California now leads the nation with standards that could save over 10 billion gallons of water in the first year and eventually over 100 billion gallons of water per year according to the California Energy Commission.

Effective January 1, 2017, new water conservation regulations took effect for interior water fixtures in almost all single family residential properties. Here’s what you need to know:

Background: In 1992, the California Legislature passed SB–1224. This senate bill imposed water conservation standards on all toilets and urinals installed in all single family residential homes, multi–family residential properties, and commercial properties. Subsequently in 2009, with California’s on–going drought, the Legislature passed SB–407, extending the toilet and urinal standards to all properties and further added shower and faucet standards. Those standards are:

• Toilets – no more than 1.6 gal/flush
• Urinals – no more than 1.0 gal/flush
• Showers – no more than 2.5 gal/min
• Internal Faucets – no more than 2.2 gal/min

Compliance Deadlines: The lawmakers appreciated that complying with these standards could cause some economic hardship if retrofit was immediately required, so a schedule of compliance was established:

• By January 1, 2017, all single family residences must be in compliance; and
• By January 1, 2019, all multi–family and commercial properties must be in compliance.

In addition, if any such properties were being substantially improved or refinanced prior to the compliance deadline, compliance must occur at the time of improvement or refinance.

Disclosure Obligations: The law requires that any Seller must disclose to any Buyer whether or not the property is compliant with the water conservation law. This is, in part, already referenced in a key disclosure form,  the California Real Estate Transfer Disclosure Statement (“TDS”) and non–compliance would have to be disclosed on the Seller Property Questionnaire (“SPQ”). While the law does not impose this disclosure obligation on real estate agents, the prudent agent should inquire whether or not a property is in compliance since it is possible that a Seller might not be aware of the law.

Non–Compliance Penalties: Currently, there are no state–wide monetary sanctions set forth in the law for non–compliance. However, local governments and water agencies have the authority to impose additional regulations which could include non–compliance penalties. Further, non–disclosing Sellers would reasonably be liable to Buyers for the costs of compliance. It will be interesting to see whether effective means of compliance will emerge.

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