California Real Estate Law

Because of the value of real property in California, every real property transaction is a significant event.

 

In every real property sale or purchase there are legal and tax issues such as:

 

 

  1. Proper parties to the transaction

  2. Income tax consequences

  3. Estate tax consequences

  4. Liability exposure

  5. Property disclosures and inspections

  6. Deeds and encumbrances, among others. 

 

Professional assistance in any real property transaction is highly recommended. Our pre-screened real estate  lawyers have estensive experience in California real estate law and will effectively protect your interests.

New California Real Estate Laws 2020-2021

1. AB 1482 California Rent Control 

California recently enacted one of the nation's most stringent state-wide rent control rules, as many know. The aim of the law is to provide additional protections for tenants, subject to exceptions, through the restriction of rent increases and the introduction of just cause evictions.

 

Importantly, retroactive to March 15 , 2019 are the rent control limits. Therefore, to determine the status of their property and the applicability of rent control, property managers, owners, and sub-owners should independently investigate or consult legal counsel. 

2. AB 5 Independent Contractors

Although AB 5 started out as a possible challenge for the real estate sector, due to C.A.R. lobbying efforts, the codification of Dynamex ended in triumph, as the legislature established unique exceptions for real estate licensees, enabling them to self-designate under the provisions of the Business & Professions Code as independent contractors. Significantly, brokers under AB 5 are also given some guidance as to the extent of their power over licensees in exercising their supervisory responsibilities.

 

The brokers would want to ensure that the contracts of their licensees comply with the Business & Professions Code, similar to the actions taken during the Dynamex holding. 

While the legislation provides the real estate industry with some good news, it also establishes that administrative and non-licensed staff are employees by default. It will therefore be relevant, when entering the new year, to assess the status of administrative non-licensees as well. 

3. AB 68, 670, 881 Accessory Dwelling Units 

The legislature passed AB 68, 670, and 881 to fix Accessory Dwelling Units ("ADU") in support of the California legislature's efforts to combat the housing crisis. Under the combination of bills, cities, subject to exceptions, are required to accept ADU applications, are unable to compel the owner to reside on the land, are unable to charge impact fees, and are unable to prohibit an ADU from forming concurrently with the primary unit.

 

Likewise, the bills forbid the building of ADUs within the Association from prohibiting or disallowing Home Owners Associations (HOA's). Although these laws are open to exceptions, the duty to permit ADUs, including certain garage conversions, is essentially granted to cities and HOAs.

 

If a customer plans to install an ADU, officers may want to review the municipal code, HOA laws, fire setbacks, and encourage the customer to obtain legal advice to ensure that the building will otherwise comply with the law. 

4. AB 1110 Notice of Rent Increases in California 

In the case that AB 1482 does not extend to a specific house, if the owner of a month-to - month tenancy raises the rent by more than 10 per cent of the lease fee to the occupant annually, the newly enacted AB 1110 provides a 90-day notice. The new notice criteria will be relevant to bear in mind for property managers as they pass into 2020 and beyond, and only apply to AB 1482-exempt rental properties. 

5. AB 2343 Unlawful Detainer and Notice Periods 

AB 2343 is another notification rule for property managers, close to AB 1110. AB 2343 is already reliable, however. In short, AB 2343 modifies the manner in which the notice period is measured for the purpose of notice periods and for the purpose of illegal detainers. In an attempt to shield tenants from inventive landlords, AB 2343 was enacted by the legislature to exempt judicial holidays, such as Saturday and Sunday, from the three ( 3) day notice calculations as they apply to illegal detainers. 

6. SB 18 90 Day Notices 

The Senate bill acts to abolish the previous sunset date of the notice law which requires tenants to be provided with at least 90 days ' notice before the termination of a tenancy if the property is foreclosed. 

