A list of new laws that will take effect this year.
No Short Sale Deficiencies:
Starting January 1, 2011, a seller's first trust deed lender cannot obtain a deficiency judgment against the seller after a short sale. Providing written consent to a short sale shall obligate the first trust deed lender to accept the sales proceeds as full payment and discharge of the remaining amount owed on the loan. This law applies to first trust deeds secured by one-to-four residential units, but does not limit the lender from seeking damages for fraud or waste by the borrower. Senate Bill 931. Governor Schwarzenegger vetoed Senate Bill 1178, our sponsored bill, which would have extended California's anti-deficiency protection to refinance loans.
Energy Audit in Home Inspection Report:
Beginning January 1, 2011, a home inspection and inspection report may, upon a client's request, include an audit of the energy efficiency of a home, according to the standards of the Home Energy Rating Systems (HERS).
Assembly Bill 1809 and California Civil Code section 2079.10.
Restriction on Adverse Possession Claim:
Effective January 1, 2011, a claim for adverse possession requires, among other things, certified records of the county tax collector showing that all state, county, or municipal taxes have been timely paid for the five-year period the property has been occupied and claimed. Existing law merely requires proof that taxes have been paid for the five-year period, not certified proof of timely payments. Assembly Bill 1684.
Enforcement of MLO Requirements:
Effective January 1, 2011, anyone acting as a mortgage loan originator (MLO) without an MLO license endorsement will be guilty of a crime punishable by six months imprisonment, plus a $20,000 fine. Furthermore, a broker cannot employ or compensate a real estate licensee for MLO activities unless that licensee has a license endorsement. This law has also given the Department of Real Estate (DRE) the authority to deny or revoke a MLO license endorsement or take other action. This law also amends the MLO requirements for finance lenders and residential mortgage lenders under the Department of Corporation. Senate Bill 1137.
Post-Foreclosure Protection for Tenants:
Commencing January 1, 2011, a notice to terminate a residential tenant who remains after a foreclosure sale must generally include a statutory notice of the tenant's rights. This requirement, which sunsets on January 1, 2013, applies to an immediate successor-in-interest for one year after a foreclosure sale. Senate Bill 1149.
Tenant Protection for Domestic Violence Victims:
Starting January 1, 2011, a residential landlord cannot terminate or fail to renew a tenancy based on domestic violence against the tenant or tenant's household members as specified. This law applies if the person restrained from contact with the tenant by court order or named in a police report is not also a tenant of the same dwelling unit. Senate Bill 782.
Protections Against Real Estate Fraud:
Effective January 1, 2011, new laws protecting consumers from real estate fraud include, without limitation, the following:
(1) Expanding the foreclosure consultant law to include someone who performs a forensic audit of a residential mortgage loan (Assembly Bill 2325);
(2) Requiring any mailed solicitation that offers to provide a copy of an owner's grant deed or other title records for a fee to include a prominent statutory disclosure that the copy service is not associated with any governmental agency and that the homeowner can obtain such records from the county recorder (Assembly Bill 1373);
(3) Increasing the criminal punishment for renting out a residential dwelling without the owner's consent from six months imprisonment plus a $1,000 fine, to one year imprisonment, plus a $2,500 fine (Assembly Bill 1800).
Thats it for now!
Brian Barringer
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