2014 New Real Estate Laws for California

2014 New Real Estate Laws for California


NEW 2014 LAWS: Real Estate

Sacramento, CA – On Wednesday, January 1, a host of new laws will take effect in California, related to real estate and housing. During the legislative year, Governor Jerry Brown signed a total of 800 bills and vetoed 96. Brown, who is a third-term governor, has now signed over 13,500 regular session bills during his tenure as the state’s top elected official.


A.B. 551 – URBAN AGRICULTURAL INCENTIVE ZONES ACT(D-Philip Y. Ting-San Francisco/19) – The Urban Agriculture Incentive Zones Act promotes small-scale sustainable urban farm enterprises. It permits a city or county and a landowner to enter into a contract for at least five years to restrict the use of vacant, unimproved, or otherwise blighted lands for small-scale production of agricultural crops and animal husbandry. The law does require the property must be at least 0.10 acres in size. The county assessor must value property restricted for crops and animal husbandry at a rate based on the average per-acre value of irrigated cropland in the state of California, adjusted proportionately to reflect the acreage of the property as specified.EXPIRES: January 1, 2019.

Effective January 1, 2014

A.B. 92 – LIKE-KIND PROPERTY ACQUISITION – (Assembly Budget Committee) – Not withstanding any other law, any 1031 exchange that occurs on or after January 1, 2014, a taxpayer acquiring a “like-kind” property located outside of California must file an information return with the California Franchise Tax Board (FTB) for that taxable year and every year thereafter in which the gain or loss from the exchange has not been recognized. Taxpayers who fail to file such information return and tax returns, the FTB may then propose to assess the amount of tax, interest, and penalties due by estimating net income from any available information, including the amount of gain.

A.B. 1404 – SHARED FENCES AND BOUNDARIES (Assembly Judiciary Committee) – This law states that adjoining landowners must share equally the responsibility for maintaining boundaries and monuments between them. Adjoining landowners are presumed to share an equal benefit from any fence dividing their properties, as well as equal costs for construction or maintenance, unless otherwise agreed in writing. The legislation also provides specific procedural requirements for an owner who intends to incur costs for a division fence to notify the adjoining owner of the estimated costs and other information. The existing law — enacted in 1872 which requires a homeowner who fully encloses a property to refund a neighbor a just proportion of the value of a division fence — has been repealed.

S.B. 196 – UTILITY RATE SCHEDULE (R-Anthony Cannella-Modesto/12) -   A master-meter customer of an apartment building, mobile-home park, or similar residential complex, must post in a conspicuous place the applicable specific current residential gas or electrical rate schedule as published by the serving utility, rather than the prevailing residential utilities rate schedule as previously required. Alternatively, the landlord as a master-meter customer may elect to post a website address for a tenant to access the schedule as long as the landlord also does the following: (1) state in the posting that an individual user may request a copy of the specific current residential gas or electrical rate schedule from the master-meter customer; and (2) provide the schedule upon request at no cost.

S.B. 269 – PREPAID RENTAL LISTING SERVICE (D-Jerry Hill-San Mateo/13) – The California Bureau of Real Estate (CalBRE) is authorized under this legislation to cite an unlicensed person for engaging in prepaid rental listing services without a prepaid rental listing service license or real estate broker license. A prepaid rental listing service is generally considered a business that charges a fee for providing a prospective tenant with a list of available places for rent. Under this bill, existing required content for a written contract that a prepaid rental listing service licensee must offer a prospective tenant before accepting a fee has been broadened to include the licensee’s license number as well as a specific statutory notice about refunds. An aggrieved person with a final judgment against a prepaid rental listing service licensee may apply to CalBRE for payment from the Consumer Recovery Account. Any payment from the Consumer Recovery Account will automatically lead to the suspension of the prepaid rental listing service licensee.

S.B. 310 – MORTGAGE FORECLOSURE NOTICE – (D-Ron Calderon-Montebello/30) – This measure states that except when acting as a trustee, a title insurance company is not liable for violating certain laws prohibiting the filing of a notice of default or notice of sale if the title company, while acting in good faith and in the normal course of business, records or causes to record a notice of default or notice of sale at the request of the trustee, substituted trustee, or beneficiary. This protection applies to the following laws: (1) prohibition against the filing of a notice of default until 30 days after the lender contacts a borrower to explore options of avoiding foreclosure; (2) prohibition against the filing of a notice of default or sale if a short sale is approved by all parties as specified; (3) prohibition against the filing of a notice of default or sale if the borrower has submitted a complete loan modification application as specified; and (4) injunctive relief for certain violations.

