Stay Ahead: True Property Management’s Essential Guide to 2025 Real Estate Law Changes

January 13, 2025

Stay Ahead: True Property Management’s Essential Guide to 2025 Real Estate Law Changes

California’s real estate landscape is set for significant changes in 2025, bringing new regulations on screening fees, photo documentation, and protections for small businesses. These updates, aimed at fostering transparency and fairness, are designed to create a more equitable rental market but also introduce new responsibilities for property managers and rental property owners (RPOs). Whether you’re a seasoned professional or a first-time landlord, staying ahead of these changes is crucial. From stricter tenant screening rules to mandatory photographic documentation for move-ins and move-outs, these laws highlight the state’s commitment to protecting both residential and commercial tenants. Wondering how these updates will affect your business? Let True Property Management guide you through these shifts with ease! 🌟

Here’s what you need to know about AB 2493, AB 2801, and SB 1103.

Law Images – Browse 2,155,571 Stock Photos, Vectors, and Video | Adobe Stock

Screening Fee Restrictions (AB 2493)

AB 2493 revolutionizes the tenant screening process by ensuring fairness in how application fees are handled. Under the new law, property managers and RPOs must either refund the screening fee to applicants not selected for tenancy or provide clear screening criteria. If an applicant is considered but does not meet the criteria, the fee does not need to be refunded. Additionally, screening fees cannot be charged unless a unit is available or will be within a reasonable timeframe. Transparency is further emphasized, as property managers must provide applicants with a copy of their consumer credit report within seven days of receiving the screening fee. These changes aim to make the application process more equitable and transparent for prospective tenants.

People Taking Pictures Vector Art, Icons, and Graphics for Free Download

Move-In, Move-Out, and Post-Repair Photo Requirements (AB 2801)

Starting April 1, 2025, AB 2801 mandates that property managers and RPOs document the condition of rental units with photographs at specific points in the tenancy. Photos must be taken at the start of a tenancy, after the tenant vacates, and following any repairs or cleaning related to security deposit deductions. This practice, already common among many property managers, will now become a legal requirement. Furthermore, these photographs must accompany the itemized statement of security deposit deductions. By enforcing this law, California aims to reduce disputes over damages and enhance accountability for both landlords and tenants.

News | California landlords say they could lose millions of dollars amid new protections for small businesses

Protections for Small Business Tenants (SB 1103)

SB 1103 extends critical residential tenant protections to qualified small business tenants. These protections include a 90-day notice for rent increases exceeding 10%, a 60-day notice for lease terminations for tenants with over a year of occupancy, and a requirement to provide lease translations if negotiations occur in specific languages. To qualify, tenants must be microenterprises, small restaurants, or nonprofits meeting specific employee thresholds. The law requires tenants to self-attest their status when entering a lease or annually. These measures aim to provide stability and fairness to small businesses navigating commercial leases.

5 Tips to Avoid Tenant Damages to Your Texas Rental Property

Why These Changes Matter

These new laws reflect California’s ongoing efforts to balance the interests of landlords and tenants while enhancing fairness and transparency. For property managers and RPOs, adapting to these changes is crucial to ensure compliance and maintain trust with tenants. For tenants, the updates provide greater clarity and protections during the rental process. By addressing common pain points—such as security deposit disputes, screening fee practices, and commercial lease fairness—these laws aim to create a more equitable rental market for all parties involved.

In conclusion, the 2025 California real estate laws introduce important updates that demand attention from property managers, landlords, and tenants alike. Whether it’s refining application fee practices, documenting property conditions with photos, or safeguarding small business tenants, these laws underscore the importance of transparency and accountability in rental property management. Property managers should review their current practices, update policies, and educate staff to align with these new regulations, ensuring a smooth transition into the new legal landscape.

2024 California Association of Realtors (C.A.R.). All rights reserved. November 22, 2024

Leave a Comment

Your email address will not be published. Required fields are marked *

Skip to content