Legislative Gossip Years: 2009 / 2010 / 2011 / 2012 / 2013
Last Updated: December 23, 2010
Here’s a list of the 2010 Legislative Session’s bills and Department of Real Estate Regulations which may substantially affect how you do business as a real estate licensee. Bills are sorted by topic, and we provide you with the bill number, the status, and a brief description of the bill. Reports on passed bills can be found on our Legislative Watch page. This list is updated every two weeks.
Status Legend:
INTRO = Date the bill was originally introduced for consideration. Bill is still being considered, but not yet law.
AMENDED = Date the bill was last amended. Bill is still being considered, but not yet law.
ENROLLED = Bill approved by both houses and pending the governor’s signature.
PASSED = Bill signed by the governor and passed into law.
| Common interest developments (CIDs) | ||
| AB 1793 | ENROLLED 08/20/10 | This bill would make unenforceable any provision in a CID’s CC&Rs that prohibits the use of artificial turf or synthetic grass. |
| AB 1927 | ENROLLED 08/19/10 | This bill would require, after January 1, 2011, any prohibition of a rental or lease of separate interest in a CID contained in that CID’s governing document initially recorded on or after January 2, 2011 be approved by at least 2/3 of all the owners of separate interests in the CID. |
| AB 2016 | PASSED 08/13/10 | This bill would clarify that a CID requesting notification that a notice of default (NOD) has been filed on any individual interests in the CID does not constitute a request for a document that transfers or encumbers that separate interest. |
| Department of Real Estate and Licensing | ||
| DRE Reg “Appraisal Influence” | INTRO 08/13/10 | This proposed regulation would add the existing list of activities which constitute improper appraisal influence into the DRE Regulations, and adds additional activities which are considered improper appraisal influence to the existing, non-exclusive activities. |
| DRE Reg “Broker Supervision” | INTRO 08/13/10 | This proposed regulation would clarify a broker’s duty to have direct supervision over the activities of his agents. It specifies how and to whom delegation of a broker’s supervisory activities may be made. Editor’s note — individuals prohibited from participating in real estate activities are now ‘debarred’. Does this lift the real estate industry to that of the legal industry…? |
| DRE Reg “Good Standing” | INTRO 08/13/10 | This proposed regulation would redefine a license in “good standing” as one which has never been suspended, revoked or restricted as a result of disciplinary action. Licenses which expire but are renewed within the statutory grace period would still be considered in “good standing”. |
| DRE Reg “Trust Funds” | INTRO 08/13/10 | This proposed regulation would clarify trust fund activities which violate the fiduciary duties a broker owes to a client. |
| SB 1137 | PASSED 09/24/10 | This bill would make it a crime for any person to act as a mortgage loan originator without the required endorsement. It would also prohibit a real estate broker from compensating an un-endorsed person for mortgage origination activities which require an endorsement. This bill would give the DRE commissioner the ability to suspend, revoke or deny a license based on a violation of endorsement law. |
| AB 2257 | AMENDED 04/06/10 | This bill would transfer authority over real estate appraisers to the Department of Real Estate (DRE), and transfer from the DRE to the Division of Corporations (DOC) regulation of residential real estate financial services. If passed, this bill would go into effect July 1, 2012. |
| Disclosures | ||
| SB 183 | PASSED 05/07/10 | This bill would change the Transfer Disclosure Statement (TDS) to include a seller certification that the smoke detector and water heather be in compliance with state laws by the end of escrow, and add a disclosure regarding carbon monoxide devices. |
| Fair housing | ||
| AB 1680 | ENROLLED 08/25/10 | This bill would require enforcement of a waiver of an individual’s civil rights to be contingent on proof that the waiver was made knowingly and voluntarily and not as a condition of a contract. |
| Energy | ||
| AB 1705 | AMENDED 03/11/10 | This bill would exclude from gross income any grant received under the American Recovery and Reinvestment Act for the installation of alternative energy properties as specified (e.g., solar panels). |
| AB 2014 | AMENDED 05/18/10 | This bill would, from the taxable year beginning January 1, 2010 and ending January 1, 2014, provide a tax credit for houses that are brought into compliance with certain energy efficiency standards. |
| Fees | ||
| AB 1762 | PASSED 07/15/10 | This bill would redefine the term “advance fee” to mean a fee regardless of form that is claimed for services requiring a license. The exceptions to this definition now include money claimed for advertising the sale, lease, investment in or exchange of real property, or money earned under stand-alone real estate services. |
