{"id":784,"date":"2014-12-22T14:36:44","date_gmt":"2014-12-22T22:36:44","guid":{"rendered":"https:\/\/shellyrobersonrealtor.com\/?p=784"},"modified":"2015-03-25T21:54:37","modified_gmt":"2015-03-26T04:54:37","slug":"new-real-estate-laws-2015","status":"publish","type":"post","link":"https:\/\/shellyrobersonrealtor.com\/new-real-estate-laws-2015\/","title":{"rendered":"New California Real Estate Laws for 2015"},"content":{"rendered":"

Here is a quick recap of the new 2015 real estate laws effecting owners, residents, real estate agents, and brokers.\u00a0 How these laws effect you, your business interests, your family, landlords, and tenants vary greatly depending on your individual circumstances, but please read and make yourself aware of the basics.\u00a0 For detailed analysis or any questions don\u2019t hesitate to give me a call 1-650-464-3797 or send me an email to sroberson@apr.com<\/a>. <\/p>\n

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Tax Exclusions for Mortgage Debt Forgiveness<\/h2>\n

This law extends California\u2019s exclusions of taxation of mortgage debt forgiveness for qualified principal residence indebtedness in partial conformity with the federal Mortgage Forgiveness Debt Relief Act of 2007. \u00a0Qualified principal residence indebtedness is limited to $800,000 ($400,000 for taxpayers filing separately). Forgiven debt will not be treated as cancellation of debt income, but will instead be capital gains. Taxpayers may exclude from capital gains up to $500,000 ($250,000 for taxpayers filing separate) of qualified mortgage debt forgiven.\u00a0 See Revenue and Taxation Code \u00a717144.<\/em><\/strong><\/p>\n

Documentary Transfer Tax \u2013 Purchase Price No Longer A Secret<\/h2>\n

This law repeals the right of a principal buyer to request that the transfer tax be shown on a separate document, thus shielding it from public \"Transfertax\"view. \u00a0Previously, a seller or buyer of real property could demand from the county that the documentary transfer tax (DTT) be stated apart from the recorded document. \u00a0This enabled principals to effectively keep the purchase pric
\ne secret, since the amount of the transfer tax can be reliably used to deduce the purchase price. \u00a0Celebrities and high profile officers of public companies frequently hid their real estate purchase prices for security reasons. Now every document subject to DTT when it is submitted for recordation must show on its face the amount of the tax due.\u00a0 See Revenue and Taxation Code \u00a7\u00a711932<\/em> and 11933.<\/em><\/strong><\/p>\n

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Solar Energy Property Tax Exclusion Extended<\/h2>\n

Extends a solar tax exemption for new active solar energy systems until 2025. \u00a0Existing law, set to expire in 2017, bars property tax increases based upon the construction or addition of a solar system.\u00a0 See Revenue and Tax Code \u00a773.<\/em><\/strong><\/p>\n

Document Bundling Prohibited by HOAs – Sellers Must Pay Fees<\/h2>\n

This California Association of Realtors sponsored bill prohibits the practice of \u201cdocument bundling\u201d in the sale of units in a common interest development. (\u201cDocument bundling\u201d is requiring the purchase of a package of documents together with the legally mandated disclosures.) Current law requires delivery of various common interest disclosure documents (\u201cmandated CID disclosures\u201d). These disclosures include the CC&Rs, Bylaws, Operating Rules, rental and age restrictions, budget reports, regular and special assessments, etc. Under the new law the fees for these mandated CID disclosures must be individually itemized for each document. Additionally, the fees for all mandated CID disclosures must be separately stated and separately billed from all other fees, fines, or assessments. Only mandated disclosures may appear on the statutory form. Once a written request for the mandated CID disclosures is made, the HOA must estimate the cost of the mandated CID disclosures prior to processing the request. Where there is no hard copy delivery of documents, the HOA may not charge an additional fee for electronic delivery in lieu of the hard copy. \u00a0The statutory form has been modified to reflect these changes. This law would also require a seller to provide a prospective purchaser with all mandated CID documents that the seller possesses \u2014 free of charge. If a seller confirms in writing that the document is a current document then the HOA may not bill for it. The association may collect a reasonable fee based upon the association\u2019s actual cost for the procurement, preparation, reproduction, and delivery of the documents \u2013 but only from the seller. It is the responsibility of the seller to pay the association, person, or entity that provides the mandated CID disclosures.\u00a0 See Civil Code \u00a7\u00a74528 -4530.<\/em><\/strong><\/p>\n

No Shill Bidding At Real Estate Auctions<\/h2>\n

New law prohibits anyone from causing or allowing any person to bid at a sale for the sole purpose of increasing the bid on any real property being sold by the auctioneer. An auctioneer or another person may place a bid on the seller\u2019s behalf during an auction of real property if proper notice is given that bid has reserve. The law also requires disclosure to all auction participants that the particular bid has been placed on seller\u2019s behalf.\u00a0 See Civil Code \u00a7\u00a7 2079.23 and 1812.610.<\/em><\/strong><\/p>\n

