New California Real Estate & Property Management Laws for 2026

Oasis Singleton
2 days ago
8 min read

Every January, California drops a fresh batch of laws that quietly change how we list, market, lease, and close real estate. 2026 is no exception.

If you haven’t already, it’s worth reviewing the prior years too so you can see the trend line:

For full legal text and the official C.A.R. summaries, members can log in to the C.A.R. New Laws page here (login required):https://www.car.org/riskmanagement/qa/New-Laws/2026-New-Laws

This article is a practical, plain-English breakdown so you can update your checklists, templates, and conversations with clients.

1. Algorithmic Collusion: Rent-Setting & Pricing Software Under a Microscope (AB 325)

California is tightening antitrust rules around “common pricing algorithms.” In simple terms:If multiple competitors use the same software to align or stabilize prices (for rents or fees), and the tool uses competitor data to recommend pricing, that can now be treated as collusion.

What this means in practice

Using your own in-house pricing tool just for your company is not the target.
Risk shows up when:
- Multiple landlords or companies use the same third-party pricing tool, and
- That tool uses competitor data to help everyone “optimize” rents or fees.

This is especially relevant after the federal cases involving RealPage and large landlords over alleged rent-setting “algorithmic collusion.”

Action steps for brokers/property managers:

Ask your rent-setting or pricing software vendor:
- Does this tool use competitor data from other clients?
- How does it recommend or “align” pricing?
Keep your own independent judgment in pricing decisions and avoid blindly following algorithm outputs.
If you manage a portfolio for multiple owners, document that pricing decisions are made property-by-property, not to “keep up” with other landlords using the same tool.

For more context on how regulatory changes have impacted representation and compliance in recent years, see: Buyer Representation Agreements: What You Need to Know About California AB 2992

2. Digitally Altered Listing Photos: New Disclosure Rule (AB 723)

If you use AI or photo editing to add, remove, or change elements in a property photo, you now have disclosure obligations.

The new rule for altered images

If a photo is digitally altered (beyond basic edits like brightness, cropping, or color correction), your ad must:

Include a clear statement near the image saying it has been digitally altered, and
Provide a link, URL, or QR code to a page where the original, unaltered image is available and clearly identified.

If the image is on a website you control, you can comply by either:

Showing both the original and altered images together, or
Using the statement + link/URL/QR code method.

“Digitally altered” includes things like:

Virtually changing flooring, paint, walls, fixtures, appliances
AI-generated staging or removing power lines, neighboring buildings, or views you don’t like

Basic photo tweaks like lighting, straightening, and color correction are fine and do not trigger the new requirement.

Key point: This applies to sales and to any lease over one year.

This dovetails with a broader push for better disclosures. If you want a county-by-county view of local disclosure add-ons, bookmark: California Local Real Estate Disclosure Guide by County

3. Balcony Inspections & HOA Disclosures: More Transparency (AB 130 & SB 410)

Two separate but related issues to track:

A. Balcony inspections with asbestos present (AB 130)

Existing law required balcony and exterior elevated element inspections for multi-family buildings (3+ units) by January 1, 2026.

If asbestos-containing material (ACM) is discovered during that process:

Owner gets 9 extra months to complete asbestos abatement, and
An additional 3 months after abatement to complete the balcony inspection,
But they must keep documentation for three years.

This extension does not apply to common interest developments (CIDs/HOAs).

B. HOA balcony inspection reports become part of the disclosure set (SB 410)

For condos and HOAs, the most recent balcony inspection report now becomes part of the required HOA disclosure package:

HOAs must provide the latest balcony inspection report when requested during a sale.
Reports must include a summary page covering:
- How many units/elements exist
- How many were inspected
- How many balconies/elements are an immediate safety risk

This helps buyers and lenders understand whether there are immediate safety issues and potential future special assessments.

4. Fire-Affected Zip Codes: Ban on Unsolicited Offers (AB 851)

Who should care: Any agent prospecting in certain Southern California fire-impacted zip codes.

In specified fire-affected zip codes, buyers (and their agents) are prohibited from making unsolicited offers on residential property until January 1, 2027.

An “unsolicited offer” includes offers sent by text, email, call, mail, etc., if the property is not publicly listed or otherwise publicly marketed for sale.
Before closing, buyer and seller must sign an attestation (recorded with the deed) confirming the sale was not the result of an unsolicited offer.
Sellers who received an illegal unsolicited offer have a four-month right to cancel the contract.
Violations can be a DRE licensing issue, a misdemeanor, and can carry civil penalties.

If you coach agents on lead generation, this should be part of your farm and prospecting training going forward.

For general business strategy and healthy growth without stepping on legal landmines, you can point agents to:Tips for Growing Your Real Estate Business

5. Defensible Space “Zone 0” Around Structures (AB 1455)

California is finally pushing implementation of the “Zone 0” ember-resistant area within five feet of a structure in high fire-risk areas.

The Board of Forestry must finalize regulations by December 31, 2025, and publish updated guidance within one year.
For new structures in State Responsibility Areas (SRA) and Very High Fire Hazard Severity Zones (VHFHSZ), Zone 0 will apply as soon as the regulations and guidance are effective.
For existing structures, owners have three years after the effective date to comply.

Key idea: Zone 0 means removing flammable materials (mulch, wood piles, certain plants, etc.) immediately around the structure to reduce ember ignition risk.

Local agencies can adopt stricter or alternate standards, so your local fire authority may go above the state minimums.

6. Third-Hand Smoke Disclosure in Residential Sales (AB 455)

Who should care: Listing agents, sellers, TCs managing disclosure packets.

Sellers now have a specific duty to disclose “third-hand smoke” if they have actual knowledge of:

Residue from smoking tobacco or nicotine products (including vapes), or
A history of smoking inside the property.

