Existing law requires the Department of Real Estate to develop, and the Department of Toxic Substances Control to publish, a booklet to educate and inform consumers on, among other things, common environmental hazards that are located on, and affect, real property. Existing law requires the types of common environmental hazards to include, but not be limited to, asbestos, radon gas, lead-based paint, formaldehyde, fuel and chemical storage tanks, and water and soil contamination. Existing law also states the intent of the Legislature that the booklet be updated to include a section on carbon monoxide.

This bill would, as existing resources permit or as private resources are made available, require the booklet to be updated to include 3 new sections on wildfires, climate change, and sea level rise, as specified. The bill would require the Department of Toxic Substances Control to seek the advice and assistance of departments within the Natural Resources Agency in the writing of the booklet, as specified.

This bill would make nonsubstantive changes to correct erroneous cross-references.

Existing law requires the Department of Real Estate to develop, and the Department of Toxic Substances Control to publish, a booklet to educate and inform consumers on, among other things, common environmental hazards that are located on, and affect, real property. Existing law requires the types of common environmental hazards to include, but not be limited to, asbestos, radon gas, lead-based paint, formaldehyde, fuel and chemical storage tanks, and water and soil contamination. Existing law also states the intent of the Legislature that the booklet be updated to include a section on carbon monoxide.

This bill would, as existing resources permit or as private resources are made available, require the booklet to be updated to include 3 new sections on wildfires, climate change, and sea level rise, as specified. The bill would require the Department of Toxic Substances Control to seek the advice and assistance of departments within the Natural Resources Agency in the writing of the booklet, as specified.

This bill would make nonsubstantive changes to correct erroneous cross-references.

Existing law requires the Department of Real Estate to develop develop, and the Department of Toxic Substances Control to publish, a booklet to educate and inform consumers on, among other things, common environmental hazards that are located on, and affect, real property. Existing law requires the types of common environmental hazards to include, but not be limited to, asbestos, radon gas, lead-based paint, formaldehyde, fuel and chemical storage tanks, and water and soil contamination. Existing law also states the intent of the Legislature that the booklet be updated to include a section on carbon monoxide.

This bill would, as existing resources permit or as private resources are made available, require the booklet to be updated to include 3 new sections on wildfires, climate change, and sea level rise, as specified. The bill would require the State Department of Public Health Department of Toxic Substances Control to seek the advice and assistance of departments within the Natural Resources Agency in the writing of the booklet, as specified.

Existing law requires the Department of Real Estate to develop a booklet to educate and inform consumers on, among other things, common environmental hazards that are located on, and affect, real property. Existing law requires the types of common environmental hazards to include, but not be limited to, asbestos, radon gas, lead-based paint, formaldehyde, fuel and chemical storage tanks, and water and soil contamination.

This bill would express the intent of the Legislature that when the booklet is next updated, would, as existing resources permit or as private resources are made available, it require the booklet to be updated to include 3 new sections on wildfires, climate change, and sea level rise, as specified. The bill would require the State Department of Public Health to seek the advice and assistance of departments within the Natural Resources Agency in the writing of the booklet, as specified.

Existing law requires the Department of Real Estate to develop a booklet to educate and inform consumers on, among other things, common environmental hazards that are located on, and affect, real property. Existing law requires the types of common environmental hazards to include, but not be limited to, asbestos, radon gas, lead-based paint, formaldehyde, fuel and chemical storage tanks, and water and soil contamination.

This bill would express the intent of the Legislature that when the booklet is next updated, as existing resources permit or as private resources are made available, it be updated to include 3 new sections on wildfires, climate change, and sea level rise, as specified. The bill would require the State Department of Public Health to seek the advice and assistance of departments within the Natural Resources Agency in the writing of the booklet, as specified.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 225

Author:(Grayson)

As Amended Ver:September 1, 2023

Majority vote

SUMMARY

Requires, as existing resources permit, or as private resources are made available, the Homeowners' Guild to Environmental Hazards to be updated and include new sections on wildfire, climate change, and sea level rise, as specified.

Senate Amendments

1. Make the update a requirement, rather than legislative intent.
2. Replace the Department of Public Health with the Department of Toxic substance Control as the updating agency.
3. Add various findings and declarations.

COMMENTS

Background. After legislation establishing the booklet was first established through legislation in 1989, the Department of Real Estate (DRE) was the department tasked with the responsibility for preparing the first edition of the booklet. The DRE worked alongside the California Department of Health Care Services for valuable input for composing the content that would inform the homeowner and prospective homeowner about environmental hazards located on and affecting residential property. When the booklet's content was updated in 2005, it was prepared through a collaboration of the California Department of Toxic Substances Control, the California Air Resources Board, and the California Department of Health Care Services. The updated content includes information relating to lead exposure, which is a required disclosure to consumers. The 2005 booklet edition also incorporated the Federal "Protect Your Family from Lead" pamphlet.

Under current California law, sellers of real estate properties are required to disclose the presence of any known environmental hazard. In California, sellers are required to disclose the presence of any known environmental hazard. A statement that the homeowner is unaware of environmental hazards is not a guarantee that the property is free of such hazards. It is in any homeowner's and prospective homeowner's interest to know what hazards are common, where they are found, and how they might be mitigated. As noted earlier in the analysis, the booklet was created to provide homeowners and prospective homeowners with the information and additional resources needed to make an informed decision about environmental hazards that may be present on a property. The booklet also includes content that provides information and recommendations for proper storage of household hazardous as well as proper disposal of household hazardous products. The booklet also provides resources, additional information, and a list of government agencies for further information on the topics presented in the material.

