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For a total list of all the real-estate laws digested by first tuesday for the 2007-2008 legislative session, click here.

08/31/09: Corrections have been made to withholding rates under AB 3078, and are represented in blue.  One item has also been added.

Reported by Nick Love:

Prohibition on Eminent Domain Takings of Owner-Occupied Housing

California Constitution, Section 19 Article I
Amended by Proposition 99
Effective: January 1, 2009

Owner-occupied housing is now protected from eminent domain abuse.

The taking of owner-occupied housing through the use of eminent domain with the purpose of transferring the property to another private owner is prohibited.

State and local governments are prohibited from using eminent domain to acquire an owner-occupied residence except when doing so:

  • to protect public health and safety; or
  • to construct a public work or improvement.

Reported by Ai M. Kelley:

Wildfire defensible space redefined

Government Code §51177
Amended by SB 1595
Effective January 1, 2009

The definitions used in regards to defending against wildfires in Very High Fire Hazard Severity zones are as follows:

Defensible space is the area around a structure or dwelling where wildfire prevention/protection practices are implemented by the owner to defend against approaching wildfires or to minimize the spread of a structure fire to wildlands or surrounding areas.

Fuel includes any combustible material, especially petroleum-based products and wildland fuels.

Fuel management is the practice of controlling flammability and reducing resistance to control of fuels through mechanical, chemical, biological and manual means, or by the setting of controlled fires.

A single specimen tree is a live tree that stands alone and clear of buildings, structures, combustible vegetation, or other trees that does not readily transmit fire from vegetation to the occupied dwelling or structure or from the occupied dwelling or structure to the vegetation.

Vegetation includes all perennial and annual plants, including trees, shrubs, and grass.

Very high fire hazard severity zone includes any area designated by the Director of Forestry and Fire Protection which is not a state responsibility area.

Wildfire is an unplanned, unwanted wildland fire, including those caused by unauthorized individuals, escaped wildland fire use events, escaped prescribed fire projects, and all other wildland fires where the objective is to extinguish another fire.

Government Code §51178
Amended by SB 1595
Effective January 1, 2009

Very high fire hazard severity zones are areas identified based on fuel loading, slope, fire weather, and other relevant factors.

Other relevant factors now includes whether an area has been identified by the Department of Forestry and Fire Protection as prone to Santa Ana, Mono, or Diablo winds, a major cause of spreading wildfires.

Government Code §51182
Amended by SB 1595
Effective January 1, 2009

A person who owns, leases, controls, operates, or maintains an occupied dwelling or structure in or next to any mountains, forests, or brush/grass/flammable material covered land, which is within a very high fire hazard severity zone used to need to maintain a defensible space of at least 30 feet.

Now, the defensible space must be at least 100 feet from each side of the structure, but not beyond the property line unless allowed or required by state or local laws.

Clearance beyond the property line will not be required unless state or local laws find that it is necessary in order to significantly reduce the risk of setting the structure on fire and there is no other feasible mitigation measure possible. Clearance on adjacent property can only occur once written consent of the owner of the adjacent property is obtained.

An insurance company that insures an occupied dwelling or structure can also require more than a 100-foot clearance, but not beyond the property line, if a fire expert designated by the fire chief or fire official with jurisdiction provides findings that the extra clearance is necessary and there is no other feasible mitigation measure possible.

Fuels must be maintained in a condition so that a wildfire burning under average weather conditions would be unlikely to ignite the structure.

Adjacent and overhanging trees, shrubs, and other plants must be maintained free of dead or dying wood.

The most intense fuel management should occur within the first 30 feet around the structure. Steps should also be taken to minimize erosion.

The Department of Forestry and Fire Protection website will post a guidance document on fuels management with suggestions on regionally appropriate vegetation management which will preserve and restore native species, minimize erosion and water consumption, and permit trees near homes for shade, aesthetics, and habitat; and suggestions on how to minimize or eliminate the risk of flammability of non-vegetative sources of combustion such as woodpiles, propane tanks, wood decks, and lawn furniture.

