10 New California Real Estate Laws for 2027: What Homeowners Should Know
Published on October 14, 2026 by Leegie Parker
Leegie Parker | Real Estate Advisor | DRE 01020534 | Compass | Leegie.com
Quick Answer The new California real estate laws for 2027 mostly take effect January 1, 2027. They let homeowners build up to two detached ADUs and pay lower ADU fees, stop HOAs from blocking air conditioning, heat pumps, and energy-efficient windows, strengthen wildfire insurance and smoke-damage protections, create permanent mortgage forbearance after disasters, and open a faster approval path for for-sale townhomes. |
The new California real estate laws for 2027 touch almost every kind of homeowner in Los Angeles. Most take effect on January 1, 2027, and they cover ADUs, HOA rules for condo and townhome owners, home insurance after wildfires, mortgage relief after a disaster, and new for-sale townhomes.
I went through what the governor signed this fall, before the September 30 deadline, and pulled out the ten that matter most for homeowners in the San Fernando Valley and on the Westside of Los Angeles. Here they are in plain English, along with two things coming up after 2027 that are worth knowing now.
One note before we start: I'm a real estate advisor, not an attorney. This is a plain-English overview, not legal advice, so check with an attorney or the right professional before acting on any of it.
In This Post
What Changes for ADUs in 2027?
Two new laws make accessory dwelling units easier and cheaper to build, and that matters on the larger lots common across the San Fernando Valley.
Law 1: You Can Build Up to Two Detached ADUs (AB 956)
AB 956 allows a qualifying single-family lot to have up to two detached, newly built ADUs under the state's streamlined approval path, up from one, and bars HOAs from blocking ADUs that comply with state law.
Until now, the state's by-right path generally allowed one detached ADU on a single-family lot. Starting in 2027, a qualifying lot can potentially have two, subject to the law's requirements. The law also extends ADU rights to single-family homes sitting on multifamily-zoned land, and it says homeowners associations cannot block ADUs that follow state law.
Here's what I see with buyers: a permitted ADU is a huge perk. Not everyone wants to use it as a separate rentable space. Most buyers want the extra space for a home office, a teen hangout room, a man cave, or a she-shed. Having that flexibility is a big part of why buyers love it.
The key word is permitted. If a full ADU isn't in your plans, finishing a garage into permitted habitable space, even a simple studio, can still add value. Either way, check with the city before you start.
Law 2: ADU Impact Fees Go Down (SB 1117)
SB 1117 limits impact fees on ADUs larger than 750 square feet to only the space above 750 square feet, for up to two ADUs per lot.
Under current law, ADUs of 750 square feet or less are already exempt from impact fees, but once you go over that size, fees can apply to the whole unit. That creates a steep jump in cost for a slightly larger ADU. Starting in 2027, only the square footage above 750 counts. In the cities' own example, fees on a 1,000-square-foot ADU would drop from about $2,500 to about $625. Junior ADUs of 500 square feet or less stay exempt.
What Changes for HOA and Condo Owners in 2027?
Three new laws give condo and townhome owners more control over the comfort and energy costs of their own homes. I'm seeing more owners move from single-family homes into condos, and these are the kinds of rules that matter once you live in an HOA community.
Law 3: HOAs Can't Ban Air Conditioning (AB 1684)
AB 1684 generally prevents an HOA from prohibiting or restricting an owner from installing, upgrading, replacing, or using a qualifying cooling system in their own unit.
"Cooling system" is defined broadly. It includes central air, window units, portable air conditioners, evaporative (swamp) coolers, cooling fans, heat pumps, and other technology that cools the inside of a home. The system still has to meet building and safety codes, permits may still be required, and an HOA can set some requirements when an installation affects common areas.
The law also generally bars an HOA from charging a fee to install or use the system, or from requiring a particular system or contractor, with some exceptions. A willful violation can expose the HOA to actual damages and a civil penalty of up to $2,000, plus attorney fees.
