Laws affecting Realtors

Foreclosure and Forbearance Protections: Small Landlords and Homeowners

Urgency legislation that took effect immediately on August 31, 2020.  Requires servicers to comply with applicable federal guidance regarding COVID-19 forbearance.  Servicer must comply with special notice and information requirements if a forbearance is denied.

A mortgage servicer shall comply with applicable federal guidance regarding borrower options following a COVID-19 related forbearance as provided by the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), the Federal Housing Administration of the United States Department of Housing and Urban Development, the United States Department of Veterans Affairs, or the Riral Development division of the United States Department of Agriculture.

With respect to a nonfederally backed loan, a mortgage servicer is required to review a customer for a solution that is consistent with the guidance to servicers as provided by the above entities. However, It is the intent of the Legislature that a mortgage servicer offer a borrower a post forbearance loss mitigation option that is consistent with the mortgage servicer's contractual or other authority.

A borrower who is harmed by a material violation of this law may bring an action to obtain injunctive relief, damages, restitution, and any other remedy to redress the violation and reasonable attorney’s fees and costs to the prevailing party.

If the mortgage servicer denies a forbearance request, they are required to explain why if the request was made before April 1, 2021. The servicer must specifically identify any curable defect in the written notice; Provide 21 days from the mailing date of the written notice for the borrower to cure any identified defect; Accept receipt of the borrower's revised request for forbearance before the aforementioned 21-day period lapses and; Respond to the borrower's revised request withing five business days of receipt of the revised request....

Housing: Residential Entitlements Extended

Requires cities and counties to evaluate the impact of government actions on the cost of housing and associated impacts to minority communities and extends by 18 months, the time frame for the expiration, effectuation, or utilization of a housing entitlement for any housing entitlement that was issued prior to, and was in effect on, March 4, 2020, and will expire prior to December 31, 2021.

The California Building Industry Association writes in support, "This important measure has two critical components. First, it encourages local governments to consider the impacts their zoning decisions have on communities of color, and second, extends the expiration date of building permits or other entitlements necessary for, or pertaining to, a housing development project. This proposed legislation recognizes the extreme health and financial devastation due to this pandemic-induced recession has had on Californians and proposes a measured and time-limited response.

This law extends by 18 months any applicable time frame for any “housing entitlement.” This extension applies to any such entitlement issued prior to and effective on March 4, 2020, and that will expire prior to December 31, 2021.

“Housing entitlement” is defined in the statute to include:

  • A building permit, including extension of any applicable time frame within which an applicant must request issuance of a building permit;
  • “A legislative, adjudicative, administrative, or any other kind of approval, permit, or other entitlement necessary for, or pertaining to, a housing development project issued by a state agency”;
  • “An approval, permit, or other entitlement issued by a local agency for a housing development project that is subject to [the Permit Streamlining Act]”;
  • “A ministerial approval, permit, or entitlement by a local agency required as a prerequisite to issuance of a building permit...

Residential Property Insurance. Fire Insurance - Consumer Protections

Assembly Bill 2756 Residential Property Insurance - This measure seeks to provide greater information to consumers on their homeowner policies. Additionally, it includes provisions which mandate 10% building code upgrade coverage for replacement cost coverage policies which will work to ensure more homes are rebuilt and existing housing stock is maintained when disaster strikes.

C.A.R. supported this measure as it provides more transparency to homeowners on information related to their home insurance policy.

Assembly Bill 3012 Residential Property Insurance -  This measure among other provisions, provides that certain information be included in a notice of nonrenewal of a homeowners insurance policy, clarifies that a policyholder shall receive the full amount of what would have been recoverable if the home were to be rebuilt at the original location, clarifies that policies which include additional living expenses (ALE) shall not limit claims if the home is uninhabitable, but not destroyed.  Additionally, the bill states that a policyholder is entitled to a payment of 30% (up to $250,000) of the stated policy limit for contents coverage in the event of a total loss without itemization and directs the FAIR plan to create a clearinghouse of policy information that should be made available to admitted insurers to encourage them to offer policies to FAIR plan customers.