Public Resources Code §4202
Amended by SB 1595
Effective January 1, 2009

The Director of Forestry and Fire Protection will classify lands within a state responsibility area into fire hazard severity zones. Each zone will be comprised of like land and be based on fuel loading, slope, and fire weather.

The classified zones will now also take into account whether the area is prone to winds which have been identified by the Department of Forestry and Fire Protection as a major cause of wildfire spread.

Public Resources Code §4291
Amended by SB 1595
Effective January 1, 2009

A person who owns, leases, controls, operates, or maintains a building or structure in or next to any mountains, forests, or brush/grass/flammable material covered land, which is within a state responsibility area used to have to maintain a defensible space of at least 30 feet.

Now the defensible space must be at least 100 feet from each side of the structure, but not beyond the property line unless allowed or required by state or local laws.

Clearance beyond the property line will not be required unless state or local laws find that it is necessary in order to significantly reduce the risk of setting the structure on fire and there is no other feasible mitigation measure possible. Clearance on adjacent property can only occur once written consent of the owner of the adjacent property is obtained.

An insurance company that insures an occupied dwelling or structure can also require more than a 100-foot clearance, but not beyond the property line, if a fire expert designated by the fire chief or fire official with jurisdiction provides findings that the extra clearance is necessary and there is no other feasible mitigation measure possible.

Fuels must be maintained in a condition so that a wildfire burning under average weather conditions would be unlikely to ignite the structure.

Adjacent and overhanging trees, shrubs, and other plants must be maintained free of dead or dying wood.

The most intense fuel management should occur within the first 30 feet around the structure. Steps should also be taken to minimize erosion.

The Department of Forestry and Fire Protection website will post a guidance document on fuels management with suggestions on regionally appropriate vegetation management which will preserve and restore native species, minimize erosion and water consumption, and permit trees near homes for shade, aesthetics, and habitat; and suggestions on how to minimize or eliminate the risk of flammability of non-vegetative sources of combustion such as woodpiles, propane tanks, wood decks, and lawn furniture.



Reported by Anthony Renaud:

Business and Professions Code §10474
Amended by AB 2454
Effective January 1, 2009

DRE Recovery Fund limits raised for claims against real estate licensees

The limits on payments from the Real Estate Recovery Fund have been raised from $20,000 to $50,000 for any one transaction and from $100,000 to $250,000 for any one licensee.

Withholding requirements on a sale of real estate by out-of-state entities
Civil Code § 18662
Added by AB 3078
Effective January 1, 2009

On the sale of California real estate by an out of state partnership, the profit tax withheld and forwarded to the Franchise Tax Board is now 3 1/3% of the sales price, or 9.55% of profit on the sale.

On the sale of California real estate by an out-of-state “S corporation,” the elective withholding rate has been raised from 1.5% to 11.05%, or 13.05% of the reportable profit on the sale, as applied to the amount taxed.

Out of state corporations selling California real estate are now subject to the buyer withholding the tax from each payment on the installment sale and sending the tax to the Franchise Tax Board.

Out of state entities liable for misrepresenting residency
Civil Code § 18668
Amended by AB 3078
Effective January 1, 2009

Out of state Corporations and partnerships making false written statements about their presence in the state to avoid withholding tax on the sale of California real estate are now guilty of perjury.

Changes to the allocation of low-income housing tax credits to partnerships
Revenue and Taxation Codes § 12206, §17058 and § 23610.5
Added by SB 585
Effective immediately, until January 1, 2016

State tax credits for partnerships owning low-income housing projects are now distributed to partners according to allocations in the partnership agreements instead of distributing the tax credits according to federal low income housing credit allocation.

Farm worker housing is now exempt from requirements placed on residential low-income housing projects, allocating credits specifically for farm worker housing. The following ceilings for low-income housing tax credits for farm worker housing have been added:

  • $500,000 per calendar year; or
  • the unexhausted amount of any unallocated or returned credits.

