California Real Estate Law Changes Highlighted
INDUSTRY NEWS, REAL ESTATE LEGISLATION, TIPS FOR BUYERS, TIPS FOR SELLERS
October 21st, 2009
The first half of the 2-year legislative session is in the books and here is a summary of new laws that impact those
involved with real estate transactions:
- Buyers of REO’s (foreclosures) can choose the escrow or title company. Prior to October 11, 2009 REO lenders routinely dictated where the escrow would be handled. Breaking this new law can result in a fine equal to triple the charges the buyer incurred and if the real estate agent insisted on a particular company he or she shall be subject to disciplinary action against their real estate license. This law expires January 1, 2015.
- Agents or attorneys can no longer charge any upfront fees for loan modification services. The Department of Real Estate and State Bar Association have received numerous complaints from borrowers that have paid for assistance and received little if any help. This law is an attempt to put scam artists out of business. This law sunsets January 1, 2013.
- Real estate agents that originate mortgage loans must obtain a license endorsement beginning December 2010. To obtain an endorsement, agents must complete education, testing and reporting requirements.
- Mortgage Broker Activities redefined-Starting January 1, 2010, mortgage brokers will be deemed a fiduciary meaning they must put the interest of their client’s economic interest above their own. Real estate agents have had this fiduciary requirement for decades, now mortgage brokers will have the same duty.
- Appraisal Industry Oversight-The Home Valuation Code of Conduct (HVCC) prompted the requirement that someone oversee the appraisal management companies that have sprung up this year in response to this new code. The Office of Real Estate Appraisers will have regulatory oversight including registration, fingerprinting, and background checks. This law also better defines what conduct constitutes improper influence of the appraiser including threats to withhold compensation or deny future business or promise future referrals if the appraiser does what is asked.
- Mortgage fraud is now a state crime under California law. Violators are subject to 1-year prison term. Federal law adds a $1 million fine. Fraud is defined as making a material misrepresentation or omission during the loan process.
- Increase in Homestead Exemptions- Beginning in 2010, judgement creditors will be faced with additional protection of home owner’s equity to the tune of $75,000 for individuals and $100,000 for married couples and $175,000 for persons over 75 years of age. Homeowners must formerly file a Homestead Declaration to protect their equity from creditors.
- Landlords must give 60-day notice to terminate a month-to-month tenancy with a term greater than one year. 30-day notice will suffice for tenants that have rented for less than one year. The law was scheduled to sunset January 1,2010 but has been extended indefinitely.
Other new laws impact tenants of properties where the landlord has past due utility accounts, who can sell a mobile home in a park, swimming pool anti-entrapment devices, Mechanic’s Lien laws, low water-using plants, reverse mortgages, disposal of abandoned records that include personal information and plumbing fixture retrofits. Call me if you have any questions on these new laws.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
CORNER OF COURT AND PLACER IN REDDING
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
I’ve been active in taxations for lengthier then I care to admit, both on the individual side (all my working lifetime!!) and from a legal point of view since passing the bar and pursuing tax law. I’ve supplied a lot of advice and corrected a lot of wrongs, and I must say that what you’ve posted makes complete sense. Please uphold the good work – the more people know the better they’ll be armed to cope with the tax man, and that’s what it’s all about.