Notable Real estate laws taking effect in 2024

Jan 5

The new year ushers in a number of notable real estate-related laws taking effect in 2024. While this list is by no means exhaustive, the following are some of the more important laws that property owners, property managers, landlords, and HOAs should all be aware of.

Assembly Bill 968 – Disclosures for House Flippers

AB 968, which has been codified as California Civil Code § 1102.6h, takes effect on July 1, 2024 and applies to the sale of a residential property consisting of 1 to 4 dwelling units. The new law expands disclosure laws, requiring anyone who purchases and then flips a home within 18-months to disclose all repairs and renovations done to the property during that time, including inter alia the name of any contractor who performed work and information related to any permits for said renovations. The law is made in conjunction with the Transfer Disclosure Statement law.

Assembly Bill 12 – Limitations on Security Deposits

At present, landlords are permitted under Civil Code § 1950.5 to charge a security deposit of up to two months’ rent for unfurnished apartments or homes and up to three months’ rent for furnished properties, in addition to any rent for the first month payable on or before taking possession. AB 12, however, which takes effect on July 1, 2024, would prohibit a landlord from demanding or receiving a security deposit in excess of an amount equal to one months’ rent. AB 12 does carve out an exception for a landlord that (1) is a natural person or an LLC in which all members are a natural person or (2) owns no more than 2 residential rental properties that collectively include no more than 4 dwelling units offered for rent, in which case the landlord may charge up to 2 months’ rent.

Assembly Bill 1033 – Sale of ADUs

To address California’s housing crisis, there has been a major push by the legislature to remove the red tape associated with the construction of ADUs. However, existing laws greatly restrict or outright prohibit the ADU from being sold or otherwise being conveyed separate from the primary residence. AB 1033, however, eliminates these restrictions and authorizes a local agency to adopt ordinances that allow the separate conveyance of the primary dwelling unit and accessory dwelling unit as condominiums. One interesting side note to this, and something to keep an eye on as these local ordinances are implemented, is that the creation of these separate condominiums will require implementation of Covenants, Codes & Restrictions (CC&Rs) for these newly formed condominiums. AB 1033 took effect on January 1, 2024.

Assembly Bill 976 – Properties Need not be Owner-Occupied to Construct an ADU

Further loosening the yoke on ADU construction is AB 976. Existing law permits local jurisdictions to implement ordinances that only permit the construction of ADUs on properties that were owner-occupied. AB 976 makes permanent a 2019 bill, set to sunset in 2025, making it illegal to require owners live on-site. Moreover, AB 976 revises rental requirements of ADUs from “longer than 30 days” to “30 days or longer.”

Assembly Bill 1449 – Reduction of CEQA Restrictions for Affordable Housing Projects

The California Environmental Quality Act (CEQA) requires a lead agency to prepare an environmental impact on a project that may have a significant impact on the environment. This can often lead to months, if not years, of delays in bringing housing projects to fruition. This is particularly problematic with affordable housing projects. AB 1449, until at least January 1, 2033, would exempt from CEQA certain actions related to affordable housing projects if certain requirements are met. The bill permits a “Notice of Exemption” to be filed, which greatly reduces the cost and red tape in constructing affordable housing.

Senate Bill 71 – Small Claims Limit Increased

Small claims can be a more efficient, cost effective alternative to full blown litigation. Up until December 31, 2023, the jurisdictional limit for a small claims complaint was $10,000, meaning that one could not file in small claims court if the amount demanded exceeded $10,000. SB 71 raises the small claims limit from $10,000 to $12,500 for natural persons.

The legal landscape of real estate is fluid and ever changing. It is important to consult with an attorney that is up to speed on these laws and who understands the implications of the changes to the laws.

The foregoing is not intended to be exhaustive, and the information provided above does not, and is not intended to, constitute legal advice. All information, content, and materials are for general informational purposes only and do not create an attorney-client relationship. The experienced and knowledgeable attorneys at Blake Law Firm are available to answer questions and help you navigate your real property issues.

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Andrew Hall

Attorney Andrew Hall has over 10 years of experience handling complex real estate, business, and litigation matters throughout California and Washington. Andrew has vast experience with a wide range of clients – from residential to commercial property owners, landlords to tenants, real estate agents to brokers, title to escrow companies, hard money lenders to banking institutions. Andrew has handled cases ranging from administrative disputes, to unlawful detainers, to bankruptcies, to litigation, leaving his clients with the confidence that he can handle all of their needs from soup to nuts.

Andrew is committed to exploring efficient and cost-effective resolutions for his clients, whether that be through informal conversations with parties or attorneys, mediations, or settlement conferences. However, when litigation is inevitable, Andrew has counseled his clients through all stages of a dispute, including arbitrations, court trials, jury trials, and appeals at both the State and Federal Court levels.

Andrew resides in Carlsbad with his wife Lauren, son Nolan (7), and daughter Madeline (5). Andrew is actively involved with the Magdalena Ecke Family YMCA, where he can often be found on the weekends cheering Madeline on in any variety of youth sports or with Nolan participating in the Y’s Adventure Guides Program. Andrew enjoys playing golf, tennis, softball and good barbeque.

Andrew is committed to identifying his client’s goals and employing his big firm experience with small firm attention to help his clients achieve those goals.