Sacramento, CA – On January 14, 2025, Governor Gavin Newsom issued Executive Order N-7-25 in response to the recent devastating wildfires in Southern California, particularly affecting the Greater Los Angeles Area. The Order aims to protect property owners from exploitative and predatory real estate practices in the wake of the fires, ensuring that victims of this disaster are not taken advantage of by those seeking to profit from their misfortune.
In the aftermath of the fires, many homeowners, business owners, and faith-based leaders have reported receiving unsolicited offers to sell their properties for significantly less than their pre-fire market value. While property owners have the right to sell their homes or businesses if they choose, these unsolicited offers—often below fair market value—can be harmful, particularly for those who have lost their homes or livelihoods. Governor Newsom’s executive order takes action to prevent this type of exploitation.
Key Provisions of Executive Order N-7-25
The Executive Order specifically targets "unsolicited offers" made to property owners in the fire-impacted areas, prohibiting individuals or entities from offering to purchase properties for amounts lower than the fair market value of the property as of January 6, 2025. The prohibition is in effect through April 14, 2025, and covers properties within the following Los Angeles-area zip codes:
- 90019
- 90041
- 90049
- 90066
- 90265
- 90272
- 90290
- 90402
- 91001
- 91040
- 91104
- 91106
- 91107
- 93535
- 93536
These areas include neighborhoods like Altadena, Pacific Palisades, Malibu, Santa Monica, Pasadena, Eagle Rock, and Lancaster, among others—communities that have been heavily affected by the recent fires.
Any violation of this order can result in a misdemeanor charge, with penalties including a fine of up to $1,000 and/or up to six months in jail.
What Is an "Unsolicited Offer"?
An unsolicited offer refers to any offer to buy property that the owner did not actively seek out. These offers may be sent via text, email, phone calls, or mail and can come from individuals claiming to represent a buyer, a real estate agent, or even an investor offering "cash deals" for properties in any condition.
If the offer seems much lower than the value you believe your property had prior to the fires, it may be a violation of the Executive Order.
How to Spot Unlawful Practices
Some signs that an unsolicited offer may be predatory include:
- Unreasonably low offers: If the offer price is significantly below your property's market value before the fires, especially if the property was undamaged.
- Promises of "quick cash" or “hassle-free” transactions: Beware of offers that claim you can sell quickly with minimal paperwork or "no closing costs."
- Pressuring tactics: If the individual threatens that your property won’t qualify for future insurance or pushes you to sell fast.
- Vague answers: If the person making the offer is evasive or unwilling to provide clear, verifiable information.
- Pre-closing cash advances or full lien payment offers: While tempting, these promises can be designed to pressure you into making a quick decision without fully considering your options.
Your Rights and Next Steps
It’s important to take your time when evaluating any offer to sell your property. You are not required to accept any unsolicited offers, and the Executive Order is in place to give you the time and peace of mind needed to make an informed decision about your future.
Before selling, consider the following:
- Research the fair market value of your property, whether damaged or not, to ensure you’re getting a fair deal.
- Consult professionals like real estate agents, attorneys, or appraisers to get an accurate assessment and advice.
- Review your mortgage or liens and determine whether selling is the best option for you financially.
Remember, you have the right to make decisions about your property without being rushed into a deal that isn’t in your best interest.
How to Report Violations
If you receive an unsolicited offer that you believe violates the Executive Order, you can report it to the California Department of Real Estate (DRE) at LAFires@dre.ca.gov. Include details such as your name, contact information, the property address, the offer you received, and any other relevant information. Violations can also be reported to the California Attorney General’s Office at oag.ca.gov/report.
The DRE will promptly acknowledge receipt of your complaint and take appropriate action, which could involve investigating the matter with the help of the Attorney General and local law enforcement.
Additional Resources for Fire Victims
If your property has been damaged or destroyed, many resources are available to help you navigate the aftermath:
- Mortgage Assistance: Contact your lender to explore relief options such as postponed payments.
- Insurance Claims: Contact your insurer to file a claim and discuss rebuilding options.
- Housing Counselors: Reach out to HUD-approved housing counselors for advice on avoiding foreclosure, managing credit, or exploring rental options.
- Legal Aid: Non-profit organizations like the Legal Aid Foundation of Los Angeles can provide legal assistance for fire victims.
- Contractor Verification: If you’re looking to repair or rebuild, ensure your contractor is licensed through the Contractors State License Board.
Conclusion
As a Realtor, it’s important to stay informed about the protections provided by Executive Order N-7-25 and share this information with your clients. If you encounter any cases of unsolicited offers or potential exploitation in your professional dealings, don’t hesitate to advise your clients to report these violations. By working together, we can help safeguard property owners from unscrupulous practices and ensure they receive the fair treatment they deserve.
Source: For more information, visit the California Department of Real Estate’s website at www.dre.ca.gov.
This blog post is designed to inform real estate professionals and property owners of the recent protections in place to combat predatory offers in the wake of the Southern California wildfires. Stay vigilant and continue to advocate for your clients’ best interests.
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