California Real Estate Attorney
California real estate transactions sit at the intersection of an unusually active regulatory environment, the highest property values in the country, and a tax framework (Proposition 13, Proposition 19, the documentary transfer tax, FTB withholding) unlike that of any other state. Whether you are buying or selling commercial property, negotiating a multi-tenant lease, structuring a 1031 exchange, navigating a disclosure dispute, or developing land subject to CEQA review, the right legal representation is the difference between a clean transaction and a costly mistake.
Southern California: (714) 464-5188 · Northern California: (707) 207-8005
How California Real Estate Closings Work
Unlike North Carolina or Georgia (which require attorney closings) and unlike many eastern states (which use title companies and attorneys interchangeably), California is an escrow state. For routine residential transactions, an independent escrow company — licensed by the California Department of Financial Protection and Innovation — handles funds, prepares the deed, and coordinates with the title company that issues the policy. The transaction can close without attorney involvement.
That is fine for a simple, single-family purchase with conventional financing and no disputes. It is dangerous in any of these common scenarios:
- Commercial purchases or leases.
- Multi-property transactions.
- Sales by trusts, estates, or LLCs (where signing authority and tax basis must be confirmed).
- Out-of-state sellers subject to FTB Form 593 withholding.
- Properties with disclosure issues, title defects, easement disputes, or boundary problems.
- Seller financing, lease-options, or other non-standard structures.
- 1031 tax-deferred exchanges.
- Transactions affecting Proposition 13 assessed value (any change-of-ownership analysis).
Our firm provides attorney representation throughout California for all of these situations.
California Disclosure Requirements
California has some of the most extensive seller disclosure requirements in the country for residential property. The principal statutory disclosures include:
- Transfer Disclosure Statement (TDS) — Required by California Civil Code §§ 1102 et seq. for sales of one-to-four-unit residential property. The seller must disclose known material conditions and defects of the property.
- Natural Hazard Disclosure Statement (NHD) — Required by Civil Code § 1103, identifying whether the property is in a designated flood zone, fire hazard severity zone, earthquake fault zone, seismic hazard zone, or other designated natural hazard area.
- CC&R and HOA disclosures — Civil Code §§ 4525 et seq. require the seller to deliver association governing documents, financial statements, and required statutory disclosures for any property subject to a homeowners association.
- Lead-based paint disclosure for pre-1978 properties (federal Title X).
- Mello-Roos and 1915 Act bond disclosures for properties in Community Facilities Districts.
- Megan’s Law disclosure regarding the sex offender database.
- Death-on-premises disclosure for deaths within three years (Civil Code § 1710.2).
Failure to disclose known material defects exposes the seller to rescission and damages claims that often outlive the transaction. We advise sellers on disclosure obligations and represent buyers when post-closing problems suggest a disclosure failure.
Commercial Real Estate
Commercial transactions — office, industrial, retail, multi-family, hospitality, mixed-use — require legal work that escrow companies do not perform. Our commercial real estate practice covers:
- Purchase and sale agreements for commercial property, including letter-of-intent and term-sheet negotiation, due diligence period coordination, and closing.
- Commercial leases — office, industrial, retail, ground leases, and percentage rent leases — on behalf of both landlords and tenants. California commercial lease law gives the parties broad freedom of contract; well-drafted documents matter.
- Entity formation — nearly every commercial purchase is taken in the name of an LLC or other entity. We coordinate with our business law practice to form the holding entity in conjunction with the closing.
- Title and survey review with negotiation of ALTA endorsements appropriate to the transaction.
- Lender representation in commercial real estate financing.
- Hospitality industry transactions — see our Commercial Real Estate for the Hospitality Industry page.
- Real estate development including subdivision map approval under the Subdivision Map Act, CEQA review, conditional use permits, and entitlement coordination.
1031 Tax-Deferred Exchanges
California enforces unique rules around 1031 exchanges that often surprise out-of-state participants. California requires a non-California qualified intermediary to register and post a security bond for funds held during the exchange. California also has a “clawback” provision (FTB Form 3840) that requires ongoing annual filing for California-source gains deferred into out-of-state replacement property — effectively recapturing California tax if and when the replacement property is later sold without a further 1031 exchange. We coordinate with qualified intermediaries on California-specific exchange structuring and with clients on the long-term Form 3840 compliance obligation.
Proposition 13 and Proposition 19 Reassessment Analysis
Any transfer of California real estate is potentially a “change of ownership” under Revenue and Taxation Code § 60, triggering reassessment to market value. The exclusions are detailed, technical, and very valuable when they apply:
- Interspousal transfers are excluded.
- Parent-child transfers are now narrowly limited by Proposition 19 to a primary residence (becoming the child’s residence within one year) and only up to the parent’s assessed value plus $1 million.
- Transfers between legal entities and their owners can be excluded if certain ownership-proportion tests are met.
- Transfers to or from revocable trusts by the grantor are generally not a change of ownership.
- Long-term lease transfers can trigger reassessment.
Getting any of these wrong — whether in an estate plan, an entity restructuring, or a routine sale — can result in a multiple-fold property tax increase. We perform Proposition 13 and 19 analysis on every California real estate transaction we touch.
FTB Withholding for Non-California Sellers
California Franchise Tax Board requires withholding of 3 1/3% of the gross sales price (or up to 12.3% of the gain in some cases) on the sale of California real estate by non-residents, unless an exemption applies (FTB Form 593). The withholding is collected by the escrow company and remitted to the FTB. Out-of-state sellers should obtain certificates of partial or full exemption where eligible. We coordinate with escrow on Form 593 compliance and prepare exemption documentation where appropriate.
Real Estate Litigation
When a transaction goes wrong — nondisclosure of material defects, breach of purchase contract, title defects, boundary or easement disputes, partition actions, broker disputes, or specific performance claims — we represent clients in California superior court, in mediation (often required by purchase agreements), and in arbitration. The earlier counsel is involved, the better the resolution; most disputes can be settled before discovery, but only if positioned properly.
Schedule a California Real Estate Consultation
Southern California: (714) 464-5188
Northern California: (707) 207-8005
Our other offices:
Idaho (208) 696-2772 · Texas (469) 535-6260 · Washington (206) 279-4780 · North Carolina (919) 363-9945
See also: California (state hub) · Commercial Real Estate (pillar)
Disclaimer: This page provides general legal information about California real estate law and does not constitute legal advice. California real estate law, including FTB withholding rates and Proposition 19 implementation rules, changes. No attorney-client relationship is formed by visiting this page.
Schedule a Free Consultation in California
Discuss your matter with our California team. Initial consultations are complimentary.
California: (714) 464-5188
Submitting a contact form or calling does not create an attorney-client relationship. Do not send confidential information until a written engagement letter is signed.
Related Pages
- California multi-state practice hub — overview of all our California services.
- Real Estate across five states — see how we coordinate real estate matters across Idaho, California, Texas, Washington, and North Carolina.
- California Estate Planning
- California Business Law