2025 New Laws (Part 2)

Disclosure of Local Requirements re Replacement of Gas-Powered Appliances and Electrical System Inspection – Commencing January 2026

TDS-Related Disclosure: Disclosures under this law are subject to the same application, exemptions and statutory termination rights as the Transfer Disclosure Statement.

This disclosure applies to

•residential real property

•improved with one to four dwelling units, or mobilehomes.

•Among other exemptions, sales of property in probate, bankruptcy, foreclosure, REOS and certain trusts are exempt.

A buyer may terminate the purchase agreement within five days of delivery of this disclosure (or three days if delivered personally).

Questions pertaining to this disclosure requirement will be integrated into the Seller Property Questionnaire (C.A.R. Form SPQ) in December 2025.

Delivery of Listing AgreementExtends Foreclosure Saleby 45 Days

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45- day postponement based on listing

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For residential 1 to 4 properties subject to a power of sale contained in any deed of trust or mortgage, the sale shall not be conducted until the expiration of an additional 45 days following the scheduled date of sale when:

•The trustee receives five business days prior to the scheduled date of sale

•A listing agreement

•With a California licensed real estate broker

•To be placed in a publicly available marketing platform

•Sent by certified mail with USPS or other overnight mail courier service

•With tracking information that confirms the recipient’s signature and date and time of receipt and delivery

•This postponement may be used only one time

AB 2424

With additional extension for executed purchase agreement

Delivery of Executed Purchase Agreement Extends Foreclosure Sale by 45 Days

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45- day postponement based on executed purchase agreement

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If the scheduled date of sale has been postponed in the above manner the trustee shall postpone the scheduled date of sale for 45 days following receipt of an executed purchase agreement when:

•The trustee receives five business days before the scheduled date of sale

•A copy of a purchase agreement for sale of the property

•Purchase agreement must be bona fide and fully executed

•Must include name of buyer, sales price, closing date and acceptance by the designated escrow agent

•Purchase price must be equal to or greater than the amount of the unpaid balance of all obligations of record secured by the property

•Sent by certified mail with USPS or other overnight mail courier service

•With tracking information that confirms the recipient’s signature and date and time of receipt and delivery

•This postponement may be used only one time

Summary of Time Periods for Foreclosure

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110 days: Under California law, 110 days from the time from when a Notice of Default is recorded to the scheduled trustee’s sale. (90 days from recordation of notice of default and 20 days for setting trustee’s sale)

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120 days prior to NOD under RESPA: Since 2021, for properties subject to the Real Estate Settlement Procedures Act (RESPA) the earliest a Notice of Default can be filed is 120 days after the loan becomes delinquent.

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230 days total time: With this latter requirement, the total time a borrower has from default to the date of sale is 230 days for properties subject to RESPA.

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Up to 85 more days under AB 2424: In addition to the 230-day timeline indicated above, AB 2424 may add up to 85 more days to the foreclosure process as follows: Delivery of a listing to the trustee five business days prior to date of sale will give the borrower 45 more days beyond the scheduled date of sale. And delivery of an executed purchase agreement five business days prior to the date of sale may effectively add another 40 days.

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Up to 315 days total: With AB 2424 total time is up to 315 days from the time the loan becomes delinquent for properties subject to RESPA

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See ourForeclosure Timeline chart.

Probate Small-Estate Exception: Limit Raised to $750,000 for Real Property Used as Primary Residence

•A decedent’s real property used as a primary residence may be disposed of outside of probate administration when the gross value does not exceed $750,000.

•In lieu of probate administration, a successor may petition the court to determine succession.

•The successor of the decedent to an interest in that real property, without procuring letters of administration or awaiting the probate of the will, may (after 40 days) file a petition in the superior court of the county in which the estate of the decedent may be administered requesting a court order determining that the petitioner has succeeded to that real property.

•This increased limit will be in effect for the period starting April 1, 2025, through March 31, 2028, after which the value would be adjusted at a three-year interval based on the Consumer Price Index.

AB 2016

Screening Fees Strictly Limited:

Two Options for Collecting Them

Option #1

The landlord agrees to return the fee to any applicant

who is not selected for tenancy. This option sets no

conditions on the application process.

Option #2 – First come, first qualified, first served

The LL adopts an application screening process

whereby all completed applications are considered,

as provided in the LL’s written, disclosed screening

criteria, in the order the applications were received.

How does option #2 work?

