In recent years, the trend of property flipping in California has raised concerns among lawmakers, leading to the passage of Assembly Bill 968 (AB 968) under the California Civil Code Section 1102.6h. Effective from July 1, 2024, AB 968 mandates that homeowners who resell their properties within 18 months of purchase must disclose all repairs and renovations undertaken during this period, along with relevant work permits, to the buyer.
AB 968 applies specifically to residential properties comprising one to four units, focusing particularly on renovations or repairs conducted by sellers after acquiring ownership of the property. Under the new law, sellers are required to provide detailed disclosures on any additions, structural alterations, repairs, or other modifications made, including copies of all relevant permits. If renovations were performed by contractors, sellers must disclose the names and contact information of each contractor involved. Sellers are also obligated to explain and provide contact information for any third-party contracts lacking necessary permits.
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Industry experts anticipate that the implementation of AB 968 will elevate the transparency of property transactions and enhance market integrity. Previously, some sellers may have prioritized cosmetic renovations while neglecting critical internal systems such as plumbing and electrical facilities, posing potential risks and additional maintenance costs to buyers due to opaque and dishonest practices. The new requirements under AB 968 will compel sellers to disclose renovation details more truthfully, thereby reducing instances of unfair competition in the market.
Additionally, experts recommend that prospective buyers seek experienced third-party inspection services before purchasing properties. These professionals utilize advanced technological tools such as cameras, probes, and ultrasound detectors to conduct comprehensive inspections of pipelines and material quality, ensuring that the property's structure and facilities meet expected standards. Experienced inspectors can swiftly and accurately identify potential issues and provide informed purchasing advice to help buyers make rational decisions.
Overall, AB 968 represents a significant step towards fostering transparency and trust in California's real estate market, benefiting both consumers and the industry as a whole by promoting fair and informed property transactions.
