California New Law Affecting Private Home Equity

california new law affecting private home equity

There are numerous benefits of buying foreclosure properties and other types of real estate investments. However, various laws regulate the sale and purchase of properties. All these protect home sellers, buyers, and tenants alike. A perfect example is California's new laws on home equity. Why all the fuss about it? It offers community members an opportunity to bar the private equity housing grab. 

California's New Housing Laws - What Are They All About? 

The new California's housing laws will impact housing operations in all manner of ways. These are regulations concerning tenants but may affect housing operators as well. The laws date back to October 14th when Holland & Knight land use attorneys came up with a ruling on new laws affecting housing projects and applicants. 

The new laws also discuss entitlement extensions and modifications to Senate Bill 35 and the State Density Bonus Law. One of the items of discussion included laws relating to Accessory Dwelling Units (ADUs). 

Other issues include; 

• Housing Element planning efforts 
• The California Environmental Quality Act (CEQA) amendments regarding the housing crisis during the Covid-19 pandemic. 

What About The New Law On Private Home Equity? 

The entry of private firms into the housing sector in California came with numerous changes. This happened during the Great Recession, and the scale was unprecedented. Before 2010. corporate landlords never existed, and this particularly true for the single-family market. 

However, this has since changed, and most of the properties have since become rentals. From 2006 to 2012, the number of homeowners occupying their own homes declined significantly. On the other hand, these units were occupied by renters, and the numbers soared. 

What Are The Changes? 

With the advent of Covid-19 and recession, it's expected that major real estate investors will launch a massive wave of investment. But most cities are now cautious and have learned from the previous recession. The new laws will make it more difficult for investors to purchase foreclosed properties. The bill also prohibits the sale of foreclosed properties in bulks. The reason? They are enticing, and investors can easily buy hundreds of properties at a go. 

And There's More On Tenant Notices 

There are more regulations on tenant notices. These apply to single-family properties comprising of up to four units. You must notify tenants to allow them an opportunity to match the bid-offer. The provisions come with a list of eligible potential buyers who include; cooperatives, nonprofits, housing developers, and community land trusts. The law resembles the community opportunity to purchase laws in Washington, D.C., or San Francisco. Only that here it's only applicable to REO (real estate owned) properties. 

The Bottom Line 

There are different housing laws in California, and all are intended to protect property owners and tenants. Although some investors and may try to take advantage of the regulations, this won't be easy. The main aim of the new laws is to keep private homes within the ownership of community members. If you own a property in California, be sure to go through the new private equity laws before lending out or selling your property.

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