•The screening criteria must be provided with the application

•All completed applications are considered, as provided in the written criteria, in the order the applications were received

•The first applicant who meets the landlord's established screening criteria is approved for tenancy

•The applicant is not charged an application fee unless their application is actually considered

•If a landlord denies an applicant because the applicant does not meet the established, disclosed screening criteria, then the landlord is not required to refund the application fee

Additional Screening FeeRules Under AB 2493

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Maximum screening fee: Cannot be greater than actual out-of-pocket costs but not to exceed approximately $63.50

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Copy of credit report to tenant: Credit report must be provided to all tenant applicants who pay a screening fee within 7 days regardless of whether it was requested

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No unit available? Prohibition on screening charges when no unit is available. But a landlord may still place a prospective tenant on a waiting list and charge a fee as long as a unit will be available within a reasonable time.

Move-in, Move-out and Post-repair and Cleaning Photos Demonstrating Deductions Required

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Move-in, Move-out and post-repair and cleaning photos are required:

•Beginning April 1, 2025, the landlord is required to take photographs of the unit within a reasonable time after the possession of the unit is returned to the landlord, but prior to any repairs or cleaning for which the landlord will make a deduction from or claim against the security deposit pursuant to this sectionand

•The landlord is also required to take photographs of the unit within a reasonable time after such repairs or cleanings are completed.

•For tenancies that begin on or after July 1, 2025, the landlord is required to take photographs of the unit immediately before, or at the inception of, the tenancy.

AB 2801

Move-in, move-out and post-repair and cleaning photos demonstrating deductions required

In returning the itemized statement of deductions, if a deduction is made for repairs or cleaning, the landlord

•Must provide the photographs including the move-in, move-out and post repair and cleaning photos,

•Must provide awritten explanationof the cost of the allowable repairs or cleanings.

•May provide such photographs to the tenant by mail, email, computer flash drive, or by providing a link where the tenant may view the photographs online.

•Will not be entitled to claim any amount of the security if the landlord, in bad faith, fails to comply with these requirements.

•Exception: Photos and receipts need not be returned with itemization if the total deductions for repairs and cleaning does not exceed $125.

AB 2801

Permissible charges for repairs and carpet cleaning if reasonably necessary

•Claims for materials or supplies and for work performed by a contractor, the landlord, or the landlord’s employee shall be limited to a reasonable amount necessary to restore the premises back to the condition it was in at the inception of the tenancy, exclusive of ordinary wear and tear.

•The landlord shall not require a tenant to pay for or assert a claim against the tenant or the security for, professional carpet cleaning or other professional cleaning services, unless reasonably necessary to return the premises to the condition it was in at the inception of tenancy, exclusive of ordinary wear and tear.

•AB 2801 reiterates existing law that deductions cannot be made from the deposit unless reasonably necessary. But it adds greater specificity regarding charges for repair work and professional cleaning services.

•Risk management advice:

•Do not deduct pre-set cleaning fees from a tenant’s security deposit, irrespective of the condition of the unit

•Do not require professional cleaning as the only way to avoid pre-set cleaning fees.

UD Answer Period Extended From 5 to 10 Business Days

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Extends the UD answer period from five business days to ten business days after an unlawful detainer complaint and summons is served.

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Background: In 2018, the unlawful detainer law was amended to exclude Saturdays, Sundays and other judicial holidays in counting a three-day notice to pay rent or quit (AB 2343). That same bill also excluded Saturdays and Sundays in counting the five-day answer period after service of an unlawful detainer complaint and summons. That five-day answer period is now ten days.

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AB 2347

“Qualified Commercial Tenants” Protections for Small Businesses

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This law extends to small businesses (“qualified commercial tenants”) certain tenancy rights currently applicable to residential tenancies as follows:

•30 and 90-day notice to increase rent

•30 and 60-day notice to terminate tenancy and

•Translated copy of the lease if negotiated in specified languages

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Additionally, transparency and proportionality are required for fees a landlord may charge a qualified commercial tenant to recover building operating costs:

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Prohibits a landlord of a commercial real property from charging a qualified commercial tenant a fee to recover building operating costs unless the costs are allocated proportionately per tenant and the qualified commercial tenant is provided supporting documentation (along with several other conditions that must be met).

SB 1103

“Qualified Commercial Tenants” protections for small businesses

Application to “qualified commercial tenants”

1.The tenant is a microenterprise (which generally means that the business has 5 or fewer employees); a restaurant with fewer than 10 employees; or a nonprofit organization with fewer than 20 employees.

AND

2.For month-to-month periodic tenancies or shorter, the tenant has provided the landlord, within the previous 12 months:

•A written notice that the tenant is a qualified commercial tenant and

•A self-attestation regarding the number of employees

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For leases or longer periodic tenancies, the tenant has provided the notice and self-attestation before or upon execution of the lease, and annually thereafter.