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| New Laws for 2026 |
Every year there is a plethora of bills that are passed into California law with varying effective dates for the coming year. Here are just a few of real estate laws which may be of interest for clients in residential real estate transactions. - HOA Balcony: This new law adds to the
standard package of HOA disclosures the most recent HOA balcony inspection
report. It mandates that an HOA will make available for inspection all
balcony inspection reports. Revises the requirements of the balcony
inspection report to require a summary page indicating among other
things the balconies identified as posing an immediate safety threat. Senate Bill 410: Civil Code §§ 4525, 4528, 5200 and 5551. Effective January 1, 2026. Third-Hand Smoking
- Third Hand Smoking: It
is the sole responsibility of sellers to disclose actual knowledge of
any residue from smoking tobacco or nicotine products in residential
real estate sales, or any history of occupants smoking tobacco or
nicotine products on the property. Applies to Residential 1-4 property. Assembly Bill 455
is codified as Business & Professions Code § 10084.2, Civil Code §
1102.6k, and Health and Safety Code § 25417.2. Effective January 1,
2026.
Anti Money Laundering: Starting
March 1, 2026, any escrow or title company responsible for closing must
submit reports to FinCEN (Financial Crimes Enforcement Network) if all of the following apply:
Residential 1-4 real estate is purchased (incl. vacant land, depending on intended construction) , the buyer is a legal entity or trust, the transaction is all cash or being financed with certain lenders. In
that case the legal names, dates of birth, addresses, DBAS, citizenship
and TINs of the buyers and sellers, and their entities, must be
obtained and reported to FinCEN. Without this information provided, the
escrow will not close. Also, there are certain exemptions to this reporting rule, so further advice should be obtained. Landlord/Tenant: Deposits: Electronic
return of security deposits is the default option when the initial
deposit was made electronically, unless otherwise agreed to in writing.
Upon termination of tenancy, the landlord must send notice of the right
to receive the security electronically if paid electronically, unless
otherwise agreed to in writing. However, return
of itemization of deposit is via mail by default unless landlord and
tenant agree to an address or email provided by the tenant. Assembly Bill 414 is codified as Civil Code § 1950.5. Effective January 1, 2026. Stoves and Refrigerators: Requires the landlord to provide both a stove and a refrigerator, maintained in good working order, as a condition of habitability. The tenant may choose to provide their own refrigerator by mutual agreement when the lease is signed. Digitally altered images in Advertising: A real estate broker or salesperson, or person acting on their behalf, who includes a digitally altered image in an advertisement or other promotional material for the sale of real property shall include in the advertisement or promotional material a statement disclosing that the image has been altered and a link to a publicly accessible internet website, URL, or QR code that includes, and clearly identifies, the original, unaltered image. The statement must be conspicuous, located adjacent to the image, and indicate that the unaltered image can be accessed through the link. If the advertisement is posted on an internet website over which the broker or salesperson or person acting on their behalf, has control, they may alternatively include the unaltered version of the image. This law applies to images altered with photo editing software or AI, but does not apply when only common photo editing adjustments are made.Balcony Inspection 3+ Units: If a building owner confirms the presence of asbestos during a balcony inspection and is unable to complete the inspection as a result, the owner will have an additional nine months to complete necessary asbestos abatement. After asbestos abatement, the owner will have no more than three months to complete the balcony inspection. This extension does not apply to common interest developments. NOTE: Existing law requires an inspection by January 1, 2026, of balconies, staircases and associated waterproofing elements (among other structures) for buildings with three or more multi-family dwelling units. HOA Fines: HOA fines are limited to $100 per violation unless the violation relates to health or safety in common areas. Criticism of this new law includes lack of definition of "health and safety", among other things. The above are only brief summaries about just some of the new laws for 2026. California Association of Realtors has reviewed and revised appropriate forms, as well as include new ones, for real estate transactions. New advisories in some cases are set up to disclose and inform the parties to a transaction. For more information on these laws, please contact me, I will be happy to provide a more complete and extensive description. Alternatively, in some cases you should seek the advice of your financial or legal advisor.
