Today's Law As Amended


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SB-1212 Real estate investment trusts: purchase, acquisition, and sale of housing.(2023-2024)



As Amends the Law Today


SECTION 1.

 Chapter 5 (commencing with Section 745) is added to Title 2 of Part 1 of Division 2 of the Civil Code, to read:

CHAPTER  5. Real Estate Investment Trust Ownership of Housing
745.
 The Legislature finds and declares all of the following:
(a) California has a housing supply and housing affordability crisis of historic proportions. The consequences of failing to effectively and aggressively confront this crisis are hurting millions of Californians, robbing future generations of the chance to call California home, stifling economic opportunities for workers and businesses, worsening poverty and homelessness, and undermining the state’s environmental and climate objectives.
(b) Lack of supply and rising costs are compounding inequality and limiting advancement opportunities for many Californians.
(c) Home ownership has been a primary driver of household wealth, with homeowners holding over 40 times the median net worth of renters as of 2019.
(d) Large corporations, formed as real estate investment trusts, have purchased tens of thousands of homes in California and hundreds of thousands of homes across the globe, limiting the available supply of housing for purchase by individuals and families.
(e) Investors purchased a record share of homes sold in the United States in 2021, purchasing nearly one out of every seven homes sold.
(f) It is incredibly difficult for individuals and families to compete with large corporations when trying to purchase a home because corporations have the funds to purchase homes in cash, buy multiple homes at once, and pay above market rate prices.
(g) Large corporate landlords are often less responsive to the needs of their tenants, raise rents more aggressively, and evict people more frequently than other types of landlords. These practices exacerbate housing insecurity and fuel California’s homelessness crisis.
(h) It is in the public and state’s interest to ensure that families and all Californians have a reasonable opportunity to purchase homes and to protect California’s housing market from monopolies. Large corporations purchasing family homes directly conflicts with those goals.
745.1.
 For purposes of this chapter:
(a) “Interest” means any estate, remainder, or reversion enumerated in Chapter 1 (commencing with Section 761) of Title 2 of Part 2, or portion of the estate, remainder, or reversion, or an option pursuant to which one party has a right to cause legal or equitable title to housing to be transferred.
(b) “Housing” means a single-family dwelling or other dwelling that consists of one or two residential units.
(c) “Real estate investment trust” means the same as defined in Section 23000 of the Corporations Code.
745.2.
 (a) Notwithstanding any other law, on and after January 1, 2025, it shall be unlawful for a real estate investment trust to purchase, acquire, or offer to purchase or acquire any interest in housing unless the housing has been listed for sale to the general public for at least 60 days.
(b) The 60-day timeline described in subdivision (a) shall reset if the seller changes the asking price for the housing, and a real estate investment trust shall be prohibited from purchasing, acquiring, or offering to purchase or acquire any interest in the housing until it has been listed for sale to the general public at the new asking price for at least 60 days.
(c) A real estate investment trust that purchases, acquires, or offers to purchase or acquire any housing shall pay a final sales price that is not less than 95 percent of the publically listed sales price.
(d) A real estate investment trust that violates this section shall be subject to civil damages in an amount not to exceed one million dollars ($1,000,000).
745.3.
 A seller of housing and anyone acting as an agent for the seller shall not be liable for any violation of this chapter if the seller obtains a written release signed by the buyer stating that the buyer is not a real estate investment trust.
745.4.
 (a) A real estate investment trust that sells housing in this state after January 1, 2025, shall comply with the requirements of this section before offering to sell housing to any purchaser other than an existing tenant.
(b) (1) A real estate investment trust shall send notice of its intent to sell the housing to each adult tenant who is named in the rental agreement and who currently resides at the property. If no tenant resides at the property, the real estate investment trust may proceed in selling the housing without regard to this section.
(2) The notice required pursuant to paragraph (1) shall include all of the following:
(A) The location and a description of the housing.
(B) The unit number or other designation of each rental unit of the housing, if any.
(C) The number of bedrooms and bathrooms in each rental unit.
(D) The price at which the housing will be listed for sale to the general public.
(E) The annual expenses for the housing, including, but not limited to, management, insurance, utilities, and maintenance costs.
(c) (1) A tenant may, within 20 days of receipt of the notice, send notice to the real estate investment trust expressing interest to purchase the housing.
(2) If the real estate investment trust does not receive notice from the tenant expressing interest to purchase the housing within 20 days of the tenant receiving notice under paragraph (1) of subdivision (b), the real estate investment trust may proceed in selling the housing without regard to this section.
(d) If the real estate investment trust receives notice from the tenant expressing interest to purchase the housing within 20 days of the tenant receiving notice under paragraph (1) of subdivision (b), the real estate investment trust shall afford the tenant 60 days after the date it received the notice expressing interest to secure financing and submit a formal offer. If the tenant does not secure financing and submit a formal offer within 60 days, the real estate investment trust may proceed in selling the housing without regard to this section.
(e) (1) A real estate investment trust may reject any offer submitted to purchase housing pursuant to this section.
(2) If the real estate investment trust receives a formal offer pursuant to subdivision (d) and rejects that offer, the real estate investment trust may sell the housing to any other buyer in accordance with this chapter. However, the real estate investment trust shall not list the housing for sale to the general public in an amount less than the amount offered by the tenant to purchase the housing unless one of the following conditions are satisfied:
(A) The tenant revokes the formal offer.
(B) The tenant fails to secure financing.
(C) The housing appraises for less than the amount offered in the formal offer.