C.A.R. supported this measure as it will help to alleviate the home insurance crisis that many Californians in wildfire prone areas face.

Senate Bill 872 ...

Fire: Defensible Space: Creation of Ember-Resistant Zone within Five Feet of a Structure

Establishes, upon appropriation, an ember-resistant zone within five feet of a structure as part of the defensible space requirements for structures located in specified high fire hazard areas.  Requires removal of material from the ember-resistant zone based on the probability that vegetation and fuel will lead to ignition of the structure by ember.  

However, CAL Fire will NOT changer defensible space inspection practices and forms or enforcement to to implement the requirement for an ember-resistant zone until the director makes a written finding that the legislature has approrpriated sufficient resources to do so, which the director will post on CAL Fire's website, that the Legislature has appropriated sufficient resources to do so.  Moreover, this law is to be "based on regulations" by CAL Fire, and the promulgation of these regulations is "contingent upon an appropriation by the Legislature in the annual Budget Act of another stature for this purpose."

Current law requires a person who owns, leases, controls, operates, or maintains an occupied dwelling or structure to maintain a defensible space of 100 feet from each side of the structure.  This bill would require more instense fuel reductions between 5 and 30 feet around the structure and create an ember-resistant zone within 5 feet of the structure to help reduce ember ignitions.

1)  An ember-resistant zone shall include any attached deck.

2)  Required the Department of Forestry and Fire Protection (CAL FIRE) to not change defensible space...

Deeds: Extended Revocable Transfer on Death Deed Law

Law authorizing simple procedure for transfer of property upon death is extended for one year.

The California Law Revision Commission issued its report on the Revocable Transfer on Death Deed (RTDD) in November 2019, recommending that a number of changes be made to the RTDD process,
but that overall the RTDD should be extended for another 10 years and that the CLRC do a further
study prior to that 10-year sunset. (CLRC, Revocable Transfer on Death Deed: Follow-Up Study (Nov. 2019).) However, given the COVID-19 pandemic, the Legislature’s focus has been on the health emergency and its very difficult economic onsequences.

It has not been on other less urgent matters, including the future of the RTDD and the CLRC report. To ensure that the RTDD can continue until the Legislature can fully review the CLRC report and recommendations, this law extends the January 1, 2021 sunset for one additional year, until January 1, 2022.

Senate Bill 1305 is codified as Probate Code; Section 5600 et seq.

More readings about Laws Affecting Realtors

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Disclosure and Point-of-Sale Compliance - Wildfire Defensible Space and Vegetation Management Laws, and Home Hardening

Disclosure: Disclosure and point-of-sale compliance re wildfire defensible space and vegetation
management laws, and home hardening.

This is a not a 2021 new law. It was passed last year. However, we are including it here because its most signicant provisions become effective January 1, 2021.

Requires delivery of a statutory disclosure re home hardening for homes in designated high fire areas built before 2010, and that seller list specied retrofits.

wild fire areasRequires seller of property located in designated high fire areas to provide buyer with documentation stating that the property is in compliance with local law pertaining to defensible spaces or local vegetation management laws. If there is no such local law, the seller shall provide documentation of compliance with state law, assuming the seller obtained such documentation within six months prior to entering into the transaction. But if neither of the above,the seller and the buyer must enter into a written agreement in which the buyer agrees to obtain documentation of compliance with defensible
space or a local vegetation management ordinance after close.

These disclosure requirements will apply to any property in which the Transfer Disclosure Statement is required to be delivered. TDS exemptions and cancellation rights apply.

Disclosures re Home Hardening Beginning January 1, 2020, if a seller, after completion of construction, has obtained a nal inspection report regarding compliance with, among other things,
home hardening laws...

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Santa Cruz County
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Old Town Monterey 272 $75k - $5.5m
Pebble Beach Homes 40 $799k - $29.9m
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