New California Law Grants Foreclosure Extensions of Time When Listing and Selling a Property

 

Most of the time, banks or other holders of mortgage in default would rather work with the property owner to get a property sold, rather than go to further expense to take the property back on their books and then put it back on market.  But, there have been instances when the mortgage servicer proceeded strictly within the foreclosure guidelines in the law, and foreclosed anyway, even if the seller was still actively on the market and ready to take offers. This caused a lot of people a lot of pain, and the owners lost whatever net return they might have been able to get from any possible equity in their property. But now, there is a new California law that addresses a new timeline, after both the mortgage servicer and property owner have followed procedures as contained in the bill:

Back in September, 2024, the Governor signed a bill which would prohibit a foreclosure sale for another 45 days after a listing agreement is signed, and also prohibit a foreclosure for another 45 days after a purchase agreement with a buyer is executed. This is stating the issue simply, and as stated already, certain other guidelines must be followed. Several things must be done by the mortgage servicer, including:

"The mortgage servicer shall provide a means for the borrower to contact it in a timely manner, including a toll-free telephone number that will provide access to a live representative during business hours.

"(5) The mortgage servicer has posted a prominent link on the home page of its internet website, if any, to the following information:

(A) Options that may be available to borrowers who are unable to afford their mortgage payments and who wish to avoid foreclosure, and instructions to borrowers advising them on steps to take to explore those options.

(B) A list of financial documents borrowers should collect and be prepared to present to the mortgage servicer when discussing options for avoiding foreclosure.

(C) A toll-free telephone number for borrowers who wish to discuss options for avoiding foreclosure with their mortgage servicer.

(D) The toll-free telephone number made available by HUD to find a HUD-certified housing counseling agency.

As a borrower, you should make sure your contact information is completely current with your lender, so that if they need to contact you, you are available and are properly notified.

In Long Beach right now, there are about 203 residential and commercial properties in some stage of foreclosure, according to the property tax records; only 10 of these properties is on the market or in escrow. If you are one of these owners who are not on the market, and you haven't engaged your lender in any type of conversation, or you've received some type of notice in the mail but you haven't acted on it, you should not waste any time in contacting your lender, especially if you are interested in remaining in your home or otherwise keeping your property. Because if you don't act, you could lose your property and the equity with it.

If you are thinking of selling, you still need to be in touch with your lender, but you should also take action now in finding out what your market value is by contacting a REALTOR who can work with you on your selling requirements.  

For more information on the new required timelines and procedure affecting both the mortgage servicer and the property owner, see the link below for the new law.

 See the new law at AB2424  If you have any questions about what to do, please feel free to contact me and see how I can help you.

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996

July 1, 2024 Law for California Security Deposits

Yellow bungalow

Beginning July 1, 2024, under the passage of AB12, there will be significant changes to the security deposit law for residential property as follows:

• Rental property owners will only be able to demand or receive one month’s rent in addition to the first month’s rent, for security deposit, whether the unit is furnished or unfurnished.
• However, small property owners will be able to demand or receive two month’s rent in addition to the first month’s rent before initial occupancy. 
• A small rental property owner is defined as one who:
• Owns no more than two residential rental properties that collectively include no more than four dwelling units offered for rent.
• Is a natural person or LLC in which all members are natural persons. A family trust may also qualify as a small landlord.
• Exception: If the prospective tenant is a service member, then the exception for small landlords does not apply, and the small property owner is limited to one month’s rent in addition to the first month’s rent.
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• Owners who currently hold a security deposit or those who demand or collect a security deposit in excess of one month’s rent prior to July 1, 2024, may retain the security deposit even though it is more than one month’s rent.

Unfortunately, one month's rent really provides very little protection to the property owner who may have to engage in eviction costs, and/or damage costs.  An uncontested eviction cost alone may be over $1200, see this site for an idea of costs, and that does not cover the cost of repair and cleanup. One attorney recommends that the property owner review an applicant's credit and look for a score of at least 700 FICO which ideally would indicate a more responsible tenant. Applicants' professions and history, though, are not always proof of good behavior.  (I once lived near a married couple in a high rise condo building who kept cats--more than allowed on the lease agreement--and allowed them to completely ruin a bedroom which was used as the litter box, as well do nothing about controlling fleas. The owner had to leave the unit vacant for months in order to restore hygiene and flooring.) So back to  the amount of deposit -- another good option is to own property in an LLC.

Please contact me if you would like additional information on tenant/property owner issues.

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996

Owner/Tenant Updates for California in 2024

Roommates moving in to new unit

The following is meant as a summary, not an in depth explanation of current updates (provided courtesy of California Association of REALTORS), to the Tenant Protection Act.  A real estate attorney or property manager, if you have one, should be consulted if you have questions about your particular situation.  It's really advisable to do so anyway, since in California tenant/owner laws are sometimes complex, and vary from county to county, and city to city:

    

     Beginning July 1, 2024,landlords may collect no more than one month’s rent for either furnished or unfurnished units in addition to first month’s rent. There is an exception for small landlords, defined as a landlord who is a natural person or LLC and owns no more than two residential rental properties with no more than a total of four units offered for rent. 

