A new California law that enables people making hotel accommodations or short-term rentals to cancel their reservations without penalty under certain parameters becomes effective on July 1, 2024. California Senate Bill 644, the Hotel and Private Residence Rental Reservation Refunds Law, was signed by Gov. Gavin Newsom on Oct. 10, 2023. It requires hotels, third-party booking services, hosting platforms and short-term rental locations (collectively, the Hotel Service) to allow a cancellation without penalty for at least 24 hours after the reservation is confirmed if the cancellation is made at least 72 hours before check-in time.

Upon such cancellation, the Hotel Service must issue a refund for all amounts paid to the Hotel Service to the original form of payment within 30 days. Such refund shall include all fees charged to the consumer for optional services. Each violation of the law could result in a civil penalty of up to $10,000, with each day that a defendant does not honor the refund constituting a single violation. There is no private right of action under this law, and an enforcement action may be brought only by the state attorney general or a district attorney (or its city prosecutor), city attorney for a city with a population in excess of 750,000 or county counsel for a county with a population in excess of 750,000.

The law does not apply to reservations that meet any of the following criteria:

• The reservation was completed for a negotiated rate that was not made available for booking by the public.
• The reservation is for a hotel or short-term rental reservation confirmed before July 1, 2024.
• The reservation is one in which the specific hotel or short-term rental is not disclosed to the consumer until after the booking is confirmed.

Among other particulars:

• The law applies to hotel accommodations and short-term rentals, but not to residential hotels.
• The law does not apply to reservations that begin on or after July 1, 2024, but were booked on or before June 30, 2024.
• If a consumer books with a third-party booking service or hosting platform, such third-party booking service or hosting platform will be responsible for refunding the consumer.

Relevant terms in the law:

• "Hotel" means a hotel, motel, bed and breakfast inn, or other similar transient lodging establishment in California but does not include a residential hotel, as defined in Section 50519 of the California Health and Safety Code.
• "Residential hotel" means any building containing six or more guestrooms to be used, rented or hired out for sleeping purposes by guests and also is the primary residence of those guests. This does not include any such building that is used primarily by transient guests who do not occupy that building as their primary residence.
• "Short-term rental" means a residential dwelling, or any portion of a residential dwelling, in California that is rented for 30 or fewer consecutive days.