Bill Text: CA AB985 | 2009-2010 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Real property: discriminatory restrictions.

Sponsorship: Partisan Bill (Democrat 2)

Status: (Vetoed) 2010-01-14 - Consideration of Governor's veto stricken from file. [AB985 Detail]

Download: California-2009-AB985-Amended.html

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BILL NUMBER: AB 985	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 9, 2009

INTRODUCED BY   Assembly Member De La Torre
    (   Coauthor:   Assembly Member  
Krekorian   ) 

                        FEBRUARY 27, 2009

   An act to  add Section 782.6 to the Civil  
amend Sections 12956.1, 12956.2, and 27361 of, and to add Article 3.6
(commencing with Section 27310) to Chapter 6 of Part 3 of Division 2
of Title 3 of, the Government  Code, relating to real property.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 985, as amended, De La Torre. Real property: discriminatory
restrictions. 
   (1) Existing law prohibits discrimination in housing through
restrictive covenants based on race, color, religion, sex, sexual
orientation, familial status, marital status, disability, national
origin, source of income, or ancestry 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accompanied by a statement that the covenant is repealed or void.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  similarly  declares that any 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 any specified characteristic, including,
but not limited to, race, color, religion, sex, marital status,
national origin, ancestry, familial status, disability, source of
income, or sexual orientation, by providing for payment of a penalty,
forfeiture, reverter, or otherwise, is void, except as specified.
   Existing law  also  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 the
above-specified characteristics, shall be deemed to be revised to
omit that provision. 
   This bill would require a title insurance company involved in any
transfer of real property that provides a copy of any deed or other
written instrument relating to title to real property, or any written
covenant, condition, or restriction annexed or made a part of, by
reference or otherwise, the 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 the above-specified
characteristics, with respect to any person or persons, to cause that
provision to be stricken from the deed or other instrument before
the property is transferred, except as specified.  
   Existing law also authorizes a person who holds an ownership
interest of record in property that he or she believes is the subject
of an unlawfully restrictive covenant based on race, color,
religion, sex, sexual orientation, familial status, marital status,
disability, national origin, source of income, or ancestry, to record
a restrictive covenant modification, which would include a copy of
the original document with the illegal language stricken. Before
recording the modification document, the county recorder is required
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 race, color,
religion, sex, sexual orientation, familial status, marital status,
disability, national origin, source of income, or ancestry. The
county recorder is required to make available to the public
restrictive covenant modification forms. Under existing law, a county
recorder, title insurance company, escrow company, real estate
broker, real estate agent, or association that provides a copy of a
declaration, governing document, or deed to any person is required to
place a cover page or stamp on the previously recorded document
stating that if the document contains an unlawful restriction, that
the restriction is void and may be removed by recording a restrictive
covenant modification.  
   This bill would require a county recorder, title insurance
company, escrow company, real estate broker, real estate agent, or
association that provides a copy of a declaration, governing
document, or deed to any person to also provide a restrictive
covenant modification form with instructions to that person. The bill
would authorize a title insurance company, escrow company, real
estate broker, real estate agent, or other person to record a
restrictive covenant modification, in addition to the owner of