However, if the housing project owned by the partnership qualifies as farm worker housing the partnership will not receive a preliminary reservation of state low-income housing tax credits unless it also receives a preliminary reservation of federal low-income housing tax credits.

Increased extension periods for approved map expiration
Government Code § 66452.6 and § 66453.6
Amended by SB 1185:
Effective immediately, until January 1, 2016

The length of time a subdivider or developer may extend an approved or tentatively approved map for a development or subdivision has been increased from five years to six years from the date of the map’s original expiration date.

Determining approved map expiration date
Civil Code § 66452.21
Added by SB 1185:
Effective immediately, until January 1, 2016

Any approved tentative or vesting tentative subdivision map or parcel map that expires after January 1, 2009 and before January 1, 2011 is extended by 12 months, in addition to the six-year extension allowed by this legislation.

Fee increase for recording real estate documents
Government Code § 27388
Amended by SB 1396:
Effective September 27, 2008

The fee counties may charge for recording a real estate instrument has been raised from $2 to $3.

In addition, the definition of a real estate instrument now includes any:

  • notice of default;
  • substitution of trustee;
  • notice of trustee sale; and
  • notice of rescission of notice of default.


Reported by Bradley Markano:

Business and Professions Code §10140.6
Amended by SB 1461
Effective: July 1, 2009

Disclosure of Real Estate License identification number

Real estate brokers and agents must now disclose their license ID numbers on:

  • real estate purchase agreements when acting as an agent; and
  • any solicitation material designed to be the first point of contact with consumers or designed to create a professional relationship between a licensee and a customer, including:
  • business cards;
  • stationery;
  • advertising flyers; and
  • all other advertisements, other than print/electronic media and “for sale” signs.

The DRE will likely issue regulations prior to July 2009, identifying other materials used by brokers or agents which must contain the license identification number. Brokers and their agents have until July 2009 to finish implementing the disclosure of their license identification numbers in purchase agreements and solicitations.

first tuesday has updated Forms 102, 103, 104, 110, 111, 112, 150, 151, 152, 153, 154, 155, 156, 158, 159, 160, 161, 161-1, 164, 167, 171, 185, 237, 241, 242, 426, 556, and 590 to reflect these changes.

Civil Code § 798.29.6 & 799.11
Added by SB 1107
Effective: January 1, 2009

Allowance for installation of accommodations for the disabled in mobilehome parks

A mobilehome park may not prohibit a resident from installing ramps, handrails, or any other accommodations for the disabled, as long as the required permits are obtained and the installations comply with code. The management may require the accommodations be removed under written agreement when the mobilehome is removed from the park.

Civil Code § 798.34 & 799.9
Amended by SB 1107
Effective: January 1, 2009

Restriction on fees for live-in caregivers in mobilehome parks

A mobilehome park is prohibited from charging a homeowner of any age a fee for sharing his home with any individual over 18 years old if that individual is providing live-in health care or live-in supportive care to the homeowner in accordance with a written treatment plan prepared by a physician and surgeon.

Government Code § 65863
Amended by AB 2069
Effective: January 1, 2009

Limitations on lowering housing density

Cities and counties may not reduce residential density for any parcel of land, or allow development of any parcel at lower residential density, unless they present written findings supported by substantial evidence.

“Lower residential density” for a city or county which has adopted a housing element for the current planning period means:

  • fewer residentially zoned units available on the site than originally projected by the housing element inventory; or
  • fewer units developed than originally projected by the housing element program.

“Lower residential density” for a city or county which has not within 90 days of the housing element deadline adopted a housing element for the current planning period, or if the adopted housing element has not been brought into compliance within 180 days of the housing element deadline, means:

  • “lower residential density” for residentially zoned sites is a density lower than 80% of the maximum allowable residential density.
  • “lower residential density” for sites on which both residential and nonresidential uses are permitted is a density of less than 80% of the number of residential units allowed under the maximum residential density for the site.

