As the California real estate landscape continues to evolve, new laws and regulations in 2025 are reshaping the way real estate professionals do business. From commission structures to disclosure requirements, realtors must stay informed about these legal changes to remain compliant and provide the best service to their clients. In this guide, we’ll break down the key legislative updates every real estate professional in California should know.
AB 2992: Changes to Commission Structures
One of the most significant changes to California real estate law in 2025 is the introduction of Assembly Bill (AB) 2992, which alters commission structures for dual agency situations. Under this new law, real estate agents acting as dual agents (representing both the buyer and the seller in a transaction) must clearly disclose the full commission agreement to both parties upfront and ensure that the commission is divided equally.
Previously, dual agents had the flexibility to negotiate commission terms with both parties, but AB 2992 mandates full transparency. While this change aims to protect consumers and ensure fairness, it may require agents to adjust their approach to negotiations. Real estate professionals will need to adopt more rigid procedures for handling commission discussions and ensure that all documents are signed and disclosed according to the law.
SB 164: Amendments to Disclosure Requirements
Another major update is Senate Bill (SB) 164, which amends several sections of California’s real estate law concerning property disclosures. These amendments require real estate professionals to be even more diligent when disclosing property conditions to potential buyers.
For example, in 2025, SB 164 introduces stricter rules regarding the disclosure of environmental hazards, such as lead-based paint, radon, and asbestos. Realtors must now provide more detailed information about these hazards, including the steps taken to mitigate them (if applicable), and inform potential buyers of any inspections done on the property.
The law also extends the disclosure timeline, ensuring that buyers have ample time to review all documentation before proceeding with a sale. These changes are aimed at increasing buyer awareness and ensuring that all parties are fully informed about the properties they are purchasing.
AB 2533: Simplifying ADU Permitting
Accessory Dwelling Units (ADUs), also known as “granny flats” or “in-law suites,” have become an increasingly popular way for homeowners to expand their living space or generate rental income. Assembly Bill 2533, passed in 2025, streamlines the permitting process for ADUs, making it easier for property owners to build them.
Under the new law, local governments are required to fast-track ADU permit applications, reducing red tape and delays that have traditionally hindered construction. Realtors can expect this law to have a significant impact on the housing market, as more homeowners will be encouraged to build ADUs on their properties. The increased supply of ADUs may help alleviate some of the pressure on Los Angeles’ tight housing market, providing affordable rental options in a city with soaring rents.
Real estate agents working with clients interested in adding an ADU to their property should be well-versed in the new requirements and assist with the permitting process. This could be a valuable service to offer clients looking to expand their homes or increase rental income potential.
The Impact of New Fair Housing Regulations
California’s 2025 real estate laws also address ongoing efforts to combat housing discrimination and promote fair housing practices. New regulations under the California Fair Employment and Housing Act (FEHA) mandate that all real estate professionals undergo additional training to identify and prevent discriminatory practices in real estate transactions.
Under these updated regulations, real estate agents are required to be proactive in preventing discrimination based on race, gender, religion, or other protected classes. Agents must also provide equal opportunities to all prospective buyers and renters and ensure that housing listings are free from discriminatory language or practices.
This increased focus on fair housing aims to create a more equitable real estate market in California and ensure that all individuals, regardless of background, have access to housing opportunities. Realtors should stay up to date on these regulations and incorporate them into their daily practices to avoid violations and promote inclusive real estate practices.
Conclusion: Adapting to Legislative Changes
For real estate professionals, the passage of these new laws represents a shift in how business will be conducted in 2025 and beyond. While change can be daunting, those who are proactive in understanding these updates and adapting their practices accordingly will be well-positioned for success.
Realtors should prioritize continuous education on these new laws, seek guidance from legal experts when necessary, and update their business procedures to ensure compliance. These changes will ultimately serve to protect consumers and improve transparency in California’s real estate market, fostering a more informed, fair, and equitable industry.
