New Laws Affecting the Multifamily and Condo Market in 2026?

Short version: beginning in 2026 California tightens condo safety disclosures, protects rebuilding rights in common interest developments after a disaster, adds a foreclosure notice step for restricted housing, and changes a few recording requirements. For anyone buying or selling attached housing, the practical takeaway is to ask for HOA and compliance documents much earlier than you used to.

California’s 2025-26 session produced several measures that touch the title and escrow side of a transaction. Most take effect January 1, 2026, unless a bill names a different operative date.

Effective is not the same as easy. Condo and multifamily deals already involve an association, recorded restrictions, a lender’s calendar, and county recording rules that do not bend. A small compliance gap in any of those turns into a delayed closing. Below are the changes most likely to show up in Southern California files. Treat 2026 as a documents-first year for condos and attached multifamily.

This is a plain-language summary for planning purposes. It is not legal advice.

SB 410: the balcony inspection report becomes a document you must request

Slow HOA document delivery is already one of the most common reasons a condo closing slips. SB 410 raises the stakes on one item in particular, the exterior elevated element inspection report covering balconies, walkways, and stairways.

Under the new language the inspector’s report must state the total number of units in the project and certify that a statistically significant sample of those elements was actually evaluated. The most recent report also has to be included among the documents a seller provides to a prospective buyer.

Practical effect: request the report the day escrow opens, not after contingencies come off. That single habit removes most of the last-minute disclosure scrambles we see on condos.

SB 625: rebuilding rights after a disaster

Repairs after a disaster raise questions about approvals, insurance, and what actually changed, and buyers usually want those answered before they commit.

SB 625 makes association rules and governing document provisions void and unenforceable to the extent they prohibit, or effectively prohibit, a substantially similar reconstruction of a residential structure destroyed or damaged in a qualifying disaster. It also sets deadlines for completeness review and decision-making, and it allows a court to award attorney’s fees to an owner who prevails in enforcing those rights.

Practical effect: if you are buying into a project that has rebuilt recently, ask for proof of approvals and any related notices. Lift Escrow can help you track the recorded and disclosure items that keep the file clean.

AB 1050: private covenants lose some leverage over housing projects

A lot of multifamily and mixed-use deals die on private restrictions rather than zoning. Older CC&Rs and reciprocal easement agreements can bar residential use on a parcel that a city is now happy to see converted to housing.

AB 1050 widens the covenant modification framework so it reaches certain housing developments that redevelop an existing commercial property and include residential uses permitted under state housing law or local rules. It also extends coverage to restrictions sitting inside reciprocal easement agreements.

Practical effect: conversion-style sites may be able to reduce enforcement risk through the statutory recording process. You still need to know exactly what is recorded today and what can realistically be modified tomorrow.

AB 1529: foreclosure notices for assisted and tax-credit housing

When a multifamily property carries a recorded use restriction, a foreclosure can disturb program compliance. AB 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. A failure to comply does not affect the validity of a trustee’s sale to a bona fide purchaser, but it does create a new diligence question.

Practical effect: on restricted housing, confirm the recorded restriction first, then confirm the notice history, especially where the property is showing signs of distress.

AB 851: an extra signed and recorded attestation in certain disaster ZIP codes

Aimed at curbing predatory buying after major disasters, AB 851 creates a statutory restriction that can apply in specified parts of Los Angeles County and in additional ZIP codes across Los Angeles and Ventura Counties.

The part that matters at closing: buyer and seller must execute a written attestation affirming compliance before title transfers, and the buyer must record that signed attestation as an attachment to the deed or other conveyance.

The provision is scheduled to repeal on January 1, 2027, so verify current applicability during the contract period rather than assuming. Getting this wrong produces a recording rejection at the worst possible moment.

SB 255: recorder notification programs go statewide

Condo owners and rental investors often live somewhere else, which is exactly why deed fraud can sit undetected for months. SB 255 requires each county to establish a recorder notification program. The recorder must notify the parties who executed 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 had separate authority here, so the real change is statewide coverage.

Practical effect: enroll as soon as your county offers it, and ask your Lift Escrow officer what local fraud prevention options are available.

Which document does each law trigger?

SB 410 calls for the most recent exterior elevated element inspection report in the HOA disclosure package, which supports buyer disclosures and prevents post-acceptance surprises.

SB 625 calls for HOA reconstruction approval records where disaster rebuilding has occurred, which explain the condition and approval history of the project.

AB 851 calls for a signed compliance attestation recorded with the deed in covered ZIP codes, which keeps the conveyance from being rejected at recording.

AB 1529 calls for evidence of the recorded use restriction and the notice history, which answers lender and diligence questions on restricted housing.

SB 255 calls for enrollment in recorder notification alerts where offered, which improves fraud detection for owners and investors who live out of the area.

A short checklist before you open escrow

Order HOA documents immediately and ask specifically for the exterior elevated element inspection report.

Read the recorded CC&Rs and any reciprocal easement agreement for residential limits, especially on conversion-style sites.

Confirm whether the property sits in a covered disaster ZIP code and whether the AB 851 attestation applies.

On restricted housing, verify the recorded use restriction and track any foreclosure notice history.

Use your county’s recorder notification program where it exists, and verify wire instructions by phone every single time.

How Lift Escrow approaches Southern California closings

A new requirement rarely stops a transaction on its own. Missing the right document at the right moment does. Our approach is to request early, write clear escrow instructions, and coordinate with the association and the lender before anyone is under time pressure. We track recording attachments and compliance steps so the file is complete when it reaches the recorder, which is the difference between closing on the date you promised and explaining why you did not.

If you have a condo or attached multifamily transaction coming up, reach Lift Escrow at info@Liftescrow.com or 818-900-1865.

This article is a general summary for planning purposes and is not legal advice. Please consult your own attorney about how these laws apply to your transaction.