February 2021 Update
Department of Financial Protection and Innovation. Effective January 1, 2021, the Department of Business Oversight was reorganized and renamed the Department of Financial Protection and Innovation (DFPI). See §§2.2, 2.4, 2.18.
California Consumer Financial Protection Law. The California legislature has enacted the California Consumer Financial Protection Law (CCFPL) (Fin C §§90000–90019) to expand the enforcement powers of the DFPI and to protect consumers from scams, promote innovation, clarify regulatory hurdles for emerging products, and increase education and outreach. See §2.2.
Broker and salesperson advertising. In August 2020, the Department of Real Estate issued an informational booklet for the industry titled Real Estate Advertising Guidelines. See §2.13.
Broker agreements. Reeder v Specialized Loan Servicing LLC (2020) 52 CA5th 795 (alleged oral agreement to refinance or reamortize home equity loan on maturity was both barred by statute of frauds and too indefinite to be enforced). See §2.38.
New CAR Forms. The California Association of Realtors® (CAR) has revised and adopted the following forms:
Residential Listing Ageement (Exclusive Authorization and Right to Sell) (CAR Form RLA). See §2.46.
Tenant in Possession Addendum (CAR Form TIP). See §6.26D.
Real Estate Transfer Disclosure Statement (CC §1102.6) (CAR Form TDS). See §6.37.
Breach of fiduciary duties. Moore v Teed (2020) 48 CA5th 280 (in purchasing property, buyer relied on claims of agent that agent could remodel property for certain amount, actual costs were significantly higher, and construction work was defective; court held “faithless fiduciary” accountable for all costs proximately caused by agent’s actions). See §§2.91, 2.121–2.122, 2.128, 2.130.
Holding title to property; statutory presumptions. In re Brace (2020) 9 C5th 903 (holding that, at least in bankruptcy and marriage dissolution, Evid C §662 title presumption inapplicable when it conflicts with community property presumption of Fam C §760). See §§4.21, 10.2, 10.33, 10.39, 11.11.
Statement of Partnership Authority. In November 2020, the Secretary of State revised and updated the Statement of Partnership Authority (California Secretary of State Form GP-1). See §4.25, App F.
AB 3088. The California legislature enacted the temporary COVID-19 Tenant Relief Act of 2020 (CCP §§1170.01–1179.07), which expands foreclosure protections under the California Homeowner Bill of Rights (HBOR) and places additional restrictions on landlords’ use of unlawful detainer proceedings against financially distressed tenants. See §§4.72, 9.55A.
Executive Order N-54-20. In April 2020, Governor Newsom issued Executive Order N-54-20, which, among other things, temporarily suspends the public notice and access requirements of the California Environmental Quality Act (CEQA) (Pub Res C §§21000–21177). See §4.98.
SB 1079. Among other things, SB 1079 (2020) temporarily prescribes an alternative process in connection with a trustee’s sale of property under a power of sale contained in a deed of trust or mortgage on real property containing 1 to 4 residential units. See §10.5A.
Responsibility for surface waters. Ruiz v County of San Diego (2020) 47 CA5th 504 (reviewing reasonableness of county’s use of private storm drain pipeline). See §§4.77, 11.77.
Wildfire damages. In re PG&E Corp. (2019) 611 BR 110 (strict liability standard appropriate for inverse condemnation claims arising from wildfire damages related to utility company equipment). See §4.77.
Survival of warranties. Rehearing has been granted in Ram’s Gate Winery, LLC v Roche (2015) 235 CA4th 1071, which held that the close of escrow did not extinguish a seller’s duty to disclose material conditions of the property under the purchase agreement. See Roche v Ram’s Gate Winery, LLC (Sept. 17, 2019, No A150462 and A150459) 2019 Cal App Lexis 980 and 2019 Cal App Lexis 982. See §4.109.
Arbitration. Victrola 89, LLC v Jaman Props. 8 LLC (2020) 46 CA5th 337 (CAR agreement used by parties incorporated both Federal Arbitration Act (FAA) (9 USC §§1–16) and CCP §1283.05 of California Arbitration Act; FAA must be applied to dispute). See §§4.150, 6.18A.
Transfer disclosures. The discussion of the statutory disclosure requirements of CC §§1102–1102.19 has been updated to reflect recent changes in the law. See §§6.35–6.37, 6.39, 6.70B.
Transfer fees. Effective January 1, 2019, CC §1098.6 prohibits the creation of new transfer fees unless they provide a direct benefit to the property. See §6.46A.
Wildfire mitigation. Assembly Bill 38 (2019) requires California fire agencies to designate specified areas as very high fire hazard severity zones and requires property owners, lessors, and others with property in or adjoining those areas to take specified measures to protect their buildings or structures from wildfires. Beginning in 2021, sellers of real property located in these zones must provide documentation to a buyer that the property is in compliance with the wildfire protection measures set by the fire agencies. If the home was constructed before January 1, 2020, the seller must also provide a statutory disclosure notice of information relating to fire-hardening improvements on the property and a list of specified features that may make the home vulnerable to wildfire and flying embers. See §6.50.
