As 2008 roles in, several new laws will take effect that are significant to real estate professionals and consumers. Here is a brief summary of a number of these new laws.
Cell Phone Usage: This new state law affects every driver. Beginning July 1, 2008, all motorists will be required to use hands-free devices when using a cell phone while driving. Violators will face a $20 fine for the first offense and a $50 fine for each subsequent breach. The only exception is when contacting a law enforcement agency or public safety entity for emergency purposes.
New Mortgage Lenders and Broker Regulations: As of January 1, 2008, anyone who makes eight or more loans to the public in a calendar year using that person’s own funds must be licensed as a real estate Broker. This new law applies to loans secured by one-to-four residential units whether loans are held or resold.
Anti-Discrimination: Landlords and their agents, as of January 1, may no longer legally inquire into the immigration or citizenship status of an existing or prospective tenant.
Real Estate Licensing: If you want to become a realtor, you now must first complete three real estate classes before applying for the real estate salesperson examination. This legislation also eliminated the conditional salesperson license.
Real Estate Appraisers: A licensed appraiser’s compensation can no longer be dependent upon or affected by the value conclusion generated by an appraisal for a real property purchase, transfer, sale, financing or development. In addition, any party with an interest in a real estate transaction is barred from influencing or attempting to influence the appraisal process for a mortgage loan.
New Disclosure for Private Transfer Fees: As of January 1, a seller who must provide a transfer disclosure statement is required to concurrently furnish a disclosure statement of private transfer fees, if applicable. Transfer fees include any payment that must be paid upon transfer of real property as imposed by a deed, CC &Rs or other documents. The statement must include a notice that payment is required, the amount of the fee and name of the entity that is to receive payment.
Recording Private Transfer Fees: As a condition of payment of the fee, any person or entity imposing a private transfer fee must record the instrument creating the fee and a separate notice of payment of transfer fee required. Both must be simultaneously recorded at the county recorder’s office for which the property is located.
Loan Regulations: As of January 1, each of the agencies governing residential loans (all under the purview of the California Secretary of Business, Transportation and Housing) will have the authority to adopt guidelines that provide more stringent provisions on residential loans on one-to-four unit family residences for interest-only, negatively amortized and adjustable mortgage loans. We expect these new guidelines will require lenders to verify that consumers can repay their loans and will demand clearer statements concerning the likelihood that future payments will be made. Criminal penalties for failing to do so are likely to be considered. This new law also brings certain private lenders under the influence of the Department of Real Estate.
New Escrow Fees: Escrow companies licensed by the California Department of Corporations are now permitted to charge a fee for cancellations or postponements resulting from acts or omissions of the parties to an escrow transaction. Under the new law, the escrow must have been postponed for at least two months from the most recent closing date agreed upon by the parties, or the escrow cancelled if certain conditions are met. Finally, it is now a violation of the escrow licensing laws if the escrow company violates any provision of the Real Estate Settlement Procedures Act.
Mobile Homes and Manufactured Homes: Beginning January 1, both mobile and manufactured homes are defined as, “Transportable structures of certain specifications, with or without foundations.” Manufactured homes are considered those constructed on or after June 15, 1976, while mobile homes are those built prior to that date.
Property Tax Reassessment: As of January 1, any transfer of real property made from January 1, 2001 through January 1, 2006 between registered domestic partners is retroactively exempt from property tax reassessment. The recipient of the real property transfer must submit an application by June 30, 2009 to reverse the reassessment.
If you have questions concerning any of these laws, I recommend you contact the California Association of Realtors (www.car.org ).