According to the Author

"As the effects of climate change continue to manifest themselves in the form of sea level rise and an increasing number of wildfires, it is imperative that consumers be provided with the necessary information on these issues when purchasing a home. This is a timely measure that will help consumers make, what is in many cases, the biggest purchase of their life. It is this desire to provide transparency about risks associated with purchasing a home that led to the establishment of this booklet in statute in 1989 and is why it has been updated twice. AB 225 is an attempt to provide more updated information to consumers about the latest risks potential homeowners may face in the future."

Arguments in Support

According to the California Association of Realtors (sponsor): "Since the early 2000's C.A.R. has been an active participant in how to address challenges presented by climate change which have led to heat waves, wildfires, floods, persistent droughts, and sea level rise. Sustainability and resilience are vital to combating these threats. Risks associated with wildfires, climate change and sea level rise have increased over the last decade to the point where these risks pose a general hazard to most California property owners…. Updating the Environmental Hazard Booklet to add three new chapters to the booklet would provide consumers with valuable information regarding these risks at no cost to the state of California. Based on previous updates made to the booklet, the benefit to buyers far outweighs the cost to update the booklet as existing state statute permits industry to pay for the costs associated with the update."

Arguments in Opposition

None on file

FISCAL COMMENTS

According to the Senate Appropriations Committee:

1. Unknown, potentially significant costs, likely ranging in the tens to low hundreds of thousands of dollars, to the Department of Toxic Substances Control (DTSC) to update the booklet to include the additional specified sections. The bill specifies that the booklet be updated as existing resources permit or as private resources are made available. To the extent that workload to DTSC is not absorbable within existing resources or private funds are not available or inadequate to cover the costs of updating the booklet, there may be General Fund impacts.
2. The Department of Real Estate (DRE) reports costs of $37,000 in the first year and $35,000 in the second year to educate consumers about the new content included in the booklet, educate licensees about the revised publication, update related publications, draft Real Estate Bulletin and industry advisories, launch social media campaigns, and update web posting systems (Real Estate Fund).

VOTES:

ASM BUSINESS AND PROFESSIONS: 18-0-1

YES: Berman, Flora, Alanis, Alvarez, Bains, Bonta, Chen, Dixon, Gipson, Grayson, Irwin, Jackson, Lee, Lowenthal, McKinnor, Stephanie Nguyen, Joe Patterson, Ting

ABS, ABST OR NV: McCarty

ASM APPROPRIATIONS: 15-0-1

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Sanchez, Weber, Ortega

ABS, ABST OR NV: Robert Rivas

ASSEMBLY FLOOR: 77-0-3

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones‑Sawyer, Kalra, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon

ABS, ABST OR NV: Chen, Lackey, Quirk-Silva

SENATE FLOOR: 39-0-1

YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk

ABS, ABST OR NV: Caballero

UPDATED

VERSION: September 1, 2023

CONSULTANT: Vincent Chee / B. & P. / (916) 319-3301 FN: 0002243

 THIRD READING  

Bill No: AB 225

Author: Grayson (D)

Amended: 9/1/23 in Senate

Vote: 21

SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 13-0, 7/10/23

AYES: Roth, Nguyen, Alvarado-Gil, Archuleta, Ashby, Becker, Dodd, Eggman, Glazer, Niello, Smallwood-Cuevas, Wahab, Wilk

SENATE APPROPRIATIONS COMMITTEE: 7-0, 9/1/23

AYES: Portantino, Jones, Ashby, Bradford, Seyarto, Wahab, Wiener

ASSEMBLY FLOOR: 77-0, 5/22/23 - See last page for vote

SUBJECT: Real property: environmental hazards booklet

SOURCE: California Association of Relators

DIGEST:

This bill requires that the Homeowners’ Guide to Environmental Hazards be updated to include three new sections on wildfires, climate change, and sea level rise, as existing resources permit, or as private resources are made available and requires the Department of Toxic Substances (DTSC) to seek the advice and assistance of departments within the Natural Resources Agency in the writing of the booklet. This bill also makes minor and clarifying changes.

ANALYSIS:

Existing law:

1. Establishes the Department of Real Estate (DRE). (Business and Professions Code (BCP) § 10004 et seq.)
2. Requires DRE to develop a booklet to educate and inform consumers on all of the following using funds appropriated from the Education and Research Account in the Real Estate Fund:
3. Common environmental hazards that are located on, and affect, real property. The types of common environmental hazards shall include, but not be limited to, asbestos, radon gas, lead-based paint, formaldehyde, fuel and chemical storage tanks, and water and soil contamination.
4. The significance of common environmental hazards and what can be done to mitigate these hazards.
5. What sources can provide more information on common environmental hazards for the consumer. (BCP § 10084.1(a))
6. Requires DRE to seek advice State Department of Health Services to assist it in determining the contents of the booklet, and the assistance of the State Department of Health Services in the writing of the booklet. (BCP § 10084.1(b))
7. States that if a consumer information booklet as specified is delivered to a transferee in connection with the transfer of real property, including property as specified, or manufactured housing, as defined, a seller or broker is not required to provide additional information concerning, and the information shall be deemed to be adequate to inform the transferee regarding, common environmental hazards, as described in the booklet, that can affect real property. (Civil Code § 2079.7)
8. States the DRE Commissioner may prepare a pamphlet or brochure dealing with disclosures of information in residential real estate transactions. (BCP § 10084)
9. States the costs of preparation and distribution may be paid from appropriated moneys from the Real Estate Fund for education and research. (BCP § 10084)
10. States the DRE commissioner will make copies of the pamphlet or brochure available upon request to sellers, buyers, and real estate licensees for a fee commensurate with the cost of preparation and distribution. States these collected fees will be paid into the education and research account of the Real Estate Fund. (BCP § 10084)

This bill:

1. Requires that Homeowners’ Guide to Environmental Hazards be updated to include three new sections on wildfires, climate change, and sea level rise, as existing resources permit, or as private resources are made available.
2. Requires DTSC to seek the advice and assistance of departments within the Natural Resources Agency in the writing of the booklet to determine the contents of the booklet, as specified.
3. Makes minor and clarifying changes.

