2014 NEW LAWS FOR CALIFORNIA'S REALTORS®
Just hours before his deadline at midnight last night, Governor Jerry Brown signed or vetoed all the legislative bills on his desk to end the legislative process for 2013. C.A.R.’s Legal Department has summarized and made available on our webpage about 130 of these New Laws mostly taking effect next year that may affect your real estate practice or otherwise be of interest to REALTORS®. The full text of each new law is available at http://leginfo.legislature.ca.
This legislative session’s new laws cover a wide range of topics of interest, including disclosure requirements, licensing matters, adjoining owners, affiliated real estate services, landlord-tenant, subdivisions, land use, employment, and many more. Some of the significant new laws that you as home owner or landlord might be interested -
TDS Revised to Include Construction Defect Litigation
Effective July 1, 2014, the Real Estate Transfer Disclosure Statement (TDS) has been revised to require disclosure of the seller’s knowledge of certain construction defect claims for newly constructed homes under a law commonly referred to as SB 800. As amended, the TDS will inquire, in question 16 of Section 11C, as to whether a seller is aware of any claims or lawsuits involving construction defects threatening to or affecting the real property, including any pre-litigation claims of a construction defect, claims of breach of warranty, or claims for breach of an enhanced protection agreement under SB 800. Senate Bill 652.
FTB Information Return for Out-of-State Acquisition in 1031 Exchange
For any 1031 exchange that occurs on or after January 1, 2014, a taxpayer acquiring a "like-kind" property located outside of California must file an information return with the Franchise Tax Board (FTB) for that taxable year and every year thereafter in which the gain or loss from the exchange has not been recognized. If a taxpayer fails to file such information return and tax returns, the FTB may propose to assess the amount of tax, interest, and penalties due by estimating net income from any available information, including the amount of gain. Assembly Bill 92.
Adjoining Owners Equally Responsible for Shared Fences and Boundaries
Commencing January 1, 2014, adjoining landowners must share equally the responsibility for maintaining boundaries and monuments between them. Adjoining landowners are presumed to share an equal benefit from any fence dividing their properties, as well as equal costs for construction or maintenance, unless otherwise agreed in writing. This new law also provides specific procedural requirements for an owner who intends to incur costs for a division fence to notify the adjoining owner of the estimated costs and other information. Existing law enacted in 1872 which requires a homeowner who fully encloses a property to refund a neighbor a just proportion of the value of a division fence has been repealed. Assembly Bill 1404.
Smoke Detectors Specifications Changed
Starting on July 1, 2014, the State Fire Marshall will not approve a battery-operated smoke alarm unless it contains a non-replaceable, non-removable battery capable of powering the smoke alarm for at least 10 years. This rule was originally slated to take effect on January 1, 2014. Until July 1, 2015, an exception to this rule applies to smoke alarms ordered by, or in the inventory of, an owner, managing agent, contractor, wholesaler, or retailer on or before July 1, 2014. Furthermore, starting January 1, 2015, the State Fire Marshal will not approve a smoke alarm unless it does all of the following: (1) displays the date of manufacture on the device; (2) provides a place on the device to insert the date of installation; and (3) incorporate a hush feature. A previous requirement for the smoke alarm to incorporate an end-of-life feature that provides notice that the device needs to be replaced has been eliminated. The requirements taking effect on January 1, 2015 was originally slated to take effect on January 1, 2014. The State Fire Marshal has the authority to create exceptions to these requirements. Senate Bill 745.
Landlord Required to Provide Specific Utility Rate Schedules
Starting January 1, 2014, a master-meter customer of an apartment building, mobilehome park, or similar residential complex, must post in a conspicuous place the applicable specific current residential gas or electrical rate schedule as published by the serving utility, rather than the prevailing residential utilities rate schedule as previously required. Alternatively, the landlord as a master-meter customer may elect to post a website address for a tenant to access the schedule as long as the landlord also does the following: (1) state in the posting that an individual user may request a copy of the specific current residential gas or electrical rate schedule from the master-meter customer; and (2) provide the schedule upon request at no cost. Senate Bill 196.
Protection of Victims of Human Trafficking as Tenants
Beginning January 1, 2014, a residential tenant can terminate a tenancy within 30 days by notifying the landlord that the tenant was a victim of human trafficking as defined. The tenant’s notice to terminate tenancy must generally include a copy of a police report or court order regarding the tenant or tenant’s household member. From January 1, 2014 to January 2016, however, a tenant may simply provide documentation from a qualified third party professional indicating that the tenant or household member is seeking assistance for physical or mental injuries resulting from the offense. This law also prohibits a landlord from terminating a tenancy, or failing to renew a tenancy, based on acts of human trafficking if documented by a police report or protective court order and the wrongdoer is not a tenant of the same dwelling unit. The landlord, however, may terminate the tenancy if, after invoking protection under this law, the tenant allows the wrongdoer named in the police report or protective order to visit the property, or the landlord reasonably believes that the wrongdoer poses a physical threat to other tenants or to the tenant’s right to quiet possession. Existing law already protects a tenant if the tenant or tenant’s household member is a victim of domestic violence, sexual assault, or elder or dependent adult abuse. Senate Bill 612.
Minimum Wage Increased to $10 Per Hour
Minimum wage in California has been increased from $8 per hour to $10 per hour. A one-dollar increment from $8 per hour to $9 per hour will come into effect on July 1, 2014, and another one-dollar increment from $9 per hour to $10 per hour will come into effect on January 1, 2016. The minimum wage has been $8 per hour since January 1, 2008. Assembly Bill 10.