     Tenant Protection Act law tightens up the requirements for a landlord to terminate a tenancy under the Tenant Protection Act (i.e., California statewide rent cap and just cause eviction law) for no-fault evictions based upon owner move-in or substantial remodeling.  Additionally, an owner who violates the TPA by improperly terminating a tenancy or by raising rent beyond the maximum amount is liable for actual damages, reasonable attorney’s fees and costs (at the discretion of the judge), up to three times actual damages for willful violations and punitive damages. The Attorney General et al is authorized to seek injunctive relief. Effective April 1, 2024. 

    Prohibits local ordinances that penalize tenants and landlords for various types of law enforcement contacts, i.e., local “crime free” rental housing programs and ordinances. 

    Landlord must offer “ability to pay” in lieu of reliance on credit history and reports in assessing a tenant’s rental application when prospective tenant is receiving a government rent subsidy such as a Section 8 rental voucher.

    Allows a jurisdiction with local rent control to require an owner of a rent-controlled unit to allow a tenant with a permanent physical disability to relocate to an available comparable or smaller unit located on an accessible floor of the property and retain their same rental rate. 

     SB 712 prohibits a landlord from prohibiting a tenant from owning personal micromobility devices or from storing and recharging up to one personal micromobility (e.g., e-bike) device in their dwelling unit for each person occupying the unit, subject to certain conditions and exceptions.   

    This law tightens up the requirements for a landlord to terminate a tenancy under the Tenant Protection Act (i.e., California statewide rent cap and just cause eviction law) for no-fault evictions based upon owner move-in or substantial remodeling.  Additionally, an owner who violates the TPA by improperly terminating a tenancy or by raising rent beyond the maximum amount is liable for actual damages, reasonable attorney’s fees and costs (at the discretion of the judge), up to three times actual damages for willful violations and punitive damages. The Attorney General et al is authorized to seek injunctive relief. Effective April 1, 2024. 

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996

New Real Estate California Laws for 2024

Here are some of the laws pertaining to real estate (although this is not all inclusive) that parties to a sale or purchase of a  home may want to know about.

 

• Property "flippers" must disclose recent repairs and renovations. This applies to residential 1-4 units, if property was closed within 18 months from prior sale, and renovations were performed by the contractor with whom the seller entered into a contract. For more complete information on this law, feel free to contact me, or review Assembly Bill 968.
• The Natural Hazard Disclosure statement now "expands the disclosures required by the Natural Hazard Disclosure Statement (NHD) to include High as well as Very High Fire Hazard Severity Zones (FHSZ) by explicitly highlighting three new subcategories of FHSZs. If the property is located in any of these zones, the defensible space and (for properties built before 2010) fire hardening disclosures would then be required."  Assembly Bill 1280.
•  ADUs (Accessory Dwelling Units) may now be sold separately as a condominium from the primary residence. Assembly Bill 1033

 There is now a permanent prohibition on requiring owner occupancy of a parcel containing an ADU.  Senate Bill 976

The California FAIR Plan Association (fair access to insurance requirements) plan will be extended to commercial properties by July 1, 2024, and the new law requires the Association to reduce the number of existing policies by allowing admitted insurers to offer homeowner policies to current FAIR Plan policy holders. Senate Bill 505

Allows a jurisdiction with local rent control to require an owner of a rent-controlled unit to allow a tenant with a permanent physical disability to relocate to an available comparable or smaller unit located on an accessible floor of the property and retain their same rental rate. Assembly Bill 1620.

Landlords may collect no more than one month’s rent for either furnished or unfurnished units in addition to first month’s rent. There is an exception for small landlords, defined as a landlord who is a natural person or LLC and owns no more than two residential rental properties with no more than a total of four units offered for rent.  Assembly Bill 12

Vacation Rentals: Beginning July 1, 2024, AB 537 prohibits a place of short-term lodging, as defined, from advertising, displaying, or offering a room rate that does not include all fees or charges required to stay at the short-term lodging, except government-imposed taxes and fees. Assembly Bill 537

Listing Agreements. This law prohibits: 1) exclusive listing agreements lasting longer than 24 months from the date the agreement was made; 2) renewing an exclusive listing agreement for longer than 12 months from the date the renewal was made; and 3) recording or filing an exclusive listing agreement of any duration.  Applies to residential one to four properties, condos and manufactured homes. It also deems any licensed real estate professional who violates these prohibitions as having violated that person's licensing laws.  Assembly Bill 1345

 There are numerous additional laws concerning tenants/ owners, housing laws, short term rentals, and more.  For the complete summary, please contact me via text, email or phone call.  I will be happy to help!

   

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996