Background

Department of Real Estate. Real estate licensing in California commenced in 1917. The Department of Real Estate (DRE, or Department) is the state entity currently charged with responsibility to enforce the Real Estate Law, the Subdivided Lands Act, and the Vacation Ownership and Time-share Act of 2004. DRE’s programs are in place to satisfy the Department’s statutorily mandated obligations of licensing and regulating mortgage loan originators, real estate and prepaid listing service licensees, reviewing and approving subdivision and time share offerings, and approving continuing education and pre-license courses. Each of DRE’s programs contribute toward satisfying its mission of protecting and serving the interests of the public in real estate transactions and providing related services to the real estate industry. Specifically, Business and Professions Code Section 10050 requires the Real Estate Commissioner to enforce all laws in a manner which achieves the maximum protection for the purchasers of real property and those persons dealing with real estate licensees.

With respect to its core functions, DRE currently licenses 421,624 persons in California. Licensed real estate salespersons (291,759) outnumber real estate licensed brokers (129,865) nearly two to one. Of these real estate licensees, over 26,000 have a Mortgage Loan Originator endorsement that allows the licensee to originate residential mortgage loans. In Fiscal Year (FY) 2019/2020, DRE issued over 17,396 new salesperson licenses and 3,911 new broker licenses. DRE’s enforcement efforts resulted in 184 license application denials, 414 licensing disciplinary actions (revocations, surrenders, suspensions, and public reprovals), and 20 desist and refrain orders. Additionally, DRE issued over 2,852 final public reports, which translated to 33,679 new housing units being offered for sale in California in FY 2019/20.

Environmental Pamphlets Legislative History. This statute was originally created in 1989 with AB 983 (Bane, Chapter 969, Statutes of 1989). It was updated twice since then via AB 2753 (Sher, Chapter 264, Statutes of 1994) and SB 183 (Lowenthal, Chapter 19, Statutes of 2010). This bill would make a further update to require that Homeowners’ Guide to Environmental Hazards will include three new sections on wildfires, climate change, and sea level rise, as existing resources permit, or as private resources are made available. It also requires the DPH seek the advice and assistance of departments within the Natural Resources Agency in the writing of the booklet to determine the contents.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Committee on Appropriations, the fiscal impact is unknown, with potentially significant costs, likely ranging in the tens to low hundreds of thousands of dollars, to the DTSC to update the booklet to include the additional specified sections, and to the extent that the workload to DTSC is not absorbable within existing resources or private funds. Additionally, DRE reports costs of $37,000 in the first year and $35,000 in the second year to educate consumers about the new content included in the booklet, educate licensees about the revised publication, update related publications, draft Real Estate Bulletin and industry advisories, launch social media campaigns, and update web posting systems (Real Estate Fund).

SUPPORT: (Verified 9/1/23)

California Association of Realtors (source)

OPPOSITION: (Verified 9/1/23)

None received

ARGUMENTS IN SUPPORT: Generally the California Association of Realtors argue that the existing Residential Hazard Booklet needs to be updated to include wildfire, climate change, and sea level rise information given climate change in California over the last few decades since this statute creating this booklet was initially enacted.

ASSEMBLY FLOOR: 77-0, 5/22/23

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon

NO VOTE RECORDED: Chen, Lackey, Quirk-Silva

Prepared by: Dana Shaker / B., P. & E.D. /

9/2/23 14:57:33

**** END ****

SENATE COMMITTEE ON

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

AB 225 (Grayson) - Real property: environmental hazards booklet

Bill Summary:

AB 225 requires the Homeowners’ Guide to Environmental Hazards be updated to include sections on wildfires, climate change, and sea level rise, as specified.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on September 1, 2023

Fiscal Impact:

• Unknown, potentially significant costs, likely ranging in the tens to low hundreds of thousands of dollars, to the Department of Toxic Substances Control (DTSC) to update the booklet to include the additional specified sections. The bill specifies that the booklet be updated as existing resources permit or as private resources are made available. To the extent that workload to DTSC is not absorbable within existing resources or private funds are not available or inadequate to cover the costs of updating the booklet, there may be General Fund impacts.
• The Department of Real Estate (DRE) reports costs of $37,000 in the first year and $35,000 in the second year to educate consumers about the new content included in the booklet, educate licensees about the revised publication, update related publications, draft Real Estate Bulletin and industry advisories, launch social media campaigns, and update web posting systems (Real Estate Fund).

Author Amendments:

• Remove the California Department of Public Health and instead task DTSC to develop and update the booklet with the specified new sections on wildfires, climate change, and sea level rise.
• Make technical changes.

-- END --

SENATE COMMITTEE ON

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

AB 225 (Grayson) - Real property: environmental hazards booklet

Bill Summary:

AB 225 requires the Homeowners’ Guide to Environmental Hazards be updated to include sections on wildfires, climate change, and sea level rise, as specified.

Fiscal Impact:

• The California Department of Public Health (CDPH) reports costs of $187,000 annually to develop and update the new booklet sections. The bill specifies that the booklet be updated as existing resources permit or as private resources are made available. However to the extent that these resources are unavailable, then costs would be to the General Fund.
• The Department of Real Estate (DRE) reports costs of $37,000 in the first year and $35,000 in the second year to educate consumers about the new content included in the booklet, educate licensees about the revised publication, update related publications, draft Real Estate Bulletin and industry advisories, launch social media campaigns, and update web posting systems (Real Estate Fund).

