What New Laws Affect Multifamily and Condo Transactions in 2026?
Starting in 2026, California updates condo safety disclosures, HOA reconstruction rights after disasters, foreclosure notice rules for restricted housing, and certain recording requirements. Because of this, you should request key HOA and compliance documents earlier.
California’s 2025-26 session produced several title-industry laws that take effect in 2026. According to the California Land Title Association (CLTA), most of the summarized bills take effect January 1, 2026, unless a bill lists a different operative date.
However, “effective” does not always mean “easy.” In addition, condo and multifamily transactions often involve HOAs, recorded restrictions, lender timelines, and strict recording rules. As a result, small compliance gaps can turn into closing delays. Below, you will find the updates most likely to affect Southern California deals, with Ventura, Santa Barbara, Thousand Oaks, Oxnard, Los Angeles, and San Diego mentioned only as examples.
Source note: This blog summarizes selected items from the CLTA 2025 Summary of Legislation for planning purposes. It is not legal advice.
2026 multifamily and condo transaction laws: what changes in a real closing
To stay practical, we focus on what you must disclose, what you may need to record, and what can change timeline risk. For example, one law adds a condo inspection report to the buyer disclosure file. Similarly, another law can require an extra recording attachment in certain disaster ZIP codes. Therefore, you should treat 2026 as a “document first” year for condos and attached multifamily.
Condo balcony and exterior elevated element reports become a must-request document (SB 410)
HOA document delays already cause many condo closings to slip. Now, Senate Bill 410 increases the importance of one specific item, the exterior elevated element (EEE) inspection report.
Under SB 410, the inspector’s report must include the total number of units in the condominium project and a certification that the inspector evaluated a statistically significant sample of the EEEs. In addition, the statute requires that the most recent EEE inspection report be included among the documents a seller provides to a prospective buyer.
Because of this, you should request the EEE report at the start of escrow, not after contingencies. As a result, you reduce the chance of a last minute disclosure scramble.
More protection for post disaster rebuilding in condos and common interest projects (SB 625)
Disaster repairs can create questions about approvals, insurance, and “what exactly changed.” Consequently, buyers often want clarity before they commit.
Senate Bill 625 makes certain HOA rules and governing document limits void and unenforceable if they prohibit, or effectively prohibit, a substantially similar reconstruction of a residential structure destroyed or damaged in a qualifying disaster. In addition, the law sets deadlines for completeness review and decision-making, and it allows courts to award attorney’s fees to prevailing owners who enforce these rights.
Therefore, if you are buying into a project with recent rebuilding, you should ask for proof of approvals and any related notices. 805title can help you track the recorded and disclosure items that support a clean closing file.
Private covenants and reciprocal easement agreements lose leverage against certain housing projects (AB 1050)
Many multifamily and mixed use deals fail because of private restrictions, not because of zoning. For example, older CC&Rs and reciprocal easement agreements (REAs) can restrict residential use on a parcel that a city now supports for housing.
Assembly Bill 1050 expands the covenant modification framework so it applies to certain housing developments that plan to redevelop an existing commercial property and include residential uses permitted by state housing laws or local rules. In addition, the law extends coverage to restrictions inside REAs that restrict or prohibit residential uses.
As a result, some conversion-style sites may reduce enforcement risk through the required recording process. However, you still need careful due diligence on what is recorded today, and what can be modified tomorrow.
Foreclosure notices for assisted and tax-credit housing now include state agencies (AB 1529)
If a multifamily property carries a recorded “use restriction,” foreclosure can affect program compliance. Because of this, the state added a notice step that matters to lenders, investors, and title professionals.
Assembly Bill 1529 requires the party recording a notice of default or notice of sale to also mail the notice to the Director of Housing and Community Development and to the California Tax Credit Allocation Committee when a qualifying use restriction is recorded against the property as of the recording date. Although the law states that a failure to comply does not affect the validity of a trustee’s sale to a bona fide purchaser, the mailing rule still creates a new diligence question.
Therefore, if you buy restricted housing, confirm the recorded restriction, then confirm the notice history, especially when the property has distress signals.
Source: CLTA 2025 Summary of Legislation, Chapter 203 (AB 1529), updating Civil Code section 2924b and related statutes.
Disaster area sales may require an extra signed and recorded attestation (AB 851)
After major disasters, California has moved to curb predatory buying in certain ZIP codes. Assembly Bill 851 creates a statutory restriction that can apply in specified parts of Los Angeles County and additional ZIP codes in Los Angeles and Ventura Counties.
Most importantly for closing, the buyer and seller must execute a written attestation affirming compliance before the transfer of title for covered residential property. In addition, the buyer must record the signed attestation as an attachment to the deed or other conveyance when recording the transfer.
Because the bill is scheduled to repeal January 1, 2027, you should verify current applicability during your contract period. As a result, you avoid a recording rejection at the end of escrow.
Recorder notification programs expand fraud protection statewide (SB 255)
Condo owners and rental investors often live out of area, so deed fraud can go unnoticed for too long.
Senate Bill 255 requires each county to establish a recorder notification program. Under the program, the recorder must notify the parties executing a deed, quitclaim deed, mortgage, or deed of trust within 30 days of recordation, and counties may also offer electronic notifications. Los Angeles County already has separate authority, so the big change is broader statewide coverage.
Therefore, once your county offers enrollment, use it. In addition, ask your escrow officer at 805title what local fraud prevention options are available.
Inline infographic: 2026 laws and the documents they trigger
| Law | Document or step you may need | Why it matters in escrow |
| SB 410 | Most recent EEE inspection report in HOA disclosure package | Supports buyer disclosures and reduces post-acceptance surprises |
| SB 625 | HOA reconstruction approval records (when disaster rebuilding occurred) | Explains condition and approval history |
| AB 851 | Signed compliance attestation recorded with deed (covered ZIP codes) | Avoids recording issues and supports statutory compliance |
| AB 1529 | Evidence of recorded use restriction and notice history | Adds diligence for restricted housing and lender questions |
| SB 255 | Enrollment in recorder notification alerts (where offered) | Improves fraud detection for owners and investors |
Quick checklist you can use before you open escrow
Because timing drives cost, use this short checklist on every condo or attached multifamily deal:
- Order HOA documents immediately, and ask specifically for the EEE inspection report (SB 410).
- Review recorded CC&Rs and any REA for residential limits, especially on conversion-style sites (AB 1050).
- Confirm whether your property falls in a covered disaster ZIP code and whether the AB 851 attestation applies.
- For restricted housing, verify recorded use restrictions and track any foreclosure notice history (AB 1529).
- Use recorder notification programs when available, and verify wire instructions by phone every time.
Trusted advice from 805title for Southern California closings
New requirements rarely stop a transaction by themselves. However, missing the right document at the right time can.
Therefore, 805title focuses on early requests, clear escrow instructions, and proactive coordination with HOAs and lenders. In addition, we track recording attachments and compliance steps so you can close on time. As a result, you get a smoother buyer experience.
Want to know more? 👉 Visit 805title Services and let’s connect.