California Real Estate Law: property timeline, record discipline, and when review matters

California's real estate market is the largest in the United States by total value, and its legal framework reflects both that scale and the policy priorities of a high-cost state where housing access is persistently contested. Several California-specific rules — the anti-deficiency statute, the AB 1482 rent cap, the Costa-Hawkins exemptions, and the strengthened homestead exemption — operate differently from any other state.

Non-Judicial Foreclosure: The Trustee's Sale Process

Most California home loans are secured by a deed of trust rather than a mortgage, which allows non-judicial foreclosure under Civil Code § 2924. The process: (1) the lender records a Notice of Default (NOD) in the county recorder's office; (2) the borrower has a 90-day reinstatement period — paying the full amount in default plus fees stops the foreclosure; (3) after 90 days, if not reinstated, a Notice of Trustee's Sale (NTS) is recorded and published, with the sale scheduled at least 20 days after recording; (4) the trustee's sale occurs at public auction. The entire non-judicial process from NOD to sale typically takes 4–6 months under California's procedures.

The critical distinction from judicial foreclosure states: California does not require court involvement, and the process cannot be permanently stopped by simply contesting in court. Defenses must be raised quickly, often through temporary restraining orders if there is a legitimate basis. After the trustee's sale, the right of redemption does not exist for non-judicially foreclosed properties — the sale is final.

The Anti-Deficiency Statutes: Protection After Foreclosure

California's anti-deficiency statutes (Civil Code §§ 580b and 580d) provide significant protection against post-foreclosure personal liability. Civil Code § 580b prohibits deficiency judgments after foreclosure of purchase money liens — if your lender forecloses on the home you bought with the loan they made you, they cannot sue you personally for any shortfall between the sale price and what you owed. This protection applies to both non-judicial foreclosure and any judicial foreclosure of a purchase money loan. Civil Code § 580d prohibits deficiency judgments after any non-judicial foreclosure, regardless of the loan type. A cash-out refinance may lose § 580b protection but retains § 580d protection if foreclosed non-judicially — the analysis depends on the specific sequence.

AB 1482: Statewide Rent Control

The Tenant Protection Act of 2019 (AB 1482, codified at Civil Code §§ 1946.2 and 1947.12) imposes statewide limits on rent increases and just-cause eviction requirements for covered rental units. The rent increase cap is the lower of: 5% plus the local Consumer Price Index change, or 10% — whichever is less. The 10% absolute ceiling means even in high-inflation years, covered rents can only increase 10%.

AB 1482 covers residential rental units that are: (1) in a building more than 15 years old (as of the effective date of the tenancy or the increase notice); and (2) not otherwise exempt. Exemptions under the Costa-Hawkins Rental Housing Act (Civil Code § 1954.50) remove single-family homes, condominiums, and units built after February 1, 1995 from local and statewide rent control. Additionally, AB 1482 does not apply if the landlord has provided a required written exemption notice to the tenant. Many California tenants believe they are covered by AB 1482 when they may be exempt — and many landlords believe they are exempt when they are covered.

Security Deposit: One Month's Rent Maximum Since July 2024

Assembly Bill 12 (2024) reduced California's maximum security deposit from two months' rent (unfurnished) and three months' (furnished) to one month's rent for all residential tenancies, effective July 1, 2024. The one-month cap applies regardless of furnishing status. Landlords who collected higher deposits before July 2024 under existing tenancies are not required to immediately refund the excess, but any new deposits or renewals after July 1, 2024 are subject to the one-month limit. Landlords must return the security deposit (or a detailed accounting of deductions) within 21 days of the tenant vacating — failure to do so makes the landlord liable for the wrongfully withheld amount plus statutory damages of up to twice the deposit amount.

California's Automatic Homestead Exemption

California revised its homestead exemption in 2021 (AB 1885). The exemption protects between $300,000 and $600,000 in home equity from most creditor enforcement — the exact amount is pegged to the median sale price of homes in the county where the property is located in the prior calendar year, with a floor of $300,000 and a ceiling of $600,000. In high-cost counties (San Francisco, Santa Clara, Marin), this exemption provides substantial protection. The exemption applies automatically to principal residences — no filing is required in bankruptcy. In a bankruptcy proceeding, if your home equity does not exceed the applicable exemption, a Chapter 7 trustee cannot force the sale of your home to pay creditors.