Gov. Gavin Newsom signed a package of real estate laws before the 2026 legislative session closed Sept. 30. LA homeowners who survived the Palisades and Eaton fires gain stronger insurance protections, longer mortgage relief and new smoke-damage standards.

Newsom signed 1,040 bills and vetoed 120 this session, according to the Beverly Hills Courier. Several dozen touch real estate directly. Here are the changes LA property owners, landlords and renters should know about.

Wildfire insurance overhaul

SB 876, taking effect Jan. 1, 2028, doubles penalties for unfair insurer practices tied to a declared emergency to $10,000 per violation and $20,000 per willful violation. After a total loss, insurers must pay the full cost of code upgrades for rebuilding, even if the owner rebuilds elsewhere. Living-expense coverage must run at least 24 months and continue 15 days after a home becomes habitable.

A companion measure, SB 1301, authored by state Sen. Ben Allen, D-Pacific Palisades, requires insurers to give 90 days' notice before dropping a policyholder and explain the reason in plain language. If the problem is fixable, the insurer must spell out the needed repair at least 120 days before the policy expires. The owner then gets 90 days to complete it. That law also takes effect in January 2028.

"This law says Californians deserve to be treated like customers, not liabilities to be shed," Joy Chen, executive director of Every Fire Survivor's Network, said of SB 1301, according to the Santa Monica Daily Press.

AB 2038 separately bars insurers from canceling policies solely for wildfire-area location in zip codes within or adjacent to a fire perimeter for two years after a state-of-emergency declaration.

Smoke damage and mortgage relief

AB 1795, the Smoke Damage Recovery Act, creates a legal presumption that smoke, ash or soot found in a home within a wildfire zone came from that fire. Insurers must pay for testing and living expenses until the home is cleared for occupancy. The state Department of Insurance estimates more than 13,000 of roughly 40,000 claims filed after the January 2025 fires involved smoke damage to homes that never burned, according to the governor's office.

The numbers are stark. Many of those survivors have not returned to their homes 21 months later, according to CalMatters.

For LA fire survivors still paying mortgages on uninhabitable homes, AB 1847 doubles the forbearance window to 24 months. Eligible homeowners may apply until Jan. 7, 2029. Servicers must offer the option to defer missed payments to the end of the loan, unless investor contract terms prohibit it.

ADU expansion

AB 956 requires cities to approve two detached accessory dwelling units (ADUs) on a single-family lot, up from one. Under SB 1117, ADUs of 750 square feet or smaller are exempt from impact fees. Fees on larger units apply only to the square footage above that threshold.

Landlord rules

Starting April 1, 2027, SB 1296 requires every landlord to maintain a written pet policy, even one that bans pets entirely, and disclose it with every rental application. If a landlord collects an application fee without first disclosing the policy and the applicant declines because of it, the landlord must refund the fee. AB 2025 requires rental ads with digitally altered photos, such as virtual staging, to disclose the alteration and link to the original image.

HOA reserve mandate

Starting Jan. 1, 2032, AB 2050 requires HOAs to update reserve studies annually and fund them at a level that keeps reserves above zero for 30 years. If projections turn negative, the HOA must transfer at least 15% of its gross annual budget into reserves. The law allows a reserve-funding special assessment no more than once every nine years. The Beverly Hills Courier noted that owners in older, underfunded buildings should expect higher dues.

AB 1684 lets condo owners install air conditioners and heat pumps regardless of HOA rules. An HOA that willfully blocks an installation faces up to $2,000 in civil penalties plus the owner's attorney's fees.

Newsom vetoed AB 1997, which would have required cities to approve or deny housing projects within 30 days. Local review timelines remain unchanged.