New Year Means New Laws for Property Owners in California in 2019: Part I: Residential and Commercial Real Estate

2018 was a busy year for state and local lawmakers and regulators in California, bringing about roughly a dozen new statutes and regulations critical to owners of commercial and multi-resident real estate, as well as common interest communities (which will be addressed in Part II). From building inspections to wetlands regulations, and from landlord-tenant issues to parking regulations, parties affected by these new statutes and regulations will want to be aware of these changes and ensure they remain in compliance with California law.

Below is a brief summary of some of the changes relative to residential and commercial property owners enacted in 2018 and taking effect in 2019.

In real estate, AB 3041 (Civil Code § 1098.6) bans private real estate transfer fees. Specifically, the law prohibits new recorded covenants requiring subsequent property owners to pay a private fee upon the transfer of real property unless the fee provides a direct benefit to the property. Any transfer fee created in violation of the prohibition is deemed void as against public policy.

To increase property safety, SB 721 (Civil Code § 1954 and Health and Safety Code § 17973) deals with inspections of decks, balconies, stairways, and walkways. With certain exceptions, this bill requires an inspection of exterior elevated elements and associated waterproofing elements, including decks and balconies, for buildings with 3 or more multi-family dwelling units by January 1, 2025 and requires subsequent inspections every 6 years. The bill excludes common interest developments.

In leasing, AB 2219 (Civil Code § 1947.3) requires landlords to accept rent paid by a third party, provided, however, landlords may condition third-party rent payments on the third party signing an acknowledgment stating that they are not currently a tenant of the premises and that acceptance of the rent payment does not create a new tenancy with the third party.

In commercial property, AB 2847 (Civil Code §§ 1946, 1951.3 and 1951.35) holds that real property is deemed abandoned by a lessee and a lease terminates if the lessor gives notice of belief of abandonment. For commercial real property, this bill authorizes a notice of belief of abandonment to be given where rent has been due and unpaid for at least the number of days required for the lessor to declare a rent default under the terms of the lease (but in no case less than 3 days). Previously, the Civil Code authorized a notice of belief of abandonment to be given only where rent has been due and unpaid for at least 14 consecutive days.

Also in commercial property, AB 2173 (Civil Code §§ 1993.04 and 1993.07) revises the law regarding a landlord’s disposal of a lessee’s personal property at the end of the lease term. In general, a landlord must provide written notice to a tenant if personal property remains after the end of a tenancy and must sell the personal property at public sale by competitive bidding. Previously, if a landlord reasonably believes that the total resale value of the personal property is the lesser of (i) $750 or (ii) $1 per square foot of the premises occupied by the tenant, the landlord may keep the property or dispose of it. This bill changes the calculation of the total resale value of the personal property to the greater of (i) $2,500 or (ii) an amount equal to one month’s rent.

Watch for more 2019 real estate updates in Parts II and III, relating to common interest developments (Part II) and environmental law and land use updates in Part III.

Contact the attorneys at Khashayar Law Group and LOKK Legal for more information.

Khashayar Law Group
(760) 806-4388
www.mysdlawyer.com

LOKK Legal
(858) 472-9700
www.lokklegal.com