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Statutes Affecting Real Estate Agents in 2013

Appraisers:  Various procedural and administrative changes have been made to the Real Estate Appraisers Licensing and Certification Laws.

Fictitious Name Statements:  Beginning January 1, 2014, a registrant filing a Fictitious Name Statement must present a form of identification to the County Clerk.

Disability:  Effective January 1, 2013, attorneys cannot issue a pre-litigation demand for money to a building owner or tenant for violations of the Americans with Disabilities Act.

Real Estate Disclosure:  Effective July 1, 2013, every contract for the sale of residential real property (one to four units) must contain a specified notice regarding gas and hazardous liquid transmission pipelines.  The notice informs buyers of the National Pipeline Mapping System found at www.npms.phmasa.dot.gov.

Discrimination:  Employers may not discriminate against religious dress or breastfeeding.

Real Property:  Effective January 1, 2013, if an easement owner refuses or fails, after receiving a written demand, to pay for the owner’s cost of maintaining the easement, the other easement owners may jointly or severally bring a lawsuit to recover the costs before, during or after performing the maintenance work.

Social Media:  Effective January 1, 2013, an employer is prohibited from requesting or requiring an employee to provide access to personal social media.

Lenders:  Effective January 1, 2013, exemptions under the Mortgage Loan Originator Requirements for finance lenders and residential mortgage lenders have been expanded to include an employee of a government agency, housing finance agency, non-profit organization, depository institution or institution regulated by the Farm Credit Administration.  Further, the DOC commissioner can order an unlicensed person engaged as an MLO or licensed MLO to stop violating MLO requirements.

Effective January 1, 2013, safeguards for borrowers seeking to obtain a reverse mortgage have been expanded.  A certification must be obtained that the applicant has received counseling from a HUD-approved counseling agency before obtaining a reverse mortgage.

Effective January 1, 2013, antideficiency protections are extended from purchase money loans to refinance purchase money loans, so long as the borrower has not “cashed out.”
Maintaining Vacant REO Properties:  Existing law requiring an owner of vacant residential property acquired through foreclosure to maintain the exterior of the property was extended indefinitely.  It was previously set to expire on January 1, 2013.

Foreclosure:  Buyers of a foreclosed home now have an opportunity to correct Building Code violations if a buyer has purchased a residential property that has been foreclosed upon.  An enforcement agency cannot commence any action for nuisance abatement for at least 60 days after the buyer takes title.  An exception is if there is an immediate threat to health and safety.

Effective April 1, 2013, or 90 days after the Department of Corporations issues summary translations, a lender must provide a borrower with a specified summary of information attached to a Notice of Default and Notice of Sale.  The summary must be in English, Spanish, Chinese, Tagalog, Vietnamese and Korean.  The Department of Corporations has been ordered to provide a standard translation of the statement free of charge.

Fraud Prevention:  Effective January 1, 2013, victims of corporate fraud can apply to the Secretary of Trade for payment under its Victims of Corporate Fraud Compensation Fund.  Any claimant is limited to $50,000.

Homeowners’ Association:  Effective January 1, 2014, the Davis-Stirling Common Interest Development Act has been comprehensively reorganized.

Effective January 1, 2013, a licensed, private investigator must be granted access to a gated community for a reasonable period of time to perform lawful service of process or service of a subpoena.

Trustee’s Foreclosure:  A trustee’s deed upon a non-judicial foreclosure of a unit in a common-interest development must be recorded within 30 days in the Office of the Recorder where the property is located.

Restricting Cancellation Fees for HOA Documents:  Effective January 1, 2013, an HOA cannot collect a cancellation fee for HOA sales disclosure documents in the following two situations:

1.  A request is cancelled in writing by a party who placed the order and the work has not yet been performed; or

2.  The request is cancelled in writing and the HOA had been compensated for any work performed.

Smoke Alarms:  Effective January 1, 2014, all dwelling units intended for human occupancy for which a building permit is issued, the owner must demonstrate that the smoke alarms required for the unit are devices approved by the State Fire Marshall.

Homestead Exemptions:  The income threshold has been increased for a person of 55 years of age to qualify for $175,000 homestead exemption for an involuntary sale of a principal residence.

Landlord/Tenant:  Effective January 1, 2013, every landlord who offers a residential property containing one to four units must disclose in writing to any prospective tenant the receipt of a Notice of Default.  The disclosure must be made before executing a lease agreement.  If the landlord violates the law, the tenant can elect to void the lease.  A property manager will not be held liable for failing to provide the written disclosure unless the landlord has given the property manager written instructions to deliver the disclosure to the tenant.