record, and would require the county recorder to notify each owner of
record and the requester of the action taken on that request. The
bill would require the county counsel to make its determination
whether the original document contains an unlawful restriction within
a reasonable period of time, not to exceed 3 months, as specified,
and would authorize the county counsel to compile a list of phrases
identified as unlawfully restrictive language for the purpose of
expediting that determination. The bill would require restrictive
covenant modification forms to include instructions for completion
and would permit submissions on behalf of several homes or in lots.
These new duties would impose a state-mandated local program on the
county recorder and county counsel.  
   (2) Existing law requires the recorder of each county to establish
a social security number truncation program in order to create a
public record version of each official record so that the public
record is in an electronic format and is an exact copy of the
official record, except that any social security number contained in
the official record shall be truncated by redacting the first 5
digits of that number. These provisions apply to any document
recorded since January 1, 1980, as specified. If a public record
version of an official record exists, and upon a request of any
person to inspect, copy, or to otherwise publicly disclose that
record, the recorder shall make available only the public record
version of that record, and publicly disclose the official record
only in response to a subpoena or court order. The county recorder
may, upon authorization of the board of supervisors, charge an
additional fee of $1 for recording the first page of each document to
be used to implement a social security number truncation program
pursuant to these provisions. The county auditor is required, at the
request of the county board of supervisors, to verify that these fees
are used only for the purpose of the program.  
   This bill would require the recorder of each county to create a
public record version of each official record for which a restrictive
covenant modification is recorded on or after January 1, 2010, so
that the public record is in an electronic format and is an exact
copy of the official record, except that any unlawfully restrictive
covenant contained in the official record shall be redacted. If a
public record version of an official record exists, and upon request
of any person to inspect, copy, or to otherwise publicly disclose
that record, the recorder shall make available only the public record
version of that record, and publicly disclose the official record
only in response to a subpoena or court order. The county recorder
may, upon authorization of the board of supervisors, charge an
additional fee in an unspecified amount for recording the first page
of each document to be used to implement these provisions. The county
auditor is required, at the request of the county board of
supervisors, to verify that these fees are used only for that
purpose. By creating new duties for county recorders and auditors,
this bill would impose a state-mandated local program.  
   (3) This bill would make legislative findings that any limitation
on the public's right of access to the writings of public officials
and agencies made by its provisions is necessary to protect against
the risk of discrimination.  
   (4) 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, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions. 
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program:  no
  yes  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 12956.1 of the  
Government Code   is amended to read: 
   12956.1.  (a) As used in this section, "association," "governing
documents," and "declaration" have the same meanings as set forth in
Section 1351 of the Civil Code.
   (b) (1) A county recorder, title insurance company, escrow
company, real estate broker, real estate agent, or association that
provides a copy of a declaration, governing document, or deed to any
person shall  also provide a Restrictive Covenant Modification
form with instructions and  place a cover page or stamp on the
first page of the previously recorded document or documents stating,
in at least 14-point boldface type, the following:


   "If this document contains any restriction based on race, color,
religion, sex, sexual orientation, familial status, marital status,
disability, national origin, source of income as defined in
subdivision (p) of Section 12955, or ancestry, that restriction
violates state and federal fair housing laws and is void, and may be
removed pursuant to Section 12956.2 of the Government Code. Lawful
restrictions under state and federal law on the age of occupants in
senior housing or housing for older persons shall not be construed as
restrictions based on familial status."


   (2) The requirements set forth in paragraph (1) shall not apply to
documents being submitted for recordation to a county recorder.
   (c) Any person who records a document for the express purpose of
adding a racially restrictive covenant is guilty of a misdemeanor.
The county recorder shall not incur any liability for recording the
document. Notwithstanding any other provision of law, a prosecution
for a violation of this subdivision shall commence within three years
after the discovery of the recording of the document.
   SEC. 2.    Section 12956.2 of the  
Government Code   is amended to read: 
   12956.2.  (a) A person who holds an ownership interest of record
in property that he or she believes is the subject of an unlawfully
restrictive covenant in violation of subdivision (l) of Section 12955
may record a document titled Restrictive Covenant Modification. 
A title insurance company, escrow company, real estate broker, real
estate agent, or other person also may record the modification
document provided for in this section.  The county recorder may
choose to waive the fee prescribed for recording and indexing
instruments pursuant to Section 27361 in the case of the modification
document  provided for in this section  . The
modification document shall include a complete copy of the original
document containing the unlawfully restrictive language with the
unlawfully restrictive language stricken.
   (b) Before recording the modification document, the county
recorder shall submit the modification document and the original
document to the county counsel who shall determine whether the
original document contains an unlawful restriction based on race,
color, religion, sex, sexual orientation, familial status, marital
status, disability, national origin, source of income as defined in
subdivision (p) of Section 12955, or ancestry. The county counsel
shall return the documents and inform the county recorder of its
determination  within a reasonable period of time, not to exceed
three months unless extraordinary circumstances apply  . The
county recorder shall refuse to record the modification document if
the county counsel finds that the original document does not contain
an unlawful restriction as specified in this  paragraph
  subdivision. For the purpose of expediting the
determination required pursuant to this subdivision, the county
counsel may compile a list of phrases identified as unlawfully
restrictive language  . 
   (c) If a title insurance company, escrow agent, realtor, or other
person requests to record a modification document, the county
recorder shall notify each person who holds an ownership interest of
record in the property of that request and the action taken. The
requestor also shall be notified as to the action taken on the
request; however, that notice shall not include the name of any owner
of record or any confidential information regarding the property.
The notices required pursuant to this section may be made on a
postcard mailed by first-class mail.  
   (c) 
    (d)  The modification document shall be indexed in the
same manner as the original document being modified. It shall contain
a recording reference to the original document in the form of a book
and page or instrument number, and date of the recording. 
   (d) 
    (e)  Subject to covenants, conditions, and restrictions
that were recorded after the recording of the original document that
contains the unlawfully restrictive language and subject to
covenants, conditions, and restrictions that will be recorded after
the Restrictive Covenant Modification, the restrictions in the
Restrictive Covenant Modification, once recorded, are the only
restrictions having effect on the property. The effective date of the
terms and conditions of the modification document shall be the same
as the effective date of the original document. 
   (e) 
    (f)  The county recorder shall make available to the
public Restrictive Covenant Modification forms.  Those forms
shall include instructions for completion and shall permit
submissions on behalf of several homes or in lots for processing in
batches.  
   (f) 
    (g)  If the holder of an ownership interest of record in
property causes to be recorded a modified document pursuant to this
section that contains modifications not authorized by this section,
the county recorder shall not incur liability for recording the
document. The liability that may result from the unauthorized
recordation is the sole responsibility of the holder of the ownership
interest of record who caused the modified recordation. 
   (g) 
    (h)  This section does not apply to persons holding an
ownership interest in property that is part of a common interest
development as defined in subdivision (c) of Section 1351 of the
Civil Code if the board of directors of that common interest
development is subject to the requirements of subdivision (b) of
Section 1352.5 of the Civil Code.
   SEC. 3.    Ar   ticle 3.6 (commencing with
Section 27310) is added to Chapter 6 of Part 3 of Division 2 of Title
3 of the   Government Code   , to read:  


