Legal Updates
Last week, the L.A. County Board of Supervisors extended the price gouging protections within the County of Los Angeles through July 31, 2025. This means that the protections outlined in Penal Code section 396(d), (e), and (f) will remain in place through the end of the month specifically within L.A. County. However, Governor Newsom did not extend any of his executive orders relating to price gouging. This means that certain modifications made to PC 396 via previous Executive Orders expired on July 1 and no longer apply. These include:

• The expansion of the definition of “housing” to include leases with an initial term of longer than one year.
• The exemption of properties with a certificate of occupancy issued on or after January 1, 2025.
• The exemption of certain large single-family homes located in certain specified zip codes. 

The main takeaway is that there are no more price gouging restrictions in place outside of LA County. The price gouging restrictions within LA County are only based on Penal Code 396(d),(e), and (f).

The Governor did extend a different executive order relating to short-term housing rules but took no action with respect to price gouging. For a complete summary of the current price gouging rules, please see the updated Quick Guide here.

Gov. Newsom extends emergency short-term housing protections in Los Angeles
Governor Gavin Newsom has issued an executive order to extend his emergency declaration, which aims to increase the availability of short-term housing by allowing survivors of the LA area firestorm to stay in hotels and other short-term rentals for more than 30 days. The executive order extends the suspension of rules that could deter hotels, motels, and other short-term rentals from offering shelter to survivors for more than 30 days. The order temporarily allows survivors to remain classified as short-term occupants rather than tenants when they stay beyond 30 days, effectively suspending rules that might limit hotel and short-term rental operators’ flexibility to support extended stays. The order was first issued on March 7, 2025, and is now extended to October 1, 2025. Read the Executive Order here.

Legal Live Webinars
The June 2025 Forms Release Quick Summary Guide can be found here and the recording of the Legal Live Webinar on the New Forms can be found here.

Mark your calendar for our next Legal Live Webinars, where our legal team will cover essential topics:

• July 15 – Tiny homes | Register here
• August 12 - Escrow | Register here

Stay ahead of legal changes—these resources and webinars provide critical insights to help you navigate the evolving real estate landscape. 

Useful Legal Info for Brokers:

• Send all suggestions for changes to standard forms to [email protected].
• Continue to check the Broker Compensation Compliance page for updates and new information.
• Legal Hotline for Brokers & Office Managers: (213) 739-8350

Legislative Update
C.A.R. applauds Gov. Newsom and lawmakers for prioritizing housing policy in state budget
C.A.R. issued the following statement in response to Governor Gavin Newsom finalizing the 2025-2026 state budget and signing into law groundbreaking and transformative housing reforms — including sweeping CEQA exemptions — to boost housing production and infrastructure statewide and improve affordability for all:

“The CALIFORNIA ASSOCIATION OF REALTORS® commends Governor Gavin Newsom and legislative leaders for prioritizing housing policy as part of this year’s budget process. Governor Newsom signed into law some of the most significant changes to CEQA to boost the creation of new housing, along with including $300 million for the California Dream for All program to assist first-time homebuyers. These new laws will expand homeownership opportunities for working Californians. We are also encouraged by the enactment of provisions that will provide greater predictability and certainty for residential homebuilders across the state,” said C.A.R. President Heather Ozur.

“Moving forward, California must continue to adopt policies that foster a greater housing supply and promote homeownership. We remain committed to working with lawmakers and the Administration to address California’s ongoing housing crisis and ensure these reforms result in the production of more housing,” Ozur said.

Senate narrowly advances reconciliation package
The U.S. Senate has passed its version of One Big Beautiful Bill, the tax-focused reconciliation package, by a narrow 51–50 vote, with Vice President Vance casting the tie-breaking vote. This follows the U.S. House of Representatives’ earlier approval of the package by a similarly close 215–214 margin.

Among the most closely watched provisions is a revision to the State and Local Tax (SALT) deduction cap. Working with California Representative Young Kim and NAR, C.A.R. helped secure language in the House bill that would have increased the SALT cap to $40,000 for households with incomes below $500,000. The Senate version modifies the House-passed provision, raising the cap to $40,000 for individuals and married couples with incomes below $500,000, but only for a five-year period. After that, the cap would revert back to the current $10,000 limit.

While the bill features a range of tax provisions for individuals and businesses, it continues to fall short in addressing several long-standing REALTOR® priorities. Notably absent are proposals to address housing affordability and homeownership opportunities. REALTOR®-advocated policies, such as increasing the capital gains exclusion on the sale of a primary residence and federal incentives to convert underused commercial properties into residential housing — both seen as critical tools to expand homeownership and housing supply — were not included. The package would also codify the current lower mortgage interest deduction limit of $750,000 — which had been set to increase back to $1 million at the end of the year — in perpetuity.

The bill includes provisions that will support commercial real estate and affordable rental housing, such as an extension of the Opportunity Zones program and enhancements to the Low-Income Housing Tax Credit (LIHTC). These measures aim to boost investment in underserved communities and increase the availability of affordable rental housing, central components of a balanced housing strategy.

Lastly, the bill will make permanent the 20% pass-through for 199a filers. 

Because of Senate changes to the bill, the House of Representatives will have to vote on the Senate version. Both chambers must still pass identical bills before it can be sent to the President.