Essential Insights into 26 California Real Estate Laws and Regulations
Whether you’re gearing up to buy or sell a property in California, understanding the state’s real estate laws is crucial. From disclosure responsibilities for sellers to protecting the rights of buyers and lenders, familiarizing yourself with these regulations is key to a smooth transaction. Explore our comprehensive guide to gain valuable knowledge for a successful real estate journey in California.
Guide to California Real Estate law
Navigating the complexities of real estate law in California is crucial, given its intricate and precise nature. These laws play a pivotal role in shaping the sale of homes and properties across both Southern California and the entire state. Enhancing your comprehension of the applicable rules and regulations is key to a successful understanding of the real estate landscape. Keep reading to delve deeper into this subject.
To whom do California real estate laws pertain?
Real estate laws in California are relevant to individuals involved in any real estate transaction. This encompasses homeowners gearing up to sell, landlords contemplating the sale of rental properties, tenants, prospective home buyers, and others. Whether you’re a seller or buyer, engaging in a real estate deal automatically subjects you to the applicable real estate laws of the state.
Explore the 26 laws and regulations governing real estate in California
California has established an extensive set of real estate rules, acts, and regulations to safeguard the interests of buyers, sellers, and lenders. Whether you are considering a sale or purchase, it is advisable to acquaint yourself with the essential real estate laws.
1. Hiring a real estate attorney or agent is not mandatory in California
Unlike several states mandating the involvement of a real estate attorney in property transactions, California does not impose such a requirement. There is no statutory obligation to enlist the services of a real estate agent when selling your house in California. Wondering how to sell your house without a realtor in California? A reputable Southern California real estate investor can provide assistance.
2.Selling a home in California necessitates the involvement of an escrow agent
To sell a home in CA, it is necessary to involve an escrow agent. The property, its title, and the funds are placed in escrow until certain conditions are fulfilled. Once the buyer submits the funds and the seller provides the deed, the escrow agent retains them until the escrow requirements are met. Subsequently, the deed is transferred to the buyer, and the funds are released to the seller.
3.A transfer tax is applicable
California imposes taxes on the sale of property, including a county transfer tax and, in certain situations, a city transfer tax. Typically, in Northern California, the buyer assumes the responsibility for the transfer tax, while in Southern California, it is commonly the seller’s obligation.
4.Sellers are required to provide information about the physical condition of the home
In California, sellers must furnish specific information about the home or property, encompassing details such as ownership, the physical state of the property, information on property taxes, the presence of military artillery locations nearby, and the working condition of appliances or features included in the sale.
5. Purchasers have the right to file a lawsuit for fraudulent misrepresentation by sellers
Sellers bear the responsibility of revealing any significant issues with the home they are selling, and buyers retain the right to take legal action if the seller deliberately hides a defect.
6.It is mandatory to perform a title search
When selling a home in California, a Preliminary Title Report (PTR) must be generated subsequent to a comprehensive title search conducted by a title company. Subsequently, the buyer procures the requisite title insurance based on the information provided in this PTR.
7. A real estate disclosure law exists
In collaboration with a real estate agency, the seller’s agent is required to furnish a real estate transfer statement, disclosing relevant information such as:
- Any existing relationship with the seller
- Negotiability terms regarding their commission
- Sale price details
Additionally, it is mandated that the agent informs prospective buyers about any deaths on the property within the last three years and advises them to check the national registry for information on sex offenders in the vicinity.
8. Disclosure requirements apply to lenders
In transactions involving a lender, it is mandatory for them to furnish the borrower with comprehensive information, including:
- Disclosure of any advance fees
- Acknowledgment of the borrower’s right to obtain a copy of the appraisal report
- Notification of any transfer of loan servicing
- Clear presentation of lending credit terms
- Disclosure of any compensation received by the agent from the lender.
9. Sellers bear liability for buyer damages resulting from withheld information
In instances where a seller fails to adhere to all the stipulated requirements and regulations concerning information disclosure, they can be held accountable for any damages incurred by the buyer. Even if the sale remains unaffected, the onus of covering the buyer’s losses rests with the seller.
10. Failure to provide an accurate disclosure statement allows for agreement cancellation
In the absence of an accurate disclosure statement, the buyer retains the right to cancel the agreement at any point. Sellers are strongly advised to prioritize truthfulness from the outset.
11.Smoke alarm minimum requirements are in effect
Every residential unit in the State of California must be equipped with at least one operational smoke detector located outside each sleeping area, with the seller responsible for furnishing written confirmation of compliance.
12.Disclosure of lead paint presence is mandatory
California real estate sellers must disclose the existence of lead paint to potential buyers and share associated risks. In cases where a real estate agency is involved, the agent is obliged to furnish the buyer with a comprehensive paint history of the property, and a state-accredited inspection is mandatory.
