Real Estate Laws In California: 20 Surprising California Property Laws

Introduction

As a real estate attorney with over two decades of experience navigating California’s complex property laws, I’ve seen firsthand how understanding these regulations can make or break a real estate transaction. Whether you’re a seasoned investor, a first-time homebuyer, or simply curious about the unique aspects of California’s real estate landscape, this guide will unveil some of the most intriguing and often overlooked laws that shape the Golden State’s property market.

From the sun-soaked beaches of Southern California to the tech hubs of Silicon Valley, each region has its quirks regarding real estate. However, overarching laws affect all property transactions in the state. In this guide, we’ll explore 20 fascinating California real estate law aspects that might surprise you. So, let’s dive in and uncover the hidden gems of California’s property regulations!

1. The Invisible Menace: Earthquake Fault Zones

Did you know? California law requires sellers to disclose if a property is located within an earthquake fault zone, even if no visible signs of fault lines are present.

As a state notorious for its seismic activity, California takes earthquake preparedness seriously. The Alquist-Priolo Earthquake Fault Zoning Act, enacted in 1972, mandates that sellers inform potential buyers if a property lies within an earthquake fault zone. This isn’t just about visible fault lines – it’s about being within a designated zone where future earth movement could occur.

What this means for you:

• If you’re buying, always check the Natural Hazard Disclosure Statement.
• Sellers, ensure you know your property’s zoning status to avoid legal issues.
• Consider the potential impact on insurance rates and future resale value.

2. The Ghost in the Attic: Death Disclosure Laws

Did you know? In California, sellers must disclose any death on the property within the last three years, regardless of the cause.

California Civil Code Section 1710.2 requires sellers to disclose any death that occurred on the property within the past three years. This law aims to provide transparency to potential buyers concerned about the property’s history.

What this means for you:

• Sellers must disclose this information voluntarily, even if not directly asked.
• Buyers, if you’re concerned about events beyond the three-year window, you’ll need to ask specifically.
• Exceptions exist for deaths related to HIV, but the law is strict about other causes.

3. The Hidden Oasis: ADU (Accessory Dwelling Unit) Revolution

Did you know? Recent California laws have made adding an Accessory Dwelling Unit (ADU) to your property significantly easier, potentially increasing its value and rental income potential.

To address the housing shortage, California has passed several laws since 2017 that streamline the process of adding ADUs (also known as granny flats or in-law units) to existing properties. This has opened up new opportunities for homeowners to maximize their property’s potential.

What this means for you:

• Homeowners can potentially add an ADU with minimal bureaucratic hurdles.
• Local governments are required to approve ADU applications quickly if they meet state standards.
• This can be a game-changer for property values and rental income opportunities.

4. The Time Traveler’s Clause: Adverse Possession

Did you know? In California, someone can legally claim ownership of your property if they’ve been using it openly and continuously for at least 5 years, even without your permission!

Adverse possession is a legal doctrine that allows a trespasser to essentially become the rightful owner of a piece of land if they meet certain conditions. In California, these conditions include:

• Open and notorious use of the property
• Continuous use for at least 5 years
• Exclusive use (keeping others out)
• Hostile use (without the owner’s permission)
• Payment of property taxes

What this means for you:

• Property owners should regularly inspect their land, mainly undeveloped parcels.
• If you notice someone using your property without permission, address it immediately.
• This law underscores the importance of clearly marking property boundaries.

5. The Silent Partner: Community Property Laws

Did you know? If you’re married and buy a house in California, your spouse automatically owns half of it, even if their name isn’t on the deed or mortgage.

California is one of nine community property states in the U.S. This means that any property acquired during marriage is considered equally owned by both spouses, regardless of who paid for it or whose name is on the title.

What this means for you:

• Consider how this might affect your real estate investments if you’re married.
• Property division can be complex in case of divorce, especially for real estate acquired during the marriage.
• Prenuptial agreements can modify these rules, but they must be carefully drafted to be enforceable.

6. The Landlord’s Ticking Clock: Security Deposit Return

Did you know that California landlords have exactly 21 days from the date a tenant moves out to return the security deposit, or they face penalties?

California Civil Code Section 1950.5 sets strict rules for handling security deposits. Landlords must return the deposit, less any deductions for cleaning or repairs, within 21 days of the tenant vacating the property.

What this means for you:

• Landlords, mark your calendars and start the inspection process immediately after tenant move-out.
• Tenants, know your rights and follow up if your deposit isn’t returned within the legal timeframe.
• If landlords fail to comply, they may be liable for damages up to twice the security deposit.

