February 2022 Update
Proposition 19. The Property Tax section of chap 6 was updated to reflect the changes to property tax exemptions prompted by the passage of Proposition 19 (Cal Const art XIIIA, §2.1). See §6.99.
Senate Bill 303. Senate Bill 303 is a 2-year extension for the transfer of base year value in a home that was destroyed by a disaster (if the damage or destruction occurred during the COVID-19 pandemic, e.g., between March 2020 and March 2022). See §6.99.
Assembly Bill 1466. Assembly Bill 1466 mandates action by county recorders to identify and remove racially restrictive or other unenforceable discriminatory provisions from covenants recorded on real property, and allows certain parties (not only the buyer) to seek removal of such provisions. See §6.105.
Assembly Bill 948. Assembly Bill 948 (the Fair Appraisal Act) provides a data-gathering and reporting process to understand bias in the home appraisal process. See §6.105.
Senate Bill 591. Senate Bill 591 authorizes the establishment of intergenerational housing developments. See §6.106.
Internal Revenue Code §1(j). The maximum tax rate for ordinary income is set at 37 percent for tax years 2018 through 2025. See §9.32.
Assembly Bill 1096. Assembly Bill 1096 revised CC 671 to state that any person, regardless of their citizenship status, may take, hold, and dispose of property (real or personal) within California. See §10.24.
Senate Bill 315. Senate Bill 315 extends the operative date of the revocable transfer on death deed statutes (until January 1, 2032), and revises and clarifies certain aspects thereof. See §10.52A.
Interference With Prospective Economic Advantage. Ixchel Pharma, LLC v Biogen, Inc. (2020) 9 C5th 1130 (tortious interference with at-will contracts requires independent wrongfulness). See §2.85.
Attorney Fees. Hom v Petrou (2021) 67 CA5th 459 (nonsignatory lenders entitled to recover attorney fees on tort claims pursuant to a contractual fee provision when the contract clearly anticipated encumbrance of property by lenders). See §2.131.
Hazardous Materials: Remediation Obligations and Defenses. City of W. Sacramento v R & L Bus. Mgmt. (ED Cal Jan. 26, 2021, No. 2:18-cv-00900 WBS EFB) 2021 US Dist Lexis 15512 (the Carpenter-Presley-Tanner Hazardous Substance Account Act (HSAA) does not provide for joint and several liability, but incorporates the same broad discretion vested in the trial judge under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) to allocate costs). See §7.10.
Hazardous Materials: Parties Eligible for Cost Recovery Actions. Guam v United States U.S. (2021) ___ US ___, 141 S Ct 1608 (settlement under a statute other than CERCLA does not trigger a contribution claim under 42 USC §9613(f)(3)(B)). See §7.17.
Transmutation Between Spouses. Marriage of Wozniak (2020) 59 CA5th 120 (transmutation of real property is not valid unless made in writing by express declaration, and joined in or consented to by adversely affected spouse). See §10.39.
Resolving Ambiguities. Pear v City & County of San Francisco (2021) 67 CA5th 61 (CC §1069 is considered in connection with rule that interpretation be directed toward ascertainment of true intent of parties). See §§10.42, 11.15, 11.50.
Public Rights-of-Way. Riverside County Trans. Com. v Southern Cal. Gas Co. (2020) 54 CA5th 823 (public utility accepts rights in public right-of-way subject to implied obligation to relocate its facilities at its expense when necessary to make way for proper governmental use). See §11.50.
Prescriptive Easements and Adverse Possession. Husain v California Pacific Bank (2021) 61 CA5th 717 (whether use is hostile or merely matter of neighborly accommodation requires fact-based inquiry for court to determine). See §§11.57, 11.77.
Property Insurance. Wexler v California Fair Plan Ass’n (2021) 63 CA5th 55 (policy covering property owned by “members of your family residing with you” covered named insured parents’ interest in property that daughter had in insured premises). See §13.17.
Liability Insurance. Guastello v AIG Specialty Ins. Co. (2021) 61 CA5th 97 (summary judgment reversed due to disputed issue of fact regarding whether soil movement and collapse of retaining wall in 2010 was caused by insured subcontractor’s negligent construction on adjacent property before policy expired in 2004). See §14.49.
Indemnitor’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”); but see Carter v Pulte Home Corp. (2020) 52 CA5th 571 (noting in footnote distinction when multiple subcontractors are involved; they each have duty to defend only with respect to claims involving their respective scope of work). See §14.53.
Administrative and Other Developments
CEQA-related suspension terminated. On April 22, 2020, in response to the COVID-19 pandemic, Governor Newsom issued Executive Order N-54-20, which, among other things, suspended the public notice and access requirements of 14 Cal Code Regs 15075 for projects exempt from CEQA review. The suspension related to CEQA terminated as of September 30, 2021, pursuant to Executive Order N-8-21. See §4.98.
Hotel sales strategy notes. See §5.12 for a strategy note regarding the COVID-19 pandemic and large-scale renovation projects in hotels, §5.15 for a strategy note (and sample language) regarding seller covenants concerning reduced operations as a result of COVID-19, and §5.20 for a strategy note regarding closing conditions in light of COVID-19.
Property Insurance. This year’s update added a series of sections to chap 13 concerning various insurance issues raised by the COVID-19 pandemic. See §§13.145–13.145F.
CAR Form Updates. The California Association of Realtors® (CAR) has revised and adopted the following forms:
RPA-CA California Residential Purchase Agreement and Joint Escrow Instructions (12/21). See §6.24.
BIA Buyer’s Inspection Advisory (12/21). See §6.25.
AFA Assumed Financing Addendum (12/21). See §6.26A.
BUO Back-Up Offer Addendum (12/21). See §6.26B.
SIP Seller In Possession Addendum (12/21). See §6.26C.
NBP Notice to Buyer to Perform (12/21). See §6.28.
SSA Short Sale Addendum (12/21). See §6.28A.
REO REO Advisory (12/21). See §6.118.
SFA Seller Financing Addendum and Disclosure (12/21). See §9.13.
Chapter 5 (Specialty Commercial Purchase and Sale Agreement Provisions: Hotels) Updates. The section of chap 5 concerning franchise arrangements, residential and common interest arrangements, liquor licenses, and safe deposit boxes, baggage, and valeted vehicles was greatly expanded and revised in this update, as were several provisions in the form Hotel Purchase and Sale Agreement. See §§5.1–5.2, 5.4, 5.7, 5.22, 5.28, and App P.
Chapter 13 (Property Insurance) Update. This year’s update added a new section to chap 13 regarding the applicability of the “clear and convincing” standard on appeals, and discussing the holding of Conservatorship of O.B. (2020) 9 C5th 989. See §13.119A.