New California State Law Requires Buyer Broker Agreement as of January 1, 2025.

 

Craftsman home in Long Beach

As predicted, Governor Newsom has signed into law AB 7229, the new requirement for buyers and their brokers to sign an agreement with each other before making an offer on  a property.  This law applies to both residential and commercial real estate.  There are some differences from the National Association of REALTORS settlement requirements already in practice, including the fact that the NAR settlement concerns residential property only, whereas the new state law (in effect starting January 1, 2025) covers all properties both residential and commercial, and all licensed agents whether or not they are REALTOR members of the National Association of REALTORS.

"Unlike the N.A.R. settlement, which focuses solely on homes listed on an MLS, AB 2992 requires a written buyer representation agreement for any property, residential or commercial, whether it is listed on an MLS or not. This means that all licensed real estate agents, regardless of the type of property they are showing, must have a signed agreement in place before representing a buyer. This is a significant improvement in transparency for consumers, ensuring that they are fully aware of the services their agent will provide and the compensation structure before engaging in any transaction."  from the Santa Barbara Independent, Oct. 3, 2024 .

Contracts may be renewed, and are limited to 3 months for each contract period. While some people may not understand the significance of having such a contract, as a buyer it is important to understand what is to be expected of the agent and the standard of care to be received by the buyer. Buying a property is a large financial and legal commitment, and both agent and buyer need to be actively engaged with each other. According to the NAR settlement, such contracts must be signed before showing a property which will affect REALTORS, and per state law, commercial agents must have a buyer agreement signed before submitting an offer.

It's worth noting that if the state law requirement for a buyer broker agreement is not met, the Department of Real Estate may remove an agent's license.

If you would like more information on working with a Realtor, please contact me for further explanation and consultation before entering into a contract.

See prior post for buyer broker contracts

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

New Laws Affecting California Real Estate Starting in 2022

Naples Canal

Every year many new bills are signed into California law, and this year is no exception.  Not all have to do directly with real estate, but here are some of the ones that do:

AB 468 concerns emotional support animals (which are not the same as service animals).  While landlords must provide reasonable accommodation concerning emotional support animals per current federal or state law, there are now restrictions on how health providers may provide documentation, requiring specific language, in order to reduce emotional support animal fraud.  To read more about service animals vs. emotional support animals, go to Emotional Support Animal Fraud.

AB 491 Fair Housing Equal Access, a new law which states that in "mixed-income multifamily structures, all occupants must have equal access to common entrances, areas, and amenities as the occupants of market-rate housing units." (California Association of Realtors).  The purpose of this bill is to eliminate the "poor door" for certain occupants of designated affordable housing units who in some instances were not allowed to use certain entrances or common area features.

AB 938 Appraisal Discrimination: To combat this problem which has existed in some geographic areas (nationwide) , after July 1, 2022, Realtor contracts in California which also require the delivery of a Seller's Transfer Disclosure Statement (TDS), must contain specific language concerning unbiased valuation of properties which cannot be influenced by race, religion, marital status, pregnancy, and 13 other categories.

SB 392 Homeowner associations must "communicate with homeowners via email if that is the homeowner's preferred method of communication (for notices that are required to be delivered individually under the Davis-Sterling Act)." (California Association of Realtors). This is a time saver and a money saver for associations which may be spending hundreds of dollars annually on mailing costs for multi-page documents that are required by law to be sent to HOA members. The annual budget report, annual policy statements and notices regarding assessments or delinquencies, among others, are notices that must be delivered "individually," and thus, the homeowner may now require that they receive these notices via email.

SB 9 governing lot splits in otherwise single SFR zoned areas, is lengthy and should require in depth study by the interested party:

"This law requires a city or county to ministerially approve either or both of the following, (subject to exceptions and conditions):  a) A housing development of no more than two units in a single-family zone ("duplex").  b) The subdivision of a parcel zoned for residential use, into two approximately equal parcels ("lot split")." (California Association of Realtors).

Existing law governing zoning of units and/or Accessory Dwelling Units may help the end user achieve his/her housing dream, and in spite of media coverage on how SB9 will chop up neighborhoods, there are many requirements to be consulted with, so long term affect may ultimately be seen as one more tool for increasing housing, rather than a huge overwhelming impact on neighborhoods.

 Further laws concern redaction and disclosure (if known by the Realtor) of restrictive covenants AB 1466;  SB 60 governing short term rentals; Revocable transfer on death deeds (avoiding probate) SB 315;

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

The "Bureau of Real Estate" is slated to return to the "Department of Real Estate" when Gov. Brown signs

Several years ago when Gov. Jerry Brown took office, efforts to streamline state operations the Department of Real Estate was renamed the Bureau of Real Estate and moved to function as part of the Department of Consumer of Affairs, as of 2012.

Instead of being known under the acronym of DRE, it became CalBRE--more letters and, I thought, more awkward sounding.  But what really determines things in the government is how much money is involved.  The Bureau--former Department--is funded by solely by the fees paid by real estate licensees, and is not part of the State's budget system. However, part of the money going to the Bureau was being allocated to the Department of Consumer Affairs.  The Bureau, still found on the internet as http://www.dre.ca.gov, oversees a variety of functions which are found on its website.

A bill has now passed the Legislature and will hopefully be signed very soon by Gov. Brown, which will finalize the return of this agency to being a Department, and thereby saving the current Bureau of Real Estate about $3.5 million which can be utilized to make the agency function at its property level.

This site is where current news, education and enforcement about California real estate laws can be found, and should you want to check someone's real estate license, this is where to do it.

We are looking forward to the upcoming change.