SB681 - Housing.

Amended IN Senate May 23, 2025 Amended IN Senate April 10, 2025 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Senate Bill No. 681 Introduced by Senator Wahab (Principal coauthors: Senators Becker, Grayson, McGuire, and Pérez) February 21, 2025 An act to amend Sections 714.3, 1950.6, 5850, and 5855 of, and to add Sections 1950.3 and 2924.13 to, and to repeal Section 1947.1 of, the Civil Code, to amend Sections 54221, 65584.01, 65584.04, 65589.5, 65905.5, 65913.10, 65928, 65941.1, 65953, and 65956 of, to amend and repeal Sections 65940, 65943, and 65950 of, to add Section 8590.15.5 to, and to repeal Section 66301 of, the Government Code, to amend Section 30603 of, to add Section 30342 to, and to add and repeal Section 25402.15 of, the Public Resources Code, and to amend Section 17053.5 of the Revenue and Taxation Code, relating to housing. LEGISLATIVE COUNSEL'S DIGEST SB 681, as amended, Wahab. Housing. (1) Existing law, the Planning and Zoning Law, authorizes a local agency to provide for the creation of accessory dwelling units in single-family and multifamily residential zones by ordinance, and sets forth standards the ordinance is required to impose with respect to certain matters, including, among others, maximum unit size, parking, and height standards. Existing law authorizes a local agency to provide by ordinance for the creation of junior accessory dwelling units, as defined, in single-family residential zones and requires the ordinance to include, among other things, standards for the creation of a junior accessory dwelling unit, required deed restrictions, and occupancy requirements. Existing law makes void and unenforceable any covenant, restriction, or condition contained in any deed, contract, security instrument, or other instrument affecting the transfer or sale of any interest in real property that either effectively prohibits or unreasonably restricts the construction or use of an accessory dwelling unit or junior accessory dwelling unit on a lot zoned for single-family residential use that meets the above-described minimum standards established for those units. However, existing law permits reasonable restrictions that do not unreasonably increase the cost to construct, effectively prohibit the construction of, or extinguish the ability to otherwise construct, an accessory dwelling unit or junior accessory dwelling unit consistent with those aforementioned minimum standards provisions. This bill would prohibit fees and other financial requirements from being included in the above-described reasonable restrictions. (2) Existing law regulates the hiring of real property and imposes various requirements on landlords relating to the application for, and leasing of, residential rental property. Existing law places limitations on the amount of rent and security that a landlord can charge a tenant, as specified. This bill would prohibit a landlord or their agent from charging certain fees, including, any fee that is not specified in the rental agreement, a processing fee, including a convenience fee or a check cashing fee, for the payment of rent or any other fees or deposits, or a fee for a tenant to own a household pet. The bill would also prohibit a landlord or their agent from charging a late fee for the late payment of rent that is more than 2% of the monthly rental rate, and would prohibit the late fee from being charged unless the rent is overdue by 7 days or more. unless the fee is specified in the rental agreement. The bill would prohibit any fees charged, in total, from exceeding more than 5% of the monthly rental amount, except as specified. Under the bill, if a landlord or their agent charges and collects a fee from a tenant that is not authorized by law, the landlord or their agent would be liable to the tenant in a civil action for the cost of the fee, plus 5% interest compounded daily from the date the fee was collected. Existing law requires the owner of qualifying residential property, as defined, that provides parking with the qualifying residential property to unbundle parking from the price of rent, as specified. Existing law defines “unbundled parking” as the practice of selling or leasing parking spaces separate from the lease of the residential use. This bill would repeal those provisions, and instead, would prohibit a landlord or its agent from charging a fee for a parking space. Existing law authorizes a landlord or their agent to charge an applicant who requests to rent a residential housing unit an application screening fee to cover the costs of obtaining information about the applicant. Existing law prohibits the amount of the application screening free fee from being greater that the actual out-of-pocket costs of gathering information concerning the applicant, including, but not limited to, the cost of using a tenant screening service or a consumer credit reporting service, and the reasonable value of time spent by the landlord or their agent in obtaining information on the applicant, as provided. This bill, instead, would authorize the application screening fee to cover the actual costs of the screening, and would prohibit the amount of the application screening fee from being greater that the actual out-of-pocket costs of conducting the screening, including, but not limited to, the cost of using a tenant screening service or a consumer credit reporting service, as provided. The bill would thereby eliminate the authority of the landlord or their agent to charge, as part of the application screening fee, the reasonable value of time spent by the landlord or their agent in obtaining information on the applicant. (3) Existing law prescribes various requirements to be satisfied before the exercise of a power of sale under a mortgage or deed of trust. Existing law authorizes a borrower to bring an action for injunctive relief to enjoin material violations of certain of these requirements, and requires that the injunction remain in place and any trustee’s sale be enjoined until the court determines that the violations have been corrected, as specified. This bill would deem all or a portion of a debt secured by a subordinate mortgage abandoned if any of certain conditions are met, including make certain conduct an unlawful practice in connection with a subordinate mortgage, including, among others, that the mortgage servicer did not provide the borrower with any communication regarding the loan secured by the mortgage for at least 3 years. The bill would prohibit a mortgage servicer from conducting or threatening to conduct a nonjudicial foreclosure if any part of the debt secured by the mortgage or deed of trust is deemed abandoned pursuant to those provisions, and would prohibit a mortgage servicer from exercising a power of sale in a mortgage or deed of trust unless the mortgage servicer records a certification under penalty of perjury that no portion of the debt secured by the mortgage or deed of trust is abandoned pursuant to those provisions. until the mortgage servicer (A) records or causes to be recorded a certification, as specified, under penalty of perjury that either the mortgage servicer did not engage in an unlawful practice or the mortgage servicer lists all instances when it committed an unlawful practice and (B) the mortgage servicer sends the recorded certification and a notice to the borrower, as specified. By expanding the scope of a crime, this bill would impose a state-mandated local program. (4) Existing law, the Davis-Stirling