New Real Estate Laws You Should Understand

Starting January 1, 2011 there will be some new laws effecting buyers, sellers, homeowners and renters, as well as foreclosures. To read the full text of the laws you can go to http:// Here they are in a nut shell.

Short Sale Deficiencies Not Allowed. Lenders may not go after borrowers for the short sale deficiencies any longer after January 1. Once the lender has given written permission to accept the short sale price it is bound to accept that price as payment in full of the obligation. This law applies to first trust deeds only, in residential 1-4 unit properties, and still permits the lender to seek damages for fraud or waste committed by the borrower in relation to the sale. Senate Bill 931.

Home Inspection Report Energy Audit Inclusion. Buyers will be allowed to ask that an energy audit be included in their home inspection report, according to the standards of the Home Energy Rating Systems (HERS). Assembly Bill 1809 and California Civil Code Section 2079.10.

Adverse Possession Claim Restriction. A person or entity may not initiate a claim for adverse possession (taking of property of another) without certified proof that all taxes–state, county and municipal–have been paid for the five year period the property has been occupied and claimed. Assembly Bill 1684.

Mortgage Loan Originator (MLO) Enforcement. One who acts as a MLO without a license endorsement as such will be guilty of a crime.  Senate Bill 1137.

Post-Foreclosure Tenant Protection. Tenants remaining on property after a foreclosure sale must receive a notice of tenant’s statutory rights. There is another part of this bill that also protects residential tenants’ credit. Senate Bill 1149.

Tenant Protection and Domestic Violence. A landlord cannot terminate a tenancy based on domestic violence that occurred or is alleged against the tenant or his/her household members. There are some exceptions. A landlord is also required to change exterior locks on leases entered into after January 1, 2011 upon written request of the tenant and within 24 hours of a request. For details and exception see Senate Bill 782.

Real Estate Fraud Protections. There are several new laws pertaining to foreclosure consultants, mailed solicitations and grant deeds, and for renting out dwellings without owner permission. See Assembly Bills 2325, 1373 and 1800.

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