California-Specific Real Estate Laws: What to Know

Whether you’re a property owner, buyer, seller, landlord, or tenant, many real estate laws in California dictate your rights and responsibilities.

You need to familiarize yourself with how these California real estate laws affect you so you can comply with them or know how to protect yourself should you be involved in a real estate dispute.

In this post, I’ll share with you some of the major property and real estate laws in California you should be aware of.

What Is Different about California Real Estate Law?

Before I get into key CA real estate laws, here are a few things that differentiate the Golden State’s laws from many other states, particularly when it comes to real estate purchases.

  • California Law Doesn’t Require a Property Seller to Physically Meet with a Buyer

In some states, the buyer and seller must be present at the closing of a real estate transaction, but in California real estate brokers and agents can be the link between both parties until the deal is closed. 

This has the benefit of avoiding deals in a real estate deal because of conflicting schedules between the buyer and seller and other factors that may get in the way of their meeting.

  • You Don’t Need an Attorney

Many states, including Alabama, Delaware, Florida, New York, Rhode Island, South Carolina, and Virginia, require a property buyer and seller to have an attorney present when closing.

In California having an attorney is optional. I however strongly recommend that you hire a real estate attorney to guide you through the property buying or selling process.

The attorney can answer your questions on the contracting process, which your real estate agent may not have answers to, and more importantly, they could save you thousands of dollars by helping you avoid legal issues before they arise or later after a deal closes.

  • Dual Agency Is Allowed

States like Alaska, Colorado, Florida, Texas, and Wyoming prohibit dual agency, which happens when a buyer and seller in a real estate transaction are represented by the same real estate broker or agency. 

This is legal in California, but you want to avoid it as it creates a conflict of interest for the agent.

If you decide to go ahead with dual agency, you must sign a Disclosure Regarding Real Estate Agency Relationships form, which is a document where the buyer and seller in a California real estate transaction consent to being represented by the same real estate agent.

  • You Might Have to Pay Mello-Roos Taxes 

Once you buy a home in California, you’ll pay property tax like you would in any other US state.

On top of that, depending on the district where your property is located you may have to pay Mello-Roos Taxes, which is a tax used to repair roads, improve police and fire protection services, build new sewer and sanitation systems, etc.

5 Must-Know Real Estate Laws in California

These are a few of the important to know California real estate laws:

  • Property Sellers Are Required to Disclose Any Negative Details about a Property

Is your property not connected to the public sewer system? Does it get flooded when it rains or has a death occurred within the premises within the last three years?

California has a real estate disclosure law, which requires anyone selling property to inform potential buyers in writing of any issues regarding the property.

If you fail to disclose defects or lie about the condition of a property a buyer can sue you if they find problems with the property after a real estate transaction has been closed.

Disclosure of material defects on a property doesn’t only apply when selling a property. If you’re renting out your home you also shouldn’t conceal any defects from the tenant.

  • Most Real Estate Contracts in California Must Be In Writing 

A real estate buyer and seller can verbally agree on property transactions, but according to The Statute of Frauds in California, for their deals to be valid they must be written.

Some of the agreements that fall under The Statute of Frauds include real estate purchase agreements, property exchanges, leases that run for over a year, and property transfer agreements.

  • Tenant Security Deposits Must Be Refunded

When renting a property, California real estate laws allow you to ask for two months rent from the tenant as security and three months rent for a furnished rental.

The security deposit must be returned in full to the tenant once their lease ends within 21 days.

As a landlord, you can keep part or all of the security deposit for reasons such as to repair damages on the property, recover unpaid rent, pay for cleaning costs, and future debts that may arise due to a tenant’s breach of their lease.

  • Abandon Real Estate In California Reverts to the State

Under California real estate law, a property that remains unclaimed for three years becomes the property of the California government. A situation where a property can go unclaimed for years is if the owner died and they had no beneficiaries. 

Note, until the state takes over an abandoned property, it is deemed to have an owner, and squatting, destroying, modifying, or entering the property is considered trespass.

  • Landlords Cannot Evict Tenants At Will

Evictions can get complicated, but if as a property manager you want to evict someone living on your premise, you must give them prior notice. For example, if a tenant has seriously violated lease terms, you have to give them a three-day notice to vacate, excluding weekends and judicial holidays.

Gallagher Krich, APC: Your California Real Estate Attorneys

The above are just some of the main real estate laws in California. If you have questions regarding the application of these laws or would like to know more about California real estate laws, please contact Gallagher Krich, APC.

Our attorneys have over 30 years of combined San Diego real estate law experience and we can help you comply with all relevant property laws whether you’re a property owner, buyer, or seller.

We can also represent you in a wide range of real estate transactions and disputes, including property buyers and sellers disputes, sellers’ nondisclosure, and construction defects.

Get in touch today at (858) 926-5797 or send us an email through our contact form to schedule a free consultation with one of our attorneys.

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