Common Interest Development Act, governs the formation and operation of common interest developments. Existing law requires that a common interest development be managed by an association. Existing law, if an association adopts or has adopted a policy imposing any monetary penalty on any association member for a violation of the governing documents, requires the board to adopt and distribute to each member a schedule of the monetary penalties that may be assessed for those violations, as provided, and prohibits an association from imposing a monetary penalty on a member for a violation of the governing documents in excess of that schedule. Existing law requires the board to notify a member 10 days before a meeting to consider or impose discipline on the member, as specified. Existing law requires the board to provide a member with written notification of a decision to impose discipline on the member within 15 days. This bill would prohibit monetary fees from exceeding the lesser of that specified schedule or $100 per violation. The bill would require the board to give a member the opportunity to cure a violation prior to the meeting to consider or impose discipline, as specified. The bill would reduce the time to provide written notification of a decision to impose discipline from 15 days to 14 days. (5) Existing law, until July 1, 2042, establishes the Seismic Retrofitting Program for Soft Story Multifamily Housing for the purposes of providing financial assistance to owners of soft story multifamily housing for seismic retrofitting to protect individuals living in multifamily housing that have been determined to be at risk of collapse in earthquakes, as specified. Existing law establishes the Seismic Retrofitting Program for Soft Story Multifamily Housing Fund, and its subsidiary account, the Seismic Retrofitting Account, within the State Treasury. Existing law requires the California Residential Mitigation Program, also known as the CRMP, to develop and administer the program, as specified. This bill would require, upon appropriation by the Legislature, the CRMP to fund the seismic retrofitting of affordable multifamily housing, as specified. The bill would require the CRMP to prioritize affordable multifamily housing serving lower income households, as defined. (6) Existing law prescribes requirements for the disposal of surplus land by a local agency. Existing law provides that an agency is not required to follow the requirements for disposal of surplus land for “exempt surplus land,” except as provided. Existing law defines “exempt surplus land” to mean, among other things, real property that a school district is required to appoint a district advisory committee prior to sale, lease, or rental of any excess real property, as specified, and real property that a school district may exchange for real property of another person or private business firm, as specified. This bill would remove the above-described school district real property from the definition of “exempt surplus land,” thereby requiring that the disposal of that property be done in accordance with the above-described requirements for surplus land disposal. (7) Existing law, the Planning and Zoning Law, requires each county and each city to adopt a comprehensive, long-term general plan for the physical development of the county or city, and specified land outside its boundaries, that contains certain mandatory elements, including a housing element. That law requires each local government to review its housing element and to revise the housing element in accordance with a specified schedule. For the 4th and subsequent revisions of the housing element, existing law requires the Department of Housing and Community Development to determine the existing and projected need for housing for each region, and requires the appropriate council of governments, or the department for cities and counties without a council of governments, to adopt a final regional housing need plan that allocates a share of the regional housing need to each city, county, or city and county, as provided. Existing law requires the department to meet and consult with the council of governments regarding the assumptions and methodology used to determine a region’s housing needs at least 26 months prior to the scheduled revision. Existing law requires the council of governments to provide certain data assumptions from the council’s projections, if available, including, among other things, the percentage of households that are overcrowded, the overcrowding rate for a comparable housing market, the percentage of households that are cost burdened, and the rate of housing cost burden for a healthy housing market. This bill would revise these data assumptions requirements to, instead, require the council of governments to provide data on the percentage of households that are overcrowded within the region, the percentage of households that are overcrowded throughout the nation, the percentage of households that are cost burdened within the region, and the percentage of households that are cost burdened throughout the nation. Existing law requires each council of governments, or delegate subregion, as applicable, to develop, in consultation with the department, a proposed methodology for distributing the existing and projected regional housing need to cities, counties, and cities and counties within the region or within the subregion, where applicable, at least 2 years before a scheduled revision. This methodology is also referred to as the allocation methodology. Existing law requires the council of governments, or delegate subregion, as applicable, to publish a draft allocation methodology on its internet website and submit the draft allocation methodology to the department. Existing law requires the department to determine whether the methodology furthers the specified objectives within 60 days. If the department determines that the methodology is not consistent with the objectives, existing law requires the council of governments, or delegate subregion, as applicable, to either (A) revise the methodology to further the objectives and adopt a final regional, or subregional, housing need allocation methodology or (B) adopt the regional, or subregional, housing need allocation methodology without revisions and include within its resolution of adoption findings, supported by substantial evidence, as to why the council of governments, or delegate subregion, believes that the methodology furthers the objectives, despite the findings of the department. This bill, if the department determines that the draft allocation methodology is not consistent with the objectives, would instead require the council of governments, or delegate subregion, to revise the methodology, in consultation with the department, to further the objectives within 45 days, receive department acceptance that the revised methodology furthers the objectives, and adopt a final regional, or subregional, housing need allocation methodology. The bill would remove the ability for a council of governments or delegate subregion to adopt the regional or subregional housing need allocation methodology without revision, as described above. (8) Existing law, except as provided, generally requires that a public hearing be held on an application for a variance from the requirements of a zoning ordinance, an application for a conditional use permit or equiva [Text truncated for display. Full text available on Congress.gov.]