There are several new California real estate laws aimed at protecting renters and new homeowners that go into effect in 2024.

The new laws were laid out for the San Diego Association of Realtors event Friday at the Hyatt Regency La Jolla.

Gov Hutchinson, assistant general counsel for the California Association of Realtors, went into details that real estate agents might face when helping buyers and sellers who are considering renting.

While Hutchinson focused on the landlord perspective, the renter side is also paying close attention to what they see as a welcome change to a system they feel is rigged against them.

“It’s a step toward recognizing housing is a human right,” said Rafael Bautista, director of the San Diego Tenants Union.

Neither side seems overly pleased. Bautista said groups like his, and others throughout the state, want to see stronger rent control and say the new laws don’t go far enough.

There are other new real estate laws in 2024, from homebuyer disclosures to ADUs, but the trickiest part for those in the industry will be complying with rental laws, Hutchinson told the crowd of roughly 200 agents.

He said it was not a good idea to try and skirt new rules or give clients advice on renter protections without checking with a lawyer first. Hutchinson said headaches, such as lawsuits, could be avoided by having a firm understanding of the following new laws. He also talked about other statutes that impact the real estate industry:

Smaller security deposits (AB 12)

Starting July 1, landlords can only require security deposits of one month’s rent.

The law is in response to longtime renter complaints that they are required to fork over huge sums just to start a lease. It seemed to become more of a talking point during the pandemic as vacancy rates dropped sharply across the nation, making it difficult for many to find housing.

For the next six months, a San Diego landlord can still charge up to two months’ rent for an unfurnished apartment and three months’ rent for a furnished apartment. The law is not retroactive, so renters could still be charged up to three months’ rent until June 30.

There are some exceptions for small landlords. The law says a landlord who owns no more than two rental properties, and collectively no more than four rental units, can ask for up to two months’ rent for a security deposit. The exception doesn’t apply to active duty military who seek to rent a unit from a small landlord — keeping the deposit limit at one month.

Hutchinson said rental units owned in other states count toward that total.

“What if the landlord has three units in Arizona, but only two in California?” he asked the crowd. “Are they exempt? No.”

Hutchinson cautioned the crowd that advising clients to make up for the law with cleaning or pet deposits would not work. The law is specific that any deposit can’t go over the one-month-rent total, no matter what you call it.

He also added that pet deposits aren’t always the best idea, because a renter can claim an emotional support animal or service dog. Hutchinson reminded attendees they are allowed to ask for proof that an emotional support animal is needed, but that proof only needs to come from someone that has been treating the tenant or has been taking care of them for 90 days.

“I hate to tell you this, but ‘taking care of’ does not necessarily mean a doctor. It could be mom. Seriously, If mom is taking care of this person, they could have the opinion that this person needs an emotional support animal. Don’t tell (renters) because they don’t know this. Most people think they actually need a doctor.”

Eviction restrictions (SB 567)

It’s often criticized, but California law currently allows a landlord to legally evict a tenant if the landlord or select family members plan to move into the property.

A new law that takes effect April 1 doesn’t ban the practice, but it requires the family member to live there for 12 months. Hutchinson said this prevents a landlord from potentially evicting a tenant, moving in for a week, and then renting out the unit to someone else.

Hutchinson said many of the eviction protections, including the family member rule, only take effect after the renter has been there a year.

Landlords can still evict a renter for what’s known as a “substantial remodel.” Hutchinson said the new law clarifies that means something that requires a permit and needs to take at least 30 consecutive days.

Bautista said the law was a step in the right direction to close loopholes that seem to get exploited as soon as new tenant laws are enacted.

Section 8 credit checks (SB 267)

Landlords may be limited in their use of credit reports when screening potential tenants who receive Section 8 housing vouchers or other government rent subsidies.

This will allow a prospective tenant to show ability to pay, such as a bank statement or voucher, without having to worry about a poor credit score. California already has a law on the books that says a landlord cannot discriminate based on source of income, such as a housing voucher.

Hutchinson said his reading of the new law, which went into effect Jan. 1, meant a subsidized renter has the right to say to a landlord that they do not want their credit report used in their application, only ability to pay.

Renters can still be legally screened for rental history, criminal record and eviction history.

Disclosure of major repairs (AB 968)

This law is mainly aimed at home flippers but could add a level of complication to some home sales.

Starting July 1, anyone who owns a house for fewer than 18 months must disclose all repairs and improvements made to the home during that time. Reports given to new owners must include each contractor used and contact information and evidence of permits if they were needed. Repairs under $500 do not need to be disclosed.

The idea behind the law is to expose homeowners who do poor renovations.

Sale of Accessory Dwelling Units (AB 1033)

Starting this year, Californians could sell their accessory dwelling units as a separate entity — if a local municipality decides to allow it.

It might not be a local issue this year because the new statewide law is optional, and no San Diego County communities have decided to go for it yet. It also appears no other municipality in the state has signed on to it either.

Mayor Todd Gloria’s office told the San Diego Union-Tribune in November that city staff was evaluating the law for possible implementation. However, Gloria and allies failed last year at an attempt to enact the another optional statewide law, Senate Bill 10, which aimed to change some single-family housing zoning.

Hutchinson questioned how many homeowners would actually go for the law if a city passed it.

“I can think of one drawback already,” he said. “If I sell my ADU in the backyard to somebody, I’m stuck with them forever. If I don’t like them, I can’t kick them out.”

Source: SDuniontribune by Phillip Molnar