This applies wherever a Transfer Disclosure Statement (TDS) is required (1–4 units, some long-term leases, and similar—subject to the usual TDS exemptions like probate, foreclosure, certain trusts, etc.).

Third-hand smoke means the residual chemicals left behind on walls, carpets, surfaces, etc., not just smell.

Buyers get a cancellation right similar to other TDS issues if the disclosure comes late.

This is a good moment to audit your listing packets. For a broader look at how local disclosure layers sit on top of state law, share: California Local Real Estate Disclosure Guide by County

7. FinCEN “Residential Real Estate Reporting Rule” (FRR-PA Addendum)

Effective for closings on or after March 1, 2026

For certain transactions, escrow/title (the “reporting person”) must gather detailed information and report to FinCEN when all of this is true:

The property is 1–4 residential units, a stock cooperative, or vacant land intended for 1–4 units.
The buyer is a legal entity or trust.
The purchase is all-cash or financed through a lender that doesn’t already have its own federal anti-money-laundering reporting duty.

A new C.A.R. addendum (FRR-PA) will be bundled with standard purchase agreements so that providing this information becomes both a legal and contractual obligation.

Key points:

Buyer and seller must provide required identity information within 7 days of escrow/title’s request.
If info isn’t provided, escrow will not close.
Persistent failure to provide information can be a breach of contract, and the performing party may gain a contractual right to cancel.

If you routinely work with LLCs, trusts, or investors, this is one to flag early in your buyer consult and listing intake.

For a broader context on how recent changes have shaped commissions, representation, and compliance in California, your clients can explore: Buyer Representation Agreements: What You Need to Know About California AB 2992

8. Landlord-Tenant Changes That Matter for Property Managers

Several new laws hit the landlord-tenant side. A quick rundown for anyone managing doors:

a) Electronic return of security deposits (AB 414)

If the tenant paid the deposit electronically, the default is that the deposit should be returned electronically as well, unless the parties agree otherwise in writing.

Landlord must notify the tenant in writing (when the tenancy is ending) of their right to receive the deposit electronically.
Itemized statements can be sent by:
- Personal delivery or first-class mail (default), or
- Email or another address if both sides agree in writing.
For multiple tenants, the default is one check to all adult tenants, unless everyone signs an agreement saying otherwise and specifying how funds will be split.

b) Landlord duty to remediate after disasters (SB 610)

If a disaster (fire, flood, etc.) leaves debris, smoke residue, ash, mold, or similar hazards, the landlord has a duty to:

Remove debris, and
Mitigate hazards (including mold, smoke residue/odor, ash, asbestos, water damage),within a reasonable time and following any official cleaning protocols.

Debris like ash or sludge is presumed to make a unit untenantable unless a public health official says it isn’t toxic. Tenants retain a right to return at the same rent once it’s safe, unless the tenancy is lawfully terminated and the landlord chooses not to rebuild.

c) Tenant freedom to choose internet provider (AB 1414)

Landlords cannot require tenants to use a specific internet provider.

Tenants can opt out of bundled or third-party ISP subscriptions in tenancies starting, renewed, or continuing month-to-month on or after January 1, 2026.
If the landlord violates this, the tenant can deduct the cost of the unwanted subscription from rent.
Anti-retaliation statutes apply.

d) Stoves and refrigerators now part of habitability (AB 628)

For leases entered into, amended, or extended on or after January 1, 2026:

Landlords must provide a stove and refrigerator in good working order (not subject to recall).
If a recall notice arrives, the landlord has 30 days to repair or replace.
Tenants can agree at the start of the lease to bring their own refrigerator, but:
- The lease must include specific statutory language, and
- The tenant can later give 30 days’ notice and require the landlord to provide one.

These are now baked into California’s habitability standards, so non-compliance can fuel habitability defenses and rent-related claims.

If you manage a lot of landlord files, this is a great moment to revisit your intake and habitability checklist. For agents who dabble in property management or refer it out, this pairs well with your educational content on landlord obligations.

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9. Other Notable Tenant Protections

A few more changes to have on your radar:

Short-term disaster housing (AB 299): When housing is used as temporary lodging after a disaster, occupants do not gain traditional eviction protections until day 270 (instead of day 30). This runs through January 1, 2031.
Unlawful detainer defense for Social Security interruptions (AB 246): Through January 20, 2029, tenants who fall behind on rent due to a documented interruption of Social Security benefits can raise this as a defense and obtain a temporary stay of eviction proceedings. They still owe the rent but have more time and procedural protection.

10. Safe Maximum Indoor Temperature Policy (SB 655)

California is signaling that extreme heat in rentals is a policy priority.

The state has declared that all rentals should be able to maintain a “safe maximum indoor temperature.”
Starting January 1, 2027, various agencies must consider this policy when updating their rules and grant programs.

The law doesn’t yet set a specific number (like 78°F or 82°F), and it’s not fully embedded into the standard habitability sections. But it’s a clear warning shot: expect more clarity and possibly stronger standards in the future.

11. Where to Go From Here

The theme of 2026 is consistent with 2024 and 2025:

More transparency (photos, smoke, HOAs, FinCEN reporting, consumer choice)
More consumer protections (tenants, disaster victims, elderly/disabled renters)
More scrutiny of tech-driven tools (pricing algorithms, AI imagery)

If you want a chronological view of how we got here, you can point clients and team members to:

And for the official legal summaries, C.A.R. keeps a detailed 2026 New Laws chart for members (login required): https://www.car.org/riskmanagement/qa/New-Laws/2026-New-Laws

As always, this blog is for education, not legal advice. For specific cases, agents and property managers should consult their broker and legal counsel—and lean on their transaction coordinator to keep the paperwork and timelines aligned with these updates.