Dear CAR Member,
Happy New Year!
2018 was a busy year for REALTORS® as we worked to successfully defeat Proposition 10 to protect the Costa Hawkins Rental Housing Act and at the same time, embarked on a historic effort to pass Proposition 5, C.A.R.’s own Property Tax Fairness Initiative.
2019 will no doubt be another busy year as we work with a new governor and new legislature to achieve our housing policy goals. Governor Gavin Newsom revealed his proposed budget last week. In total, the Budget includes $7.7 billion across multiple departments and programs to address housing and homelessness throughout the state. While the governor’s budget makes it clear that housing is on the forefront of his legislative agenda, it was not clear how many new units the governor’s proposal would generate.
During his campaign, Gov. Newsom had proposed building 3.5 million new units over the next seven years. In the budget, the governor has proposed linking transportation funding to housing production goals, which is similar to legislation C.A.R. tried to enact last year. Of particular note, the governor also proposed granting one-time General Fund dollars of up to $750 million to the Department of Housing and Community Development to help jumpstart housing production. These funds will be used to provide technical assistance to cities seeking to meet their housing production goals across all income levels. An additional $500 million to $750 million will be made available as a reward to those jurisdictions that reach the state’s specified production milestones. The governor’s proposed budget will be before the legislature for the next few months with a final budget being approved before the next fiscal year.
A new year always brings with it new laws that may affect REALTORS®. In 2018, C.A.R. sponsored a package of “cleanup” legislation that was signed into law by Gov. Brown last fall. This cleanup law accomplishes a number of things, including conforming the Real Estate Law to existing practice, eliminating antiquated or confusing laws and introducing plain language where appropriate. All of the changes in the cleanup law went into effect on January 1, 2019. Here are the most significant ones:
Agency Disclosure and Confirmation of Agency Forms – Intended to make these forms understandable to the consumer and easier to use for agents, various changes have been made to the Agency Disclosure and the Agency Confirmation forms. Throughout, plain English is now used instead of more antiquated industry jargon (for instance, “Buyer’s Agent” is now used instead of “Selling Agent.”) The “third” agency form has now been eliminated, which means that the buyer’s agent is no longer required to provide an agency form to the seller (unless representing both sides as a dual agent). Finally, the Agency Confirmation has been expanded to now require the names and license numbers of both the brokers and agents on each side of the transaction.
Transfer Disclosure Statement: Electronic Delivery and Cancellation Rights – Electronic delivery is often the norm nowadays, but the law being written in the 80s, envisioned only personal delivery or delivery by mail. Now, electronic delivery of the Transfer Disclosure Statement as well as the NHD Statement is formally recognized as legal delivery. Likewise, the law clarifies that when the TDS is delivered electronically, the buyer has a right to cancel a purchase agreement within five days after delivery of a completed TDS. Most significantly for REALTORS®, the law is now explicit that the TDS is not complete until the listing agent’s visual inspection disclosure has been completed and provided to the buyer.
Delivery of Copy of Listing – Until last year, the law required a copy of a signed listing agreement to be delivered to a seller “at the time the signature was obtained.” Strict compliance was often a practical impossibility. Now the listing need only be provided to the seller “as soon as practicable” after the agreement is signed. Furthermore, a copy of the listing may be delivered electronically, when the parties have agreed to conduct the transaction by electronic means.
More information on each of these updates as well as all of the other changes made by the cleanup law can be found in the Legal Q&A: “2019 Real Estate Cleanup Law Changes.” See a complete list of all 2019 laws impacting REALTORS®.
Lastly, I’ll be out on the road much of this year visiting local Associations of REALTORS®, and I look forward to meeting many of you.
Have a great weekend.