Suppose you’re buying land for 72 townhomes. You’ve allowed $600,000 for street and drainage work. Then the water district identifies a required main extension. With additional paving, the offsite budget reaches $2.1 million. At the agreed land price, that additional $1.5 million reduces profit before any added financing costs. Finding out during diligence gives you a chance to reconsider the purchase.
SB 1014 was signed on September 29, 2026, as Chapter 806 and takes effect January 1, 2027. Its new disclosure duties cannot be invoked before then, although a 2026 buyer could have qualifying permit activity afterward. 1 2
The early estimate starts with your request
Beginning January 1, 2027, an applicant may include a request in a qualifying preliminary housing application or, if none was filed, a development application containing all required processing information. The city or county will have 30 business days from the request to respond. 3
The response will estimate, in good faith, the types of improvements that might be required. Mandatory cost estimates will cover only work the city or county will construct, priced as of the estimate date. Developer-built work may remain unpriced, and the response may exclude other agencies’ requirements and California Environmental Quality Act (CEQA) mitigation. 3 4
Physical improvements also need to be distinguished from impact fees, which have separate disclosure and estimate procedures. 5
Other public agencies and utilities, including special districts but excluding school districts, will respond separately. Applicants will have 30 calendar days after the qualifying application submission to request their improvement lists; recipients will have 30 business days to reply. No cost estimate will be mandatory. Send those requests on the application date. 3
The early responses will be nonbinding. An omission will not cancel an otherwise lawful requirement. The law specifies no automatic penalty or clearance for a missed early-response deadline, so silence gives the buyer no basis to assume the water connection needs no work. 3
A later list will limit additional requirements
Once a covered postentitlement permit application is deemed complete, the city or county will have 30 business days to issue an itemized improvement list, without a separate request. Generally, it may not require an unlisted improvement in connection with that permit. 3 4
Covered permits include local nondiscretionary construction permits after entitlement for projects intended to be at least two-thirds residential: building permits and related reviews, demolition, and minor or standard offsite, grading, and excavation permits. The definition also includes discretionary building-code permits. It excludes permits issued by special districts, the Coastal Commission, and utilities outside local ownership and operation. 6
Additions could still be required for a specific public-health or safety impact supported by substantial evidence, or work reasonably related to a developer-expanded scope. The separate CEQA exception applies to discretionary building or building-code permits. It does not provide a basis for adding CEQA mitigation to a ministerial permit. 3 4
The list will not cap construction prices. An unchanged improvement could still receive a higher bid; a price commitment would depend on the construction agreement. 3
Tie the investigation to the purchase agreement
A qualifying SB 330 preliminary application can preserve applicable rules, subject to statutory exceptions and follow-through requirements. SB 1014 expressly preserves that protection when a city seeks an improvement requirement that wasn’t in effect at filing. The nonbinding estimate will not override those existing rights. 7 3
Filing before acquisition requires owner consent. It also starts a 180-calendar-day deadline to submit the development application with the required information. The purchase agreement should therefore address seller cooperation and who funds the follow-up work. 5
For our townhome buyer, suppose the district needs a hydraulic study to establish pipe size and the connection point. Commission that study during diligence. Give the resulting alignment to the city for pavement-restoration requirements, then price the combined work. Check whether the connection depends on an easement or another utility project before assuming a completion date.
I’d make the acquisition contingency turn on an acceptable infrastructure scope, cost, and delivery timetable. If the district can’t resolve the connection before that contingency expires, the parties need to negotiate an extension or decide who will accept the unresolved exposure. Receipt of an early estimate alone wouldn’t settle that decision.
For questions about entitlement research, contact me at doug@prebreak.com.
The project and figures are hypothetical. This article describes SB 1014’s chaptered text and related law reviewed October 5, 2026; project-specific legal and engineering review remains necessary.
Sources and verification notes
Legal status. Official chaptered text and related statutes were checked October 5, 2026. SB 1014 is enacted, with new requirements effective January 1, 2027. The Assembly analysis is supporting background; the chaptered text controls. The acquisition example and dollar amounts are hypothetical.
Reference 1
Reference 2
California Constitution, Article IV, §§ 8 and 10.
Reference 3
SB 1014 chaptered text, Government Code §65941.3.
Reference 4
Assembly Housing Committee analysis, pp. 1–2.