As the housing market has continued to bounce back from the setbacks of the pandemic, California has established itself as one of the fastest rising in the country. Homes stay on the market for an average of 20 days, the shortest amount of time since August 2022, and 42% sell for more than the asking price.
If you are considering buying, selling, or renting a home in California, learning your rights and responsibilities as a neighbor and as a landlord or tenant is vital. This page will inform you about some of the most important aspects of California’s property laws, including homestead exemptions, fencing requirements, adverse possession, and renters’ rights.
California Homestead Laws
If you own your home and reside there full-time, you may be able to benefit from California’s homestead laws. In contrast to non-residential or rental properties, these laws provide property owners with greater financial security.
If you ever declare bankruptcy, you can protect up to $600,000 of equity in your homestead. You are expected to sell your current home and use the exempted equity to purchase a new one within six months. If you own your children’s, grandchildren’s, or other dependents’ homes, you can retain up to $31,950 of equity.
If the applicable exemption is more than your total home equity, you can apply it to any other properties you own. This is known as the “wildcard exemption.”
What is considered a homestead in California?
Your home is considered a homestead once you have lived there for 1,215 days. Any type of residential property can benefit from the homestead exemption, including houseboats and mobile homes.
However, if you declare bankruptcy before having lived in your home for 1,215 days, you can still benefit from a partial homestead exemption of $189,050.
You do not need to officially declare your home a homestead in order to benefit from the homestead exemption. However, doing so can protect you in case a creditor challenges your right to the exemption.
Do I get a tax break on my homestead in California?
You can get a property tax break if you have been living in your current residence since the beginning of the current year or earlier. A property declared a homestead in California would have its value assessed as $7,000 lower than its actual value, lowering your property taxes by approximately $70 annually. You do not need to declare your residence a homestead in order to take advantage of the homeowners’ exemption.
California Property Line and Fence Laws
California produces more agriculture than any other U.S. state. It supplies 46% of the commercial fruit and nuts in the country and 49% of commercially-grown vegetables, leading the nation in agricultural earnings.
Fittingly, much of California’s land is dedicated to agricultural production. In 2022, 24 million of the state’s 101 million acres were devoted to farming. In California, land ownership and earning ability are inextricably linked. Therefore, knowing your rights and responsibilities regarding your property lines can be a significant asset to your finances.
Determining ownership and responsibility for material located along a property line can be tricky. California state law details who is responsible for
If you own livestock, you are expected to maintain “good, strong, and substantial” fencing, defined as any fence that keeps animals from entering or leaving your property. The state does not consider wire fencing substantial unless it is four feet tall or taller with at least three barbed wires.
If an animal escapes your property, it can be impounded by the city or county and potentially euthanized. Those who find a stray animal on their property may keep the animal until the animal's owner is located, and the owner will be obligated to reimburse them for their labor and expenses in taking care of the animal. Strong fencing can ensure that you avoid losing your animals or owing money to someone who takes them in.
An inappropriately tall or obstructive fence between neighboring properties is called a “spite fence.” California defines a spite fence as any structure “unnecessarily exceeding 10 feet in height” with the intent of impacting a neighbor’s quality of life. Note that the language allows for material other than fencing to constitute a spite fence. Other objects, such as trees, can also be prohibited under the spite fence law.
Since the definition of a spite fence is somewhat subjective, they are only regulated through civil action. If you feel that your neighbor erected an overly tall fence for the sole purpose of antagonizing you, you can file a civil action to have the obstruction removed.
Tree trimming laws
A tree in California is the property of whoever owns the land on which its trunk is located. However, if a neighbor’s tree overhangs onto your yard, the overhanging portion is considered your property, and you may trim it up to, but no further than, your property line.
There are some exceptions to this law. If by trimming your neighbor’s tree you damage or kill it, you could owe them a fee of thrice the amount of damage you caused.
California Adverse Possession Laws
Adverse possession, more commonly known as “squatters’ rights,” is a legal process by which a person can take ownership of another’s property by illegally living on it for an extended period of time. California is the most lenient state when it comes to adverse possession, only requiring someone to reside on a piece of land for five years before they may claim ownership. However, for their claim to be valid, their residence must meet a few requirements.
