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2019 New Laws for Real Estate Issues

On Behalf of | Jun 26, 2019 | 2019 New Laws, Landlord Tenant, Real Estate |

Here is a summary of some of the larger new real estate oriented laws for 2019.

  1. Landlord Tenant: Evictions – Three Days’ Notice Excludes Holidays and Weekends:  When counting a three days’ notice to pay rent or quit or a three days’ notice to perform covenant or quit, or in responding to a complaint for unlawful detainer, Saturdays, Sundays and judicial holidays are now excluded.  (Code of Civil Procedure §§ 1161 and 1167.  Effective September 1, 2019.)
  2. Landlord Tenant: Commercial Property Abandonment:  Allows a commercial landlord to serve Notice of Belief of Abandonment after the rent is unpaid for three days (or any longer period required under the terms of the lease for a monetary default), as opposed to 14 days under prior law, and allows delivery of that notice by overnight courier. (Civil Code § 1951.35 and as an amendment to Civil Code §§ 1946 and 1951.3. Effective January 1, 2019.)
  3. Landlord Tenant: Commercial Property  – Disposal of Tenant’s Personal Property:  Increases the calculation of the total resale value of the personal property from $750 (or $1 per square foot, whichever is lesser) to either $2,500 or an amount equal to one month’s rent for the premises the tenant occupied, whichever is greater.  (Civil Code §§ 1993.04 and 1993.07. Effective January 1, 2019.)
  4. Requires landlord to accept rent tendered by a third party. While no right of tenancy is created by acceptance of rent by a third party, nor is a landlord required to accept housing assistance programs such as section 8 (which probably will be the new law next year).  The landlord may condition acceptance of rent from a third party on a signed acknowledgment that no tenancy is created with the third party who pays the rent.  Assembly Bill 2219 codified as an amendment to Civil Code § 1947.3. Effective January 1, 2019.
  5. Victims of Domestic Violence Protection from Eviction  Victims of domestic violence and other types of abuse cannot be evicted because they or the landlord has had to call law enforcement to respond to incidents of violence or abuse.  The protection is not unlimited or if calls or a pattern of 9-1-1 calls were frivolous in nature or not necessary to prevent or address a crime, emergency, or incident of abuse.  Technically, this statute creates a rebuttable presumption in unlawful detainer cases and is an affirmative defense if the landlord or owner files a complaint for unlawful detainer within 30 days of a tenant summoning law enforcement on behalf of, a victim of abuse.  The landlord may also rebut the presumption by showing that some other reason was a substantial motivating factor for filing the complaint.  Assembly Bill 2413 is codified as Civil Code § 1946.8 and amendments to Code of Civil Procedure § 1161.3 and Government Code § 53165. Effective January 1, 2019.
  6. Attorneys representing clients in mediation will have to provide a notice to the client about the confidentiality of mediation.  While most mediators have the parties (and attorneys) sign a form during the mediation stating the law about confidentiality, this law requires an attorney representing a person participating in a mediation to provide his or her client with a printed disclosure, per a statutory form, containing the confidentiality restrictions related to mediation, and to obtain a printed acknowledgment signed by that client stating that he or she has read and understands the confidentiality restrictions.  Remember, all communications, negotiations, or settlement offers in the course of mediation must remain confidential.  Statements made and writings prepared in connection with a mediation are not admissible or subject to discovery or compelled disclosure in noncriminal proceedings.  A mediator’s report, opinion, recommendation or finding about what occurred in a mediation may not be submitted to or considered by a court or another adjudicative body.  A mediator cannot testify in any subsequent civil proceeding about any communication or conduct occurring at, or in connection with, a mediation.  The law also provides that the failure of an attorney to comply with these disclosure requirements does not invalidate an agreement prepared in the course of, or pursuant to, a mediation.  SB 954 is codified as Evidence Code §§ 1122 and 1129. Effective January 1, 2019.
  7. Landlord Tenant: Inspection of Decks, Balconies, Stairways and Walkways:  This law requires that buildings with 3 or more multifamily dwelling units with decks, balconies, stairways and walkways must be inspected by a properly licensed person by 2025, and a subsequent inspection must be done every 6 years. The owner would have to make repairs if the inspector found that the decks or balconies were in need of repair.  (Civil Code § 1954 and Health and Safety Code §§ 17973 et seq. Effective January 1, 2019.)
  8. Landlord Tenant: Service Member Protections: The new law requires a landlord or even a property manager who believes that a service member’s request to terminate a lease due to deployment within 30 days of the request set forth in writing the lessor’s objections. See Military & Veterans Code §409.15 and The Soldiers’ and Sailors’ Civil Relief Act, Title 50 of the United States Code, Section 534.
  9. Building Permits: Expiration period extended:  A building permit remains valid despite changes in the building code as long as work is commenced within 12 months after issuance, unless the permittee has abandoned the work authorized by the permit. The law also authorizes a permittee to request and the building official to grant, in writing, one or more extensions of time for periods of not more than 180 days per extension.  (Health and Safety Code § 17958.12. Effective January 1, 2019.)
  10. Civil Liability for sexual harassment expanded:  Even if a business, service, or professional “relationship” does not presently exist, a person such as a real estate agent (or probably an investor among other persons) may be liable for sexual harassment when he or she holds himself or herself out as being able to help the plaintiff establish a business, service, or professional relationship with the defendant or a third party. This law eliminates the element that the plaintiff prove there is an inability by the plaintiff to easily terminate the relationship.  (Civil Code § 51.9, and Government Code §§ 12930 and 12948. Effective January 1, 2019.)
  11. “Clean Up” Legislation Clarifying that Realtors may be “independent contractors”.  The California Association of Realtors sponsored “clean-up” legislation to address a number of substantive issues in real estate law and have those laws “conform” more closely to current practice.  The most important provision of this legislation specifically reiterates that existing law permits salespersons and brokers to establish their relationship as one of either independent contractor or employment.  This change was in response to a recent case, Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903, which called into question the ability of real estate licensed salespersons and brokers to elect an independent contractor relationship.  Brokers should consult with their in-house counsel regarding the impact of the various provisions of this legislation, which in some cases modify the required disclosure forms.
  12. Licensing: Applicant for a Real Estate license cannot be required to disclose citizenship or immigration status:  This law prohibits a licensing board, including the DRE, from requiring an individual to disclose either citizenship status or immigration status for purposes of licensure, or from denying licensure to an otherwise qualified and eligible individual based solely on his or her citizenship status or immigration status.  (Business and Professions Code §§ 30 and 1247.6; Education Code §§ 44339.5; Family Code §§ 4014, 17506, and 17520; and Health and Safety Code §§ 1337.2, 1736.1, 1797.170, 1797.171, 1797.172, 106995 and 114870. Effective January 1, 2019.)
  13. Licensing: Criminal convictions may be limited to seven years to deny a license:  This law limits a seven year “look back period” for a board, including the DRE, to consider a criminal conviction in denying a license, and only if the crime is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made. There are exceptions such as convictions for serious crimes and sex offenders, and a specific exception for the DRE, among other boards, in regard to financially related crimes. In any case, a board may not deny a license to a rehabilitated applicant or one whose criminal record has been expunged.  (Business and Professions Code §§ 7.5, 480, 480.2, 481, 482, 488, 493, and 11345.2. Effective July 1, 2020.)
  14. CC&R’s:  New Private Transfer Fees Outlawed:  Prohibits developers from creating new property covenants, conditions, or restrictions that force subsequent owners to pay specially designated fees every time the property is transferred, unless the fee provides a “direct benefit” to the property, as defined in federal law. (Civil Code § 1098.6. Effective January 1, 2019.)