Judgment Debtor Retains Equitable Right to Redeem Real Property After Execution Sale Even Beyond 90 Day Statutory Period<\/h2>\n

In 1982 the legislature codified the Enforcement of Judgments Law which provides that a sale of real property pursuant to execution sale regarding enforcement of judgments is absolute and may not be set aside. As a procedural safeguard, that same law states that if the sale was improper because of irregularities in the proceedings, because the property sold was not subject to execution among other reasons, the judgment debtor may commence an action within 90 days after the date of sale to set aside the sale if the purchaser at the sale is the judgment creditor. Importantly, the Enforcement of Judgments Law was not originally intended to affect the equitable right of redemption. This is the right that a judgment debtor has to redeem property from a sale where there may be a grossly inadequate price, or where the purchaser is guilty of unfairness or has taken undue advantage, or in other circumstances which could merit an equitable right to redeem beyond the 90 day period. \u00a0This law declares that these provisions of existing law do not affect, limit, or eliminate a judgment debtor\u2019s equitable right of redemption.\u00a0 See Code of Civil Procedure \u00a7701.680.<\/em><\/strong><\/p>\n

Landlords and Tenants May Agree to Use Email Regarding Security Deposits<\/h2>\n

New landlord\/tenant law permits landlords, professional property managers<\/a> and tenants to agree to the use of emails for some notices and agreements regarding security deposits.\u00a0 Importantly, the new law includes the Notice of Right to Inspection Prior to Termination of Tenancy. The security deposit law itself, found in Civil Code \u00a7 1950.5, still requires that the itemization of the security deposit and notice to the tenant of its disposition must still be made be either personal delivery or regular mail.\u00a0 See Civil Code \u00a71633.3.<\/em><\/strong><\/p>\n

Seller\/Borrower Now Has Right to Request Suspension of Home Equity Line of Credit (HELOC) During Escrow<\/h2>\n

Today, if a borrower has a home equity line of credit (HELOC) secured by a lien on his or her house, the HELOC loan is supposed to be closed and not drawn on during the sale or refinancing of the house. \u00a0If the lender fails to close the HELOC during escrow and money is drawn on, the underlying lien and loan may become the debt of the innocent buyer. This law facilitates the seller\u2019s\/borrower\u2019s request to suspend the HELOC by creating a form for the seller\/borrower to sign in escrow, the ultimate purpose being to avoid the mistake of drawing upon a HELOC during the escrow or immediately following the sale of the house.\u00a0 See Civil Code \u00a72943.1.<\/em><\/strong><\/p>\n

HOAs and Landlords Must Now Permit Personal Agriculture<\/h2>\n

Present landlord\/tenant law regulates the terms and conditions of residential tenancies, and prohibits a landlord or professional property manager<\/a> from interfering with a tenant\u2019s quiet enjoyment of the premises. \u00a0This law requires a landlord to permit a tenant to participate in personal agriculture in portable containers approved by the landlord in the tenant\u2019s private area if certain conditions are met. This law makes void any provision of a governing document of a common interest development that effectively prohibits or unreasonably restricts the use of a homeowner\u2019s backyard for personal agriculture.\u00a0 The law is ambiguous with respect to personal marijuana cultivation for medicinal purposes.\u00a0 See Civil Code \u00a7\u00a7 1940.10 and 4750.<\/em><\/strong><\/p>\n

\"HOA<\/a><\/p>\n

HOAs Now Prohibited From Fining Members for Reducing Water Use<\/h2>\n

This law prohibits a homeowner\u2019s association from imposing a fine or assessment against a member\/owner\/tenant that reduces or eliminates watering of vegetation or lawns during any period during which the Governor or local government has declared an emergency due to drought. \u00a0In January of 2014 Governor Brown declared a State of Emergency to exist in California due to severe drought conditions.\u00a0 See Civil Code \u00a74735.<\/em><\/strong><\/p>\n

Flood Insurance Premiums Increases Delayed<\/h2>\n

The Biggert-Waters Flood Insurance Reform Act of 2012 was became law with the purpose of requiring homeowners to pay premiums which reflect the true risks of living in high-flood areas.\u00a0 Importantly, the intent for the adjusted premiums was to cover a short fall in the National Flood Insurance Program and end subsidization of flood insurance for second homes and businesses. Upon implementation the astronomical premium increases was unanticipated. The harsh result of the extreme rise in premiums, \u201cproperty owners across the nation are again facing foreclosure in the 20,000 communities where flood insurance is required for a mortgage,\u201d and additionally \u201creal estate agents are being forced to explain to former clients the lack of FEMA disclosures,\u201d according to the National Association of Realtors.\u00a0 Thus, the present legislation necessity. The Home Flood Insurance Affordability Act of 2014 amends the Biggert-Wate\"Floodrs law as follows:<\/p>\n