Claim of Right or Color of Title
Someone who wishes to claim land under adverse possession must present either a claim of right or color of title. A claim of right is simply the intent to take ownership of the property, which a claimant can demonstrate by residing there. A color of title is a document that gives someone the appearance of legal ownership over a piece of land. Even if that document is not legally valid, it supports the claimant’s belief that they have a right to the land.
The possessor’s residence must be hostile, meaning that the landowner cannot have approved it. A paying tenant could not claim adverse possession from a landlord as the landlord has already agreed to allow the tenant to live there. A landowner can make it more difficult for someone to claim adverse possession by granting that person permission to use their land.
The possessor must demonstrate actual ownership of the property they are claiming in order to obtain legal ownership. Different states mandate different lengths of time that a possessor must exert control over the land they intend to claim. In California, the statutory period is five years.
A possessor can make their claim to ownership more persuasive by performing regular upkeep on the property and by building additions, enclosures, or otherwise improving it. For example, someone who builds a fence around their house that encroaches on their neighbor’s property is demonstrating actual control over their neighbor’s land. If the neighbor does not act against them for five years, that person could claim adverse possession.
The possessor must also pay property taxes for the five-year statutory period in order to demonstrate actual possession.
The possessor’s residence on the land must be notorious, meaning that they cannot make any attempt to hide it from the public. An individual who lives on another's property and hides all of their possessions whenever the owner visits is not occupying the land openly and, as a result, would not be entitled to adverse possession.
The claimant’s actual possession of the land must be continuous for the entire five-year statutory period. Someone living on abandoned property for two years, abandoning it for a year, and returning for three more years would have to live on that property for another two years before having a valid claim to adverse possession.
California Concealed Handgun Laws
For the most part, California restricts the carrying of a concealed handgun to people with a Carry Concealed Weapon license. In order to obtain a CCW license, you will have to be over 18, pass a background check, and take a firearm safety course.
Many state buildings, including the Capitol and the location of any Senate or Assembly hearing, do not permit the carrying of concealed weapons at all. You are also prohibited from carrying at a picket, even with a CCW license. California does not consider out-of-state CCW licenses to be valid.
California Lease and Rental Agreement Laws
In order to ensure fair and equitable opportunity for housing, California state law regulates the terms that landlords are allowed to set for tenants.
Terms of Leases and Rental Agreements
California state law mandates that leases and rental agreements provide the following information:
California landlords may charge their tenants a security deposit. A deposit for an unfurnished rental cannot exceed two months’ rent, and the deposit for a furnished unit cannot exceed three months’ rent. A deposit must be returned, less expenses, within 21 days of the tenant’s move-out date, and a landlord cannot deduct cleaning fees.
A tenant who believes that they are entitled to a greater share of their deposit than they received can sue their landlord in small claims court.
California landlords are permitted to charge tenants a late fee; however, this fee has to be reasonable and based on the landlord’s actual expenses. For example, if the landlord had to pay a collector to go after a late rent check, they might charge the tenant a late fee to compensate for the collection fee.
A landlord can also fine a tenant $25 for a bounced rent check the first time and $35 for subsequent bounced checks.
It is illegal for a landlord to deny a tenant’s application based on the tenant’s membership in a protected class. Protected classes include race, religion, gender, sexual orientation, disability, age, marital status, and military service.
Someone whose application was denied in a manner that they believe constitutes discrimination can lodge a complaint with the California Civil Rights Department and pursue civil action for a violation of the Fair Employment and Housing Act. The statute of limitations for a FEHA violation is one year.
Rent Hikes and Nonrenewal
The California Tenant Protection Act limits how much a landlord may increase rent annually. The law states that rent can only increase by 5% each year plus the local increase in the cost of living or by 10%, whichever is lower. This act is binding, and a landlord cannot have a tenant opt out as part of their rental agreement.
