By Stuart R. Simone Esq. and Edna Fok
Gomez & Simone wishes you a Happy and Informed New Year! On the first of every year, hundreds of new laws take effect, and one or more of these may affect you. For 2018, these new laws range from Federal Real Estate Tax Law changes to State legalization of Marijuana in California. Here are just some of the new laws, directed towards the realm of Consumer Real Estate – the useful, the controversial, and the downright quirky:
NEW CALIFORNIA LAWS for 2018
Fees on Real Estate Transactions
Three new laws were passed in an effort to address California’s acute lack of Affordabel Housing. Senate Bill 2 adds a fee of $75 to $225 on real estate transactions. This affects G&S on an everyday basis, as there is now a $75 fee for recording Deeds. The fees are expected to generate up to $300 million annually for affordable housing projects. Senate Bill 35 allows developers to bypass the lengthy, and often expensive, review process for new projects if a community has not met its state-mandated housing needs. Assembly Bill 167 seeks to crack down on “not in my backyard” backlash by making it harder for cities and counties to vote down proposed developments that fit within their long-range housing plans.
Flood Hazard Disclosures
Under Assembly Bill 646 which is effective on July 1, 2018, residential rental and lease agreements will be required to disclose to a tenant when the landlord has actual knowledge the rental property is located in a flood hazard zone or area of potential flooding.
Marijuana New Laws
The biggest buzz (sorry) has been California’s legalization of Recreational Pot. Voters legalized recreational marijuana in 2016 with Proposition 64, but it was not available for retail purchase until January 1st of 2018. Adults aged 21 and older can buy up to an ounce of weed and up to 8 grams of cannabis concentrates, though only in cities that have permitted stores. Proposition 64 also prohibits public consumption of Marijuana. While most Californians are aware that pot is now “legal”, there is a huge exception that has NOT been publicized, and may affect you or someone in your family: As part of Senate Bill 65, it is illegal to keep pot in your car (it must be in a container in the trunk) or partake of the marijuana while driving the car or even riding as a passenger. So after you purchase your once of weed, you’d better not smoke it on the drive home!
Another issue is the conflict of state law and federal law – which still lists marijuana as an illegal and dangerous drug. This is especially tricky when you fly. According to a spokesman for the LAX Police, if as passenger at Los Angeles International Airport has less than an ounce of weed or 8 grams of concentrate, it is treated “just as cigarettes or any tobacco product would be treated.” But once in the air, passengers now become subject to federal law. The FAA has stated that “federal law still prohibits transporting the drug on aircraft.” So it’s not a good idea to follow the classic George Carlin comedy routine and “get high on a plane when you’re high in a plane.”
Landlord-Tenant Bedbug Laws
Under Assembly Bill 2281, the California Civil Code was amended to include many protections for tenants facing problems with bedbugs. The new laws prohibits a landlord from retaliating against a tenant who gives notice of a suspected bed bug infestation and from showing, renting or leasing a unit that the landlord knows has bed bugs. On July 1, 2017, landlords are also required to give new tenants a specific notice about bedbugs.
Sanctuary State of California
Senate Bill 54 restricts the ability of state and local police in California to cooperate with U.S. Immigrations and Customs Enforcement, or ICE, agents. In addition, Assembly Bill 291 prohibits landlords from reporting renters who are in the country illegally.
The new minimum wage has increased to $11 per hour for workers at companies with at least 26 employees, and to $10.50 for those at smaller businesses. T his is part of the new minimum wage law enacted nearly two years ago, Senate Bill 3, that will continue to raise the hourly wage annually until it reaches $15 in 2022 for large companies, and in 2023 for all workers.
The new Senate Bill 17 requires drug manufacturers to notify the state at least 60 days before dramatically increasing the price of most drugs See also Assembly Bill 265.
Under Assembly Bill 168, the salary history of job applicants can only be disclosed voluntarily. As such, this new laws could help women close the persistent gender pay gap. See also Assembly Bill 1008.
Under Senate Bill 63, workers at small businesses with between 20 and 49 employees are now guaranteed up to 12 weeks of unpaid parental leave within the first year of their child’s birth, adoption or foster care placement. See also Assembly Bill 908.
Vehicle Registration Fee Increase
As part of Senate Bill 1, drivers will pay between $25 and $175 more for vehicle registration at DMV. The fee, which goes into effect Jan. 1, is based on the vehicle’s current value, as follows:
- Vehicles worth between $0 and $4,999: $25 fee increase
- Vehicles worth between $5,000 and $24,999: $50 fee increase
- Vehicles worth between $25,000 and $34,999: $100 fee increase
- Vehicles worth between $35,000 and $59,999: $150 fee increase
- Vehicles worth $60,000 and higher: $175 fee increase
Ride-Sharing New Laws
Assembly Bill 711 will allow alcohol companies and businesses to team up with ride shares, like Uber and Lyft, as well as taxi services, to give out vouchers or promo codes for discounted rides. Moreover, drivers for ride-hailing companies can now be cited for driving under the influence if they have blood-alcohol content of 0.04%, the same as other commercial drivers.