7. The Solar Mandate: New Construction Requirements

Did you know? Since 2020, California law requires all new homes to have solar panels installed, making it the first state with such a mandate.

In a bold move to promote renewable energy, California implemented a law requiring all new single-family homes and multi-family dwellings up to three stories high to include solar panels. This groundbreaking legislation aims to reduce the state’s carbon footprint and energy costs for homeowners.

What this means for you:

• If you’re building a new home, factor in the cost of solar installation.
• For buyers of new homes, expect to see solar panels as a standard feature.
• This law may influence property values and energy costs in the long term.

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8. The Rent Control Revolution: Statewide Tenant Protections

Did you know? As of 2020, California implemented statewide rent control, limiting annual rent increases and requiring “just cause” for evictions.

The Tenant Protection Act of 2019 (AB 1482) brought significant changes to California’s rental landscape. It caps annual rent increases at 5% plus inflation (up to 10% total) for most residential properties and requires landlords to have a valid reason for evicting tenants who have lived in a unit for at least a year.

What this means for you:

• Landlords, be aware of these restrictions when planning rent increases or evictions.
• Tenants, know your rights under this new law, which applies to most residential properties over 15 years old.
• Some properties, like single-family homes not owned by corporations, are exempt from these rules.

9. The Disclosure Dilemma: Megan’s Law and Real Estate

Did you know? While California requires sex offender registration, real estate agents are not obligated to disclose if a registered sex offender lives nearby when selling a property.

Megan’s Law requires the registration of sex offenders and makes this information publicly available. However, California Civil Code Section 2079.10a explicitly states that neither the seller nor the real estate agent must disclose the proximity of registered sex offenders.

What this means for you:

• Buyers should research using the Megan’s Law database if this concerns them.
• Sellers and agents are protected from liability for non-disclosure in this specific case.
• If asked directly, however, sellers and agents must provide truthful information.

10. The Landlord’s Limit: Tenant Screening Fee Cap

Did you know? California law sets a maximum amount that landlords can charge for tenant screening fees, which is adjusted annually for inflation.

California law caps the amount landlords can charge for tenant screening to prevent excessive fees for rental applicants. As of 2024, this maximum is [insert current year’s cap, e.g., $55.58]. This fee covers obtaining a consumer credit report and must not exceed the landlord’s out-of-pocket costs.

What this means for you:

• Landlords must provide an itemized receipt for this fee upon request.
• Prospective tenants, be wary of landlords charging more than the legal maximum.
• The cap is adjusted annually based on changes in the Consumer Price Index.

11. The Seller’s Crystal Ball: Natural Hazard Disclosures

Did you know? California sellers must disclose if a property is in a high-risk area for natural disasters, even if no disaster has occurred there yet.

The Natural Hazard Disclosure Statement is a crucial part of real estate transactions in California. Sellers must inform buyers if the property is located in:

• A special flood hazard area
• A very high fire hazard severity zone
• A wildland area with substantial forest fire risks
• An earthquake fault zone
• A seismic hazard zone

What this means for you:

• Sellers must obtain a Natural Hazard Disclosure Report to ensure compliance.
• Buyers, pay close attention to this disclosure as it can affect insurance rates and future risks.
• This information can be crucial for long-term property value and safety considerations.

12. The Neighborly Notice: Tree Trimming Laws

Did you know? In California, you have the right to trim parts of your neighbor’s tree that extend onto your property, but you must be careful not to harm the tree.

California law allows property owners to trim parts of a neighbor’s tree that extend over the property line. However, you must not cause damage to the health of the tree or trespass onto your neighbor’s property to do so.

What this means for you:

• You can trim overhanging branches, but only up to the property line.
• If trimming could potentially harm the tree, it’s best to discuss with your neighbor first.
• Intentionally damaging a neighbor’s tree can result in significant legal penalties.

13. The Coastal Commission’s Control: Beachfront Property Restrictions

Did you know? If you own beachfront property in California, you might need permission from the California Coastal Commission for particular renovations or changes to your property.

The California Coastal Act gives the California Coastal Commission authority over development in the coastal zone. This can affect everything from major construction projects to installing a new fence.

What this means for you:

• Always check local regulations and Coastal Commission requirements before making changes to coastal properties.
• The commission’s authority extends beyond just beachfront homes to include a significant inland area in some regions.
• Violations can result in hefty fines and mandatory restoration of the property.

14. The Fence Finance Fiasco: Shared Fence Responsibility

Did you know? If your neighbor wants to build or repair a fence between your properties in California, you might be legally obligated to split the cost.