7. SB 329 Housing Discrimination 

In implementation, SB 329 allows landlords to accept Section 8 housing from an otherwise eligible resident. The current Senate Bill seeks to broaden income-based discrimination rights and aims to provide greater protection for tenants who depend on housing assistance. Under SB 329, a landlord who discriminates against a tenant receiving housing assistance, such as Sectio, is a landlord who discriminates against a tenant receiving housing assistance Policies for ensuring compliance. 

Thus, to ensure enforcement, landlords and property managers should review their policies. 

8. SB 969 Garage Doors Battery Backups 

SB 969 is special in that, on July 1, 2019, it became successful. It is, therefore, already working. Under SB 969, in the case of a power failure, automatic garage doors must provide a battery backup to provide power. For homeowners and real estate agents, it is necessary that when a new door is built or when the original opener is replaced, it involves the installation of a battery backup for the opener. When they counsel and advise customers on the purchase or selling of properties, agents may want to keep this in mind.

The New Eviction Notices COVID-19 2020-2021

You could have received a "15-day" eviction notice, with a signature declaration, and you need to understand what to do. It's tempting to take the bait while in a panic, which promises to prevent an eviction, but it has a major drawback. The basic explanations of the new State and Federal laws and Civil Code 1511 are provided here. 

Here's how it works: 

Options in the Notices


1. The notice you received gives you 3 weeks (15 court days) to mail or otherwise send in the signed Declaration for sums due prior to September 1st. You don't have to pay anything as a condition, nor do you have to provide any evidence of your failure to pay this amount back. If you do sign, the number will not be evicted for non-payment, but instead, the landlord will still file a civil claims lawsuit against you for it. If you do not sign and submit the Declaration by the deadline of 21 days, the landlord Will begin to evict you. 


2. As far as rents due from 1 September to 31 January are concerned, there is a different 3-week notice, declaration and procedure. If you make that statement, you do not have to provide evidence of any failure to pay (unless you are "high income"), and you have to pay just 25 percent of the total sum due for those months by January 31, 2021. If you sign and pay, so the rest can not be evicted for nonpayment, but in small claims or standard superior court, the landlord can still sue you for the unpaid sum. 


3. If those claims in that declaration are valid, you can also use the declaration in the Trump package, a totally different strategy, to delay any non-payment avoidance until 2021. 


These notices and declarations are intended to shield you from eviction, but only briefly and only during the duration of COVID [3/1/20-1/31/21] for non-payment of rent. 


What about the sum of money? 


Civil Code 1511 states that you are "excused" from paying the rent, which means at the very least that if you are still at reduced salary, you are excused from paying now, and at most excused from ever paying it, either legally or in practical terms. The primary defense for COVID-related cases is Section 1511.

 

By signing the document, these new laws state you are only not being evicted for non-payment. Instead, in small claims court, the landlord will win a large judgment against you. AB 3088 extended the small claims court to include the rent claims of all landlords, no matter the number. That makes it simple and cost-effective for the landlord to win the judgment against you.

 

That will destroy your credit, allow the landlord to take your car, bank account, household furniture, and other personal property, and garnishee your wages 25 percent. A few months after signing the declaration, you will find yourself "in the fire," thinking you're "out of the pot." 


Through signing the document, you are gambling that in the future, while also paying future rent and other necessities, you will somehow have the money to pay. If your pre-COVID income has given you enough to cover current expenses with plenty left, and you are fortunate enough to return to that post-COVID income level, then if you sign this document, you can possibly easily pay the return amount due.

 

However, if you spent almost all your paycheck before, or end up like that if and when you return or get a job, what seems like a rescue might turn into a tragedy, the darker lining of a dark cloud. Of course, you could file bankruptcy and wipe out the entire debt, which might not look too bad with a large percentage of the country doing so, but in other ways it could affect you. 


Sign or Not to Sign 


This decision is being taken by you, not the landlord. The landlord is required to give you this option: as an eviction case or as small claims to combat the debt. The result is largely the consequence of the circumstances in every dispute, whether war, chess, or litigation.