Background:

AB 983 (Bane, Chapter 969, Statutes of 1989) is the enacting statute first requiring the DRE to develop and educate consumers on common environmental hazards that are located on and affect real property. The Homeowners’ Guide to Environmental Hazards booklet has since been updated to consolidate California and federal disclosure requirements via AB 2753 (Sher, Chapter 264, Statutes of 1994) and SB 183 (Lowenthal, Chapter 19, Statutes of 2010).

Generally in California, sellers are required to disclose the presence of any known environmental hazard. The purpose of the booklet is to provide homeowners and prospective homeowners with the information and additional resources needed to make an informed decision about environmental hazards that may be present on a property. The booklet is required to be made available to homeowners or prospective homeowners, however real estate licensees and home sellers are not required to provide additional information on such hazards.

Proposed Law:

• Requires, as existing resources permit or as private resources are made available, the Homeowners’ Guide to Environmental Hazards be updated to include three new sections on wildfires, climate change, and sea level rise.
  • Requires the CDPH to seek the advice and assistance of the Natural Resources Agency to determine the contents of the booklet.

Staff Comments: The DRE’s activities are funded by regulatory and license fees and generally the department does not receive support from the General Fund. New legislative mandates, although modest in scope, may in totality create new cost pressures and impact the department’s operating costs and future budget requests.

-- END --

SENATE COMMITTEE ON

BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT

Senator Richard Roth, Chair

2023 - 2024 Regular

Bill No: Hearing Date: July 10, 2023

Subject:

SUMMARY:

Require that the Homeowners’ Guide to Environmental Hazards be updated to include three new sections on wildfires, climate change, and sea level rise, as existing resources permit, or as private resources are made available and requires the Department of Public Health (DPH) to seek the advice and assistance of departments within the Natural Resources Agency in the writing of the booklet.

Existing law:

1. Establishes the Department of Real Estate (DRE). (Business and Professions Code (BCP) § 10004 et seq.)
2. Requires DRE to develop a booklet to educate and inform consumers on all of the following using funds appropriated from the Education and Research Account in the Real Estate Fund:
3. Common environmental hazards that are located on, and affect, real property. The types of common environmental hazards shall include, but not be limited to, asbestos, radon gas, lead-based paint, formaldehyde, fuel and chemical storage tanks, and water and soil contamination.
4. The significance of common environmental hazards and what can be done to mitigate these hazards.
5. What sources can provide more information on common environmental hazards for the consumer. (BCP § 10084.1(a))
6. Requires DRE to seek advice State Department of Health Services to assist it in determining the contents of the booklet, and the assistance of the State Department of Health Services in the writing of the booklet. (BCP § 10084.1(b))
7. States that if a consumer information booklet as specified is delivered to a transferee in connection with the transfer of real property, including property as specified, or manufactured housing, as defined, a seller or broker is not required to provide additional information concerning, and the information shall be deemed to be adequate to inform the transferee regarding, common environmental hazards, as described in the booklet, that can affect real property. (Civil Code § 2079.7)
8. States the DRE Commissioner may prepare a pamphlet or brochure dealing with disclosures of information in residential real estate transactions. (BCP § 10084)
9. States the costs of preparation and distribution may be paid from appropriated moneys from the Real Estate Fund for education and research. (BCP § 10084)
10. States the DRE commissioner will make copies of the pamphlet or brochure available upon request to sellers, buyers, and real estate licensees for a fee commensurate with the cost of preparation and distribution. States these collected fees will be paid into the education and research account of the Real Estate Fund. (BCP § 10084)

This bill:

1. Requires that Homeowners’ Guide to Environmental Hazards be updated to include three new sections on wildfires, climate change, and sea level rise, as existing resources permit, or as private resources are made available.
2. Requires the DPH to seek the advice and assistance of departments within the Natural Resources Agency in the writing of the booklet to determine the contents of the booklet, as specified.

FISCAL EFFECT:

This bill is keyed fiscal by Legislative Counsel. According to the Assembly Committee on Appropriations, when funding becomes available, DPH estimates limited-term costs over two years of approximately $374,000 to prepare and produce the booklet. The Department of Real Estate will require minor resources to educate consumers about the new content included in the Homeowner’s Guide to Environmental Hazards, educate licensees about the revised publication, update related publications, and update web posting systems.”

COMMENTS:

1. Purpose. The California Association of Relators is the Sponsor of this bill. According to the Author, “Risks associated with wildfires, climate change and sea level rise have increased over the last decade to the point where these risks pose a general hazard to most California property owners. Updating the Environmental Hazard Booklet to add three new chapters to the booklet would provide consumers with valuable information regarding these risks. Based on previous updates made to the booklet, the benefit to buyers far outweighs the cost to update the booklet as existing state statute permits industry to pay for the costs associated with the update.”
2. Background.

DRE. Real estate licensing in California commenced in 1917. The Department of Real Estate (DRE, or Department) is the State entity currently charged with responsibility to enforce the Real Estate Law, the Subdivided Lands Act, and the Vacation Ownership and Time-share Act of 2004. DRE’s programs are in place to satisfy the Department’s statutorily mandated obligations of licensing and regulating mortgage loan originators, real estate and prepaid listing service licensees, reviewing and approving subdivision and time share offerings, and approving continuing education (CE) and pre-license courses. Each of DRE’s programs contribute toward satisfying its mission of protecting and serving the interests of the public in real estate transactions and providing related services to the real estate industry. Specifically, BPC § 10050 requires the Real Estate Commissioner to enforce all laws in a manner which achieves the maximum protection for the purchasers of real property and those persons dealing with real estate licensees.

