REAL ESTATE
Construction Defect Claims in Residential Construction Contracts:
On September 29, 2005, Governor Schwarzenegger signed a new law that prohibits builders from including "Type I" indemnity provisions for construction defect claims in their residential construction contracts.
Assembly Bill 758 is effective January 1, 2006.
Type I indemnity provisions require a subcontractor to indemnify the builder for all claims arising from the subcontractor's work even where the builder's negligence also may have contributed to the claim.
Now, AB 758 (amends Civ. Code § 2782) renders unenforceable any provision in a residential construction contract that indemnifies the builder against construction defect claims to the extent the claims "arise out of, pertain to, or relate to the negligence of the builder" or other independent contractors directly responsible to the builder.
Megan's Law Disclosure:
The California Association of Realtor's Data Base Disclosure has been revised to reference the new Megan's Law Website which provides online information about registered sex offenders. Starting April 1, 2006, the revised disclosure language will be mandatory for residential sellers up to four units, as well as for residential landlords.
C.A.R. will be updating its standard-form Data Base Disclosure (DBD) and its purchase and lease agreements to reflect this change in the law. The updated forms are expected to be release in January 2006. Source: Assembly Bill 1323.
Supplemental Property Taxes Disclosure:
Although change of ownership triggers reassessment of property taxes, buyers may not realize that they may have to pay supplemental tax bills. Hence, starting January 1, 2006, sellers of most residential properties up to four units, or their agents, must disclose to prospective buyers that hey may owe supplemental taxes.
C.A.R. will soon release a new standard form titled Notice of Your Supplemental Property Tax Bill (SPT) to satisfy this requirement. Source: Assembly Bill 459.
Methamphetamine-Contaminated Properties:
Starting January 1, 2006 a property owner must disclose in writing to a prospective buyer or tenant if local health officials have issued an order prohibiting the use or occupancy of a property contaminated by meth lab activity. The owner must also give a copy of the pending order to the buyer or tenant to acknowledge receipt in writing.
Failure to comply with these requirements may subject an owner to, among other things, a civil penalty up to $5,000. Aside from disclosure requirements may subject an owner to, this new law also sets forth procedures for local authorities to deal with meth-contaminated properties, including the filing of a lien against a property unitl the owner cleans up the contamination or pays for the cleanup costs. Source: Assembly Bill 1078.
Property Taxes for Domestic Partners:
Beginning the lien date for the 2006-07 fiscal year, any transfer of property between registered domestic partners will not trigger property tax reassessment. As a result, registered domestic partners will be treated the same as spouses under California property tax laws. Source: Senate Bill 565.
Notice of Termination of Tenancy:
Starting January 1, 2006, landlords may give a 30-day notice to terminate their month-to-month tenants (unless rent control or subsidized housing rules apply). Prior law required a 60 day notice of termination under certain circumstances. C.A.R. will soon release a revised standard-form Notice of Termination of Tenancy (NTT) to reflect this change in the law. Source: Senate Bill 51 defeated.
Risk Management Courses:
Beginning July 1, 2007, the 45 hour continuing education requirement for brokers and sales persons must cover coursework on risk management, including principles, practices, and procedures for avoiding errors and omissions. For a first-time license renewal, a licensee must complete among other things, a 3 hour course in risk management. For subsequent renewals, a licensee must complete, among other things,
an 8-hour update survey course covering ethics, agency, trust funds, fair housing, and risk management. This law comes into effect on January 1, 2006 so the DRE can start preparing implementation. Source: Assembly Bill 223
