Why this article matters: Following the 2025 LA wildfires, legislators sought to protect affected homeowners. A new law prohibits investors and their agents from swooping in after a fire and submitting offers to homeowners who have not yet marketed their property for sale.
Speculators subdued in the wake of a disaster
When a crisis occurs, like vultures, real estate speculators begin to circle. Of course, agents get involved, but first need to know what the rules are for this type of buyer representation.
Many homeowners who lost property during the LA and Ventura wildfires of early 2025 were quickly approached by investors, eager to take the property off their hands for a “good price.” This practice is now quelled by passage of Assembly Bill 851, intended to stop speculators from initiating negotiations while homeowners are overwhelmed by the rebuilding or relocation process.
Investors are prohibited until January 1, 2027 from making unsolicited offers to purchase property in zip codes affected by the LA wildfires, prior to the owner marketing their property for sale.
The fire-affected zip codes where the law applies are: 90049, 90263, 90265, 90272, 90290, 90402, 91001, 91024, 91103, 91104, 91106, 91107, 91301, 91302, and 91320. [CC §2079.26(a)]
When a homeowner located in one of these zip codes decides to market their property for sale prior to January 1, 2027, the buyer and seller need a written statement that the purchase agreement they enter into was not the result of an unsolicited offer, but due to the owner marketing the property for sale. [CC §2079.26(b)(1)]
When closing on a sale of a property subject to a wildfire, the written attestation is attached to the document conveying title. [CC §2079.26(b)(3)]
Real estate licensees acting on behalf of themselves or a client may not make an unsolicited offer to buy a wildfire property since the owner has not marketed the property for sale. Submitting an unsolicited offer to buy wildfire property subjects the licensee to a review of their licensing status by the Department of Real Estate (DRE). [CC §2079.26(c)]
When an unsolicited offer is made by a buyer, the Attorney General, county counsel, city attorney, or district attorney may bring a civil action against the buyer. [CC §2079.26(d)]
Related laws:
Mortgage forbearance for homeowners affected by 2025 wildfires