With respect to its core functions, DRE currently licenses 421,624 persons in California. Licensed real estate salespersons (291,759) outnumber real estate licensed brokers (129,865) nearly two to one. Of these real estate licensees, over 26,000 have a Mortgage Loan Originator (MLO) endorsement that allows the licensee to originate residential mortgage loans. In FY 2019/2020, DRE issued over 17,396 new salesperson licenses and 3,911 new broker licenses. DRE’s enforcement efforts resulted in 184 license application denials, 414 licensing disciplinary actions (revocations, surrenders, suspensions, and public reprovals), and 20 desist and refrain orders. Additionally, DRE issued over 2,852 final public reports, which translated to 33,679 new housing units being offered for sale in California in FY 2019/20.

Environmental Pamphlets Legislative History. This statute was originally created in 1989 with AB 983 (Bane, Chapter 969, Statutes of 1989). It was updated twice since then via AB 2753 (Sher, Chapter 264, Statutes of 1994) and SB 183 (Lowenthal, Chapter 19, Statutes of 2010). This bill would make a further update to require that Homeowners’ Guide to Environmental Hazards will include three new sections on wildfires, climate change, and sea level rise, as existing resources permit, or as private resources are made available. It would also require the DPH seek the advice and assistance of departments within the Natural Resources Agency in the writing of the booklet to determine the contents.

1. Arguments in Support. Generally the California Association of Realtors argue that the existing Residential Hazard Booklet needs to be updated to include wildfire, climate change, and sea level rise information given climate change in California over the last few decades since this statute creating this booklet was initially enacted.

SUPPORT AND OPPOSITION:

Support:

California Association of Realtors (Sponsors)

Opposition:

None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 225

Author:(Grayson)

As Introduced Ver:January 11, 2023

Majority vote

SUMMARY

Expresses legislative intent for the existing Homeowners' Guild to Environmental Hazards to include updated material relating to wildfire, climate change, and sea level rise.

Major Provisions

1. Recognizes the Residential Environmental Hazards Disclosure Booklet as an important educational tool for consumers.
2. States that it is the Legislature's intent that at the next opportunity to update the booklet, revisions to the updated edition should include three additional chapters relating to wildfires, climate change, and sea level rise.
3. Directs the California Department of Health (CDPH) to seek the advice and assistance of departments within the Natural Resources Agency when determining the updated content for the booklet in collaboration with the Department of Real Estate (DRE).

COMMENTS

After legislation establishing the booklet was first established through legislation in 1989, the DRE was the department tasked with the responsibility for preparing the first edition of the booklet. The DRE worked alongside the California Department of Health Care Services for valuable input for composing the content that would inform the homeowner and prospective homeowner about environmental hazards located on and affecting residential property. When the booklet's content was updated in 2005, it was prepared through a collaboration of the California Department of Toxic Substances Control, the California Air Resources Board, and the California Department of Health Care Services. The updated content includes information relating to lead exposure, which is a required disclosure to consumers. The 2005 booklet edition also incorporated the Federal "Protect Your Family from Lead" pamphlet.

Under current California law, sellers of real estate properties are required to disclose the presence of any known environmental hazard. In California, sellers are required to disclose the presence of any known environmental hazard. A statement that the homeowner is unaware of environmental hazards is not a guarantee that the property is free of such hazards. It is in any homeowner's and prospective homeowner's interest to know what hazards are common, where they are found, and how they might be mitigated. As noted earlier in the analysis, the booklet was created to provide homeowners and prospective homeowners with the information and additional resources needed to make an informed decision about environmental hazards that may be present on a property. The booklet also includes content that provides information and recommendations for proper storage of household hazardous as well as proper disposal of household hazardous products. The booklet also provides resources, additional information, and a list of government agencies for further information on the topics presented in the material.

The author of this bill has stated that the risks associated with wildfires, climate change, and sea level rise have increased over the last decade to the point where these risks pose a general hazard to most California property owners. Updating the Environmental Hazard Booklet with three new chapters to the booklet would provide consumers with valuable information regarding these risks. Based on previous updates made to the booklet, the author contends that the benefit to buyers far outweighs the cost to update the booklet as existing state statute permits industry to pay for the costs associated with the update.

This bill is an attempt to provide more information to consumers about the latest risks potential homeowners may face in the future.

According to the Author

"As the effects of climate change continue to manifest themselves in the form of sea level rise and an increasing number of wildfires, it is imperative that consumers be provided with the necessary information on these issues when purchasing a home. This is a timely measure that will help consumers make, what is in many cases, the biggest purchase of their life. It is this desire to provide transparency about risks associated with purchasing a home that led to the establishment of this booklet in statute in 1989 and is why it has been updated twice. AB 225 is an attempt to provide more updated information to consumers about the latest risks potential homeowners may face in the future."

Arguments in Support

According to the measure's sponsor, the California Association of Realtors: "Since the early 2000's C.A.R. has been an active participant in how to address challenges presented by climate change which have led to heat waves, wildfires, floods, persistent droughts, and sea level rise. Sustainability and resilience are vital to combating these threats. Risks associated with wildfires, climate change and sea level rise have increased over the last decade to the point where these risks pose a general hazard to most California property owners." The sponsor argues that "updating the Environmental Hazard Booklet to add three new chapters to the booklet would provide consumers with valuable information regarding these risks at no cost to the state of California. Based on previous updates made to the booklet, the benefit to buyers far outweighs the cost to update the booklet as existing state statute permits industry to pay for the costs associated with the update."

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, when funding becomes available, CDPH estimates limited-term costs over two years of approximately $374,000 to prepare and produce the booklet.

