BY: JOHN V. GIARDINELLI, ATTORNEY AT LAW | OF COUNSEL
CODY J. BELLMEYER, ATTORNEY AT LAW
The California legislature passed a series of new laws which Real Estate Broker and Agents should be aware of as the industry moves into the new-year. While a majority of the laws go into effect on January 1, 2020, some laws became active as recently as September 2019. Thus, it will be important to quickly assess your practices to determine if you are complying with the new laws. Administrative regulations are sure to follow. These laws are briefly addressed here for purposes of providing an overview of some of the important laws for the coming year.
AB 1482 Rent Control
As many know, California recently passed one of the most restrictive state-wide rent control laws in the nation. The purpose of the law is to provide additional protections for tenants through the limitation of rent increases and through the enactment of just cause evictions, subject to exceptions. Importantly, the rent control caps are retroactive to March 15, 2019. Thus, property managers, owners, and Sublessors should independently research or contact legal counsel to determine the status of their property and applicability of rent control.
AB 5 Independent Contractors
While AB 5 started out as a potential hurdle for the real estate community, the codification of Dynamex ended in victory thanks to C.A.R. lobbying efforts, as the legislature carved out specific exceptions for real estate licensees, permitting them to self-designate as independent contractors under the provisions of the Business & Professions Code. Significantly, brokers under AB 5 are also provided with some clarity regarding the limits
of their control in exercising their supervisory duties over licensees. Similar to the acts taken after the Dynamex holding, brokers will want to ensure that their licensees’ contracts comply with the Business & Professions Code.
Although the law provides some positive news for the real estate community, it also establishes that, by default, administrative and non-licensed workers are employees. Thus, it will be important to assess the status of administrative non-licensees as well when entering into
the new-year.
AB 68, 670, 881 Accessory Dwelling Units
In furtherance of the California legislature’s attempts to combat the housing crisis, the legislature passed AB 68, 670, and 881 to address Accessory Dwelling Units (“ADU”). Under the combination of bills, cities, subject to exceptions, must approve ADU applications, cannot require the owner to live on the property, cannot charge impact fees, and cannot prevent the concurrent development of an ADU at the same time as the primary unit. Similarly, the bills prevent Home Owners Associations (HOA’s) from preventing or disallowing the construction of ADUs within the Association. While these laws are subject to exceptions, cities and HOAs are effectively given the obligation to permit ADUs, including some garage conversions. If a client is considering adding an ADU, agents will want to assess the local ordinance, HOA rules, fire setbacks, and advise the client to seek legal counsel to ensure the building would otherwise comply with the law.
AB 1110 Rent Notice Increases
In the event that AB 1482 does not apply to a particular property, the newly enacted AB 1110 requires a 90 day notice if the landlord of a month-to-month tenancy increases the rent by more than 10% of the rent charge to the tenant annually. The new noticing requirements will be important for property managers to keep in mind as they move through 2020 and beyond, and only applies for rental properties exempt from AB 1482.
AB 2343 Unlawful Detainer and Notice Periods
Similar to AB 1110, AB 2343 is another noticing law for property managers. However, AB 2343 is already effective. In summary, AB 2343 changes the way the notice period is calculated for purposes of notice periods and unlawful detainers. In effort to protect the tenants from creative landlords, the legislature passed AB 2343 to exclude judicial holidays, such as Saturday and Sunday, from the calculations for purposes of three (3) day notices as it relates to unlawful detainers.
SB 18 90 Day Notices
The Senate bill acts to eliminate the previous sunset date of the notice law which requires tenants to be provided with at least 90 days’ notice before the termination of a tenancy if the property is foreclosed.
SB 329 Housing Discrimination
SB 329, in application, requires landlords to accept Section 8 housing from an otherwise qualified tenant. The new Senate Bill aims to expand discrimination protections on the basis of source of income and aims to provide additional protection for tenants who rely on assistance to obtain housing. Under SB 329, a landlord who discriminates against a tenant receiving housing assistance, such as Section 8, will be subject to additional liability. policies to ensure compliance.
Thus, landlords and property managers should assess their policies to ensure compliance.
SB 969 Battery Backups for Garage Doors
SB 969 is unique in that it became effective July 1, 2019. Thus, it is already effective. Under SB 969, automatic garage doors must include a battery backup to provide power in the event of a power outage. It is important for
homeowners and real estate agents as it requires the installation of a battery backup for the opener when a new door is installed or when the existing opener is replaced. Agents will want to keep this in mind as they advise and counsel clients in the purchase or sale of homes.
REALTORS® should keep an eye out in early December (approximately December 3rd) for C.A.R.’s new and revised forms to address some of these changes in the laws and ensure they are using the appropriate forms going into January 2020. If you have any questions relating to the potential application of any of the laws included above, please contact our office. In a year where the legislature passed hundreds of laws, legal counsel will be important as these laws often overlap and relate in unpredictable ways. Thus, legal counsel can be beneficial as brokerages, property managers, and REALTORS® navigate through 2020.