The Tenant Protection Act also states that a landlord must provide a valid reason to end a tenant’s tenancy, whether by eviction or not renewing their lease. These valid reasons include those that are the fault of the tenant, such as failure to pay rent, breaking the lease agreement, or engaging in criminal behavior in the unit and those that do not involve fault. A landlord can decide not to renew a tenant’s lease if they or a relative plans to move into the unit or if they intend to take the unit off the market entirely. A tenant’s own fault can justify an eviction or nonrenewal, such as failing to pay rent or breaking the lease agreement. Non-fault justifications include the landlord wishing to move into the unit, let a relative move into the unit, or take it off the market entirely.
This act only applies to 15-year-old rental units, meaning that, as of January 1, 2023, units constructed on January 1, 2008, and earlier are protected. Dormitories, two-unit apartments in which the landlord lives on-site, and single-family homes that are not owned by real estate corporations, trusts, or LLCs are also exempt from the act.
A tenant who believes they were subject to an illegal rent hike or lease nonrenewal can contact their local rent board, if their city has one, to notify their landlord. They can also take civil action against their landlord in a state court.
California law states that landlords and tenants share a responsibility to repair damages to a rental unit. Tenants must repair any damage they (or their guests or pets) caused to the premises, while a landlord must ensure that the unit remains habitable. Some standards of habitability include hot and cold water, windows, waterproofing, working locks, working smoke detectors, working carbon monoxide detectors (if the unit includes gas appliances), and a heating system. A landlord must repair any issues that undermine these standards or put the tenant at risk.
Amenities that are not necessary for a unit to be habitable, such as dishwashers, refrigerators, or washing machines, might be either the tenant’s or the landlord’s responsibility depending on the lease.
A tenant should send their landlord a written request for repairs. The landlord should address these requests within a reasonable timeframe: 30 days for issues that do not present an immediate health or safety risk to the tenant and 72 hours for those that do.
As a last resort, tenants can withhold rent in response to a landlord failing to fix problems that render a unit uninhabitable. However, the tenant should exhaust other options first. Tenants who intend to withhold rent can put the money in escrow, to be transferred upon the landlord’s completion of the tenant’s requests.
California Law Concerning Real Estate Fraud
Real estate fraud is the act of omitting any necessary information, or presenting any false information, in the process of a real estate transaction. There are several legal infractions that constitute real estate fraud in California.
Someone buying a house might be a victim of real estate fraud if the seller intentionally conceals or lies about major defects that affect the home’s habitability. Someone selling a home will usually describe the condition of every part of the property in a document called a transfer disclosure statement, or TDS. If a seller’s TDS fails to mention, for example, that a gas line is leaky, the buyer could collect damages against the seller.
A more serious violation is the use of forged documents in a real estate transaction. For example, a seller who forges a deed to represent themselves as the owner of a home that they intend to sell could be charged with a felony and be sentenced to as many as three years in prison and/or a fine of up to $10,000.
Renters are also at risk of fraud. Someone fraudulently representing themselves as the owner of the renter’s unit in order to collect rent from the tenant is guilty of “skimming.” Both the tenant and the property’s actual owner can pursue civil action against the skimmer.
Who Regulates Real Estate Laws in California?
The California Department of Real Estate is in charge of legal matters relating to real estate, including the licensing of realtors and brokers and enforcing penalties for violations of property law. However, many of California’s property laws are civil rather than criminal and will most often be decided via a lawsuit or claim. More serious criminal charges like real estate fraud are under the jurisdiction of the District Attorney.
What Is the Statute of Limitations in California
The statute of limitations for violations of California property law depends on the exact nature of the infraction.
California’s statute of limitations for property damage is three years from the date the damage occurred. The statute of limitations for fraud is three years from the date that the plaintiff discovered the fraud. The statute of limitations for breach of contract is two years in the case of an oral contract and four years if the contract was written.
A plaintiff can collect damages against an architecture firm or construction company for structural defects up to four years after construction if the defects are immediately apparent. If the defects only become apparent over time, the statute of limitations is ten years.
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