I took a class and learned a few new things today based on some changes to CA real estate law and the government shut down. In no particular order:
- All sales in California have to have a Transfer Disclosure Statement disclosure aka TDS (that's not new) ... except now for all irrevocable trusts. So if property is owned by an irrevocable trust, the trustee doesn't have to issue that disclosure. Same does not apply to most revocable trusts but could for those with more than one trustee.
- If the property is held in a trust and any of the trustees have lived in or on the property in the preceding year for any length of time (even just getting the house ready to sell for instance), a TDS is however required.
- New statement on the Request for Repairs details that sellers are not required to respond to a repair request. This has always been the case but due to many issues surrounding this, it is restated again on this form. All sales are as is in the state of CA. Buyers can ask for repairs but sellers do not have to agree or even respond (though the latter is rude in my opinion).
- There are some new laws for Home Owner Associations (HOA). When a request or an information packet for instance during the sale of one of the units, the HOA has 10 days in which to provide the information. There is also a list of questions that the HOA must answer.
- Due to the government shut down, no 4506T's are being honored. Click here to see the document. What does this mean to you? This form is used in the loan process. When a lender wants to see a certified copy of your tax return, they use this form. No tax return, no loan. Anyone initiating a new purchase right now and using a loan should be adding extra time for loan final approval due to this problem. Who knows how long the government shut down will last? Nobody has that crystal ball. Your guess is a good as mine.
- The days counted in 3 day notices (except unconditional notices) can not include weekend or holidays. This applies to 3 day notice to quit or perform a covenant for instance.
- Landlords are now compelled to take payment from third parties i.e. if you are late with your rent, and a friend or relative wants to pay it for you, the landlord can't refuse to take the payment which was legal up until now.
- In properties with 3 or more dwelling units (triplex for instance), the owner must have inspections (by a licensed inspector i.e. a pest control company or other depending on materials used) for all decks, balconies, stairways and walkways by the year 2025 and every 6 years after that. If any repairs are deemed necessary, the owner must complete those repairs. There doesn't seem to be any information on who or what agency is actually going to monitor this but I can see where insurance claims and what not might be affected by a property owners non compliance with this. Condos and PUD's are exempted from this new rule.
- Declared emergency disaster related price gouging is illegal now. For instance, a landlord can't ask an exorbitant amount for rent based on the emergency demand for housing nor can they kick a lower paying tenant out to make way for a higher paying disaster impacted tenant. Allowable rents are based on the amount the property was offered at in the past year. If it hadn't been newly rented in the past year (i.e. no advertisements etc.), then fair market rent is established at no more than 160% of fair market value as established by HUD. Mobile homes are included in this new law. A 10% increase could be allowable if the increase is directly attributable to costs for repairs or additions beyond normal maintenance. Further, price gouging is prohibited anywhere in the state where there is increased consumer demand as a result of the declared emergency, not just in the county where the event occurred. So for instance in the Paradise Fire, many of those victims are looking in nearby counties for housing so they are now protected against price gouging. Even hotels are involved in this new law as they are prohibited from raising rates more than 10% during a declared disaster event. Here again, no provision seems to be made as to who or what agency is going to be monitoring this.
- If a rental property is in a flood zone, tenants must be presented and sign the Tenant Flood Hazard Disclosure which is a new form.
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Sharon Currie | Realtor DRE#01357602
Berkshire Hathaway Home Services BRE#01317331
Physical: 2933 San Marcos Ave #102, Los Olivos
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