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A Summary of California Laws that took effect on January 1, 2011

Here are some California laws that will bring a cheer to some and tears to othes that took effect on January 1, 2011.

No Short Sale Deficiencies:

A seller's first trust deed lender cannot obtain a deficiency judgment against the seller after a short sale. Providing written consent to a short sale shall obligate the first trust deed lender to accept the sales proceeds as full payment and discharge of the remaining amount owed on the loan. This law applies to first trust deeds secured by one-to-four residential units, but does not limit the lender from seeking damages for fraud or waste by the borrower. Senate Bill 931.

Energy Audit in Home Inspection Report:

A home inspection and inspection report may, upon a client's request, include an audit of the energy efficiency of a home, according to the standards of the Home Energy Rating Systems (HERS) and buyers should expect to be provided a copy of the HERS booklet. Assembly Bill 1809 and California Civil Code section 2079.10.

Post-Foreclosure Protection for Tenants:

A a notice to terminate a residential tenant who remains after a foreclosure sale must generally include a statutory notice of the tenant's rights. This requirement, which sunsets on January 1, 2013, applies to an immediate successor-in-interest for one year after a foreclosure sale. The tenant's rights must be on a separate cover sheet or, for a 90-day termination, incorporated into the notice to terminate. Another provision of this bill protects a residential tenant's credit by generally prohibiting the court clerk from revealing unlawful detainer court records unless the plaintiff prevails at trial. Senate Bill 1149.

Tenant Protection for Domestic Violence Victims:

A residential landlord cannot terminate or fail to renew a tenancy based on domestic violence against the tenant or tenant's household members as specified. This law applies if the person restrained from contact with the tenant by court order or named in a police report is not also a tenant of the same dwelling unit. If the protected tenant subsequently allows the person restrained to visit the property, or the landlord reasonably believes the person restrained poses a physical threat to others or to quiet possession by other tenants, the landlord may serve a three-day notice to correct or quit. To further ensure safe housing for domestic violence victims, this law also requires that, for leases entered into after January 1, 2011, a landlord changes the exterior locks of a protected tenant's dwelling unit within 24 hours after the tenant provides a written request and supporting court or police documentation as specified. Senate Bill 782.

Protections Against Real Estate Fraud

New laws protecting consumers from real estate fraud include, without limitation, the following: (1) Expanding the foreclosure consultant law to include someone who performs a forensic audit of a residential mortgage loan (Assembly Bill 2325); (2) Requiring any mailed solicitation that offers to provide a copy of an owner's grant deed or other title records for a fee to include a prominent statutory disclosure that the copy service is not associated with any governmental agency and that the homeowner can obtain such records from the county recorder (Assembly Bill 1373); and (3) Increasing the criminal punishment for renting out a residential dwelling without the owner's consent from six months imprisonment plus a $1,000 fine, to one year imprisonment, plus a $2,500 fine (Assembly Bill 1800).

Other Laws: Some of the other laws that may be of interest include, but are not limited to, revisions to the mechanics' lien law (Senate Bill 189); clarification that the prohibition against discrimination of tenants based on source of income pertains to lawful and verifiable income (Senate Bill 1252); extension of the CalVet Home Loan program to include 2-to-4 residential units (Assembly Bill 2087); and lien enforcement by a municipal utility district for a tenant's delinquent charges (Senate Bill 1035).

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