| SB 858 | PASSED 10/15/10 | This bill would clarify the method of calculating the annual fees due to the Franchise Tax Board (FTB) by an LLC with income both in California and in other states or countries. |
| Home inspections | ||
| AB 1809 | PASSED 09/29/10 | This bill would authorize a home inspection to include a Home Energy Rating Systems energy audit at the request of the consumer requesting the inspection. |
| Insurance | ||
| AB 2291 | INTRO 02/18/10 | This bill would require a lender collecting insurance proceeds for repairing or rebuilding a damaged one-to-four unit residential property pay at least 2% interest on the amount the lender receives in advance. |
| Landlords and tenants | ||
| AB 505 | AMENDED 01/04/10 | This bill would prohibit a registered sex offender from living in a multi-family housing unit, motel or hotel in which there resides another registered sex offender, unless they are related by blood, marriage or domestic partnership. |
| AB 1800 | PASSED 09/30/10 | This bill would increase the penalties for the wrongful claim of ownership of residential property for the purposes of renting the property to another party without the owner’s consent. |
| SB 1149 | PASSED 09/30/10 | This bill would require, until January 1, 2013, a notice to quit given to a tenant within one year of the foreclosure sale of the property be accompanied by a separate notice setting forth the tenant’s rights. |
| Mortgages: general, defaults, foreclosures and loan modifications | ||
| AB 1639 | AMENDED 05/28/10 | This bill would establish a Facilitated Mediated Mortgage Workout (MMW) program to enable defaulting borrowers to mediate loan modification with lenders. This program is subject to federal funding and, if effected, only last until January 1, 2014. |
| AB 2024 | AMENDED 03/24/10 | This bill would require any lender who rejects a loan modification request to send within seven days a notification to the requesting borrower stating the reason for the rejection. |
| AB 2236 | INTRO 02/18/10 | This bill would require a lender sending a borrower a notice that the borrower has failed to make the required minimum mortgage payment to include the contact information of the entity who has the authority to approve a loan modification for that borrower. |
| AB 2189 | AMENDED04/06/10 | This bill would require any loan modification agreement be translated into Spanish, Chinese, Tagalog, Vietnamese or Korean if it was primarily negotiated in that respective language. |
| AB 2325 | PASSED 09/30/10 | This bill would require foreclosure consultants to provide an audit of obligations secured by liens on a residence in foreclosure, and to register with the Department of Justice to perform such audits. |
| AB 2653 | AMENDED 04/08/10 | This bill would allow borrowers to know the price paid for sale of their mortgage, and would apply to any properties purchased on or after January 1, 2005. |
| AB 2678 | AMENDED 03/23/10 | This bill would require that if a trustee’s sale is postponed, a new notice of trustee’s sale must be sent out to the borrower before the trustee’s sale can take place. |
| SB 931 | PASSED 09/30/10 | This bill would provide antideficiency protection for first trust deeds on short sales of “the dwelling”, regardless of recourse or nonrecourse status. Editor’s note — This bill needs to clarify the meaning of the word “dwelling.” |
| SB 1000 | AMENDED 04/27/10 | This bill would allow a borrower to request a lender to transfer a residential property appraisal prepared for the borrower in conjunction with a loan application to a different lender. |
| SB 1221 | PASSED 08/23/10 | This bill would allow a mortgage trustee to file a notice of sale up to five days prior to the lapse of the 3-month period has passed, provided the date of the sale is no earlier than three months and 20 days after the filing of the notice of default. |
| SB 1275*, SBX8 38, SBX 8 39 | AMENDED 08/16/10* | This bill would require, until January 1, 2013, any entity filing an NOD to provide the defaulting borrower with an application for a loan modification and other foreclosure-avoidance options. Additionally, this bill would delete the current foreclosure-avoidance declaration from the NOD and make it a separate, recordable form attesting to full compliance with NOD disclosures. |
| SB 1427 | PASSED 09/29/10 | This bill would require specified government entities to notify the owner of a property of the failure to maintain a property and provide a chance for the owner to remedy the failure before issuing fines for failing to maintain property. |
| Taxation: general, tax credits, discharge of indebtedness | ||
| SB 1316 | AMENDED 08/17/10 | This bill would tax any like-kind property exchanges where the property replacing a California property is located out of state. If enacted, this bill would go into effect for all exchanges occurring on or after January 1, 2011 and before January 1, 2012. |