Beginning Jan. 1, ammunition purchases must be made in person through an authorized firearms and ammo vendor, as per Prop 63, which was approved by voters in November 2016.
Rescue Animal Sales
Assembly Bill 485 bans pet stores from selling dogs, cats and rabbits unless they are rescue animals.
LGBT Rights for Long-Term Care Facility
Senate Bill 219 strengthens an existing law and makes it unlawful for a facility to act against an individual on the basis of their sexual orientation, gender identity, gender expression or their HIV status.
Disabled Driver Placard Misuse
Senate Bill 611 requires the DMV to tighten its oversight of the state disabled placard program, among other things installing quarterly audits of applications for placards that will cross check them with medical records.
Car Window Tinting
Assembly Bill 1303 allows drivers with a medical condition certified by a dermatologist to tint their windshields, side and rear windows to protect them from ultraviolet rays.
NEW FEDERAL LAWS for 2018
President Trump and the Republican Party rested their sights on reforming the U.S. tax code after failing to repeal and replace Obamacare. Three days before Christmas 2017, President Donald Trump signed the Tax Cuts and Jobs Act into law.
So what does it all mean for housing? For some homeowners, net after-tax housing costs will increase under the new laws. Renting may become relatively more attractive for those on the fence about becoming homeowners. And people still determined to buy may find the supply of homes on the market has dried up. How exactly the tax overhaul will affect you and your housing options will depend on where you live, how much you spent (or can spend) on your home and how much the bill decreases (or increases) your overall tax burden.
The new bill alters rates, slashes the corporate tax permanently, limits several key deductions and benefits owners of “pass-through” businesses. G&S recommended that everyone contact their tax accountant immediately to see if they need to change the way they do business or purchase and sell; due to the slashing of corporate tax rates, many may wish to set up LLCs, S-Corporations and C-Corps.
New Policies regarding the CFPB
The Consumer Finance Protection Bureau was established in wake of the Great Recession of 2008, which was caused by greedy Mortgage Lenders taking advantage of homeowners, would-be homeowners and investors in a myriad of ways. The CFPB gave borrowers and avenue to challenge home mortgage lenders without an attorney. The new CFPB chairman, Mick Mulvaney, has said that the CFPB is “a sick, sad joke.” The truth is, the CFPB has returned about $12 Billion to consumers by stepping in after banks and others behaved in abusive fashion, such as Wells Fargo creative bogus accounts and many lenders initiated foreclosures unlawfully. President Trump tweeted that the agency “has been a total disaster” that has left financial firms “devastated and unable to properly serve the public.” The truth is, U.S. banks posed record profits in 2016 and are on track for even more results for 2017. Goldman Sachs predicts that Well Fargo’s profit should increase 18% in the coming year, which amounts to a nearly $4 Billion dollar gain. All industries should be so devastated. By the way, Mick Mulvaney’s appointment is being challenged in court at this time.
In a year of devastating natural disasters, especially hurricanes and wildfires, Trump has signed several bills aimed at providing billions of dollars’ worth of relief to the victims. This funding has had, and continues to have, a very real impact for people in need.
Obamacare Mandate Repeal
While technically a part of the major tax reform package, the end of the Obamacare mandate to buy health insurance is a major change in American law on its own. It does not, as Trump has claimed, mean that Obamacare is dead, as many parts of the law are in place and affecting millions of people every day, but it could have a major impact on the insurance industry.
Using the Congressional Review Act, Republicans blocked implementation of the Obama-era “Protecting the Privacy of Customers of Broadband and Other Telecommunications Services” rule. Under the rule, internet service providers would be barred from collecting their customers’ data and selling it to other companies. Also, Net Neutrality has come to an end, which may harm the ability of smaller internet providers to provide content on the Internet.
Drug-Testing Unemployment Applicants
The Trump administration will not limit states’ ability to drug test applicants for unemployment benefits after passing a law blocking a Department of Labor rule. This means some people may be required by their states to pass a drug test before receiving government funds.
This is just a sample of the new State and Federal laws that are changing the legal landscape – and your life – in 2018. Gomez & Simone recommends that all self-employed individuals and those who own companies contact their tax advisor right away. G&S also has a new Entity-Creation service for those who wish to form LLCs, Partnerships and Corporations this year.