The following is a partial list of real estate related statutes which became effective on January 1, 2007, unless otherwise noted.
Alternative FTB withholding of reportable profits on a sale
Amended by AB 2962:
Revenue and Taxation Code §18662
On a sale of California real estate by an individual, the buyer, including an intermediary in a 1031 transaction, is required to withhold an amount equal to 3 1/3% of the sales price. Now, the seller may certify an alternate amount as his taxable profit (gain) on the sale. The reporting and withholding is handled by escrow using real estate withholding Form 593-B provided by the Franchise Tax Board (FTB). When the seller certifieds an alternate amount on FTB Form 395-B, the escrow, on behalf of the buyer, is required to withhold 9.3% of the seller’s taxable profit on the sale as calculated and certified by the seller on FTB Form 593-E.
The FTB provides an electronic means on its website for the seller to calculate the taxable profit on his sale (FTB 593-E).
Value transfer for property damaged in a disaster
Amended by AB 1890:
Revenue and Taxation Code §69
The base year assessed value of property which has been substantially damaged or destroyed by a disaster on or after July 1, 2003 may, within five years of the disaster, be transferred to comparably used and valued property constructed or acquired within the same county, and be the replacement property’s base year assessed value as the 2003 – 2004 fiscal year.
The prior law applied to any comparable property acquired or constructed to replace property substantially damaged or destroyed by a disaster occurring on or after October 20, 1991, setting base year assessed value as the 1991 – 1992 fiscal year.
A disaster is any misfortune in an area declared by the Governor to be in a state of disaster as a result of the misfortune.
A property is a considered substantially damaged or destroyed if a disaster reduces the property’s cash value by more than 50 percent. Decreased property value resulting from restricted access to the property is considered property damage.
A replacement property is considered comparable if it performs the same function as the damaged property and does not exceed the damaged property’s cash value prior to the disaster by more than 120 percent.
Residential notice to vacate, 30 or 60 days
Added by AB 1169:
Civil Code §1946.1
Periodic residential tenancies, called unspecified-term leases, are automatically extended for the same period unless the landlord or the tenant provides the other with a written notice to vacate, called termination of the tenancy.
When a residential landlord serves a written notice to vacate on a tenant, the notice must be served at least:
- 60 days prior to the date the periodic tenancy is to terminate, if the tenant has resided in the unit one year or more; or
- 30 days prior to the date the periodic tenancy is to terminate, if the tenant has resided in the unit less than one year.
When a residential tenant under a periodic tenancy serves a written notice of his intention to vacate on the landlord, the notice must be served at least one tenancy (rent payment) period in length prior to the date the periodic tenancy is terminated and the tenant intends to vacate, for example 30 days under a month-to-month rental agreement.
Until December 31, 2009, should the landlord of a single family dwelling, condominium unit, or other residential parcel occupied by a tenant on a periodic tenancy, enter into a purchase agreement and escrow instructions to sell the parcel to a buyer who intends to occupy the property for at least one year following the termination of the occupant’s tenancy, the landlord may terminate the periodic tenancy by serving a 30-day written notice to vacate and the tenant must vacate on expiration of the notice, if:
- the escrow is with a licensed escrow agent or a licensed real estate broker; and
- the notice to vacate is given within 120 days after escrow is opened.
On the termination of the tenant’s occupancy due to a sale of the dwelling to a buyer-occupant, the tenant retains the right to serve the landlord with a notice to vacate as allowed by his periodic tenancy.