New Real Estate Laws
Whether you are an investor or a homeowner, it is crucial to keep up with the recent developments in real estate before buying or selling.
As of 2021, there are new local real estate laws in the state of California that anyone who has interactions in the real estate market should be aware of:
1. Senate Bill 1079
On September 28, 2020, Senate Bill 1079 was signed into law by Governor Newsom. This bill relates to residential properties and foreclosures.
Previously, when a property was foreclosed on and sent to auction, the process was simple. It was placed for auction, offers were made by investors, and then the property was sold to the highest bidder.
Under the new real estate law, however, the buyer of the property must inform the original tenants that they have the right to purchase the property back from them. The former tenants can purchase the property back for the price paid at auction by the investor if they can raise the necessary funds within 45 days of the sale.
Likewise, Senate Bill 1079 restricts investors from purchasing multiple foreclosed homes in bundles, as is common in the real estate industry. This will drastically alter how investors operate in the state of California and can prevent purchases of properties bought at auction from being finalized.
2. Homestead Exemption
Per Assembly Bill 1885, all homeowners throughout the entire state of California are eligible for homestead exemption in the event of bankruptcy or other debt obligations. Under this law, a lien cannot be placed on a homeowner’s property unless the total amount owed is more than the average price of a home in their region.
This will likely decrease the number of foreclosures that take place in California in 2021.
3. Homeowner Associations and Rentals
Prior to 2021, homeowner associations in California were able to decide amongst themselves whether their neighborhood would allow properties to be rented or solely cater to homeowners. This limited some homeowners from renting out their properties and limited the availability of affordable rental units in California.
Amidst a crisis of homelessness in the state, Assembly Bill 3182 passed in September 2020. Within the bill, Civil Code 4741 was created, which dictates that HOAs must permit at least 25% of the total properties in the neighborhood to act as rental units.
Real Estate Laws and Information
Want to learn more about how these new real estate laws may change the buying or selling process? Contact our expert Riverside real estate lawyers today to learn how Mellor Law Firm can help.