VOTES

ASM BUSINESS AND PROFESSIONS: 18-0-1

YES: Berman, Flora, Alanis, Alvarez, Bains, Bonta, Chen, Dixon, Gipson, Grayson, Irwin, Jackson, Lee, Lowenthal, McKinnor, Stephanie Nguyen, Joe Patterson, Ting

ABS, ABST OR NV: McCarty

ASM APPROPRIATIONS: 15-0-1

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Sanchez, Weber, Ortega

ABS, ABST OR NV: Robert Rivas

UPDATED

VERSION: January 11, 2023

CONSULTANT: Annabel Smith / B. & P. / (916) 319-3301 FN: 0000473

Date of Hearing: May 3, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 225

Author:(Grayson) – As Introduced Ver:January 11, 2023

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill states Legislative intent, as existing resources permit or as private resources are made available, to include information on wildfires, climate change, and sea level rise in the next update of The Homeowners’ Guild to Environmental Hazards. This bill requires the California Department of Public Health (CDPH) to seek the advice and assistance of departments within the Natural Resources Agency in the writing of this booklet.

FISCAL EFFECT:

1. When funding becomes available, CDPH estimates limited-term costs over two years of approximately $374,000 to prepare and produce the booklet. These would be state General Fund costs unless other resources are made available. These costs will cover one staff position to coordinate, consult, and collaborate with other agencies to inform the development of the booklet’s new sections on climate change and climate hazards, and to write the content of the booklet’s new sections and ensure the booklet is available and accessible in linguistically and culturally responsive formats for publication and dissemination. 

The original booklet, as existing law allows, was prepared using funds from the Education and Research Account of the Real Estate Fund. Subsequent updates appear to have be financed with private funds. General Fund costs would be offset to the extent the updated booklet required under this bill is paid for with funds from either of these two sources.

1. The Department of Real Estate will require minor resources to educate consumers about the new content included in the Homeowner’s Guide to Environmental Hazards, educate licensees about the revised publication, update related publications, and update web posting systems.

COMMENTS:

1. Purpose. This bill is sponsored by the California Association of Realtors. According to the author:

As the effects of climate change continue to manifest themselves in the form of sea level rise and an increasing number of wildfires, it is imperative that consumers be provided with the necessary information on these issues when purchasing a home. This is a timely measure that will help consumers make, what is in many cases, the biggest purchase of their life. It is this desire to provide transparency about risks associated with purchasing a home that led to the establishment of this booklet in statute in 1989 and is why it has been updated twice. [This bill] is an attempt to provide more updated information to consumers about the latest risks potential homeowners may face in the future.

1. Background. Existing law, stemming from AB 983 (Bane), Chapter 969, Statues of 1989, requires the Department of Real Estate to prepare the Residential Environmental Hazards Disclosure Booklet (booklet) to provide homeowners and prospective homeowners about environmental hazards located on and affecting residential property including, but not limited to, asbestos, radon gas, lead-based paint, formaldehyde, fuel and chemical storage tanks, water and soil contamination. AB 983 appropriated $65,000 from the Education and Research Account of the Real Estate Fund to cover the costs of preparation and distribution of the booklet. AB 983 also authorized DRE charge a fee for the booklet to defray the cost of preparation and distribution. DRE is required to deposit fees collected into the Education and Research Account of the Real Estate Fund.

The DRE and the Department of Health Services (now the Department of Health Care Services) prepared the original booklet, which has been updated twice since. The 2005 edition was prepared by the California Department of Toxic Substances Control, in cooperation with the California Air Resources Board and the California Department of Health Services in response to AB 2753 (Sher), Chapter 264, Statutes of 1994. This update included information on the hazards of lead-based paint.

SB 183 (Lowenthal), Chapter 19, Statutes of 2010, required the booklet be updated to include information on the dangers of carbon monoxide poisoning and exposure. This update was developed by California Department of Toxic Substances Control and is posted on the California Department of Public Health (CDPH) website.

1. Real Estate Disclosures. Existing state law requires sellers of real estate to disclose the presence of any known environmental hazard. Existing law further specifies if a consumer information booklet is delivered to a buyer, in connection with the sale of real property, a seller or broker is not required to provide additional information, and that the booklet provides adequate disclosure to the buyer regarding, common environmental hazards that can affect real property. The Homeowners’ Guild to Environmental Hazards fulfills this requirement.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: March 28, 2023

ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS

Marc Berman, Chair

ABPCA Bill Id:AB 225

Author:(Grayson) – As Introduced Ver:January 11, 2023

SUBJECT: Real property: Residential Environmental Hazards Booklet

SUMMARY: Encourages the next update of the existing Residential Environmental Hazard Booklet to include three new chapters relating to wildfire, climate change, and sea level rise.

EXISTING LAW:

1. Authorizes the Real Estate Commissioner (commissioner) of the Department of Real Estate (DRE) to prepare the Residential Environmental Hazards Disclosure Booklet (booklet) to educate and inform consumers on common environmental hazards that are located on, and affect, real property. (Business and Professions Code (BPC) § 10084)
2. Allows the costs of preparation and distribution of the booklet to be paid from the Real Estate Fund for education and research. (BPC § 10084)
3. Permits the commissioner to produce and make available copies of the booklet upon request of sellers, buyers, and real estate licensees for a fee that is equal to the cost of preparation and distribution; requires the collected fees to be paid into the education and research account of the Real Estate Fund. (BPC § 10084)
4. Directs the DRE to appropriate funds from the Education and Research Account in the Real Estate Fund for the development of the Residential Environmental Hazards Disclosure Booklet to educate and inform consumers on the following:
   1. Common environmental hazards that are located on, and affect, real property. The types of common environmental hazards shall include, but not be limited to the following: asbestos, radon gas, lead-based paint, formaldehyde, fuel and chemical storage tanks, and water and soil contamination.
   2. The significance of common environmental hazards and what can be done to mitigate these hazards.
   3. What sources can provide more information on common environmental hazards for the consumer.

