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2024 New Laws with Gov. Hutchinson, Esq.
Gov Hutchinson, C.A.R. Vice President and Assistant General Counsel, described some of the new laws impacting REALTORS® in 2024.
By Tiffany Gardner Wood
DIRECTOR OF POLICY AND RISK
On January 17, 2024, Jeana Sander, Chair of the Risk Management Committee, hosted Gov Hutchinson, Vice President and Assistant General Counsel of the California Association of REALTORS®, who presented 2024 new laws affecting REALTORS® in the practice of real estate. Below is a condensed overview of the presentation. A more comprehensive list of 2024 new laws can be found on C.A.R.’s website by visiting www.ocrealtors.org/2024-newlaws.
Of the nearly thousand bills signed by Governor Gavin Newsom in 2023, Gov Hutchinson selected several bills to provide further explanation on their impact to the real estate industry in 2024.
If you have questions about a specific situation or follow-up questions about any of these new laws, please contact C.A.R. Member Legal Hotline (213-739-8282), your broker, and/or a qualified real estate attorney.
NEW LAWS (partial list)
Residential Exclusive Listing Agreements Act (AB 1345)
Previously, there was no limit to how long a listing could last, which lead to some predatory practices across the country. Homeowners were offered cash upfront to enter into 40-year exclusive right to list agreements, and these homeowners were often unsuspecting, cashstrapped individuals who were not made aware of any requirements on their end – namely, a lien placed on the home with a penalty should the individual cancel the contract or use a different real estate agency. This type of practice has been the basis for lawsuits and investigations by various state and federal agencies.
AB 1345 bans exclusive listings on residential one-tofour properties that are longer than 24 months from the date the listing was signed. It also makes it unlawful for a renewal of such an exclusive listing agreement to last longer than twelve months from the date the renewal was made. The bill limits recording or filing an exclusive listing agreement. The bill prohibits automatic extensions on exclusive listing agreements and requires a renewal to be in writing, dated and signed by all parties to the agreement.
Single-Family Residential Property: Disclosures (AB 968)
Those sellers of single-family one-to-four residential properties, who accept an offer within 18 months from the date that title was transferred must disclose:
1) Repairs and renovations made by a contractor to the property since transfer of title;
2) Name of contractor(s) and contact information; and
3) Permits obtained (or if not obtained, contact information of the third party who can provide the permits).
C.A.R. Standard Forms Committee is reviewing changes that might address any new disclosure requirements in the Seller Property Questionnaire.
This new law is part of the Transfer Disclosure Statement law and is effective for all transactions where the seller accepts an offer on or after July 1, 2024.
Fire Hazard Severity Zones: Disclosures (AB 1280) (C.A.R. Sponsored Law)
The Natural Hazard Disclosure Statement will now specifically identify high and very high fire hazard severity zones, which will make it easier to determine which properties are subject to defensible space and fire hardening disclosures.
Tenancy: Security Deposits (AB 12)
Starting July 1, 2024, a landlord may collect only one month’s rent in addition to the first month’s rent as a security deposit, with exceptions for small landlords, defined as natural persons or LLCs in which all members are natural persons, owning no more than two residential properties that together include no more than four units. Small landlords may collect two months’ rent as security deposit plus the first month’s rent.
Termination of Tenancy: No-Fault Just Cause: Gross Rental Rate Increases (SB 567)
Starting April 1, 2024, SB 567 will raise the bar of requirements for eviction based on owner move-in and substantial remodeling and it will dramatically increase the damages for violation of the Tenant Protection Act. Damages may include actual damages, “reasonable” attorney’s fees and costs, up to three times actual damages for willful violators, punitive damages, and injunctive relief may be sought by the Attorney General.
Bottom line – landlords should seek legal guidance from a qualified real estate attorney for questions about eviction before proceeding.
The full text of these laws can be found at leginfo.legislature.ca.gov. Search by California legislative branch and bill number if you know it or by topic or subject matter if you do not.
Disclaimer: This presentation was provided for information only and was not intended as a substitute for legal advice. Should you require specific advice, consult an attorney. For answers to follow-up questions, contact your broker, attorney, and/or the C.A.R. Legal Hotline (213-739-8282).
New Federal Independent Contractor Rule
The Federal U.S. Department of Labor had just issued its final rule on the classification of workers as employees or independent contractors, effective March 11, 2024. This new final rule does potentially adversely impact California real estate licensees, but it was mentioned that C.A.R. and NAR are working with state and federal contacts to seek a delay of implementation of the Final Rule to clarify the rule and allow for further understanding on how it aligns with the unique provisions on California’s labor law statutes.
Additionally, it was discovered following this presentation that the Pacific Legal Foundation, representing several freelancers, challenged its legality and requested a stay on the implementation of this rule.
FORM UPDATES
Gov reviewed several new and updated C.A.R. forms. Typically, C.A.R. releases updates to existing forms and new forms in December and June.
Buyer Homeowner’s Insurance Advisory
It is no secret that in California availability of insurance has become increasingly difficult. Thus, C.A.R. created a new form BHIA, which is bundled with the RPA to address problems with insurance availability, contract contingencies, and resources. This form serves as an advisory and explains to the buyer the importance of obtaining property insurance and that many insurance carriers have stopped issuing new property insurance policies and others are limiting the number and location of new policies, affecting the availability and cost of insurance.
Residential Listing Agreement – Seller Reserved
This form was updated to include the statutory limitation (see above for more information on AB 1345) that maximum exclusive listing period cannot exceed 24 months and that recording the listing is prohibited.
For a complete list of changes to the forms, visit www.ocrealtors.org/form-changes for a Quick Summary Guide. The Guide notes whether each form is a new form or a revised form, replacing an existing form.
