04 Feb 2020 New Laws

Numerous California Laws Take Effect in 2020

Landlord/Tenant:       SB 1188 – Creates a legal framework allowing a tenant, with the written approval of the owner/landlord, to take in a “person at risk of homelessness.” It includes a number of protections for both a landlord and tenant, including the ability for the tenant to remove the person at risk of homelessness on short notice with the assistance of the police.

SB 644 – Landlord may only collect one-month security for unfurnished unit, or two months for furnished units, from a service member who resides on the property.

SB 329 – “Discrimination” on the basis of “source of income” has been expanded to include a refusal to rent to a tenant based on the tenant’s receipt of federal, state, or local housing subsidies including “Section 8.”

SB 222 – Discrimination in housing on the basis of veteran or military status is now unlawful under the Fair Employment and Housing Act.

AB 1399 – Make changes to the Ellis Act to 1) clarify that owners may not pay prior tenants liquidated damages in lieu of offering them the opportunity to re-rent their former unit; and 2) clarify that the date on which the accommodations are deemed to have been withdrawn from the rental market is the date on which the final tenancy among all tenants is terminated.

AB 74 – The budget provides $20 million for legal services for renters facing eviction.

AB 1110 – The notice period for increasing rent above 10% in any 12-month period is 90 days. Previously, it was 60 days.

AB 1482 – Imposes statewide rent caps of 5% plus inflation and just cause eviction requirements on rental properties. Various exemptions apply including single-family homes and condos (not owned by a corporation or REIT), and properties where a certificate of occupancy has been issued within the past 15 years.

SB 18 – A law which provides various protections to tenants in foreclosed upon property has been extended. Specifically, this new law extends indefinitely the requirement that a landlord of a foreclosed property provide a month to month tenant with a 90-day notice of termination and that existing leases must generally be honored.

SB 234 – Requires large family daycare homes with up to 14 children to be treated as residential use for purpose of all local ordinances. Clarifies that apartments may be used as family daycare homes.

AB 206 – Grants immunity to landlords or agents who voluntarily abate lead paint hazards and provides that such efforts cannot be considered evidence on uninhabitability pursuant to certain lead paint abatement programs.

Real Estate Law Cleanup: This law clarifies and confirms existing law that delivery of the TDS and NHD is generally not required for leases of any duration, but the Agency Disclosure form is required for residential leases of more than one year. Confirms that there is no cancellation right for a buyer based upon delivery of the visual inspection when purchasing from an unrepresented seller. – AB 892

Tax: 1031 Exchanges: California tax law is now partially conformed to federal tax law limiting 1031 exchanges to exclude recognition of gain or loss for real property only. – AB 91

Tax: Exemptions from Reassessment: Creates a property tax change in ownership exclusion in the case of a parent to child transfer of stock in a qualified corporation following the last surviving parent’s death limited in scope to the parents’ residence and the parcel of land upon which the home is located provided that among other things: 1) the residence has continuously served as the child’s home, and 2) the property’s assessed value does not exceed $1 million. – AB 872

IRS: IRS finalizes 20% qualified business income deduction: 250 hours a year safe harbor for rental real estate owners. Individuals or entities who own rental real estate directly or through a disregarded entity may treat it as a “business” for purpose of the QBI deduction. “Management” of the real estate is considered a “rental activity.”

Source: California Association of Realtors. Information deemed reliable but we make no promises to the accuracy, applicability and completeness of the information provided. Contact a real estate attorney concerning all matters.