Bus & Prof C 7195.7. Effective January 1, 2020, Bus & Prof C 7195.7 provides that home inspectors may not provide any opinion as to the valuation of the property inspected. See §6.79.
AB 1024. If passed, would enact the Home Inspection Licensure Act, which would become operative on or after January 1, 2025. See §6.79.
Vapor intrusion. In February 2020, the state of California proposed new vapor intrusion guidance for assessing and responding to vapor intrusion inside buildings. See §7.5.
Storage tanks. Effective January 1, 2021, the UST Cleanup Fund sunset date was extended to January 1, 2026. See §7.6.
Property owner responsibility. Atlantic Richfield Co. v Christian (2020) 590 US ____, 140 S Ct 1335 (innocent owners of polluted property were potentially responsible parties under CERCLA and must obtain EPA approval of remedial action, despite running of 6-year limitations period for recovering remedial costs); Tesoro Ref. & Mktg. Co. LLC v Los Angeles Reg’l Water Quality Control Bd. (2019) 42 CA5th 453 (under CERCLA, mere disposal of hazardous substances does not give rise to liability unless disposal results in actual or threatened release into environment); United Artists Theatre Circuit, Inc. v Regional Water Quality Control Bd. (2019) 42 CA5th 851 (former property owner properly included in cleanup order when it knew or should have known that former tenant created reasonable possibility of waste discharge and claim was not fairly contemplated until after property owner’s bankruptcy). See §§7.12–7.13, 7.17, 7.30.
Sufficiency of property description. MTC Fin. Inc. v California Dept. of Tax and Fee Admin. (2019) 41 CA5th 742 (“first in time” trust deed void and unenforceable based due to insufficient legal description of property). See. §§10.35, 11.14.
Easements and licenses. Riverside County Trans. Comm. v Southern Cal. Gas Co. (2020) 54 CA5th 823 (license does not run with the land to bind a subsequent purchaser); Gamerberg v 3000 E. 11th St. LLC (2020) 44 CA5th 424 (unrecorded irrevocable license not binding on subsequent purchaser without actual or constructive notice). See §§11.45, 11.56–11.57.
Extrinsic evidence. SLPR, L.L.C. v San Diego Unified Port Dist. (2020) 49 CA5th 284 (extrinsic evidence admissible to resolve intent to fix tideland boundary in previous dispute involving same parties); Modesto Irrig. Dist. v Tanaka (2020) 48 CA5th 898 (applying historic interpretation to language of grant of riparian rights); McDermott Ranch, LLC v Connolly Ranch, Inc. (2019) 43 CA5th 549 (statements made in ordinary conversation and before boundary dispute arose by deceased declarant regarding fence lines were trustworthy and admissible). See §§11.49, 11.82.
Encroachments. Madani v Rabinowitz (2020) 45 CA5th 602 (trespass or nuisance is continuing if it “can be remedied at a reasonable cost by reasonable means”). See §11.77.
Roadways. Martis Camp Community Ass’n v County of Placer (2020) 53 CA5th 569 (abandonment of public street or highway can be either complete or partial). See §11.80.
Oil, gas, and mineral rights. Vaquero Energy, Inc. v County of Kern (2019) 42 CA5th 312 (holder of mineral rights has implied easement that burdens surface estate and allows mineral owner to use surface as is reasonably required to access minerals); Leiper v Gallegos (2019) 42 CA5th 394 (on termination of lease of oil and gas rights, profit a prendre returns to lessor). See §11.86A.
Water rights. Abatti v Imperial Irrig. Dist. (2020) 52 CA5th 236 (appropriative right to use water is usufructuary only and is ordinarily appurtenant to property); Modesto Irrig. Dist. v Tanaka (2020) 48 CA5th 898 (riparian rights are hereditaments and can be severed from land and reserved from conveyance of land). See §11.110.
Homeowners insurance. Effective January 1, 2021, among other things, AB 2756 (2020) requires insurers to obtain a signed acknowledgment from applicants or insureds if the insurer issues a new residential property insurance policy on or after July 1, 2021, that does not provide coverage for the peril of fire. A statement that the policy does not include fire coverage must be prominently disclosed on the declarations page. The bill also adds additional requirements if the policy includes coverage for replacement costs or building code upgrades. See §§13.35, 13.89.
Builder’s risk insurance. Webcore-Obayashi Joint Venture v Zurich American Ins. Co. (ND Cal 2020) 2020 US Dist Lexis 137773 (builders’ risk policies indemnify for loss of or damage to building under construction). See §13.45.
Insurer’s duty to defend. Pulte Home Corp. v CBR Elec., Inc. (2020) 50 CA5th 216 (insurer’s “duty to defend is triggered by allegations relating to a subcontractor’s work and does not depend on an ultimate finding of fault”). See §14.53.
Constructive notice. Vasquez v LBS Fin. Credit Union (2020) 52 CA5th 97 (abstracts of judgment with incorrect name of seller could not impart constructive notice of liens). See §15.87.