washington dc A great many new laws took effect on January 1, 2017 some of which have a direct impact on Buyers and Sellers of real estate as well as their brokers and agents. Here are the major issues that we see impacting property owners.

1. Water Conservation Disclosure: Effective January 1st, all single family homes are required to meet the following water conservation standards:

  • Toilets – no more than 1.6 gal/flush;
  • Urinals – no more than 1.0 gal/flush;
  • Showers – no more than 2.5 gal/min;
  • Internal Faucets – no more than 2.2 gal/min.

While the law says compliance is mandatory, there are no penalties for non-compliance. However, the law also mandates Disclosure to Buyers of whether the property is or is not in compliance. If a Seller fails to make the Disclosure, they will be liable to Buyers for non-disclosure claims. There is no such disclosure duty for real estate agents. However, since Sellers may not be aware of this new law, all agents should make sure their clients (both Sellers and Buyers) are aware. This obligation is now referenced on the Real Estate Transfer Disclosure Statement (“TDS”) and should be noted on the Seller Property Questionnaire (“SPQ”). Be aware also that effective 1/1/2019, this law will also apply to all multi-family residential and commercial properties.

2. FHA reduction of Condo Owner-Occupancy Percentage: New Federal law has reduced the FHA Condo Owner-Occupant requirement from 50% to 35% and streamlined the FHA certification process. The standard can be a very contentious issue for anyone who acquires a Condo that they intend to rent out so their Realtors must be aware of whether the purchase will be a violation. The percentage reduction should improve condo marketability.

3. PACE Loan Disclosures: The PACE energy loan program for energy improvements such as solar panels was intended to ease financing and sale by incorporating PACE payments in the property tax bill. However, the actual result was to compel Owners to actually payoff the Loan if they sought to refinance or sell their home. In many cases, this is a deal killer. The new Law, effective 1/1/17, creates a disclosure of these issues as well as a 3 Day Right of Recision. FHA has separately agreed to generally subordinate their loans to existing PACE financing.

4. Marijuana Legalization: Prior CA law legalized medical marijuana use, cultivation, and distribution subject to specific requirements. For 2017, this has extended to recreational marijuana. Specific legal clarifications will follow, such as DUI standards, etc. But perhaps the biggest concern will be that marijuana use remains illegal under Federal law. Although during the Obama administration Policy was adopted to carve out protections for States with “robust” marijuana laws (such as CA), there is no certainty that this Policy will be continued by the Trump administration. The new Attorney General, Jeff Sessions, has been an outspoken opponent of legalization of marijuana. However, President Trump may not share that opinion.

For over 20 years, the attorneys of BPE Law Group, P.C. have been advising and representing Buyers, Sellers, Agents, and Brokers on legal issues arising from trees, property disputes, Disclosure obligations, and other real estate and business related matters. Check us out on the Web at: www.bpelaw.com. If you would like a consultation with us, please call our office at (916) 966-2260 or e-mail Steve Beede at sjbeede@bpelaw.com.

This article is not intended to be legal advice, and should not be taken as legal advice. Every case requires review of specific facts and history, and a formal agreement for service. Please feel free to contact us if you need legal advice and are interested in seeing if we can help you.