The state of California has long been known for its progressive approach to real estate regulation, and in 2025, several significant updates to real estate laws will impact property owners across the state. These changes aim to address housing shortages, improve tenant protections, and streamline property development processes. Property owners must stay updated on these legislative changes to ensure they remain compliant and capitalize on new opportunities.
New Rent Control Measures: AB 1447
One of the most significant updates for property owners in California is the enactment of Assembly Bill (AB) 1447, which strengthens rent control laws in the state. While California has had rent control measures for decades, AB 1447 aims to address concerns over rising housing costs by standardizing rent increases across the state.
Under the new legislation, rent increases for most residential rental properties will be capped at 5% of the current rent or 10% of the current rent, whichever is lower, over a 12-month period. Additionally, rent hikes will now require landlords to provide at least 90 days’ notice to tenants. These changes apply to nearly all residential rental properties built before 1995, except for certain new developments or properties in specific areas where rent control ordinances are already in place.
For property owners, this bill will require more careful planning when raising rents to ensure compliance with the new limits. While the cap on rent increases will help protect tenants, it may limit the ability of landlords to cover rising operational costs. Landlords will need to closely track their operating expenses and be prepared to demonstrate the necessity of any rent increase under the new rules.
Accessory Dwelling Units (ADUs) and Streamlined Permitting: AB 2533
As part of the state’s ongoing efforts to address the housing crisis, AB 2533 has been enacted to make it easier for property owners to build Accessory Dwelling Units (ADUs). ADUs, also known as granny flats or in-law suites, have become an increasingly popular way for homeowners to create additional rental income or accommodate family members.
In 2025, AB 2533 streamlines the permitting process for ADUs, reducing bureaucratic hurdles that have historically delayed construction. Under the new law, local governments are required to fast-track ADU applications and ensure that permits are processed within a specified timeframe. Additionally, the law removes certain parking requirements for ADUs, which often posed barriers to development.
For property owners, this change represents an opportunity to increase the value of their properties and generate rental income from additional units. The reduction in permitting barriers and parking requirements is expected to make it easier for homeowners to add ADUs, particularly in urban areas where space is at a premium.
Seismic Safety Requirements: SB 564
In 2025, California passed Senate Bill (SB) 564, which mandates that owners of multi-family buildings constructed before 1980 conduct seismic retrofitting to improve the buildings’ resistance to earthquakes. California is located in one of the most seismically active regions in the United States, and after several major earthquakes in recent decades, the state has ramped up efforts to ensure that its buildings are safer in the event of a seismic disaster.
Under SB 564, property owners of older buildings are now required to conduct seismic retrofitting on their properties within a certain timeline. Buildings that fail to meet the required safety standards will face penalties, and landlords may be required to vacate tenants until retrofitting is completed.
While this law requires a significant financial investment on the part of property owners, it is ultimately designed to protect both tenants and buildings. For many property owners, retrofitting will be a necessary expense to ensure the long-term viability of their properties, especially in seismically sensitive areas like Los Angeles and San Francisco.
Environmental Hazard Disclosures: SB 161
Senate Bill (SB) 161, enacted in 2025, adds more stringent requirements for environmental hazard disclosures. Under this law, property owners must provide more detailed information about potential environmental hazards on their properties. This includes not only traditional concerns like lead-based paint or asbestos, but also emerging environmental threats such as mold, radon, and wildfire risks.
The law mandates that all sellers and landlords provide a comprehensive disclosure document outlining any known environmental hazards. Failure to disclose these hazards could result in significant fines or legal action. As the effects of climate change become more pronounced, the California government has been increasingly focused on ensuring that property buyers and renters have access to information that may affect their health or the property’s safety.
Fair Housing and Anti-Discrimination Laws: AB 1138
AB 1138, passed in 2025, strengthens California’s fair housing laws, ensuring that property owners comply with the state’s commitment to ending housing discrimination. Under the new law, real estate professionals, landlords, and property owners must undergo annual training on recognizing and combating discriminatory practices in housing transactions.
The bill expands protections against discrimination based on sexual orientation, gender identity, and marital status, and requires property owners to ensure that their advertising and leasing practices comply with these expanded protections. Additionally, property owners who are found to be in violation of fair housing laws could face fines, legal costs, and potential loss of business licenses.
Conclusion: Navigating the Evolving Landscape
The legal landscape for property owners in California is evolving rapidly, with significant changes in rent control, construction, seismic safety, and fair housing laws. For property owners, staying informed about these updates and adjusting business practices accordingly is essential to navigating this complex regulatory environment.
By proactively addressing these changes, property owners can continue to operate effectively and protect their investments. Furthermore, these legal reforms ultimately aim to create a more equitable, safe, and sustainable housing market for all Californians.
