Legal Update
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Legislative Update 
Governor Finalizes Bills as Legislature Recesses
This week, Governor Newsom acted on a multitude of bills. His actions wrap up the first year of the Legislature’s two-year session. 

Normally, the Governor has 12 days to act on bills that have been passed by both houses. During that time, the Governor may sign or veto bills. Legislation may also become law if the Governor does not take any action on it before the 12-day deadline expires. 

An exception occurs when the legislature passes bills right before they take recess after the first year of a two-year session -- as they did this year on September 12. This exception gives the Governor a wider window of 30 days to sign or veto legislation or let it pass without his signature. 

This year's thirty-day window expired on October 13. Staying within that timeline, Governor Newsom acted on several bills on the days leading up to and including Monday, October 13. 

C.A.R. actively lobbied for and against many of these bills which concerned housing and real estate: 

C.A.R.-SPONSORED BILLS SIGNED INTO LAW 

SB 410 (Grayson) Common Interest Developments: Exterior Elevated Elements Inspection-- adds to the standard package of HOA disclosures the most recent balcony inspection report. It revises the requirements of the balcony inspection report to require a summary page with information on the inspection including, among other provisions, the balconies identified as posing an immediate safety threat. 

C.A.R. SUPPORTED BILLS SIGNED INTO LAW

AB 1 (Connolly) Residential Property Insurance: Wildfire Risk -- Requires fair, transparent risk scoring and rewards of mitigation. 

AB 226 (Calderon) California FAIR Plan Association -- Establishes the FAIR Plan Stabilization Act, strengthening the financial stability of the FAIR Plan. 

AB 238 (Harabedian) Mortgage Forbearance: Wildfire Emergencies -- Provides mortgage relief for homeowners impacted by wildfire disasters. 

AB 299 (Gabriel) Hotels and Motels During Disasters -- Under current law, a tenant who has remained in occupancy on a property for 30 days or more is typically entitled to the benefit of a formal court procedure such as the unlawful detainer process before they may be removed. 

Under this law, the resident of a lodging would not enjoy this legal right until the guest has resided in the lodging for 270 days, if the guest is residing in the lodging as a result of a disaster that substantially damaged, destroyed, or otherwise made uninhabitable their prior housing. This law sunsets on January 1, 2031. 

AB 493 (Harabedian) Hazard Insurance Proceeds on Mortgages -- Protects timely release of insurance funds for rebuilding. 

AB 610 (Alvarez) Housing Element: Governmental Constraints Disclosure -- Increases transparency on local barriers to housing supply. 

AB 712 (Wicks) Housing Law Enforcement and Penalties -- Makes it easier to hold local agencies accountable for violating state housing laws pertaining to development. 

AB 818 (Ávila Farías) Permit Streamlining During Local Emergencies -- Speeds rebuilding after declared disasters. 

AB 888 (Calderon) California Safe Homes Grant Program -- Creates grants for home hardening and wildfire resilience. 

AB 1007 (Rubio, Blanca) Land Use: Development Review -- Streamlines project approval processes. 

AB 1308 (Hoover) Residential Building Permits and Inspections -- Simplifies inspection requirements to prevent delays. 

SB 429 (Cortese) Wildfire Safety and Risk Mitigation Program -- Funds research and development of a public wildfire catastrophe model 

SB 489 (Arreguín) LAFCO Procedures and Permit Streamlining -- Transparency and improving efficiency of local approval processes. 

SB 547 (Pérez) Commercial Property Insurance Nonrenewal -- Current law offers limited protections to homeowners from immediate cancellation of their insurance after a Governor declared a state of emergency after a wildfire and other insurance protections. This bill extends the protections to commercial property owners. 

SB 676 (Limón) CEQA Judicial Streamlining: Wildfire Recovery -- Accelerates court review for wildfire-related rebuilding. 

AB 102 (Gabriel) & SB 131 (Committee on Budget) Budget and Resources -- C.A.R. supported specific provisions including: 

•Significant CEQA streamlining for specified housing and mixed-use projects. 

•Building Code Freeze 

•Temporary freeze-from October 1, 2025, to June 1, 2031- on local residential building codes amendments which are often used to thwart development. 

•Sixty-day timeline for local agencies to approve or disapprove of a completed application for a ministerial housing development project. 

C.A.R. OPPOSED BILLS SIGNED INTO LAW 

AB 246 (Bryan)-New UD Defense for interruption of social security deposits. 

AB 325 (Lee) (Aguiar-Curry) Cartwright Act: Algorithmic Price Fixing 

AB 628- (McKinnor) Tenancy: Stove and Refrigerator Requirements -- Requires a stove and refrigerator in good working order for a dwelling to be considered tenantable (habitable) for new leases. 

AB 723 (Pellerin) Digitally-altered images – A digitally altered image used in an advertisement for the sale of real estate must include a statement that the image has been digitally altered, and a link, URL, or QR code to the unaltered image. The statement must be conspicuous, located adjacent to the image, and indicate that the unaltered image can be accessed through the link. 

If the advertisement is posted on an internet website over which the broker or salesperson has control, they may alternatively include the unaltered version of the image. 

This law applies to images altered with photo editing software or AI but does not apply when only common photo editing adjustments are made. 

AB 1445 (Byran) Wildfire Defensible Space and Ember Resistant Zones -- Allows the board to impose emergency regulations to speed imposition of “0-5” ember resistant zones and guides the State Board of Forestry and Fire Protection on imposition of regulations. 

Bill also contained language that would have created compliance mandates for defensible space requirements based on the sale of the property IF SB 367 been signed. SB 367 was vetoed. The section that contained that language will not go into effect, and no mandates related to the sale of the property are enacted. 

C.A.R. OPPOSED BILLS THAT WERE VETOED

AB 699 (Ward) – Sought to change (limit) the amount of information on the election ballots on bond and tax measures. 

SB 36 (Umbert) Price Gouging -- Would have created unreasonable expansions of existing price gouging law. 

SB 367 (Becker) Defensible Space: Fire Inspections and Zone 0 Mandates -- Would have imposed a stricter compliance mandate for imposition of zone 0 requirements once created by state regulatory body including a compliance mandate based on the sale of the property. 

SB 512 (Perez) -- Would have codified parts of the “Upland” decision that allow special transportation related taxes to be passed with a simple majority. 

Market Update
News in the past few days offers some cautious optimism for the months ahead. California’s housing market showed modest improvement in September, with sales rebounding and the statewide median price rising for the second consecutive month. Builder confidence increased despite ongoing challenges, while small business optimism dipped amid economic uncertainty. Meanwhile, mortgage rates hit the lowest level in nearly three years due to trade tensions and government shutdown concerns. Low rates, however, could help motivate buyers to reenter the market if they can maintain the same level or decline further. Read the full weekly report here.  

Key Read of the Week
The Federal Reserve is widely expected to cut its benchmark interest rate twice before the end of the year, as policymakers grappled with the dual threats of stubborn inflation and a weakening labor market, according to a recent Reuters poll of 117 economists. 

The consensus among surveyed economists pointed to a 25 basis point reduction next week, with another likely in December. 

“It would be fair to say approximately half of the current FOMC is more focused on the labor market and the other half on inflation risks,” Ryan Wang, United States economist at HSBC, told Reuters. Read the MPAMag article here.