Law 4: HOAs and Cities Can't Block Heat Pump Upgrades (SB 222)
SB 222 limits HOA restrictions on heat pump water heaters and heat pump heating and cooling systems in existing homes, and requires cities and counties to offer remote inspections for qualifying installations starting July 1, 2027.
If you want to replace a gas water heater or furnace with an electric heat pump, this law makes it harder for an HOA to stand in your way. It applies to existing homes, not new construction. Starting July 1, 2027, cities and counties also have to offer asynchronous (remote) inspections for qualifying heat pump installations, with more automated permitting to follow in 2028.
Law 5: HOAs Can't Block Energy-Efficient Window Replacement (SB 908)
SB 908 limits HOAs from preventing owners from replacing existing windows with windows that meet California's energy code, and makes qualifying window permits an over-the-counter approval.
Plenty of condo and townhome owners have been told they can't replace drafty old windows because of architectural rules. Under SB 908, an HOA generally can't restrict a replacement that meets the California Energy Code and building codes. Cities must treat qualifying window replacement permits as ministerial, meaning no design hearings, and can deny them only for a specific, unmitigable health or safety issue. Buildings on historic resource lists are excluded.
What Changes for Home Insurance in 2027?
After the January 2025 fires, insurance has been on almost every homeowner's mind in Los Angeles. Three groups of new laws strengthen protections for homeowners after a disaster.
Law 6: Longer Protection From Nonrenewal After a Wildfire (AB 2038)
AB 2038 extends the moratorium on canceling or nonrenewing homeowners policies in wildfire-affected ZIP codes from one year to two years after a declared emergency.
The protection applies to homes within or next to a fire perimeter in ZIP codes the Department of Insurance identifies after a declared disaster. If your primary home is a total loss, your insurer must now renew coverage for at least three renewal periods and no less than 36 months, up from 24.
Law 7: Stronger Claims Handling and FAIR Plan Oversight (SB 876 and AB 1680)
SB 876 toughens insurers' claims-handling obligations after declared disasters, and AB 1680 adds new consumer protections and oversight for the California FAIR Plan.
SB 876, the Disaster Recovery Reform Act, doubles penalties for claims violations during emergencies, requires restitution to be paid directly to policyholders, and limits how often your claim can be handed off to a new adjuster. It phases in through 2028.
AB 1680, the Make It FAIR Act, holds the FAIR Plan to clearer claims-handling standards and response times, adds fines for consumer protection violations, opens its governing meetings to the public, and requires an annual public report. According to the Department of Insurance, both laws take effect January 1, 2027.
Law 8: New Standards for Smoke-Damaged Homes (AB 1795 and AB 1642)
AB 1795 and AB 1642 create California's first standards for testing and cleaning up homes contaminated by wildfire smoke, and require insurers to pay for that testing and remediation.
Together, these laws direct state agencies to set standards for testing and remediating lead and asbestos contamination from wildfire smoke in homes within a fire's ZIP codes. Insurers must cover that testing and cleanup, restore the home to its pre-loss condition, and keep paying additional living expenses until the home is remediated and safe to live in. The provisions phase in, with the final pieces taking effect in 2029.
What Changes for Mortgages After a Disaster?
Law 9: Permanent Disaster Mortgage Forbearance and Interest on Claim Funds (AB 1842 and AB 1278)
AB 1842 creates a permanent mortgage forbearance process for homeowners whose homes become uninhabitable after a federally declared disaster, and AB 1278 guarantees interest on insurance money your lender holds during a rebuild.
Under AB 1842, a borrower who requests forbearance within six months of the disaster declaration can receive an initial 180 days, extendable in 90-day increments up to 12 months. A simple statement that the home is uninhabitable is enough to start the request. When forbearance ends, the servicer must offer at least one repayment option that doesn't require a lump sum. Borrowers who were more than 90 days behind before the disaster don't qualify.
AB 1278 covers the insurance payout your mortgage servicer holds while you rebuild. Those funds earn at least 2% simple interest, and you can choose to receive that interest directly by check or electronic transfer.
What Changes for Buyers Looking for Townhomes?