Just hours before his deadline at midnight last night, Governor Jerry Brown signed or vetoed all the legislative bills on his desk to end the legislative process for 2013. C.A.R.’s Legal Department has summarized and made available on our webpage about 130 of these New Laws mostly taking effect next year that may affect your real estate practice or otherwise be of interest to REALTORS®. The full text of each new law is available at http://leginfo.legislature.ca.
This legislative session’s new laws cover a wide range of topics of interest, including disclosure requirements, licensing matters, adjoining owners, affiliated real estate services, landlord-tenant, subdivisions, land use, employment, and many more. Some of the significant new laws that you as home owner or landlord might be interested -
TDS Revised to Include Construction Defect Litigation
Effective July 1, 2014, the Real Estate Transfer Disclosure Statement (TDS) has been revised to require disclosure of the seller’s knowledge of certain construction defect claims for newly constructed homes under a law commonly referred to as SB 800. As amended, the TDS will inquire, in question 16 of Section 11C, as to whether a seller is aware of any claims or lawsuits involving construction defects threatening to or affecting the real property, including any pre-litigation claims of a construction defect, claims of breach of warranty, or claims for breach of an enhanced protection agreement under SB 800. Senate Bill 652.
FTB Information Return for Out-of-State Acquisition in 1031 Exchange
For any 1031 exchange that occurs on or after January 1, 2014, a taxpayer acquiring a "like-kind" property located outside of California must file an information return with the Franchise Tax Board (FTB) for that taxable year and every year thereafter in which the gain or loss from the exchange has not been recognized. If a taxpayer fails to file such information return and tax returns, the FTB may propose to assess the amount of tax, interest, and penalties due by estimating net income from any available information, including the amount of gain. Assembly Bill 92.
Adjoining Owners Equally Responsible for Shared Fences and Boundaries
Commencing January 1, 2014, adjoining landowners must share equally the responsibility for maintaining boundaries and monuments between them. Adjoining landowners are presumed to share an equal benefit from any fence dividing their properties, as well as equal costs for construction or maintenance, unless otherwise agreed in writing. This new law also provides specific procedural requirements for an owner who intends to incur costs for a division fence to notify the adjoining owner of the estimated costs and other information. Existing law enacted in 1872 which requires a homeowner who fully encloses a property to refund a neighbor a just proportion of the value of a division fence has been repealed. Assembly Bill 1404.
Smoke Detectors Specifications Changed
Starting on July 1, 2014, the State Fire Marshall will not approve a battery-operated smoke alarm unless it contains a non-replaceable, non-removable battery capable of powering the smoke alarm for at least 10 years. This rule was originally slated to take effect on January 1, 2014. Until July 1, 2015, an exception to this rule applies to smoke alarms ordered by, or in the inventory of, an owner, managing agent, contractor, wholesaler, or retailer on or before July 1, 2014. Furthermore, starting January 1, 2015, the State Fire Marshal will not approve a smoke alarm unless it does all of the following: (1) displays the date of manufacture on the device; (2) provides a place on the device to insert the date of installation; and (3) incorporate a hush feature. A previous requirement for the smoke alarm to incorporate an end-of-life feature that provides notice that the device needs to be replaced has been eliminated. The requirements taking effect on January 1, 2015 was originally slated to take effect on January 1, 2014. The State Fire Marshal has the authority to create exceptions to these requirements. Senate Bill 745.
Landlord Required to Provide Specific Utility Rate Schedules
Starting January 1, 2014, a master-meter customer of an apartment building, mobilehome park, or similar residential complex, must post in a conspicuous place the applicable specific current residential gas or electrical rate schedule as published by the serving utility, rather than the prevailing residential utilities rate schedule as previously required. Alternatively, the landlord as a master-meter customer may elect to post a website address for a tenant to access the schedule as long as the landlord also does the following: (1) state in the posting that an individual user may request a copy of the specific current residential gas or electrical rate schedule from the master-meter customer; and (2) provide the schedule upon request at no cost. Senate Bill 196.
Protection of Victims of Human Trafficking as Tenants
Beginning January 1, 2014, a residential tenant can terminate a tenancy within 30 days by notifying the landlord that the tenant was a victim of human trafficking as defined. The tenant’s notice to terminate tenancy must generally include a copy of a police report or court order regarding the tenant or tenant’s household member. From January 1, 2014 to January 2016, however, a tenant may simply provide documentation from a qualified third party professional indicating that the tenant or household member is seeking assistance for physical or mental injuries resulting from the offense. This law also prohibits a landlord from terminating a tenancy, or failing to renew a tenancy, based on acts of human trafficking if documented by a police report or protective court order and the wrongdoer is not a tenant of the same dwelling unit. The landlord, however, may terminate the tenancy if, after invoking protection under this law, the tenant allows the wrongdoer named in the police report or protective order to visit the property, or the landlord reasonably believes that the wrongdoer poses a physical threat to other tenants or to the tenant’s right to quiet possession. Existing law already protects a tenant if the tenant or tenant’s household member is a victim of domestic violence, sexual assault, or elder or dependent adult abuse. Senate Bill 612.
Minimum Wage Increased to $10 Per Hour
Minimum wage in California has been increased from $8 per hour to $10 per hour. A one-dollar increment from $8 per hour to $9 per hour will come into effect on July 1, 2014, and another one-dollar increment from $9 per hour to $10 per hour will come into effect on January 1, 2016. The minimum wage has been $8 per hour since January 1, 2008. Assembly Bill 10.
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