Business and Professions Code § 10139
Amended by SB 1448
Effective: January 1, 2009

Fines increased for unlicensed persons acting as agents or brokers

Fines for unlicensed individuals or corporations acting or advertising as real estate brokers or salespersons have been increased. The fine for an individual has been raised from $10,000 to $20,000. The fine for a corporation has been increased from $50,000 to $60,000. To induce counties to set up a Real Estate Fraud Prosecution Trust Fund, any fine over $10,000 for individuals, or $50,000 for corporations, paid by a perpetrator who is convicted within the county is to be deposited in that county’s Fund.

Civil Code § 798.26
Amended by SB 1234
Effective: January 1, 2009

Mobilehome park management is prohibited from entering accessory structures

In addition to the mobilehome itself, the owner or manager of a mobilehome park is prohibited from entering any enclosed accessory structure without the prior written consent of the resident (unless the structure has been abandoned; or in the case of an emergency).

Civil Code §1632
Amended by AB 180
Effective: July 1, 2009

Foreclosure consulting contracts to be provided in translation

Foreclosure consulting contracts used by registered foreclosure consultants have been added to the list of documents which must be translated into the language used in negotiations between contracting parties.

Civil Code §2945.2
Amended by AB 180
Effective: July 1, 2009

Foreclosure consultant contracts may be cancelled within five days

The time period in which a homeowner may cancel a foreclosure consulting contract with a registered foreclosure consultant has been extended from three to five days of signing. Cancellation can be accomplished by written notice to the foreclosure consultant, sent by mail, e-mail, or fax. If given by fax or e-mail, the notice of cancellation takes effect once it has been transmitted.

Civil Code §2945.3
Amended by AB 180
Effective: July 1, 2009

Foreclosure consulting contracts to be provided in translation

A foreclosure consultant must provide a homeowner a completed contract in the language used in negotiations before the owner signs the foreclosure consulting contract. If English is the principal language used, the foreclosure consultant is required to notify the homeowner orally and in writing that he has the right to request a copy of the contract in another language.

The first page of the foreclosure consulting contract must now also include the e-mail address and fax number of the foreclosure consultant, to be used in case of cancellation. The contract must also be amended to permit the property owner to cancel the transaction within five days, rather than three.

Civil Code §2945.4
Amended by AB 180
Effective: July 1, 2009

Foreclosure consultants may not arrange for the release of surplus funds from a trustee’s sale

Foreclosure consultants are now prohibited from assisting owners in arranging the release of surplus funds from a trustee’s sale at any time for any form of compensation.

Civil Code §2945.45
Added by AB 180
Effective: July 1, 2009

Foreclosure consultants not subject to bonding and registration

In order to be a foreclosure consultant, an individual must:

  • obtain a surety bond of $100,000 in favor of the state of California for the benefit of homeowners for damages caused by the foreclosure consultant’s violation of any applicable laws. One copy must be filed with the Secretary of State, and a second copy must be provided to the DOJ; and,
  • register with the Department of Justice(DOJ) by submitting the required fees and a completed registration form, which includes:
  • all names, addresses, telephone numbers, web sites, and e-mail addresses which will be used in connection with foreclosure consultant activities;
  • a statement that the person has not been convicted of any crime, or subject to a criminal judgment for misrepresentation, dishonesty, or a violation of the requirements;
  • copies of all print and electronic advertising material and scripts of all telephone or broadcast advertising to be used in connection foreclosure consultant activities; and,
  • a copy of the required surety bond.

All fees paid to the DOJ by individuals registering as foreclosure consultants will be deposited in a Foreclosure Consultant Regulation Fund in the State Treasury in order to fund the registration program.

The DOJ has the power to deny or revoke a certificate of registration if:

  • there is any misstatement on the registration form;
  • the consultant has violated a law;
  • the consultant has failed to maintain the required bond; or
  • the consultant has violated the foreclosure consultant law.

Any individual who acts as a foreclosure consultant without meeting the above requirements will be punished for each violation by:

  • a fine of $1,000 to $25,000;
  • imprisonment in the county jail for up to a year; or,
  • both fine and imprisonment.