The “Good Neighbor Fence Act of 2013” presumes that adjacent landowners share equal responsibility for the reasonable costs of constructing, maintaining, or replacing a shared fence. This applies unless an agreement or local ordinance says otherwise.

What this means for you:

• If your neighbor proposes building or repairing a shared fence, they must give you 30 days’ written notice.
• You can dispute the necessity or proposed cost of the fence.
• This law aims to distribute the costs of boundary fences between neighbors fairly.

15. The Water-Wise Mandate: Landscaping Ordinances

Did you know? Many California cities have ordinances requiring drought-tolerant landscaping for new construction and major renovations.

In response to recurring drought conditions, many California municipalities have enacted ordinances that require water-efficient landscaping. These rules often apply to new construction and significant remodels.

What this means for you:

• Check local landscaping requirements if you’re planning new construction or major renovations.
• Even if not required, consider drought-tolerant options to save on water bills and comply with future regulations.
• Some cities offer rebates or incentives for converting to water-efficient landscaping.

16. The Squatter’s Rights Reality: Trespasser Tenant Laws

Did you know? In California, if a squatter receives mail at your property or has turned on utilities in their name, you may need to go through a formal eviction process to remove them.

California’s tenant protection laws can sometimes extend to individuals who are illegally occupying a property. If a squatter has established any semblance of residency, such as receiving mail or setting up utilities, they may be treated as tenants under the law.

What this means for you:

• Property owners should regularly inspect vacant properties to prevent squatters from establishing residency.
• If you discover squatters, do not attempt to remove them yourself – this could be considered an illegal eviction.
• Consult with a real estate attorney to navigate the proper legal channels for removal.

17. The Prop 13 Protection: Property Tax Limits

Did you know? Thanks to Proposition 13, your property taxes in California are based on the purchase price of your home, not its current market value, and increases are capped at 2% per year.

Passed in 1978, Proposition 13 dramatically changed property taxation in California. It limits property taxes to 1% of the assessed value (usually the purchase price) and caps annual increases at 2%, regardless of how much the property’s market value has increased.

What this means for you:

• Long-term homeowners often pay significantly less in property taxes than new buyers of similar homes.
• This can create a strong incentive for homeowners to stay in their properties rather than move.
• Understanding Prop 13 is crucial when considering the long-term costs of homeownership in California.

18. The Homeowner’s Shield: Anti-SLAPP Laws

Did you know? California’s anti-SLAPP laws can protect you if you’re sued for speaking out against a development project in your neighborhood.

Strategic Lawsuits Against Public Participation (SLAPP) are lawsuits intended to censor, intimidate, or silence critics. California’s anti-SLAPP laws defend against such suits, particularly in cases involving public issues like local development projects.

What this means for you:

• If you engage in public discourse about local real estate developments, you have legal protections.
• You can file an anti-SLAPP motion to dismiss the case quickly if sued for such activities.
• These laws encourage public participation in community development issues.

19. The Vacation Rental Vigilance: Short-Term Rental Regulations

Did you know? Many California cities have strict regulations on short-term rentals, including limits on the days you can rent out your property.

Many California municipalities have enacted ordinances regulating short-term rentals in response to the rise of platforms like Airbnb. These can include:

• Limits on the number of days a property can be rented short-term
• Requirements for permits or licenses
• Occupancy tax collection requirements

What this means for you:

• If you’re considering using your property for short-term rentals, check local regulations first.
• Violations can result in significant fines and penalties.
• Some cities, like Santa Monica, have very restrictive laws that ban most short-term rentals.

20. The Earthquake Insurance Enigma: Non-Mandatory Coverage

Did you know? Despite California’s high earthquake risk, earthquake insurance is not legally required for homeowners, even though standard homeowners insurance doesn’t cover earthquake damage.

While California law requires insurance companies to offer earthquake insurance, homeowners are not obligated to purchase it. This creates a significant risk for many property owners in earthquake-prone areas.

What this means for you:

• Consider carefully whether to opt for earthquake insurance based on your property’s location and risk tolerance.
• If you have a mortgage, your lender may require earthquake insurance in high-risk areas.
• The California Earthquake Authority offers policies through participating insurers, often at more affordable rates than private market options.

Conclusion

Navigating California’s real estate laws can feel like traversing a legal labyrinth, but understanding these often-overlooked regulations can save you time, money, and legal headaches. From the surprising reach of adverse possession to the nuances of short-term rental laws, California’s property regulations reflect the state’s diverse landscapes, environmental concerns, and commitment to tenant rights.