Flipped Homes Protection Finally Arrives, but why didn't they apply it to all sellers?

California's Assembly Bill 968 (AB-968), effective July 1, 2024, is a real estate disclosure law that requires sellers of single-family homes to provide detailed information on renovations if they owned the property for 18 months or less. Sellers must disclose all contractor work, provide contractor names and contact information, and share copies of relevant permits, or inform buyers how to obtain them.    The goal is to enhance transparency for buyers, especially in "flipper" properties, and to promote accountability for renovations. However, The law impacts any owner of a single-family residence, not just professional real estate flippers, if they meet the 18-month ownership criteria.

WHO MUST COMPLY?

Sellers of single-family homes who:

Bought the property, and  Accept an offer to sell it within 18 months.

WHAT SELLERS MUST DISCLOSE:

Requirements   Details Work,Performed   Any room additions, structural modifications, alterations, or repairs performed by a contractor since the seller bought the home. Contractor Info     The name of each licensed contractor and contact information (if provided) for those major works Permits    Copies of permits for the work, or the contact information of the contractor if the seller wasn't provided with the permits.

Disclosure Obligations Sellers are required to provide disclosure to potential buyers.    Lender Requirements Some lenders require evidence of compliance or plans for compliance before approving financing.    Avoid Escrow Delays Escrow officers must ensure all required disclosures are delivered and acknowledged prior to closing.

Make sure your next transaction is not affected! Stay educated about your next closing.

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