Civil Code §1367.6
Added by AB 2846
Effective Date: January 1, 2009

Owner in a CID pays disputed charge to file small claims action against a HOA

The owner of a unit in a community interest development (CID) who disputes a charge levied by a homeowners’ association (HOA) may pay the charge under protest and initiate a small claims action against the HOA to resolve the dispute.

Civil Code § 1365.1
Amended by AB 2846
Effective Date: January 1, 2009

HOA must notify members of small claims action provision

HOAs must include in their annual notice of assessments and foreclosures the option for owners of units in a CID to pay disputed assessments under protest and file a small claims action to resolve the dispute.

Revenue and Taxation Code §73
Amended by AB 1451
Effective: Immediately
Property Tax exclusion for solar energy systems in new construction

An owner-builder who incorporates an active solar energy system in the initial construction of a new building that he intends to sell or lease is eligible for an exclusion on taxes calculated by “newly constructed” property. On a sale to an initial purchaser of the new building, the purchaser is entitled to the property tax exclusion for the value of the solar energy system if the owner-builder has not already received it, as long as the initial purchaser buys the building before it becomes subject to reassessment as a new construction.

To claim the solar energy system exclusion, the initial purchaser of the building must:

  • file a claim with the assessor and provide any documents necessary to identify the value of the solar energy system; and
  • identify the amount of any rebate for the solar energy system provided to the owner-builder or the initial purchaser by any state agency.

The reassessment of the property’s value for new construction will be reduced by the difference between:

  • the value of the solar energy system; and
  • the total amount of all solar energy system rebates received by the owner-builder or the initial purchaser.

The property tax exclusion for solar energy systems held by the owner-builder or initial purchaser expires upon a change in ownership.

These actions go into effect upon the lien date for the 08-09 fiscal year and are repealed on January 1, 2017.

Revenue and Taxation Code §74.5
Amended by SB 111
Effective: Immediately

Property tax exclusions for earthquake mitigation construction

The property tax on “newly constructed” property now excludes seismic retrofitting components, including:

  • improvements designed to mitigate the effect of an earthquake; and
  • improvements which use earthquake hazard mitigation technologies.

Additionally, structures constructed with unreinforced masonry bearing walls in order to comply with local earthquake safety ordinances were previously entitled to a 15-year “new construction” property tax exclusion. Property already receiving this exclusion is now entitled to continue the exclusion after the end of the 15-year period, until a change of ownership occurs.

Financial Code §22159.5 and §50307.1
Added by AB 69
Effective: January 1, 2009

Loan servicing information to be collected by Department of Corporations

The Commissioner of Corporations now has the authority to require licensed finance lenders, finance brokers, residential mortgage lenders and loan servicers to provide reports regarding their residential mortgage loan servicing activities, including:

  • receiving more than three installment payments of principal, interest, or other amounts on a mortgage; and
  • performing services relating to those payments on behalf of the lender.

The commissioner may also survey and acquire information voluntarily supplied by residential mortgage loan servicers not subject to his jurisdiction. Survey results will be posted on the department’s website, including the number of servicers submitting data and the approximate percentage of outstanding mortgage loans in California serviced by persons other than the lender.

Civil Code §714
Amended by AB 2180
Effective: September 28, 2008

HOA written approval or denial of solar energy applications within 60 days

Homeowners’ associations (HOAS) approving the installation or use of solar energy systems must now provide approval or denial in writing.

If no written denial is issued within 60 days of receipt by the HOA, a solar energy application is to be considered approved, unless the delay is due to a reasonable request for more information.

Civil Code §714
Amended by AB 2180
Effective: September 28, 2008

Common interest developments can not place restrictions on solar energy systems

Any provision in the governing documents of a common interest development (CID) that limits the installation of a solar energy system is void and unenforceable. Reasonable restrictions which do not significantly increase the cost or reduce the efficiency of installations remain unaffected.