| AB 1779, ABX6 7, SB 97, SB 401*,SBX6 14, SBX8 25, SBX8 32 | PASSED 4/12/2010* | This bill would extend the favorable tax reporting on discharge of indebtedness in relation to mortgage debt forgiveness through January 1, 2013. This bill would make other changes to conform other state laws to existing federal laws. |
| AB 1806 | AMENDED 03/25/10 | This bill would allow a surviving spouse to exclude a full $500,000 of taxable profit from the gain on the sale of a principal residence, provided the deceased spouse was eligible for his/her exclusion at the time of death, and the sale takes place no later than two years from the date of the death. |
| AB 2038 | AMENDED 04/27/10 | This bill would, beginning January 1, 2012 and through January 1, 2016, allow the DRE to suspend, revoke or deny a license to an individual for failure to pay income taxes. |
| AB 2126 | AMENDED 05/18/10 | This bill would, on or after January 1, 2011, reduce the minimum franchise tax due for the first ten years of the existence of any corporations, limited liability companies (LLCs) or limited liability partnership (LLPs), provided the entity first commenced business on or after January 1, 2011 and before January 1, 2016. |
| AB 2458 | ENROLLED 08/30/10 | This bill would, on or after January 1, 2011, require limited liability companies (LLCs) that underpay their annual fees to pay the necessary penalties within 60 days of the notification of the underpayment. |
| AB 2492 | AMENDED 05/18/10 | This bill would require a property value reassessment be completed on any property owned by a corporation, partnership or LLC when 100% of the ownership of the corporation, partnership or LLC is sold or transferred in a single transaction,. This bill would further require the newly controlling entity to file a change of ownership form with the SBOE, and increase the penalty for failing to file such a form from 10% to 20% of the applicable taxes. |
| AB 2735 | INTRO 02/19/10 | This bill would, until January 1, 2021, except the transfer of real property from a deceased cotenant to another cotenant does not constitute a change of ownership for property taxation purposes. |
| AB 183*, ABX6 5, ABX8 34, SBX6 4, SBX8 21 | PASSED 03/25/2010* | This bill would create a tax credit of the lesser of $10,000 or 5% of the purchase price of a new property (or an existing property, provided the buyer is a first-time homebuyer) in California made between May 1, 2010 and December 31, 2010. This bill is part of the governor’s California Jobs Initiative. More information can be found on Governor Schwarzenegger’s website. |
| SB 913, SBX6 3 | INTRO 02/08/10 | This bill would extend the existing $10,000 or 5% of the purchase price tax credit for the purchase of a new or existing primary residence up to an aggregate credit of $100,000,000, from the date of passage to July 1, 2010. Additionally, once that tax credit has been depleted, this bill would create a new tax credit of $10,000 or 5% of the purchase price of purchase of a new primary residence up to an aggregate credit of $200,000,000, from the date of the first credit’s expiration to January 1, 2011. This bill is part of the governor’s California Jobs Initiative. More information can be found on Governor Schwarzenegger’s website. |
| SB 1244 | PASSED 09/29/10 | This bill would require an LLC filing taxes as an “S” corporation to make withholdings on compensation paid to any member of the LLC who files a federal income tax return. This bill would not apply to LLCs filing taxes as partnerships. |
| SB 1415, SCA 31 | INTRO 05/03/10 | This bill would, on and after January 1, 2011, allow an individual who is over the age of 65 to transfer their base year value in a property to a replacement dwelling in another county without requiring a county ordinance providing for the transfer. |
| SB 1416 | INTRO 02/19/10 | This bill would, on and after taxable years beginning January 1, 2010, allow an individual who is over the age of 65 to sell his principal residence without including any profit on the sale in his gross income. |
| SBX6 10 | AMENDED 05/05/10 | This bill would, on and after taxable years beginning January 1, 2013 and before January 1, 2016, only 50% of any net capital gains for capital assets purchased on or after January 1, 2013 will be taxed. |
| Title | ||
| AB 1684 | PASSED 07/09/10 | This bill would require a person claiming title through adverse possession to provide records certified by the county tax collector to prove payment of property taxes. |
| Title and escrow companies | ||
| AB 1720 | AMENDED 06/03/10 | This bill would require the seller provide the buyer with a disclosure of the Buyer’s Choice Act, which prohibits a seller from requiring a buyer to use the services of any particular title or escrow company. It would also extend the Buyer’s Choice Act to short sales. |