 S.B. 488 – SUBSTANDARD HOUSING CONDITIONS (D-Ben Hueso-Chula Vista/40) - The enforcement authority for determining certain substandard housing conditions previously delegated only to county health officers, has been expanded under this legislation to include local code enforcement officers as defined. To help clean up blighted areas, an infestation of insects, vermin, or rodents, as well as inadequate garbage storage and removal facilities, can now be determined by a local code enforcement officer if the city does not have an agreement or the resources to contract for county health services. To qualify to make these determinations, the local code enforcement officer must successfully complete a course of study in the appropriate subject matter as determined by the city. A property owner will not be cited by both local and county enforcement agencies for the same violation regarding pest infestation or inadequate garbage storage or removal.

S.B. 612 – HUMAN TRAFFICKING VICTIM PROTECTIONS FOR TENANTS – (D-Mark Leno-San Francisco/11) - A residential tenant can terminate a tenancy within 30 days by notifying the landlord that the tenant was a victim of human trafficking as defined. The tenant’s notice to terminate tenancy must generally include a copy of a police report or court order regarding the tenant or tenant’s household member. From January 2014 to January 2016, however, a tenant may simply provide documentation from a qualified third party professional indicating that the tenant or household member is seeking assistance for physical or mental injuries resulting from the offense. This legislation also prohibits a landlord from terminating a tenancy, or failing to renew a tenancy, based on acts of human trafficking if documented by a police report or protective court order and the wrongdoer is not a tenant of the same dwelling unit. However, the landlord, may terminate the tenancy if, after invoking protection under this law, the tenant allows the wrongdoer named in the police report or protective order to visit the property, or the landlord reasonably believes that the wrongdoer poses a physical threat to other tenants or to the tenant’s right to quiet possession. Existing California law protects a tenant if the tenant or tenant’s household member is a victim of domestic violence, sexual assault, or elder or dependent adult abuse.

S.B. 662 – INSURANCE: Structural Pest Control - (D-Cathleen Galgiani-Stockton/5) - Existing legislation permitting a structural pest control operator to file with the Structural Pest Control Board evidence of either an insurance policy or bond as specified, has been revised to eliminate the option of the bond. Furthermore, the minimum limit of the insurance policy that an operator must maintain has been increased from $25,000 to $500,000 for bodily injury and destruction of property. Additionally, the amount of a surety bond that an operator must maintain has been boosted from $4,000 to $12,500. Plus, the surety bond requirement for reissuance of a license or registration after suspension or revocation has been increased from a range of $1,000 to $8,000, to a range of $8,000 to $25,000.

S.B. 676 – REAL ESTATE RECORDS: Unlawful Destruction (D-Marty Block-San Diego/39) - Under this legislation, the Bureau of Real Estate can suspend or revoke the license of real estate salespersons, brokers, or corporate brokerage firm, if the broker, salesperson, or any director, officer, employee, or agent of the corporation, knowingly destroys, alters, conceals, mutilates, or falsifies any of the books, papers, writings, documents, or tangible objects required to be maintained and provided upon notice, or sought in connection with an investigation, audit, or examination. Under existing California law, a real estate broker must generally retain for 3 years copies of all documents executed or obtained by him in connection with any transactions involved licensed activities.

S.B. 745 – HOA DOCUMENTS/BILLING (Senate Transportation & Housing Committee) – Existing law requiring a homeowners’ association (HOA) to use a statutory form for billing charges for HOA sales disclosures has been revised. The provisions of this legislation now requires the form to be in at least 10-point type and include an itemization for “Rental Restrictions, if any.” In addition, existing law stating that, when an inconsistency exists, governing documents prevail over articles of incorporation, which in turn prevail over bylaws, and in turn prevail over operating rules, has been revised to apply when a conflict, not inconsistency, exists. Additionally, current law requiring delivery of documents to an HOA by email, fax, other electronic means, or personal delivery if the HOA consents to any of those methods, has been extended to allow delivery by first-class mail, postage prepaid, registered or certified mail, express mail, or overnight delivery by an express service center, regardless of HOA consent.

 Committee On Business, Professions & Economic Development) – California law now states that a common interest development manager performing management services is not required to have a contractor’s license. Conversely, the term “contractor” or “consultant” does not include a common interest development manager. A “common interest development manager” is generally defined as someone who, for compensation or in expectation of compensation, provides or contracts to provide management or financial services (or represents himself or herself as providing management or financial services) to a condominium complex or other common interest development. Real estate agents who are property managers performing activities for which a real estate license is required are already exempt from the contractor’s licensing requirements under existing law (378)



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Photo of Kathleen A. "KAT" Becker Real Estate
Kathleen A. "KAT" Becker
Berkshire Hathaway HomeServices California Properties
3130 Wilshire Blvd, Suite 100
Santa Monica CA 90403
(323) 819-4760 Cell
(310) 255-3489 Office
Fax: (310) 829-7541



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