2025 California Real Estate Laws Explained: What You Need to Know
California’s real estate market is seeing significant updates in 2025 with new laws affecting homeowners, renters, landlords, buyers, and sellers alike. From accessory dwelling units (ADUs) to tenant protections, these changes aim to address California’s evolving housing landscape. In this blog post, I’ve highlighted some of the most impactful updates, but there’s even more to explore! To see the complete list of new laws, check out the link to the California Association of Realtors resource mentioned at the end of this post.
Disclaimer: I am a real estate Broker Associate, not an attorney. This information is sourced from the California Association of Realtors and is provided for educational purposes only. For specific legal advice or assistance, please consult a qualified attorney.
Let’s dive into the changes that could affect you in the coming year.
ADU Amnesty Extension
Changes provide property owners a streamlined path to legalizing unpermitted accessory dwelling units (ADUs).
Before the New Law:Unpermitted ADUs were often required to comply with strict building codes to become legalized, which was costly and time-consuming. The previous amnesty program under SB 897 only covered ADUs built before January 1, 2018.
What’s Changing in 2025:
The new law, Assembly Bill 2533, expands the amnesty program to cover unpermitted ADUs and junior ADUs built before 2020.
Local agencies will now use habitability standards instead of rigid building codes to assess safety.
Fees waived: Retroactive impact fees, connection fees, and capacity charges are exempt in most cases.
Expanded eligibility: Properties built between January 1, 2018, and January 1, 2020, now qualify.
Why This Matters:This extension gives property owners an affordable path to legalize their units, making homes safer and increasing property value. Legalized ADUs are a huge plus when selling, as they provide additional living space for multi-generational families and rental income opportunities.
Balcony Inspection Deadline Extension
Changes aim to provide more time for compliance with balcony safety inspections.
Before the New Law:Under the previous law, wooden balconies and elevated elements in buildings with three or more units required inspections by January 1, 2025.
What’s Changing in 2025:
The new law, Assembly Bill 2579, extends the inspection deadline to January 1, 2026.
Why This Matters:This extra year allows property owners more time to comply with safety requirements, helping to avoid penalties while ensuring the safety of tenants.
Buyer Representation Agreements
A new law formalizes the relationship between buyers and their agents.
Before the New Law:It was optional for buyers and agents to have a written agreement, and offers could be made without formalizing expectations regarding fees, responsibilities, and services.
What’s Changing in 2025:
Agents and buyers must sign a Buyer Representation Agreement before an offer is submitted.
Agreements must include details such as:
Compensation of the broker
Services to be rendered
Contract termination policies
A three-month limit for agreements, except in special cases (e.g., agreements with corporations).
Why This Matters:This law enhances transparency for buyers by clearly outlining what to expect from their agent, ensuring a better-informed and collaborative relationship.
Contractor Exemptions
The threshold for unlicensed contractor work is significantly increased.
Before the New Law:Unlicensed contractors could only take on projects where the total cost (labor, materials, etc.) was $500 or less.
What’s Changing in 2025:
The new law increases the threshold to $1,000, provided the unlicensed contractor discloses their status in advertisements.
Why This Matters:This update reflects the rising costs of labor and materials, giving homeowners more flexibility in hiring contractors for smaller projects without requiring a licensed professional.
Gas-Powered Appliance Disclosures
New rules aim to improve transparency and safety for buyers.
Before the New Law:There were no requirements for sellers to disclose local or state regulations regarding gas-powered appliances.
What’s Changing in 2025:
Sellers must disclose any state or local requirements for replacing gas-powered appliances.
Buyers are advised to conduct an electrical system inspection before purchase, including panels and wiring.
Why This Matters:These changes ensure buyers are aware of potential costs and safety risks associated with outdated gas-powered appliances, preventing unexpected issues during escrow.
Tenant Rights and Protections
Lock Changes for Abuse Victims
Before the New Law:Landlords were required to change locks upon written request from abuse victims, but tenants often bore the cost.
What’s Changing in 2025:
Landlords are now responsible for covering the cost of lock changes.
Protection extends to immediate family or household members of the victim.
Landlords cannot deny tenancy to abuse victims based on their use of lock change protections.
Why This Matters:These changes prioritize tenant safety and prevent discrimination, ensuring victims have a secure and supportive housing environment.
Tenant Screening and Fees
Before the New Law:Landlords could charge application fees even if no rental units were available, and refund policies were inconsistent.
What’s Changing in 2025:
Landlords can only charge application fees if a unit is available or will be available soon.
Refunds are mandatory for rejected applicants within 7 days.
Landlords must disclose written screening criteria upfront, and applications must be processed in the order received.
Why This Matters:This law adds transparency and fairness to the rental process, preventing tenants from wasting money on unavailable units.
Positive Credit Reporting
Before the New Law:Landlords were not required to report positive rental payments to credit bureaus.
What’s Changing in 2025:
Landlords must offer tenants the option to have positive rental payments reported to at least one major credit bureau.
Why This Matters:This change allows tenants to build their credit history, helping them qualify for better loans and financial opportunities.
Move-In and Move-Out Photos for Security Deposits
Before the New Law:Security deposit deductions were often disputed due to a lack of documentation.
What’s Changing in 2025:
Landlords must take move-in, move-out, and post-repair photos to justify any deductions.
Why This Matters:This requirement ensures transparency and reduces disputes over security deposits, protecting both landlords and tenants.
Probate and Small Estate Exemptions
Changes to probate laws bring a significant increase in the small estate exemption, aimed at helping low and middle-income families retain financial security.
Before the New Law:The small estate exemption was capped at $184,500, and it applied to all types of real property, including commercial, vacant land, or residential properties.
What’s Changing in 2025:
The exemption limit will now be raised to $750,000, but it is limited to primary residences of the deceased.
Non-primary residential properties like commercial or vacant land will no longer qualify for this exemption.
Why This Matters:The updated threshold significantly benefits families inheriting a loved one’s primary home by enabling a faster, less expensive probate process. However, families inheriting non-primary residences may now need to go through traditional probate procedures.
This change ensures that families can safeguard their primary residences without additional financial burdens, especially in California’s high-value real estate market.
Swimming Pool Safety Standards
Before the New Law:Pools and spas required at least two safety features but lacked detailed inspection standards.
What’s Changing in 2025:
Home inspectors must report whether pool safety features are operable, in good repair, and appropriately labeled.
Revised requirements for safety features include better labeling and operability standards.
Why This Matters:This change enhances safety for families and ensures compliance with modern standards during inspections.
Stay Informed and Protected
These new laws are designed to protect California residents and ensure transparency in real estate transactions. Have questions? Schedule a free 15-minute consultation with me here. Let’s navigate these changes together!
Source:California Association of Realtors (C.A.R.) New Laws for 2025.