California has enacted new protections for homeowners dealing with wildfire-related smoke damage, establishing first-in-the-nation standards for testing, cleanup, and insurance coverage.
Gov. Gavin Newsom signed a package of bills following the January 2025 Los Angeles County fires, where thousands of properties remained standing but were potentially uninhabitable because of smoke and toxic contaminants. The California Department of Toxic Substances Control will develop standards for testing and removing lead, asbestos, and other hazardous materials from smoke-damaged homes.
Under the new legislation, smoke damage in designated fire zones will be legally presumed to have resulted from the wildfire. Insurers will be required to cover testing and remediation based on the forthcoming state standards, providing greater clarity around claims and recovery costs.
The legislation also establishes a statewide mortgage forbearance program for homeowners whose properties become uninhabitable following a major disaster. Eligible borrowers can pause mortgage payments without penalties or late fees, while Los Angeles County fire survivors can access forbearance for up to 24 months.
The new requirements could have broader implications for single-family housing, SFR portfolios, rental properties, and real estate investors in wildfire-prone markets, particularly as property owners, insurers, lenders, and residents navigate remediation costs and post-disaster housing recovery.
Source: CalMatters
