2014 New Laws Impacting Real Estate – Part 1


Simon Offord

by Simon Offord on October 28, 2013

in Boundary Dispute, Contract Disputes, Landlord/Tenant Disputes, Neighbor Issues, Real Estate Law

Another year, another set of new or revised laws.  There are 100s of new or revised laws this year for California, several of which impact the real estate community.  Over the next few weeks, we will highlight what we consider to be the most significant such laws.

These new laws cover a wide range of topics of interest, including disclosure requirements, licensing matters, adjoining owners, landlord-tenant, subdivisions, land use, employment, and many more.

Part 1 of this series will cover issues related to adjoining landowners, landlord-tenant issues, and licensing matters.

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. A landowner must give each affected adjoining landowner a 30-day prior written notice of any intent to incur costs for a division fence. The notice of intent must include the following: (1) a notice of the presumption of equal responsibility for the reasonable costs of construction, maintenance, or necessary replacement of the fence; (2) a description of the nature of the problem with the shared fence; (3) the proposed solution for the problem; (4) the estimated construction or maintenance costs to address the problem; (5) the proposed cost sharing approach; and (6) the proposed timeline for addressing the problem. An adjoining landowner can overcome the presumption mentioned by demonstrating by a preponderance of the evidence that imposing equal responsibility would be unjust.

To determine whether equal responsibility for the reasonable costs would be unjust, a court will consider the following: (1) whether the financial burden on one landowner is substantially disproportionate to the benefit conferred upon that landowner by the fence; (2) whether the cost of the fence would exceed the difference in the value of the property before and after its installation; (3) whether the financial burden to one landlord would impose an undue financial hardship given that party’s financial circumstances as demonstrated by reasonable proof; (4) the reasonableness of a particular construction or maintenance project, including the extent to which the costs appear to be unnecessary, excessive, or the result of one landowner’s personal aesthetic, architectural, or other preferences; and (5) any other equitable factors appropriate under the circumstances.  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.

The previous code section simply stated:

“Coterminous owners are mutually bound equally to maintain:

  1. The boundaries and monuments between them;
  2. The fences between them, unless one of them chooses to let his land lie without fencing; in which case, if he afterwards incloses it, he must refund to the other a just proportion of the value, at that time, of any division fence made by the latter.”

As you can see, the new law adds many specific requirements that should hopefully prevent neighbor disputes regarding fences, however in order to do so, the neighbors will need to know the law!

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. The TDS is generally a required disclosure for sales transactions involving one-to-four residential units (with certain exemptions).  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.  This is not merely a change in the forms, but a change in the law regarding disclosures.  Senate Bill 652.

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.

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.

Telephone Jack for Tenant Must Satisfy California Standards

Existing law requires a residential landlord to install at least one usable telephone jack on leased premises and to ensure that the inside telephone wiring is in good working condition and meets the most recent statutory standards. The new law replaces the applicable standards of the National Electrical Code as adopted by the Electronic Industry Association with that of the California Electrical Code.  Senate Bill 745 (codified as Cal. Civil Code § 1941.4)

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.

Consumer Protection Against Prepaid Rental Listing Services

Beginning on January 1, 2014, the California Bureau of Real Estate (BRE) is authorized to issue a citation to an unlicensed person for engaging in prepaid rental listing services without a prepaid rental listing service license or real estate broker license. As background, a prepaid rental listing service is generally a business that charges a fee for providing a prospective tenant with a list of available places for rent. Existing required content for a written contract that a prepaid rental listing service licensee must offer a prospective tenant before accepting a fee has been broadened to include the licensee’s license number as well as a specific statutory notice about refunds. An aggrieved person with a final judgment against a prepaid rental listing service licensee may apply to BRE for payment from the Consumer Recovery Account. Any payment from the Consumer Recovery Account will result in automatic suspension of the prepaid rental listing service licensee. Senate Bill 269.

Any payment from the Consumer Recovery Account will result in automatic suspension of the prepaid rental listing service licensee (Cal. Bus. & Prof. Code § 10475). This law also increases the application fees for prepaid rental listing service licenses (Cal. Bus. & Prof. Code § 10470).

Disciplinary Action for Broker Record Tampering

Starting January 1, 2014, the Bureau of Real Estate can suspend or revoke the license of any real estate salesperson, broker, or corporate brokerage, if the broker, salesperson, or any director, officer, employee, or agent of the corporation, knowingly destroys, alters, conceals, mutilates, or falsifies any of the books, papers, writings, documents, or tangible objects required to be maintained and provided upon notice, or sought in connection with an investigation, audit, or examination. Under existing law, a real estate broker must generally retain for 3 years copies of all documents executed or obtained by him in connection with any transactions involved licensed activities (this includes, but is not limited to, copies of all listings, deposit slips, canceled checks, trust records, and other documents executed by him or her or obtained by him or her in connection with any transactions for which a real estate license is required. Senate Bill 676.  (codified as Cal. Bus. & Prof. Code § 10148)

Future blog articles will highlight new HOA laws, employment issues, land use, and property taxes, among other issues.

If you or a friend is seeking real estate legal counsel regarding a California based property, don’t hesitate to contact our law firm at (650) 327-2900 or to learn more about our firm and read attorney bios, visit us on the web at www.BrewerFirm.com.

Related Posts Plugin for WordPress, Blogger...

{ 2 comments… read them below or add one }

avatar Commercial Appraiser December 26, 2013 at 3:47 pm

I loved your article, New laws Impacting Real Estate, 2014. Do you have a mailing list?

Curtis D. Harris, BS, CGREA, REB

avatar Real Estate Litigation Los Angeles January 28, 2014 at 4:29 am

According to this revised law, there might be lot of real estate lawyers will suffer. Especially changes made in rental service listing will be impact of landlords and brokers.

Leave a Comment

Previous post:

Next post: