The state of California has enacted several new laws in 2021 that are aimed at boosting home ownership and expanding the supply of rental houses. However, as expected, the laws affect most of the stakeholders in the real estate sector: landlords, renters and potential buyers.
Governor Newsom announced the new laws at the beginning of the year. Thet arrived amidst statewide evictions triggered by COVID-19 that are still ongoing in the state.
Here are some of the main laws the governor announced that will impact California real estate this year.
Homeowner association rentals
Homeowner association laws now have to allow at least a quarter of their properties to be rented. In the past, homeowner associations could block rentals, or at most, they were required to be 10% of properties. The state of California hopes that this law can boost rental capacity in the region. However, homeowner associations may still be able to block short-term rentals.
Fire notice for new buyers
This law stipulates that buyers have to be notified if they live in an area with a high fire risk. What this means for real estate agents and buyers is that they have to sign a one-page document before closing a house deal. The document should highlight any elements that are vulnerable in the event of a wildfire, such as vents that are not fire-resistant, rain gutters, roof coverings and any landscaping that is combustible.
Foreclosure: Right of first refusal
During the Great Recession, investors snapped up numerous foreclosed properties. This new law is aimed at ensuring that this does not happen again. It introduces new methods through which an investor could lose a property, even after they have acquired it during an auction. The law states that when a buyer acquires property from an auction and has no plans to live in it, a renter can attempt to acquire the property themselves. The tenant could, within 15 days of the auction, submit to purchase the home.
Homestead exception
All homeowners in California are eligible for a homestead exception. This ensures that you won’t lose your property to creditors or in the event that you file for bankruptcy. The law has received a huge boost this year, although there have been zero changes to the exception amounts. Judgment creditors cannot touch about $300,000 to $600,000 of a home’s equity. This change gives homeowners an advantage when it comes to finalizing their debts and keeping their homes.
An attorney can better help you get more familiarized with the new real estate laws or file a relevant lawsuit.