New Real Estate Laws
1. Lee v Cardiff highlights the extreme penalties available to property owners who hire contractors who violate Contractors License law by misclassifying workers as independent contractors and thereby failing to provide Workers’ Compensation Insurance
Lee hired contractors to build a pool and hardscapes for $230,000. The pool guy walked off the job just before completion. Lawsuit filed. After trial, judge finds for the pool contractor on the construction/contract claims but for the owner Lee on the violation of State Contractor License issues. Contractor did not want to pay for Workers Compensation Insurance and unemployment taxes so pays workers as independent contractors and claimed no employees. Bad move. Result was the harsh requirement of disgorgement of all money received from owner!!! That’s right. Contractor has judgment against him for $230,000 in favor of owner and owner gets to enjoy a free pool and hardscape.
2. AB 455 Now Requires Seller of a Home to Disclose In Writing the Existence of Third-Hand Smoke in the Residence
Yep, more regulations!
Statute starts January 1, 2026. If you know anyone who smoked or vaped in the house, you are obligated to disclose that third-hand smoke in a disclosure to the buyer.
Comment: The dems love regulations. They have got to keep people safe from these toxic chemicals.
3. Starting January 1, 2026, Buying Gold and Silver will be Subject to a 10% Sales Tax
4. Arbitration Contracts Imposed as a Condition of Employment are Typically Unenforceable
Courts have held that these contracts are adhesive. The terms are not subject to negotiation. If you want a job, you sign the arbitration agreement. Held to be procedurally unconscionable. Oto, LLC v KHO, 8 Cal5th 111.
5. New Laws 2026
a. CC § 1941.1 now requires landlords to supply stoves and refrigerators for all residential units. They must maintain them as well.
b. Management now cannot force a tenant to using their internet and phone service provider.
c. Proposed AB 246 would allow a tenant to assert a new affirmative defense to a UD. If they have received reduced or eliminated Social Security benefits or the Social Security benefits had been received late. Once the benefits are restored, tenant would then have to pay past due rent within 14 days.
6. AB 130 became law on June 30, 2025. Passed on party lines
Called the Zombie Mortgage Law, it prevents foreclosures on subordinate mortgages under certain circumstances, particularly when homeowners are hit with unexpected demands for payment. The law prohibits mortgage holders from foreclosing if they fail to notify borrower their loan had been sold, or if three years had passed without any communication with the borrower from the lender.
Comment: Lenders have filed a lawsuit challenging the constitutionality of this law claiming it impairs existing contracts and property rights and therefore is not legal.
About the Author
Disclaimer:
Scott Souders is a real estate attorney who has practiced real estate law in excess of 45 years in Southern California. The Real Estate Law Update cites cases or statutes which are summarized and should not be relied upon without fully reading the cases or statute in the advance sheets and shepardizing the same and consulting with your own attorney.
About the Author
Disclaimer:
Scott Souders is a real estate attorney who has practiced real estate law in excess of 45 years in Southern California. The Real Estate Law Update cites cases or statutes which are summarized and should not be relied upon without fully reading the cases or statute in the advance sheets and shepardizing the same and consulting with your own attorney.
