Whether you’re preparing to buy or sell a home or another property in Southern California, California real estate law has you covered. Sellers are bound by important responsibilities regarding disclosure, which help to ensure that a wide range of real estate transactions proceed smoothly. Having working knowledge of state laws can help you protect yourself throughout the real estate sales process.
Real estate law in California is both complex and exacting, and because these laws guide the sale of homes and properties throughout Southern California and the rest of the state, better understanding the rules and regulations that apply can help. Read on to learn more.
Real estate laws in California apply to anyone who is planning on engaging in a real estate transaction. This includes homeowners who are preparing to sell, landlords who are considering selling a rental, tenants, home buyers, and beyond. If you’re embarking on a real estate deal, the state’s real estate laws apply.
The State of California has a wide range of real estate rules and real estate acts and regulations in place, and they’re designed to protect the rights of buyers, sellers, and lenders. Whether you’re looking to sell or buy, it’s a good idea to familiarize yourself with the following must-know real estate laws.
While several states require those who purchase real estate property to work with a real estate attorney, in California this isn’t the case. There is also no law requiring you to hire a real estate agent. How to sell your house without a realtor in California? A trusted Southern California real estate investor can help.
In order to sell a home in CA, an escrow agent is needed. The property being sold, its title, and the funds involved are held in escrow until specific conditions are met. After the buyer deposits the funds and the seller deposits the deed, the escrow agent holds them until the regulations regarding escrow are satisfied. At this point, the deed is transferred to the buyer while the funds go to the seller.
The sale of a California property is taxable. The transaction triggers a county transfer tax and, in some instances, a city transfer tax. While the buyer generally covers the transfer tax in Northern California, the seller is typically responsible in Southern California.
In California, the seller is obligated to disclose specific kinds of information about the home or property. Such disclosures must include:
The seller must be upfront about selling a house in poor condition.
Owners are responsible for disclosing relevant concerns about the home they’re selling, and buyers have the right to sue if the seller intentionally conceals a defect.
Another legal requirement is that, when selling a home in California, a Preliminary Title Report (PTR) must be written after a title company conducts a thorough title search. The buyer then obtains the necessary title insurance based on this PTR.
When the seller works with a real estate agency, the agent must provide a real estate transfer statement that reveals any of the following that apply:
Further, the agent must let potential buyers know if there’s been a death on the property in the last three years and must advise buyers to search the national registry in relation to the location of sex offenders.
When there is a lender involved in the transaction, they must provide the borrower with information regarding all the following:
When a seller doesn’t comply with all requirements and regulations related to the provision of information, they can be held responsible for any damages the buyer suffers. Even if the sale isn’t affected, the responsibility for covering the buyer’s losses falls to the seller.
If the buyer isn’t provided with an accurate disclosure statement, they have the right to cancel the agreement reached at any time. Sellers are always well advised to be truthful from the outset.
Every housing unit in the State of California must have one working smoke detector outside every sleeping area, and it’s the seller’s responsibility to provide written evidence in support of this fact.
Real estate sellers in California must inform potential buyers if the property contains any lead paint and must share the risk involved with them. When selling through a real estate agency, the agent is obligated to provide the buyer with a complete paint history of the property, and a state-accredited inspection is required.
A new law went into effect in California in 2020 that is designed to help protect those at risk of homelessness. A tenant who rents can take in a person who is at risk of homelessness with the written consent of the property’s owner – regardless of the lease or rental terms. Provisions and protections are included that are designed to protect both tenants and homeowners.
Homeowners may not prohibit tenants from displaying religious items on the doors of their rentals. Only if one of the following applies is the renter required to remove the item:
Another recent addition to California’s real estate statutes is that home inspectors are barred from voicing opinions on property values. The opposite is also true – appraisers are prohibited from offering opinions that require a home inspector’s expertise.
Since 2020, service members are entitled to a reduced obligation in relation to security deposits. As such, a landlord cannot require that a service member pay more than one month of rent upfront – as a security deposit – for an unfurnished unit or more than two months of rent for a furnished unit.
After a tragic balcony collapse, California law adopted mandatory balcony inspections in 2019. Now, all buildings housing three or more residents that have exterior elevated elements and associated waterproofing must be inspected by a licensed civil engineer or city inspector.
After the immensely destructive wildfires of 2019, California enacted a law that makes it illegal to increase rental prices more than 10 percent during a state of emergency. Further, it’s now a crime to evict a current tenant in order to rent the unit to someone else for a higher price.
Another recent development in California is the easing of strict third-party payment regulations. Now, under specific circumstances, third-party payments are allowed – with the condition that such payments do not alter tenancy.
It is now against the law for a landlord to engage in any form of retaliation in response to a tenant making a 911 call.
California now also requires a three-day notice to pay rent before the owner can begin eviction proceedings. The notice period now excludes judicial holidays as well as Saturdays and Sundays – with the goal of protecting tenants from unfair evictions.
Selling a house with a lien? If the house being sold has a lien on it, the path forward toward selling is legally complicated, but a real estate investor who pays cash for properties may be a good option.
Selling a house in foreclosure? While it’s possible to sell a house that is being foreclosed upon, it’s far more challenging, and proceeding with caution is advised.
If you are facing bankruptcy, selling your home may be a financing requirement. Real estate investors pay cash for homes in speedy transactions that can help lessen the financial impact of bankruptcy.
Even if your house is at risk of foreclosure, your spouse refuses to settle in relation to the property, or there is a court ordered sale of house in divorce California, it won’t necessarily stop you from selling your home during a divorce. A judge can issue an order that begins the sales process.
If you notify all beneficiaries and comply with other specific requirements, a probate sale in California is a possibility.
Residential real estate laws in California are established to protect the rights of both sellers and buyers, but sellers face considerable responsibilities regarding disclosures. If you’re interested in selling a residence quickly and bypassing the hassles that come with selling through traditional channels, the real estate investors at SoCal Home Buyers are here to help – making fair cash offers in record time.
GET MY CASH OFFERCalifornia’s real estate law is found in the 2023 Real Estate Laws – as established by the California Department of Real Estate. These include regulations dedicated to Real Estate Law and Subdivided Lands Law, Regulations of the Real Estate Commissioner, the Administrative Procedure Act, and beyond.
There are no house lemon laws in California, but there are protections in place to help ensure that buyers know exactly what they’re getting into when they purchase a home. If the purchase has already been finalized and the place is a lemon, you’ll need to file a lawsuit.
California’s property laws originated with England’s common law. Common law means – in essence – that trial courts, or lower courts, are bound by the legal findings of higher courts, such as appeals courts. These legal findings set legal precedents and guide the determinations made by trial courts.
If you believe your rights – as they relate to California property laws – have been violated, it’s time to consult with an experienced real property lawyer. California affords buyers and sellers alike important rights and responsibilities, and if your rights were trampled, a seasoned lawyer can help.
Real Estate Professional
Doug Van Soest, the owner of SoCal Home Buyers is a seasoned real estate investor with a vast Real Estate network. His mission is to offer homeowners more solutions for their real estate needs than a typical home sale. He has been featured in various publications such as MSN, CNBC, HomeLight, FlipNerd.com, The Norris Group, Zillow, Redfin, RealtyTrac & Inman.
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