – AB 491

This bill requires all subsidized tenants to have equal access to common entrances, common areas, and amenities as the tenants of market-rate housing units in a mixed income multifamily structure or development.

15. Housing: Prohibition of Fees – AB 571

This bill forbids affordable housing impact fees, including inclusionary zoning fees and in- lieu fees, from being implemented on a housing development’s affordable units.

16. Housing: Small Home Developments – AB 803

This bill allows the construction of inexpensive single-family housing units on sites surrounded by single-family or other lower density housing in an attempt to ensure that it only applies to sites where single-family housing is the prevailing character of the area. This bill applies only to areas that are already zoned for multi-family residential use.

17. Housing: Streamlined Approval Process – AB 1174

This bill counters the delaying tactics and loopholes that are used to frustrate the streamlined approval process that was established in SB 35 in 2017. AB 1174 addressed issues in SB 35 by specifying that a development or modification’s approval is valid for 3 years from the date of the final judgement upholding the development or modification’s original approval if litigation is filed challenging the approval.  The bill also requires local governments to consider applications of subsequent building permits based on objective standards and building codes that were in effect when the original development application was submitted. Effective September 16, 2021, as urgency legislation.

18. Landlord Tenant: Eviction Moratorium Extension and The Housing Recovery Act – AB 832

The Housing Recovery Act took AB 832’s place, which extended the COVID-19 Tenant Relief Act(as established by AB 3038 and SB 91) through September 30, 2021. AB 832 extended the state eviction moratorium until September 30, 2021. Beginning October 1, 2021, standard exemptions for just cause eviction rules return, the most significant ones being for single family properties and new construction properties built within the last 15 years. And for rent due prior to October 1, 2021, the 15-day notice is required (but not for rent due prior to March 2020). SB 832 was declared urgency legislation and took effect immediately on June 28, 2021.

19. Landlord Tenant: Government Inspections for Lead Hazards or substandard building – AB 838

This bill requires complaints from tenants and other parties regarding lead hazard and substandard building complaints to be responded to by local governments. It also requires local governments to provide free copes of inspection reports and citations to the requestor and others who may be impacted.  AB  838 is codified as Health and Safety Code § 17970.5. Effective July 1, 2022.

20. Landlord Tenant: Short Term Rentals: Higher Fines – SB 60

This bill produces a new fine violation structure for short term rentals when the short-term rentals are threats to public health and safety. Short term rentals are rented to a person or persons for 30 consecutive days or less. The increased fines are in addition to already existing criminal sanctions. SB 60 is codified as Government Code §§ 25132 and 36900. Urgency legislation. Effective September 24, 2021.

21. Mobilehomes Rent Cap and Just Cause Eviction

The statewide rent cap and just cause eviction rules under Tenant Protection Act (AB 1482) will be applied to owners of mobilehome rentals owned by a mobilehome park.  AB 1482 was enacted in 2019 and created a statewide rent cap by limiting allowable rent increases to 5% plus CPI for any 12-month period with a 10% maximum increase.

22. Names: Use of Prior Surname – AB 44

This bill allows a real estate licensee who legally changes their surname where their license was originally issued to continue to utilize their former surname for the purpose of conducting business associated with their license as long as both names are filed with the department.

23. Partition Actions: "Heirs Property" – AB 633

This bill enacts the Uniform Partition of Heirs Property Act which grants co-tenants of “heirs property” the first option to buy at an appraised price in a partition action. Heirs property includes property that is in part owned by or acquired from related persons. The court must first mandate an appraisal and grant co-tenants an option to buy. If a sale is ordered, it must typically be an open market sale through a brokerage. Courts are required to weigh non-economic factors, such as the consequence of eviction and whether the property has historic value in determining whether a partition will be in kind or by sale.

24. Probate Avoidance – SB 315

The revocable transfer on death deed law that allows a homeowner to transfer a named beneficiary 1-4 residential property upon the owner’s death without a probate proceeding is extended until 2032. The law applies to residential one to four properties, condominium units, single tract agricultural land improved with a residential 1 to 4 dwellings. Stock cooperatives are excluded from the types of property that may be transferred.

25. Tax: Extension of time based on disaster – SB 303

This bill extends by two years the time period for a taxpayer affected by a disaster declared by the Governor to transfer their base year value to a new residence. The conditions that must be met for this are either a)  the last day to transfer their base year value was on or after March 4, 2020, but on or before COVID-19 termination date, or March 4, 2022, whichever is earlier or b) the property was substantially damaged during the same time period. Effective immediately as urgency legislation.

26. Tax: Prop 19 implementing legislation – SB 539

Prop 19 allows a homeowner to transfer their tax basis anywhere in the state even if the property is of greater value and SB 539 clarifies the law re exemptions from reassessment. The transfer of a tax basis of a principal residence for seniors 55 or over, the severely disabled and victims of natural disaster, as well as the transfer of property or family farms from parent/grandparent to child/grandchild are addressed and clarified are addressed. The purchase and sale of a homeowner’s principal residence may also qualify for Prop 19 tax savings even if one leg of the transaction took place prior to April 1, 2021. SB 539 is effective as of September 30, 2021, as urgency legislation.

27. Tax: Penalties on Property Tax – SB 219

If the principal payment for the proper amount of tax due is paid no later than June 30 of the fiscal year in which payment first became delinquent a tax collector may cancel property tax late payment penalties if due to a shelter in place order. SB 219 is effective July 23, 2021, as urgency legislation.

If you have any questions relating to the potential application of any of the laws included above, please contact our office.