      Article 3.6.  Unlawfully Restrictive Covenant Redaction


   27310.  As used in this article, the following terms have the
following meanings:
   (a) "Official record" means the permanent archival record of all
instruments, papers, and notices as accepted for recording by a
county recorder.
   (b) "Public record" means a record that is in an electronic format
and is an exact copy of an official record except that any
unlawfully restrictive covenant contained in the copied record is
redacted. The public record shall have the same legal force and
effect as the official record.
   (c) "Unlawfully restrictive covenant" means any written covenant,
condition, or restriction annexed or made a part of, by reference or
otherwise, a deed or other instrument in violation of subdivision (l)
of Section 12955.
   27311.  (a) The county recorder of each county shall create a
public record version of each official record for which a Restrictive
Covenant Modification is recorded pursuant to Section 12956.2 on or
after January 1, 2010. The public record shall be in an electronic
format and an exact copy of the official record, except that any
unlawfully restrictive covenant contained in the official record
shall be redacted.
   (b) Nothing in this article shall be construed to restrict, delay,
or modify access to any official record, or modify any existing
agreements regarding access to any official record, prior to the
creation and availability of a public record version of that official
record. A county recorder shall not charge any new fee or increase
any existing fees in order to fund the redaction of unlawfully
restrictive covenants pursuant to this article, except as provided in
subdivision (e) of Section 27361.
   (c) Notwithstanding subdivision (a), a county recorder shall not
be required to create a public record version of an official record
if the fee authorized in Section 27314 is determined by the recorder
to be insufficient to meet the cost of creating the public record
version.
   27313.  If a public record version of an official record exists,
both of the following shall apply:
   (a) Upon a request for inspection, copying, or any other public
disclosure of an official record that is not exempt from disclosure,
a county recorder shall make available only the public record version
of that record.
   (b) A county recorder shall publicly disclose an official record
only in response to a subpoena or order of a court of competent
jurisdiction.
   27314.  (a) Each county may use funds generated by fees authorized
by subdivision (e) of Section 27361 to implement this article.
   (b) No later than June 1, 2010, the county recorder of each county
shall petition the board of supervisors in that county for the
authority to levy the fee authorized by subdivision (e) of Section
27361.
   (c) It is the intent of the Legislature that counties be permitted
to seek revenue anticipation loans or other outside funding sources
for the implementation of this article to be secured by the
anticipated revenue from the fee authorized by subdivision (e) of
Section 27361.
   27317.  A county recorder is authorized to take all actions
required by this article notwithstanding subdivision (d) of Section
27203 or any other provision of law. 
   SEC. 4.    Section 27361 of the   Government
Code   is amended to read: 
   27361.  (a) The fee for recording and indexing every instrument,
paper, or notice required or permitted by law to be recorded is four
dollars ($4) for recording the first page and three dollars ($3) for
each additional page, except the recorder may charge additional fees
as follows:
   (1) If the printing on printed forms is spaced more than nine
lines per vertical inch or more than 22 characters and spaces per
inch measured horizontally for not less than three inches in one
sentence, the recorder shall charge one dollar ($1) extra for each
page or sheet on which printing appears, except, however, the extra
charge shall not apply to printed words which are directive or
explanatory in nature for completion of the form or on vital
statistics forms. Fees collected under this paragraph are not subject
to subdivision (b) or (c).
   (2) If a page or sheet does not conform with the dimensions
described in subdivision (a) of Section 27361.5, the recorder shall
charge three dollars ($3) extra per page or sheet of the document.
The funds generated by the extra charge authorized under this
paragraph shall be available solely to support, maintain, improve,
and provide for the full operation for modernized creation,
retention, and retrieval of information in each county's system of
recorded documents. Fees collected under this paragraph are not
subject to subdivision (b) or (c).
   (b) One dollar ($1) of each three dollar ($3) fee for each
additional page shall be deposited in the county general fund.
   (c) Notwithstanding Section 68085, one dollar ($1) for recording
the first page and one dollar ($1) for each additional page shall be
available solely to support, maintain, improve, and provide for the
full operation for modernized creation, retention, and retrieval of
information in each county's system of recorded documents.
   (d) (1) In addition to all other fees authorized by this section,
a county recorder may charge a fee of one dollar ($1) for recording
the first page of every instrument, paper, or notice required or
permitted by law to be recorded, as authorized by each county's board
of supervisors. The funds generated by this fee shall be used only
by the county recorder collecting the fee for the purpose of
implementing a social security number truncation program pursuant to
Article 3.5 (commencing with Section 27300).
   (2) A county recorder shall not charge the fee described in
paragraph (1) after December 31, 2017, unless the county recorder has
received reauthorization by the county's board of supervisors. A
county recorder shall not seek reauthorization of the fee by the
board before June 1, 2017, or after December 31, 2017. In determining
the additional period of authorization, the board shall consider the
review described in paragraph (4).
   (3) Notwithstanding paragraph (2), a county recorder who, pursuant
to subdivision (c) of Section 27304, secures a revenue anticipation
loan, or other outside source of funding, for the implementation of a
social security number truncation program, may be authorized to
charge the fee described in paragraph (1) for a period not to exceed
the term of repayment of the loan or other outside source of funding.