Civil Code §1946.7
Added by AB 2052
Effective: Immediately

Tenant May Terminate a Lease due to Sexual Assault, Stalking, or Domestic Violence

A residential tenant who has been, or whose family member has been, the victim of sexual assault, stalking, or domestic violence may terminate his tenancy by delivering to his landlord a written 30 day notice to vacate (Form 572) with an attached copy of one of the following documents relating to the sexual assault, stalking, or domestic violence:

  • a temporary restraining order;
  • an emergency protective order; or
  • a police report.

The notice must be delivered to the landlord within 60 days of the document’s date of issuance. Rent is owed for the 30 day period after delivery of written notice to vacate. On expiration of the 30 day period, the tenant can not be penalized for ceasing to pay rent.

If the tenant quits the premises within 30 days after delivering the notice to vacate and the premises is rented to another party who takes possession within the 30 day period, the rent due for that period is to be prorated.

No tenants other than the victim and any family members living in the household are relieved of their obligations under the rental agreement.

Civil Code §1161
Amended by AB 2052
Effective: Immediately

Sexual assault, stalking, domestic violence within the household of a tenant is a nuisance

If a tenant commits an act of sexual assault, stalking, or domestic violence against another person in the household, causing the victim or the victim’s other family members to leave the premises, the person committing the act is presumed to have committed a nuisance and is subject to removal on a three-day notice to quit (Form 577) by detainer action. This aspect of the law expires January 1, 2012, unless previously deleted or extended.

Public Resources Code § 25981
Amended by SB 1399
Effective: January 1, 2009

Definition of “solar collector”

A “solar collector” is now a fixed device or structure on the roof of a building used to transform solar energy into electrical, thermal, or chemical energy.

A solar collector does not include a solar collection device intended to generate more than the electrical demand of the building.

As an alternative location, a solar collector may be installed on the ground if inappropriate roofing material, the slope of the roof, structural shading, or the orientation of the building prevents it from being installed on the roof.

A solar collector must comply with local building and setback regulations, and be located at least five feet from the property line and ten feet above the ground. A solar collector can only be lower than ten feet if it is at least twenty feet from the property line.

Public Resources Code § 25982.1
Added by SB 1399
Effective: January 1, 2009

Notification of solar collector installation to be sent to affected parties

An owner intending to install a solar collector may choose to give notification of his intention through certified mail to all potentially affected property owners. If sent, the notice is to be mailed within 60 days before the installation of the solar collector.

After sending the above solar shade control notice, if the installation date is later than the date specified in the notice, the owner must send a second notice, correcting the date, to everyone who received the first notice.

The seller of property who received a solar shade control notice from a neighbor may give a copy of the notice to any buyer who acquires the property.

The seller of the property with a solar collector who sent neighbors a solar shade control notice may voluntarily provide a list of all individuals receiving the notice to any buyer who acquires the property.

To see the new first tuesday Form 322: Solar Shade Control Notice, click here.

first tuesday has updated Forms 102, 150, 151, 152, 153, 154, 155, 156, 156-1, 157, 158, 159, 164, 167, 171, and 185 to reflect these changes.

Public Resources Code § 25983
Added by SB 1399
Effective: January 1, 2009

Trees shading solar collectors are private nuisances

A tree or shrub that shades more than 10% of a solar energy collector between 10:00 a.m. and 2:00 p.m. is a private nuisance if the owner of the offending tree or shrub fails to conform the tree or shrub to the solar collector law after receiving a written notice from the owner of the solar collector.

Public Resources Code § 25984
Amended by SB 1399
Effective: January 1, 2009

Plants subject to solar collector regulation

Solar collector rules for plants which shade the solar panels do not apply to:

  • a tree or shrub planted before the installation of the solar collector;
  • the replacement of a tree that had been growing prior to the installation of the solar collector and was removed after the collector’s installation for the protection of public health, safety, or the environment; or
  • any tree or shrub that is subject to a city or county ordinance.

Public Resources Code § 25985
Amended by SB 1399
Effective: January 1, 2009

Priority of city and county ordinances in solar plant regulations

A city or county ordinance specifying requirements for tree preservation or solar shade control has priority over the state solar collector rules for plants which shade solar panels.