Governor Brown signed a series of legislative bills on September 30, 2018. Below is list of new laws pertaining to real estate that agents should anticipate to impact California real estate in 2019.

1. Building Permits Expiration Period Extended (AB 2913) – Effective 1/1/19

This bill provides that a permit would remain valid for purposes of the California Building Standards Law if the work on the site authorized by that permit is commenced within 12 months after its issuance, unless the permittee has abandoned the work authorized by the permit. The bill would also authorize a permittee to request and the building official grant, in writing, one or more extensions of time for periods of not more than 180 days per extension. It further requires that the permittee request the extension in writing and demonstrate justifiable cause for the extension.

2. Sexual Harassment Liability Expanded for Real Estate Agents (SB 224) – Effective 1/1/19

This bill would include within the elements in a cause of action for sexual harassment when the plaintiff proves, among other things, that the defendant holds himself or herself out as being able to help the plaintiff establish a business, service, or professional relationship with the defendant or a 3rd party. The bill would eliminate the element that the plaintiff prove there is an inability by the plaintiff to easily terminate the relationship. The bill would apply to state licensees, including DRE licensees, as well as investors, elected officials, lobbyists, directors, and producers as persons who may be liable to a plaintiff for sexual harassment.

3. HOA Board Financial Review Requirement and Anti-Fraud Precautions (AB 2912) – Effective 1/1/19

The bill requires a managing agent of a common interest development who accepts or receives funds belonging to the association to, upon written request by the board, deposit those funds into an interest-bearing account in a bank, savings association, or credit union in this state, provided certain requirements are met. This bill would prohibit transfers greater than $10,000 or 5% of an association’s total combined reserve and operating account deposits, whichever is lower, without prior written approval from the board. This bill would further require HOA board to review its financials on a monthly basis.

4. Revocable Transfer on Death Deeds (AB 1739) – Retroactively to 1/1/2016

The bill provides that the Revocable Transfer on Death Deed would no longer require the statutory FAQ to be recorded as part of the deed.

5. Home Inspections Requirement – Irrigation System (AB 2371) – Effectively 1/1/19

This bill would authorize a home inspection report on a dwelling unit on a parcel containing an in-ground landscape irrigation system to include certain information regarding the operation and observation of the irrigation system. The bill, to the extent funds are available, would require the Department of Water Resources, in consultation with a specified association and the Department of Housing and Community Development, to compile an estimate of the number of properties for which an irrigation system inspection report has been prepared each year, beginning with 2018, for inclusion in an update to the California Water Plan.

6. Landlord Tenant:

Commercial Property Abandonment (AB 2847) – Commercial Property Disposal of Tenant’s Personal Property (AB 2173) – Electric Vehicle Charging Stations (AB 1796) – 3 Days’ Notice Excludes Holidays and Weekends – Inspection of Decks, Balconies, Stairways and Walkways (SB 721) – Law Enforcement and Emergency Assistance (AB 2413) – Price Gouging and Eviction During a Declared Emergency (AB 1919) – Requires Landlord to Accept Rent from Third Parties (AB 2219) – Military Services Member Protections (AB 3212)

This set of Landlord – Tenant related laws will be discussed in details in the next blog.

7. Licensing – Applicant for Real Estate License Not Required to Disclose Citizenship or Immigration Status (SB 695) – Effective 1/1/19

This bill prohibits the DRE from requiring a real estate license applicant to disclose either citizenship status or immigration status for purposes of licensure, or from denying licensure to an otherwise qualified and eligible individual based solely on his or her citizenship status or immigration status.

8. Licensing – Criminal Conviction (AB 2138) – Effective 7/1/2020

This bill allows the DRE to deny a license on the grounds that the applicant or licensee has been subject to formal discipline, as specified, or convicted of a crime only if the applicant or licensee has been convicted of a crime within the preceding 7 years from the date of application that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made, regardless of whether the applicant was incarcerated for that crime, or if the applicant has been convicted of a crime that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made and for which the applicant is presently incarcerated or for which the applicant was released from incarceration within the preceding 7 years, except as specified.

The bill would prohibit a board from denying a person a license based on the conviction of a crime, or on the basis of acts underlying a conviction, as defined, for a crime, if the conviction has been dismissed or expunged, if the person has provided evidence of rehabilitation, if the person has been granted clemency or a pardon, or if an arrest resulted in a disposition other than a conviction.

9. Pest Reports – Certification and Warranty (SB 1481) – Effective 1/1/19

This bill would require a specified certification when the property is free of evidence of active infestation or infection and require all certifications to be included on the complete, limited, supplemental, or reinspection reports. The bill would, where the consumer has directly contracted for the fumigation, require the Branch 1 registered company to also provide the certification of completion of the fumigation to the consumer who ordered the fumigation and would require the Branch 1 registered company to provide a warranty for fumigation to the owner or the owner’s designated agent. The bill would specify additional requirements for a potential failed fumigation, including a requirement that, when a consumer authorizes a Branch 3 registered company to subcontract the fumigation to a Branch 1 registered company, the Branch 3 registered company verify the need for a refumigation and issue an inspection report. The bill would require, when the consumer elects to contract directly with a Branch 1 registered company to perform a fumigation, the Branch 1 registered company to take additional specified actions.

10. Private Transfer Fee Prohibited (AB 3041) – Effective 1/1/19

This bill prohibits various private transfer fee by developers imposing new property covenants, conditions, or restrictions that force subsequent owners to pay specially designated fees every time the property is transferred, unless the fee provides a “direct benefit” to the property. This bill would provide that any transfer fee created in violation of this prohibition is void against public policy.