2023 NEW LAWS AFFECTING REAL ESTATE
Here is a summary of just a handful of the new 2023 laws impacting real estate….
Prop 19 update. Property taxes in LA County deferred for homeowners claiming Prop 19 tax savings where the assessor has yet to process their Prop 19 exemptions… LA County has yet to process Prop 19 tax savings for over 1200 eligible homeowners per the Los Angeles Times. This law allows a homeowner to apply to have their property taxes deferred when the assessor has not completed its determination of the property’s eligibility under Prop 19. This is an urgency statute that took effect when the Governor signed it in September. Taxpayers have until January 1, 2024, to file for their deferment. SB 989
Partition action procedures under the Heirs Law now apply to all persons who own property as tenants in common. Last year in 2021, the Uniform Partition of Heirs Property Act was passed introducing a fair and rational procedure that allowed owners to realize the full value of their property if a sale was ordered pursuant to a partition action. Among other things, it required that in a partition action a court first mandates an appraisal and grants co-tenants an option to buy. If a sale is ordered, it must be a competitive open-market sale conducted through a broker, as opposed to a court auction. The broker’s compensation must be set by the judge, and it must be reasonable. However, this procedure was limited to “heirs property,” meaning, property owned at least in part by related persons. This law has now been expanded to apply to all persons who hold property as tenants in common no matter how the property was acquired or whether such persons are related. AB 2245
“First Look” program for REO properties owned by large banks. No bundled sales.
The law creates a state equivalent of the federal First Look program which gives priority to purchasers of foreclosed residential one to four properties who are prospective owner-occupants, nonprofits, or public entities. Within the first 30 days after a property is listed for sale, REO sellers may only accept offers from these eligible buyers. Moreover, REO sellers must “respond” in writing to any such offer received within the 30-day period. Plus, this law prohibits bundled sales of such residential one to four properties. These properties must now be sold one at a time. The law applies essentially to banks that have foreclosed on 175 or more such properties in the preceding year. AB 2170
Residential housing may be built within areas zoned for office or retail with ministerial approval. This law, the Middle Class Housing Act of 2022, allows a housing development project to be built on a parcel that is within a zone where office, retail, or parking are a principally permitted use. The goal of this bill was not only to create more affordable housing but to do so without the necessity of public subsidies, income eligibility, occupancy restrictions, lottery procedures, or other legal requirements applicable to deed restricted affordable housing. Moreover, builders and developers may proceed without cumbersome public hearings or CEQA environmental impact reports under a streamlined ministerial approval process. In the coming years where large stores like Sears or K mart may have gone out of business, this law will make possible new residential developments to be built in those places. SB 6
Bans HOAs from prohibiting the rental or leasing of a portion of a separate interest where it is owner occupied. A homeowner in a common interest development who occupies their unit has the right to rent out a portion of their separate interest — that is, they have the right to rent to a lodger. This law grants an owner occupant that right even if a rule prohibiting lodgers was in place before the property was purchased. The only restriction that an HOA may adopt is to prohibit short term rentals. Short term rentals are defined as renting a unit for 30 days or less. AB 1410
Again, these are just snippets of the myriad of new laws impacting real estate in 2023.
– Devin Lucas
Author Devin R. Lucas is a Real Estate Attorney, Broker and REALTOR®, specializing in Newport Beach, Costa Mesa and Orange County coastal communities, serving individual and investors in residential real estate.
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