Effective September 19, 2012, a commercial property owner or landlord must state on every lease or rental agreement executed on or after July 1, 2013, whether the lease premises has been inspected by a Certified Access Specialist and whether the property has or has not been determined to meet all applicable construction-related accessibility standards for the disabled.

Effective January 1, 2013, under existing law, a landlord must meet a basic habitability standard when renting property.  This new law clarifies that a landlord or tenant qualifying for a utility energy savings assistance program does not violate the basic habitability standard.

Landlords are prohibited from requiring an animal to be declawed or devocalized.

A month-to-month tenant or subtenant in possession of a rental unit at the time of foreclosure must be given a 90-day written notice to terminate.  For a fixed-term tenant, the tenant can generally remain until the end of the lease term and all rights and obligations under the lease shall survive foreclosure including the tenant’s obligation to pay.  However, there are four exceptions to the 90-day rule including the following:  (1) the purchaser will occupy the property as their primary residence; (2) the tenant is the borrower or the borrower’s child, spouse or parent; (3) the lease was not the result of an arm’s length transaction; or (4) the lease requires rent that is substantially below fair-market rent unless it is subject to rent control.

A Notice of Trustee’s Sale must now state that the occupants may be entitled to a 90-day Eviction Notice or may have a right to stay under a fixed term lease, depending on the circumstances.

A landlord must generally allow a tenant to pay rent and a security deposit by at least one form of payment other than cash or electronic fund transfer.  A landlord can, however, demand cash payments exclusively for three months after a tenant attempts to pay with a check with non-sufficient funds or stop payment.

A successor owner or manager cannot serve a Three-Day Notice to Pay or Quit, or otherwise evict a tenant for non-payment of rent that accrued during a non-compliance unless certain requirements have been met.  Those requirements include:  disclosing the name, phone number and street address of the property manager, as well as the owner for service of process; providing the name, phone number and address and account information for rent payment; providing the form in which the rent is to be paid; and providing a copy of the Rental Agreement to the tenant within 15 days of the tenant signing and once a year thereafter at the tenant’s request.

Under existing law, a landlord must generally give a month-to-month tenant who has resided in a dwelling for more than one year a 60-day Notice to Terminate Tenancy.  However, if the landlord enters into a contract to sell, a 30-day Notice is sufficient, so long as six requirements are met.  Please see the CAR Standard Form Notice of Termination for those six requirements.

Effective January 1, 2013, if the landlord and tenant agree, the landlord can deposit any unused portion of the security deposit electronically into an account designated by the tenant and the landlord can provide a copy of the itemized statement after moving out by email.

Disposal of Abandoned, Personal Property:  If personal property is left behind by a tenant after termination of a tenancy, it must be sold at public auction if it is valued at $700 or more.

Notice to Unlawful Detainer Tenants:  Starting January 1, 2013, a court clerk must mail to each defendant in an unlawful detainer action a notice and contact information for the Lawyer Referral Service to the California Bar Association.

Licensing:  Effective January 1, 2013, The California Department of Real Estate will become the Bureau of Real Estate under the Department of Consumer Affairs.

A Settlement Agreement cannot prohibit a Department of Consumer Affairs complaint.

Effective January 1, 2013, a college graduate must have a specialization in real estate including a major or minor in real estate to qualify to take the broker’s exam.

Effective January 1, 2013, new laws apply to real estate brokers who engage in a transaction involving the sale or offer to sell a note secured directly by an interest in one or more parcels of property.

The DRE can prohibit someone from taking the license examination if the following exists:  the prohibition is in the public interest and that person knowingly violated DRE rules; or the person was convicted or pleaded no contest to a crime.

The DRE can require proof concerning the honesty of a license application including any officer owning 10 percent or more of a corporate applicant.  Upon denial of an application for a real estate license, the DRE must file a statement of issues and inform the applicant for the reasons of the denial and a right to request a hearing within 60 days.

Anyone who acts as a Mortgage Loan Originator within California without having the proper license endorsement is guilty of a crime punishable by six months in jail or a $20,000 fine.

Loan Modifications:  The law extending the prohibition against advanced fees for loan modifications has been extended to January 1, 2017.

Military Service:  Existing California law protects a member in military service against foreclosure during the period of the military service and three months thereafter.  It has been extended to nine months thereafter.

Texting:  Texting while driving will be permitted as long as it is voice-operated and hands free.

Recording Fees:  Recording fees have been increased by $10 to prevent fraud prosecution.

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