13. Laws exist to safeguard individuals at risk of homelessness
In California, a law implemented in 2020 aims to protect those facing homelessness. A tenant has the right to shelter an individual at risk of homelessness with the written consent of the property owner, irrespective of lease or rental terms. The law includes provisions and safeguards to ensure the protection of both tenants and property owners.
14.Landlords cannot restrict the display of religious items on property doors
Homeowners are not permitted to prohibit tenants from displaying religious items on their rental unit doors. The only circumstances under which a renter is obligated to remove such items are if:
- The display poses a threat to public safety or health.
- The display violates any local, state, or federal law.
- The display interferes with the door’s proper functioning.
15. Home inspectors are prohibited from providing property valuation opinions
A recent addition to California’s real estate statutes prohibits home inspectors from expressing opinions on property values. Conversely, appraisers are also restricted from offering opinions that fall within the domain of a home inspector’s expertise.
16. Service members benefit from a reduction in security deposits
Since 2020, service members are entitled to a diminished obligation regarding security deposits. Consequently, landlords are prohibited from demanding more than one month’s rent upfront as a security deposit for an unfurnished unit or more than two months’ rent for a furnished unit.
17. Mandatory balcony inspections are now a requirement
Following a tragic balcony collapse, California implemented mandatory balcony inspections in 2019. Presently, all structures accommodating three or more residents with exterior elevated elements and associated waterproofing must undergo inspection by a licensed civil engineer or city inspector.
18.Limits on rental price increases during a state of emergency
In response to the devastating wildfires of 2019, California passed a law making it unlawful to increase rental prices by more than 10 percent during a state of emergency. Moreover, it is now considered a crime to evict an existing tenant with the intention of renting the unit to someone else at a higher price.
19. Recent changes in California have relaxed specific payment restrictions
California has recently implemented modifications to stringent third-party payment regulations. Under certain circumstances, third-party payments are now permitted, provided that such payments do not alter the terms of the tenancy.
20.Protections are extended to victims of domestic violence
It is now illegal for landlords to retaliate against tenants who make a 911 call in response to domestic violence.
21.A three-day notice to pay rent is now a requirement
California now mandates a three-day notice to pay rent before landlords can initiate eviction proceedings. The notice period now excludes judicial holidays, Saturdays, and Sundays, aiming to safeguard tenants from unjust evictions.
22. The presence of a lien can significantly impact the sale of a house or property
Attempting to sell a house with a lien poses legal complexities, but opting for a real estate investor specializing in cash transactions may provide a viable solution.
23.Selling a house in foreclosure is a possibility
While selling a house facing foreclosure is challenging, it can be done with caution and careful consideration.
24.Selling a house during bankruptcy may be a practical choice
In the face of bankruptcy, selling your home may be a financial necessity. Real estate investors, facilitating quick cash transactions, can help mitigate the financial repercussions of bankruptcy.
25.Selling your home amid divorce
Even in situations involving foreclosure risk, a spouse’s reluctance to reach a property settlement, or court-ordered sale of a house in a divorce in California, you can still sell your home during the divorce process. A judge can issue an order initiating the sales process.
26.Selling your home during probate may be feasible
Meeting specific requirements, including notifying all beneficiaries, opens the possibility of a probate sale in California.
Our main insights on California property law
California’s residential real estate laws are designed to safeguard the rights of both sellers and buyers. However, sellers bear substantial responsibilities, particularly concerning disclosures. If you seek a swift sale, avoiding the complexities associated with traditional channels, the real estate investors at Call for Offer are ready to assist by presenting fair cash offers promptly.
FAQs on California Real Estate Law
Where to Find California Real Estate Law?
California’s real estate laws are outlined in the 2023 Real Estate Laws established by the California Department of Real Estate. These encompass regulations such as Real Estate Law, Subdivided Lands Law, Regulations of the Real Estate Commissioner, the Administrative Procedure Act, and more.
Is There a Lemon Law for Houses in California?
While there isn’t a specific lemon law for houses in California, there are protections in place to inform buyers about their purchase. If issues arise after finalizing the purchase, legal recourse may involve filing a lawsuit.
Origins of California Real Property Law
California’s property laws trace back to England’s common law, where lower courts are bound by legal findings from higher courts. These legal precedents guide determinations made by trial courts in California.
What to Do If Your Rights Are Violated According to California Property Laws?
If you believe your rights under California property laws have been violated, seek guidance from an experienced real property lawyer. California grants important rights and responsibilities to both buyers and sellers, and a seasoned attorney can assist if your rights have been infringed.
Contact ‘Call for Offer‘ now to schedule a hassle-free consultation and let’s explore ways to ensure a smooth and uncomplicated selling process for you.
If you have any inquiries or uncertainties, we are here to assist! Reach out to us by phone at 951-400-4373.