California Legislative Bills

SB 567, known as the Homelessness Prevention & Housing Act, was enacted on April 1, 2024. It strengthens just cause eviction protections statewide, increases penalties for no-fault evictions, and imposes stricter tenant relocation requirements on investors. This legislation significantly impacts buy-and-hold investor strategies, requiring landlords to comply with more stringent tenant protections.

Effective January 1, 2024, AB 1033 allows ADUs to be sold separately from the main property in California, offering new investment opportunities for small-scale real estate investors. However, local jurisdictions must opt-in for separate ADU sales to be permitted, so investors should check local regulations before proceeding.

As of October 1, 2023, AB 968 requires wholesalers to provide sellers with written notice of their intent to assign a contract and explicitly disclose any assignment fees or profit margins. This applies to residential properties with 1-4 units. Failure to comply can result in the contract being voided by the seller, marking a critical compliance point for California real estate wholesaling laws.

AB 1482, enacted in 2019, caps rent increases at 5% plus inflation, not exceeding 10% annually. It mandates just cause for evictions statewide, with exemptions for properties less than 15 years old and certain single-family homes. This act has reshaped rental property management and investment strategies across California by limiting rent hikes and eviction flexibility.

Yes, under SB 567, penalties for no-fault evictions have increased substantially. Landlords who violate just cause eviction rules or fail to adhere to tenant relocation requirements may face significant fines and legal consequences, emphasizing compliance for property investors and landlords.

Real estate investors engaging in wholesaling in California must now navigate AB 968’s disclosure requirements carefully. Wholesalers must disclose assignment fees upfront to sellers to avoid contract voidability. While wholesaling remains a viable strategy, adherence to these laws is essential for legal and successful transactions.

Recent legislation such as AB 1033 expands opportunities by allowing separate sales of ADUs, benefiting small investors. However, laws like SB 567 and AB 1482 impose stricter tenant protections and rent controls, requiring investors to adopt more comprehensive tenant management strategies and reconsider long-term rental plans.

Although AB 1033 permits separate sales of ADUs, individual local jurisdictions have the option to opt-in or opt-out of this rule. Real estate investors should conduct thorough due diligence on local governmental policies to understand if separate ADU sale laws apply in their targeted areas. By staying informed about these key California real estate laws, investors and wholesalers can better navigate the evolving regulatory landscape and optimize their strategies accordingly.