(BPC § 10084.1(a))

1. Requires the DRE to seek advice and assistance in determining the contents of the booklet from the Department of Health Services, which is now the Department of Public Health (CDPH). (BPC § 10084.1(b))
2. Specifies that if a booklet is delivered to a buyer in connection with the sale of real property, a seller or broker is not required to provide additional information, and that the booklet provides adequate disclosure to the buyer regarding, common environmental hazards that can affect real property. (Civil Code § 2079.7)
3. Required the Department of Toxic Substances Control (DTSC), in cooperation with the California Air Resources Board and the Department of Health Services’ Childhood Lead Poisoning Prevention Program, to publish an updated edition of the booklet providing the consumer with information relating to radon gas and lead. (Health and Safety Code (HSC) § 25417.1)
4. Provides consumers information in the booklet regarding carbon monoxide exposure and its detrimental health impacts. (HSC § 13261)

THIS BILL:

1. Recognizes the Residential Environmental Hazards Disclosure Booklet as an important educational tool for consumers.
2. States that it is the Legislature’s intent that at the next opportunity to update the booklet, revisions to the updated edition should include three additional chapters relating to wildfires, climate change, and sea level rise.
3. Directs the CDPH to seek the advice and assistance of departments within the Natural Resources Agency when determining the updated content for the booklet in collaboration with the DRE.

FISCAL EFFECT: Unknown; this bill is keyed fiscal by the Legislative Counsel.

COMMENTS:

Purpose. This bill is sponsored by the California Association of Realtors. According to the author: “As the effects of climate change continue to manifest themselves in the form of sea level rise and an increasing number of wildfires, it is imperative that consumers be provided with the necessary information on these issues when purchasing a home. This is a timely measure that will help consumers make, what is in many cases, the biggest purchase of their life. It is this desire to provide transparency about risks associated with purchasing a home that led to the establishment of this booklet in statute in 1989 and is why it has been updated twice. AB 225 is an attempt to provide more updated information to consumers about the latest risks potential homeowners may face in the future.”

Background.

After legislation establishing the booklet was first established through legislation in 1989, the DRE was the department tasked with the responsibility for preparing the first edition of the booklet. The DRE worked alongside the California Department of Health Care Services for valuable input for composing the content that would inform the homeowner and prospective homeowner about environmental hazards located on and affecting residential property. When the booklet’s content was updated in 2005, it was prepared through a collaboration of the California Department of Toxic Substances Control, the California Air Resources Board, and the California Department of Health Care Services. The updated content includes information relating to lead exposure, which is a required disclosure to consumers. The 2005 booklet edition also incorporated the Federal “Protect Your Family from Lead” pamphlet.

Under current California law, sellers of real estate properties are required to disclose the presence of any known environmental hazard. In California, sellers are required to disclose the presence of any known environmental hazard. A statement that the homeowner is unaware of environmental hazards is not a guarantee that the property is free of such hazards. It is in any homeowner’s and prospective homeowner’s interest to know what hazards are common, where they are found, and how they might be mitigated. As noted earlier in the analysis, the booklet was created to provide homeowners and prospective homeowners with the information and additional resources needed to make an informed decision about environmental hazards that may be present on a property. The booklet also includes content that provides information and recommendations for proper storage of household hazardous as well as proper disposal of household hazardous products. The booklet also provides resources, additional information, and a list of government agencies for further information on the topics presented in the material.

The Residential Environmental Hazard Booklet includes information on the following topics:

Chapter 1: Asbestos: The information provided to the consumer offers a general overview of what asbestos is, how it is harmful to our health, how consumers can determine the amount of asbestos within household materials, and how the homeowner should safely repair or remove asbestos. The first section of the booklet concludes by providing the homeowner with contact information for the U.S. EPA Asbestos website. Contact information for DTSC and the American Lung Association is also listed as a resource for additional information. This section closes with sharing contact information with the homeowner for a list of certified asbestos consultants compiled by the Department of Industrial Relations.

Chapter 2: Carbon Monoxide: This chapter describes carbon monoxide, the sources and range of levels of carbon monoxide in the home, how carbon monoxide is harmful, and how to reduce exposure to carbon monoxide. It concludes with a list of governmental entities consumers may contact for additional information pertaining to carbon monoxide. These entities include the U.S. EPA’s report examining indoor air quality, basic information on pollutants, and sources of indoor air pollution and carbon monoxide. The list of resources also includes the Agency for Toxic Substances Disease Registry, the Center for Disease Control and Prevention, and the U.S. Consumer Product Safety Commission’s carbon monoxide FAQ.

Chapter 3: Formaldehyde: This chapter provides information relating to formaldehyde, how it is harmful, average levels of formaldehyde found in homes, and what are the sources of formaldehyde in the homes. The material included shares additional reports commissioned by the California Air Resources Board, Research Division, Indoor Exposure Assessment Section. The chapter also offers the homeowner publications produced by the California Department of Housing and Community Development.

Chapter 4: Hazardous Waste: This chapter of the booklet offers the homeowner the following information relating to hazardous waste: what constitutes hazardous waste and what is California proactively doing to clean up hazardous waste sites, and how the homeowner could determine if a home is impacted by a hazardous waste site. This section offers the homeowner DTSC’s contact information should the homeowner choose to hire a registered environmental assessor through DTSC’s Registered Environmental Assessor Program. Finally, this chapter includes information relating to how the homeowner may request from the DRE a publication titled “Disclosures in Real Property Transactions” and a publication from the U.S. Environmental Protection Agency titled, “Ensuring Safe Drinking Water.”

Chapter 5: Household Hazardous Waste: This chapter focuses on hazardous materials typically found within a household. This section provides a list of household hazardous waste, methods to identify a household hazardous waste product, how to properly dispose hazardous household products in an environmentally responsible manner, how these products should be safely stored, and, for larger household items, how to contact the state’s Department of Resources Recycling and Recovery (CalRecycle) for additional information on safe disposal of household hazardous waste.

