AB 1466

Bill Subjects

Abstract

Existing law, the California Fair Employment and Housing Act, prohibits discrimination in housing based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, veteran or military status, or genetic information, and provides that discrimination in housing through a restrictive covenant includes the existence of a restrictive covenant, regardless of whether accompanied by a statement that the covenant is repealed or void. Existing law also provides that a provision in any deed of real property in California that purports to restrict the right of any person to sell, lease, rent, use, or occupy the property to persons having the characteristics specified above by providing for payment of a penalty, forfeiture, reverter, or otherwise, is void, except as specified. Additionally, existing law provides that any deed or other written instrument that relates to title to real property, or any written covenant, condition, or restriction annexed or made a part of, by reference or otherwise, any deed or instrument, that contains any provision that purports to forbid, restrict, or condition the right of any person or persons to sell, buy, lease, rent, use, or occupy the property on account of any of characteristics specified above, is deemed to be revised to omit that provision. Existing law requires a county recorder, title insurance company, escrow company, real estate broker, real estate agent, or association that delivers a copy of a declaration, governing document, or deed, to place a cover page or stamp on the first page of the previously recorded document stating that if the document contains any restriction that unlawfully discriminates based on any of the characteristics specified above, that document is void. This bill would require a title company, escrow company, real estate broker, real estate agent, or association that delivers a copy of a declaration, governing document, or deed to a person who holds an ownership interest of record in property to also provide a Restrictive Covenant Modification form with specified procedural information. Existing law authorizes a person who holds an ownership interest of record in property that they believe is the subject of an unlawfully restrictive covenant, as specified, to record a Restrictive Covenant Modification, which is required to include a copy of the original document with the illegal language stricken. Existing law requires the county recorder, before recording the modification document, to submit the modification document and the original document to the county counsel who is required to determine whether the original document contains an unlawful restriction based on any of the characteristics specified above. Existing law requires the county counsel to return these documents and inform the county recorder of their determination, and requires the county recorder to refuse to record the modification document if the county counsel finds that the original document does not contain an unlawful restriction. Existing law requires the county recorder to make Restrictive Covenant Modification forms available to the public. This bill would additionally authorize a title company, escrow company, county recorder, real estate broker, real estate agent, or other person to record a Restrictive Covenant Modification. The bill, beginning July 1, 2022, would require a title company, escrow company, real estate broker, or real estate agent that has actual knowledge of a declaration, governing document, or deed that is being directly delivered to a person who holds or is acquiring an ownership interest in property and includes a possible unlawfully restrictive covenant to notify the person of the existence of that covenant and their ability to have it removed through the restrictive covenant modification process. The bill would, beginning July 1, 2022, and upon request before the close of escrow, require the title company or escrow company that is directly involved in the pending transaction to assist in the preparation of a Restrictive Covenant Modification, as specified. This bill would require the county counsel, after their review, to return the documents to the county recorder and inform the county recorder of their determination within a reasonable period of time, not to exceed 3 months, as provided. The bill would require a person who requests to record a modification document to provide a return address in order for the county recorder to notify this person of the action taken by the county counsel. The bill would require the county recorder to make Restrictive Covenant Modification forms available to the public onsite or online, as provided, and require the forms to permit the submission of a form that will correct unlawfully restrictive covenants for multiple dwellings within a subdivision, as specified. This bill would require the county recorder of each county to establish a restrictive covenant program to assist in the redaction of unlawfully restrictive covenants. In this regard, the bill would require each county recorder to prepare an implementation plan by July 1, 2022, as specified, identify unlawfully restrictive covenants in the records of their office, and to redact unlawfully restrictive covenants, as specified. The bill would require the County Recorders Association of California to submit reports to the Legislature by January 1, 2023, and January 1, 2025, of the progress of each county's restrictive covenant program and to annually convene a best practices meeting to share concepts on the implementation of restrictive covenant programs, as specified. Existing law imposes a fee, except as provided, of $75 to be paid at the time of the recording of every real estate instrument, paper, or notice required or permitted by law to be recorded, per each single transaction per single parcel of real property, not to exceed $225. Existing law exempts from this fee any real estate instrument, paper, or notice recorded in connection with a transfer subject to the imposition of a documentary transfer tax, as provided, or with a transfer of real property that is a residential dwelling to an owner-occupier. This bill would additionally exempt from this fee any real estate instrument, paper, or notice executed or recorded to remove a restrictive covenant that is in violation of specified provisions of the California Fair Employment and Housing Act. This bill, subject to authorization from the county's board of supervisors and in accordance with applicable constitutional requirements, would authorize a county recorder to impose a fee of $2 to be paid at the time of the recording of every real estate instrument, paper, or notice required or permitted by law to be recorded for the purpose of funding the restrictive covenant programs established under these provisions. The bill would exempt certain documents from a fee established pursuant to these provisions. The bill would prohibit a county recorder to charge the $2 fee after December 31, 2027, unless the fee is reauthorized, as specified. Existing law authorizes recordation of certain documents, including a release, discharge, or subordination of a lien for postponed property taxes, without acknowledgment, certificate of acknowledgment, or further proof. This bill would authorize the recordation of any modification document, instrument, paper, or notice to remove a restrictive covenant that is in violation of specified provisions of the California Fair Employment and Housing Act without acknowledgment, certificate of acknowledgment, or further proof. By imposing new duties upon counties with respect to the imposition of the recording fee and new duties upon local county officials with respect to the redaction of unlawfully restrictive covenants, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that with regard to certain mandates no reimbursement is required by this act for a specified reason. With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.