Law 10: A Faster Path for For-Sale Townhomes (AB 1751)
AB 1751, the Missing Middle Townhome Ownership Act, gives qualifying for-sale townhome projects of up to 150 units a by-right approval path with no public hearings, starting January 1, 2027.
To qualify, homes must average 1,750 square feet or less, and 10% of units in projects of 11 or more must be sold at affordable prices. Projects can go on multifamily-zoned land and on certain vacant or underused single-family lots. Very high fire hazard zones are excluded, so this will mostly affect flatland sites rather than the hills. Over time, it should mean more for-sale homes in the middle of the market, which is where many first-time buyers and downsizers are looking.
What's Coming After 2027? Condo Reserves in 2032
AB 2050 was signed this year, but its main requirements don't start until January 1, 2032. Affected associations will need reserve studies with minimum annual contributions, and if reserves are projected to fall below zero within 30 years, a minimum transfer of 15% of the gross annual budget to reserves under certain conditions.
If you're buying a condo before then, the reserve study is worth reading closely now, along with the balcony inspection report. A thin reserve today can mean higher dues or special assessments later.
Not a Law, but It Matters: Zone 0 for Hillside Homes
On August 19, 2026, the state Board of Forestry and Fire Protection adopted "Zone 0" rules for the first five feet around homes in very high fire hazard severity zones. That includes parts of the hills in Encino, Tarzana, Woodland Hills, Sherman Oaks, and Studio City.
Zone 0 limits combustible materials like bark and wood-chip mulch, firewood, dead leaves, and debris right next to the house. Roofs and gutters must be kept clear now, and existing homes phase into the remaining requirements over three to five years. Cities can adopt their own rules as long as they're equally or more protective, and compliance is expected to tie into insurance discounts. If you're selling a hillside home, getting ahead of Zone 0 is an easy way to make your home more appealing to buyers and their insurers.
Frequently Asked Questions
When do the new California real estate laws take effect?
Most of the new California real estate laws signed in 2026 take effect on January 1, 2027. Some provisions phase in later, including remote heat pump inspections starting July 1, 2027, parts of the smoke-damage standards through 2029, and condo reserve requirements under AB 2050 starting in 2032.
Can I build two ADUs on my property in California in 2027?
Under AB 956, a qualifying single-family lot can potentially have up to two detached, newly built ADUs starting in 2027, subject to the law's requirements. Check your lot with your city's planning department and pull permits before you build, since a permitted ADU is what adds value when you sell.
Can my HOA stop me from installing air conditioning?
Starting in 2027, AB 1684 generally prevents an HOA from prohibiting or restricting a qualifying cooling system in your own unit, including central air, window and portable units, and heat pumps. The system still has to meet building codes, permits may be required, and the HOA can set some requirements when common areas are affected.
Key Takeaways • Most of the new California real estate laws for 2027 take effect January 1, 2027. • AB 956 allows up to two detached ADUs on a qualifying single-family lot, and SB 1117 limits ADU impact fees to the space above 750 square feet. • HOAs can no longer block qualifying air conditioning (AB 1684), heat pumps (SB 222), or energy-code-compliant window replacements (SB 908). • Wildfire-related protections expand: a two-year nonrenewal moratorium after declared emergencies (AB 2038), stronger claims handling and FAIR Plan oversight (SB 876, AB 1680), and the first statewide smoke-damage standards (AB 1795, AB 1642). • AB 1842 makes disaster mortgage forbearance permanent, with up to 12 months for homes left uninhabitable after a federally declared disaster. • AB 1751 creates a faster approval path for for-sale townhomes, and AB 2050's condo reserve requirements begin in 2032. |
Wondering how any of these new laws affect your home, your HOA, or your next move? I'd love to talk it through. Call or text me at 310-739-9202, or email Leegie@Leegie.com. I'll give you a thoughtful, grounded take, and if your question needs an attorney, insurance agent, or tax professional, I'll tell you that too.
Leegie Parker
Real Estate Advisor, Compass
DRE 01020534
310-739-9202 | Leegie@Leegie.com | Leegie.com
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