They don't call California "The Land of the Lawsuit" for nothing. There were 36 new laws passed in 2009 that impact California real estate sales in one manner or another, ranging from new property disclosures to agent licensing disclosure on all media intended for clients.
Here's a quick recap of new or newly amended laws most likely to impact a Buyer or Seller in our area.
AB 180 - Mortgage Foreclosure consultants Law - This law amends the existing law. It contains the following provisions:
. Cancellation Right: Permits an owner to cancel a foreclosure consultant contract until midnight of the fifth business day (previously third business day) by mail, e-mail, or facsimile.
. Foreign Language Rule: Requires the contract to be written in the same language as principally used by the foreclosure consultant to describe his or her services or to negotiate the contract and requires the foreclosure consultant to provide the owner, before the owner signs the contract, with a copy of a completed contract written in any other language requested by the owner.
AB 1892 & 2180 - Solar Energy - Any governing document of a homeowners association that effectively prohibits or restricts the installation or use of a solar energy system is void and unenforceable. Reasonable restrictions are permissible. Amended Civil Code Section 714.
AB 2020 - Liquidated Damages & Hi-Rise Condos (eff. 1/1/09 thru 1/1/14) - This law provides that if the contracted sales price of a newly constructed attached residential condominium unit (located within a structure of 20 or more residential condominium units, standing over eight stories high and located in a specified high-density infill development) is greater than $1 million, a seller may recover 6% of the contracted sales price in liquidated damages if the buyer defaults on a presale contract by not purchasing the condominium unit, unless the buyer establishes that the amount claimed by the seller is unreasonable in relation to the seller's actual damages.
AB 2052 - Providing that a tenant who can provide proof they are a victim of domestic violence, sexual assault, or stalking, causing them to fear living at their leased/rented address is legally capable of terminating their lease without penalty? (You may want to review the crime reports for neighborhoods where you consider investing in rentals.)
AB 2881 - New disclosure requirements about a property's distance from a farm or ranch. An expert ("licensed engineer, land surveyor, geologist, or expert in natural hazard discovery"), when responding to a request for a natural hazards disclosure statement, must determine whether the residential property is located within one mile of farm or ranch land and to provide a specified notice to that effect.
AB 2949 - Landlords/REO Lenders and Abandoned Animals - This law requires a person that discovers an abandoned animal in or about the premises of real property that has been vacated upon, or immediately preceding, the termination of a lease or foreclosure of the property to immediately contact animal control for the purpose of retrieval and care.
SB 870 - Cal HFA Establishes Mortgage Refinance Program - Permits the California Housing Finance Agency (Cal HFA.) to establish rules and regulations for a mortgage refinance program which was authorized by the federal law, HERA.
SB 1055 - Conforms California income tax law with federal law as to mortgage debt forgiveness
SB 1065 - Cities/Counties May Use Revenue Bonds to Make/Purchase Home Mortgages - This law permits cities and counties to use revenue bond funds to make or purchase refinanced home mortgages that are federally insured, guaranteed, or eligible to be purchased by Fannie Mae or Freddie Mac.
SB 1137 - Requiring foreclosing lenders to give (non-owning) tenants of foreclosure properties 60 days notice, instead of 30 days
SB 1448 - Fines for Being Unlicensed - This law increases the maximum fine for an unlicensed person acting as a real estate licensee from $10,000 to $20,000 if the violation is committed by a person and from $50,000 to $60,000 if the violation is committed by a corporation.
SB 1461 - Requiring a real estate licensee to disclose his or her DRE license number on all "solicitation materials intended to be the first point of contact with consumers" and on real property purchase agreements when acting as an agent in those transactions
SB 1511 - HOAs Request/Notification of NOD - This law permits an association, with respect to separate interests governed by the association, to record a request that a mortgagee, trustee, or other person authorized to record a notice of default regarding any of these separate interests, mail to the association a copy of any trustee's deed after the trustee's sale concerning a separate interest.
SB 1595 - A person who owns or maintains an occupied structure in or adjoining a mountainous area or land that is covered with flammable material, that is within a very high fire hazard severity zone or in a state responsibility area must significantly reduce the risk of ignition of the habitable structure by maintaining defensible space no greater than 100 feet from each side of the structure, but not beyond the property line unless allowed by state law, local ordinance, or regulation.
SB 1737 - DRE Disciplinary Actions for Violations such as Inflating BPO - authorizes the DRE to suspend or bar from any position of employment for up to 36 months, a real estate salesperson or real estate broker or an unlicensed person, if the DRE finds the suspension or bar is in the public interest, and that the person knew or should have known that he or she violated the Real Estate Law or its regulations, and has caused material dama
ge to the public.
This law authorizes DRE to suspend or revoke the license of a licensee who provides an opinion of value of residential real property (BPO), in connection with a short sale, that does either or both of the following:
. Manipulates the lien holder to reject the proposed debt forgiveness sale.
. Acquires a financial or business advantage, including a listing agreement that directly results directly from the inaccurate opinion of value of the property.
H.R. 1424 - Emergency Economic Stabilization Act of 2008 - This law, commonly known at the $700 Billion Bailout, strengthens the FHA-insured refinance of loans for troubled mortgages under the HOPE for Homeowners program. It also extends the tax exemption for mortgage debt forgiveness on home loans under the Mortgage Forgiveness Debt Relief Act of 2007 until December 31, 2012.
HR 3221 - Housing and Economic Recovery Act/ HOPE for Homeowners Program - This federal law includes GSE reform (government sponsored enterprises such as Fannie Mae, Freddie Mac), FHA reform, homebuyer tax credit, FHA foreclosure rescue, and more. For a detailed NAR summary, click here.
H.R. 3221 - "FIRPTA Fix" - The seller may give the seller's affidavit of nonforeign status (C.A.R. form AS) to a "qualified substitute" instead of to the buyer. However, the qualified substitute must furnish a statement to the buyer stating, under penalty of perjury, that the qualified substitute has the affidavit in his or her possession.
12 C.F.R Part 226 - Final Rule under Reg Z - This Regulation Z final rule establishes a new category of "higher-priced mortgages" that includes virtually all closed-end subprime loans secured by a consumer's principal dwelling. Which loans qualify as "higher-priced" will be determined by a new index that will be published by the Federal Reserve Board.
Prop 99 - Restriction on Eminent Domain in reaction to Kelo v. City of New London - Under the new law, state and local government agencies cannot take owner-occupied residences by eminent domain to transfer to a private person except for certain very limited exceptions.
S. 1771 - Virginia Graeme Baker Pool & Spa Safety Act, 15 U.S.C. 8001 et seq., - This federal law requires new and existing public pools and spas to be equipped with anti-entrapment drain devices. The law applies to multi-family apartment complexes and not individual homes.
For more information on these or any laws impacting Orange County California real estate transactions, give me a call. Laws are constantly changing and we make it our business to stay on top of these changes, allowing our clients to know that they are in great hands.
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