 

You lose if you're playing their game; you win if they're playing your game. In which way, in real terms, are you going to have the best chance of winning? Small claims court is very much like that, whether you watch Peoples Court, Judge Judy, or those kinds of shows. Eviction hearings, with the jury and legal formalities, are just like the usual kind of court scene. 


There are some important circumstances beyond the superficial presence that weigh heavily in favor of not signing the Declaration of State Law AB 3088, signing the Trump declaration [IF all that is true], and battling the eviction head-on, rather than taking your chances in small claims court: 

 

  • Given the millions of eviction cases and the different technological things that can prolong them, an eviction case might continue for several months or even years (in the post-COVID world), while a small claim case will be over reasonably quickly. 

  • Your "leasing" duty ends when the notice expires if you contest the eviction case instead of filing the declarations, because if you win the eviction case, you owe no back amount; in the small claims scenario, you might end up battling both that case and a new eviction case beginning in February 2021, not buying your peace as anticipated. 

  • If you contest the eviction lawsuit, you are free to sublease, change the locks, have a pet, and do all the other stuff forbidden by your lease until the notice expires; whereas if you apply the declaration to delay a non-payment eviction, you may still be evicted on other [fake] grounds such as lease violation, whereas in small claims the landlord collects all the back rent. 

  • You can sue the landlord's lawyer for malicious prosecution if you win the eviction case, which gives you leverage in securing a great deal as your victory approaches, while there is no counsel until the appeal point in the small claims court. 

  • If the eviction case proceeds months to the end, in small claims or standard Superior Court, you can sue the landlord individually for breach of contract, trespass, violation of privacy, nuisance, revenge, fraud, etc., having a judgment against him even before the eviction case gets to trial. In a small claim case, at the same trial, your defendant's claim will be heard. 

  • Because of the power of Civil Code 1511, because of COVID, an eviction for non-payment would fail because you are "excused" from paying, and not in default; a small claims judge can not even recognize the rule in his zeal to assist all these clamoring landlords win as quickly as possible. 

  • You will take days to make your case in an eviction courtroom, with all the witnesses and facts you have, while you are fortunate to get as much as half an hour in a small claims court. 

  • You have the right to a jury trial in an eviction case, which might [and will probably] sympathize with your plight; in a small claims case, there is no such right. 

  • You have the right, but not in small claims, to a lawyer appearing with you in the eviction case. 

  • Proof laws shield you from misleading or harmful evidence in an eviction case, while in small claims trials, evidence is presented casually and you are taken by surprise. 

  • The eviction case requires "discovery," where the landlord needs to supply you with records and address questions in advance, so that you are not shocked at trial; you are caught by surprise in small claims. 

  • In rent / time terms, the extra time you get in possession to battle an eviction case is worth much more than what you spend fighting it. 

  • The eviction case can be won on clear technicalities which may be ignored by the small claims case, such as a notice of eviction wrongly served. 

  • The eviction case requires defenses such as rises in retaliatory rent, maintenance and deduction, and fraudulent late fees charged in the past, which may totally undermine the case of the landlord, while those offsets will actually be removed from the total owed in small claims. 

  • The time , cost and danger of fighting the eviction will increase to such a burden that the landlord may forgive all the back rent, just to cut his losses and escape the risk of losing or even paying you to go, or the landlord could lose the foreclosure property and the bank begins a new case and/or pays you to go. 

  • Period eliminates any motivation for the landlord to return from full payment. 

  • Especially with a jury trial, the extra time, cost , and risk of an eviction case gives the homeowner much more leverage in securing a great settlement [such as being paid to go rather than owing any rent], whereas the fast tiny claims time period.

  • When you win, the money you pay on legal aid in defending against an eviction can be recovered from the landlord, but not in a small claim situation. 

  • If there is a judgment against you, eviction cases are protected from credit and tenant blacklisting; small claims cases are available to the public, and tenant blacklisting firms may easily check for small claims cases over $10,000, write down your name, and destroy your potential rental opportunities.

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