   (4) A county board of supervisors that authorizes the fee
described in this subdivision shall require the county auditor to
conduct two reviews to verify that the funds generated by this fee
are used only for the purpose of the program, as described in Article
3.5 (commencing with Section 27300) and for conducting these
reviews. The reviews shall state the progress of the county recorder
in truncating recorded documents pursuant to subdivision (a) of
Section 27301, and shall estimate any ongoing costs to the county
recorder of complying with subdivisions (a) and (b) of Section 27301.
The board shall require that the first review be completed not
before June 1, 2012, or after December 31, 2013, and that the second
review be completed not before June 1, 2017, or after December 31,
2017. The reviews shall adhere to generally accepted accounting
standards, and the review results shall be made available to the
public. 
   (e) (1) In addition to all other fees authorized by this section,
a county recorder may charge a fee of ___ dollars ($___) for
recording the first page of every instrument, paper, or notice
required or permitted by law to be recorded, as authorized by each
county's board of supervisors. The funds generated by this fee shall
be used only by the county recorder collecting the fee for the
purpose of implementing Article 3.6 (commencing with Section 27310).
 
   (2) A county recorder who, pursuant to subdivision (c) of Section
27314, secures a revenue anticipation loan, or other outside source
of funding, for the implementation of Article 3.6 (commencing with
Section 27310), may be authorized to charge the fee described in
paragraph (1) for a period not to exceed the term of repayment of the
loan or other outside source of funding.  
   (3) A county board of supervisors that authorizes the fee
described in this subdivision shall require the county auditor to
conduct two reviews to verify that the funds generated by this fee
are used only for the purpose of implementing Article 3.6 (commencing
with Section 27310) and for conducting these reviews. The reviews
shall estimate any ongoing costs to the county recorder of complying
with subdivision (a) of Section 27311. The board shall require that
the first review be completed not before June 1, 2014, or after
December 31, 2015, and that the second review be completed not before
June 1, 2019, or after December 31, 2019. The reviews shall adhere
to generally accepted accounting standards, and the review results
shall be made available to the public. 
   SEC. 5.    The Legislature finds and declares that
Section 3 of this act imposes a limitation on the public's right of
access to the meetings of public bodies or the writings of public
officials and agencies within the meaning of Section 3 of Article I
of the California Constitution. Pursuant to that constitutional
provision, the Legislature makes the following finding to demonstrate
the interest protected by this limitation and the need for
protecting that interest:  
   In order to protect against the risk of discrimination when
government documents maintained by county recorders contain
unlawfully restrictive covenants, it is necessary to enact
legislation that minimizes the existence of unlawfully restrictive
covenants in those government documents. 
   SEC. 6.    If the Commission on State Mandates
determines that this act contains costs mandated by the state,
reimbursement to local agencies and school districts for those costs
shall be made pursuant to Part 7 (commencing with Section 17500) of
Division 4 of Title 2 of the Government Code.  
  SECTION 1.    Section 782.6 is added to the Civil
Code, to read:
   782.6.  (a) A title insurance company involved in any transfer of
real property that provides a copy of a deed or other written
instrument relating to title to real property, or any written
covenant, condition, or restriction annexed or made a part of, by
reference or otherwise, the 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 basis listed in subdivision (a) or (d)
of Section 12955 of the Government Code, as those bases are defined
in Sections 12926 and 12926.1, subdivision (m) and paragraph (1) of
subdivision (p) of Section 12955, and Section 12955.2 of the
Government Code, with respect to any person or persons, shall cause
that provision to be stricken from the deed or other instrument
before the property is transferred.
   (b) Notwithstanding subdivision (a), with respect to familial
status, subdivision (a) shall not be construed to apply to housing
for older persons, as defined in Section 12955.9 of the Government
Code. With respect to familial status, nothing in subdivision (a)
shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11,
and 799.5, relating to housing for senior citizens. Subdivision (d)
of Section 51 and Section 1360 of this code and subdivisions (n),
(o), and (p) of Section 12955 of the Government Code shall apply to
subdivision (a).