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Flippers Beware: AB 968 Creates New Disclosure Obligation for Sellers of Recently Renovated Houses (Scroll down to the bottom of this page) Download below the New California FLIPPERS Law Disclosure Form AB-968 for Sellers of Single-family Homes Resold within 18 months (CALIFORNIA CIVIL CODE §1102.6h) Assembly Bill No. 968 (AB-968), effective July 1, 2024
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Flippers Beware: AB 968 Creates New Disclosure Obligation for Sellers of Recently Renovated Houses Section 1102.6h California Civil Code
Introduction
Assembly Bill No. 968 (AB-968), effective July 1, 2024, will impact significantly real estate transactions, specially those involving residential flippers. This new law will mandate comprehensive disclosure of repairs and renovations by sellers who flip properties within 18 months of acquisition. The intent is to ensure transparency and protect buyers from undisclosed property conditions and material facts.
Key Provisions of AB-968
AB-968 imposes new disclosures on sellers of single-family residential properties. These disclosures are related to any room additions, structural modifications, and other alterations or repairs made since acquiring the property. This disclosure must include the name of each contractor involved and a copy of any related permits. If permits are unavailable, the seller must guide the buyer on how to obtain them from relevant third parties.
Impact on Residential Flippers
For residential flippers, this law introduces additional due diligence and documentation responsibilities. They must now meticulously track and report all property changes, including minor repairs, ensuring that all work is properly permitted and recorded. This adds a layer of complexity to the flipping process, potentially affecting the speed and profitability of these transactions.
Legal Implications and Compliance
Failing to comply with AB-968 can lead to legal disputes and financial penalties. Buyers who discover undisclosed work post-purchase may have grounds for legal action, including rescission of the sale or claims for damages. Therefore, it is imperative for sellers to understand and adhere to these new requirements fully.
SINGLE-FAMILY RESIDENTIAL PROPERTY DISCLOSURES STATEMENT FOR PROPERTIES RESOLD WITHIN 18 MONTHS
(CALIFORNIA CIVIL CODE §1102.6h) Assembly Bill No. 968 (AB-968), effective July 1, 2024