California has implemented several significant changes to its real estate laws, reflecting a broader trend toward greater transparency, equity, and sustainability in the housing market. These new laws, effective in 2024, address various aspects of real estate transactions, tenant rights and environmental considerations. 

Here is a summary of new laws affecting the real estate industry:

• Increased transparency in real estate transactions — One of the most notable changes is the requirement for enhanced disclosure of property conditions. Under Assembly Bill 3045, sellers must now provide more detailed information about the condition of the property, including recent repairs and any known issues such as foundation problems or pest infestations. This law aims to reduce surprises for buyers and promote a more transparent transaction process. Additionally, real estate agents are now required to disclose their commission structures upfront, ensuring buyers and sellers are aware of potential conflicts of interest.

• Affordable housing initiatives — To combat California's ongoing housing affordability crisis, Senate Bill 1110 introduces several measures aimed at increasing affordable housing availability. The bill encourages the development of affordable housing by offering tax incentives and reducing regulatory hurdles for developers who commit to building below-market-rate units. Local governments are also incentivized to streamline zoning and permitting processes for projects that include affordable housing components. This legislative push is part of a broader strategy to address the state's severe housing shortage and make homeownership more accessible to lower-income residents.

• Strengthening tenant protections — California continues to enhance tenant protections with the passage of Senate Bill 722, which addresses rent control and eviction practices. The bill introduces stricter limitations on rent increases, capping annual increases to a fixed percentage plus inflation, thereby providing greater stability for renters. Furthermore, SB 722 strengthens eviction protections by requiring landlords to provide more substantial justifications for evictions and offering additional time for tenants to respond to eviction notices. This legislation aims to protect tenants from unjust displacement and contribute to housing stability.

• Sustainability and environmental considerations — In response to growing environmental concerns, Assembly Bill 3785 focuses on integrating sustainability into real estate practices. The law mandates that all new residential constructions include energy-efficient features such as solar panels and advanced insulation. Additionally, existing properties are now required to disclose their energy efficiency ratings as part of the sale process. This move is intended to promote greener building practices and help California meet its climate goals by reducing the carbon footprint of residential properties.

• Revisions to property tax rules — Proposition 20, passed in the 2024 ballot, revises property tax rules to address disparities and encourage fair taxation. The proposition introduces a more equitable assessment process for property taxes, aiming to close loopholes that previously allowed certain properties to avoid full market value assessments. This change is designed to ensure a more balanced and fair tax burden across property owners and contribute to increased public funding for local services.

• Updated homeowner associations regulations — Assembly Bill 4991 updates regulations governing homeowner associations (HOAs), focusing on increasing accountability and transparency. The law requires HOAs to provide more detailed financial reports to members and establishes clearer procedures for dispute resolution. These changes are designed to improve governance within HOAs and protect homeowners from potential mismanagement or unfair practices.

For property owners, buyers, lessors and investors, staying informed about these changes is helpful in navigating the evolving legal landscape. A knowledgeable California real estate attorney can provide guidance tailored to your specific needs. 

Favaro, Lavezzo, Gill, Caretti & Heppell, PC, with offices in Vallejo and Fairfield-Suisun, has decades of practical experience providing sound real estate law advice and effective representation for clients in Solano, Contra Costa and Napa counties in Northern California. If you are seeking counsel or representation for a real estate transaction or dispute, call our firm at 707-674-6057 or contact us online.