Understanding the Basics of California Real Estate Laws

Understanding the Basics of California Real Estate Laws

Navigating the complex landscape of California real estate law can be daunting for both new and experienced property owners, buyers, and sellers. This article aims to provide a comprehensive overview of the essential aspects of real estate laws in California, highlighting key statutes and regulations that govern property transactions, ownership, and landlord-tenant relationships.

Key Areas of California Real Estate Law

1. Real Estate Transactions

Purchase Agreements: In California, most real estate transactions require a written purchase agreement that outlines terms such as price, closing date, and contingencies. These agreements become binding contracts once signed by both the seller and buyer (California Civil Code § 1624).

Disclosures: Sellers must disclose certain information about the property’s condition, including known defects, natural hazards, and environmental issues. This is mandated by the Real Estate Transfer Disclosure Statement (TDS) (California Civil Code § 1102).

Title and Deed: At closing, the deed transfers the title to the buyer. California law requires the deed to be recorded to show a change in ownership. Buyers typically obtain title insurance to protect against claims on the property (California Government Code § 27280).

Right to Cancel: California provides a three-day right of rescission for certain sales, such as foreclosures, allowing buyers to cancel the transaction within this period (California Civil Code § 1695.4).

2. Property Ownership

Forms of Ownership: California recognizes several forms of property ownership, including sole ownership, joint tenancy, tenancy in common, community property, and trusts (California Civil Code § 682).

  • Sole Ownership: One person owns the property fully.
  • Joint Tenancy: Joint owners have equal, undivided rights, and when one owner dies, the other(s) automatically inherit their share.
  • Tenancy in Common: Joint owners have separate, divisible interests in the property, and when one owner dies, their share goes to their heirs.
  • Community Property: Property acquired during a marriage is co-owned equally by spouses and is subject to special rules at divorce.
  • Trusts: Property is transferred to a trust with terms dictating future transfer or sale.

Right of Survivorship: Registering a property with a “right of survivorship” generally creates a joint tenancy in California (California Civil Code § 683).

3. Landlord-Tenant Relations

Eviction Process: Landlords must follow a legal process to evict tenants. For non-payment of rent, a three-day notice is required before filing an unlawful detainer lawsuit in Superior Court (California Code of Civil Procedure § 1161). Self-help measures, such as locking out tenants or cutting off utilities, are illegal (California Civil Code § 789.3).

Security Deposits: Landlords can ask for a security deposit of up to two months’ rent for unfurnished units and three months’ rent for furnished units. The deposit must be returned within 21 days after the tenant moves out, minus any deductions for damages or unpaid rent (California Civil Code § 1950.5).

Rent Control: Some cities in California have rent control laws that limit how much landlords can increase rent and under what conditions they can evict tenants (California Civil Code § 1947.12).

Recent Changes in California Real Estate Law (2024)

Residential Exclusive Listing Agreements Act (AB-1345): Limits exclusive listing agreements for residential properties to 24 months, with renewals capped at 12 months. Automatic extensions are prohibited.

Disclosure Requirements for Residential Flippers (AB-968): Requires flippers to disclose recent repairs and renovations for properties resold within 18 months of closing.

Accessory Dwelling Units (ADUs) Regulations (AB-1033, SB-976): Allows local agencies to permit the separate sale of ADUs from primary residences as condominiums and makes permanent the prohibition on requiring owner-occupancy for parcels containing ADUs.

Must-Know Real Estate Laws in California

  • Extensive Disclosures Upon Sale: Sellers must disclose all known defects and material facts about the property (California Civil Code § 1102).
  • Community Property Rights for Spouses: Property acquired during marriage is co-owned equally by spouses (California Family Code § 760).
  • Property Tax Increases Capped: Proposition 13 caps property tax increases at 2% per year (California Constitution Article XIII A).
  • Just Cause Required to Evict Tenants: Landlords must have a legally valid reason to evict tenants (California Civil Code § 1946.2).
  • Homestead Exemption: Protects a portion of a homeowner’s equity from creditors, up to $600,000 (California Code of Civil Procedure § 704.730).

California Real Estate FAQs: What You Need to Know

Q: How do I evict a tenant who is not paying rent?

A: In California, you must give a three-day written notice to the tenant. If the rent is not paid within three days, you can file an unlawful detainer lawsuit in Superior Court.

Q: What disclosures are required when selling a home in California?

A: Sellers must complete a Real Estate Transfer Disclosure Statement, disclosing all known defects, material facts, natural hazards, and environmental issues.

Q: Can I sell an ADU separately from my primary residence?

A: Yes, under AB-1033, local agencies can adopt ordinances allowing the separate sale of ADUs as condominiums.

Q: What is the maximum security deposit a landlord can require?

A: For unfurnished units, the maximum rent is two months. For furnished units, it is three months’ rent.

Q: What is the right of rescission in California real estate transactions?

A: Buyers have a three-day right of rescission for certain sales, such as foreclosures, allowing them to cancel the transaction within this period.


Understanding California real estate laws is crucial for anyone involved in property transactions, ownership, or landlord-tenant relationships. Staying informed about the latest changes and key regulations can help ensure compliance and protect your rights.

For specific legal advice, consulting with a knowledgeable real estate attorney is always recommended. At Resolve Wannon, we specialize in mediation and can help you navigate these complexities. Contact us at 310-592-4359 for expert guidance.