Chapter 6: Lead: This chapter covers the detrimental health impacts associated with exposure to lead. The material included in this chapter offers the homeowner evidence about how lead is harmful, and how the homeowner can determine if there is lead exposure within a property. Chapter 6 of the booklet also provides the homeowner with contact information to request a list of certified laboratories equipped to perform an analysis of the amount of lead contained in a home’s drinking water.

Chapter 7: Mold: This chapter of the booklet discusses the negative health impact of mold. Specifically, material provided in this chapter explains what mold is, how people are exposed to indoor molds, symptoms associated with mold exposure, recommendations for general cleanup if there is mold detected in the home, and resources, contact information, and informative publications produced and provided by the California Department of Public Health.

Chapter 8: Radon: This final chapter of the booklet discusses the harmful, long-term health implications associated with radon exposure, why it is harmful, where it is present, and how the homeowner may obtain a radon detector. This final chapter of the booklet advises how the homeowner may proactively reduce the radon levels within the home.

The author of this bill has stated that the risks associated with wildfires, climate change, and sea level rise have increased over the last decade to the point where these risks pose a general hazard to most California property owners. Updating the Environmental Hazard Booklet with three new chapters to the booklet would provide consumers with valuable information regarding these risks. Based on previous updates made to the booklet, the author contends that the benefit to buyers far outweighs the cost to update the booklet as existing state statute permits industry to pay for the costs associated with the update.

The author concludes that the effects of climate change continue to manifest themselves in the form of sea level rise and an increasing number of wildfires and that it is imperative that consumers be provided with the necessary information on these issues when purchasing a home.

This is arguably a timely measure that will help consumers make, what is in many cases, the biggest purchase of their lives. It is this desire to provide transparency about risks associated with purchasing a home that led to the establishment of this booklet in statute in 1989 and is why it has been updated twice, subsequently.

This bill is an attempt to provide more information to consumers about the latest risks potential homeowners may face in the future.

Prior Related Legislation.

AB 983 (Bane), Chapter 969, Statutes 1989, required the DRE and its commissioner to develop the Residential Environmental Hazards Disclosure Booklet to inform consumers on common environmental hazards located on and affect real property.

AB 2753 (Sher), Chapter 264, Statutes of 1994, directed the Department of Toxic Substances Control, in cooperation with the California Air Resources Board and the Department of Health Services’ Childhood Lead Poisoning Prevention Program, to update the Residential Environmental Hazards Disclosure Booklet for radon gas and lead. This bill also required the booklet to consolidate the state and federal disclosure requirements established by the federal Residential Lead-Based Paint Hazard Reduction Act of 1992.

SB 655 (Ortiz) of 2006, would have established the Asbestos Hazards Mapping Act, which included a requirement to update the Residential Environmental Hazards Disclosure Booklet regarding naturally occurring asbestos. Status: This bill failed passage on the Assembly Floor.

SB 183 (Lowenthal), Chapter 19, Statutes of 2010, enacted the Carbon Monoxide Poisoning Prevention Act of 2010 and required carbon monoxide detectors to be installed in all existing dwellings intended for human occupancy that have a fossil fuel burning appliance, a fireplace, or an attached garage. This bill also required the Residential Environmental Hazard Disclosure Booklet to update its content to include information regarding the dangers of carbon monoxide poisoning and exposure.

AB 1289 (Arambula), Chapter 907, Statutes of 2018, among other technical changes, contained provisions that if the Residential Environmental Hazards Disclosure Booklet is provided to a buyer in connection of the sale of real property, that information is deemed adequate to inform the buyer regarding common environmental hazards that affect real property as described in the booklet.

AB 1464 (Glazer) of 2020, would have required DRE to post the Residential Environmental Hazards Disclosure Booklet on its website. Status: This bill did not receive a hearing date in policy committee.

AB 2327 (Committee on Environmental Safety and Toxic Materials), Chapter 258, Statutes of 2022, provided numerous technical and reorganization changes to the Carpenter-Presley-Tanner Hazardous Substance Account Act, which includes an update to cross references in Civil Code 2079.7, an existing code section relating to environmental hazards disclosure and information that is provided to consumers during a real estate transaction.

ARGUMENTS IN SUPPORT:

According to the measure’s sponsor, the California Association of Realtors: “Since the early 2000’s C.A.R. has been an active participant in how to address challenges presented by climate change which have led to heat waves, wildfires, floods, persistent droughts, and sea level rise. Sustainability and resilience are vital to combating these threats. Risks associated with wildfires, climate change and sea level rise have increased over the last decade to the point where these risks pose a general hazard to most California property owners.” The sponsor argues that “updating the Environmental Hazard Booklet to add three new chapters to the booklet would provide consumers with valuable information regarding these risks at no cost to the state of California. Based on previous updates made to the booklet, the benefit to buyers far outweighs the cost to update the booklet as existing state statute permits industry to pay for the costs associated with the update.”

ARGUMENTS IN OPPOSITION:

None on file.

POLICY ISSUE(S) FOR CONSIDERATION:

The measure, as introduced, does not provide details regarding the exact information that will be provided in the proposed new sections of the booklet. Specifically, the committee recommends the author and sponsor consider adding provisions to clarify the scope of information that will be shared with the homeowner in regards to the topic of climate change. The committee recommends the bill be amended to contain some detail of the material, recommendations, and considerations that would be presented to a perspective or current homeowner and how they could attempt to address climate change.

REGISTERED SUPPORT:

California Association of Realtors

REGISTERED OPPOSITION:

None on file.

Analysis Prepared by: Annabel Smith / B. & P. / (916) 319-3301