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AB-1466 Real property: discriminatory restrictions. (2021-2022)

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Date Published: 02/20/2021 04:00 AM
AB1466:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1466


Introduced by Assembly Members McCarty, Bonta, and Chiu
(Coauthors: Assembly Members Burke and Ting)
(Coauthor: Senator Wiener)

February 19, 2021


An act to amend Sections 12956.1 and 12956.2 of the Government Code, relating to real property.


LEGISLATIVE COUNSEL'S DIGEST


AB 1466, as introduced, McCarty. Real property: discriminatory restrictions.
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includes the existence of a restrictive covenant, regardless of whether accompanied by a statement that the covenant is repealed or void.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 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 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 insurance company, escrow company, real estate broker, real estate agent, or other person to record a Restrictive Covenant Modification. This bill would require 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, to identify whether any of the documents contain an unlawfully restrictive covenant, as specified. If the title insurance company identifies unlawfully restrictive language, the bill would require the title insurance company to record a modification document. The 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, as provided. The bill would authorize the county counsel to compile a list of phrases identified as unlawfully restrictive language for the purpose of expediting this determination. 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.
By imposing 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, 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 the statutory provisions noted above.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: 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 Sections 4080, 4135, and 4150 or Sections 6528, 6546, and 6552 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 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, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, veteran or military status, genetic information, 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 of paragraph (1) shall not apply to documents being submitted for recordation to a county recorder.
(3) A county recorder, title insurance company, escrow company, or association that delivers a copy of a declaration, governing document, or deed directly to a person who holds an ownership interest of record in property shall also provide a Restrictive Covenant Modification form with procedural information for appropriate processing along with the document.
(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) (1) A person who holds an ownership interest of record in property that the person 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. document. The modification document shall include a complete copy of the original document containing the unlawfully restrictive language with the unlawfully restrictive language stricken.
(2) (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, shall identify whether any of the documents contain an unlawfully restrictive covenant as specified in paragraph (1).
(B) If the title insurance company identifies unlawfully restrictive language as specified in subparagraph (A), the title insurance company shall record a modification document as provided in paragraph (1).
(C) A title insurance company may work in conjunction with, including, but not limited to, public interest lawyers, law schools, nonprofit organizations, or activists groups with expertise in identifying unlawfully restrictive language in order to implement this paragraph.
(b) (1) 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 language in the original document contains an unlawful restriction based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, veteran or military status, 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. determination within a period of time specified in paragraph (2). 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 or the modification document contains modifications not authorized by this section. 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.
(2) (A) For documents recorded pursuant to paragraph (1) of subdivision (a), the period of time shall be a reasonable period of time, not to exceed three months, from the date the request for recordation is made, unless extraordinary circumstances apply.
(B) For documents recorded pursuant to paragraph (2) of subdivision (a), the period of time shall not exceed 30 days from the date the request for recordation is made.
(c) If a person requests to record a modification document, that person shall provide a return address in order for the county recorder to notify this person of the action taken by the county counsel on the respective property. The notice required pursuant to this subdivision 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. forms onsite in an appropriately designated area, or online on the county recorder’s internet website, either of which shall be deemed to satisfy the requirement of paragraphs (1) and (2) of subdivision (b) of Section 12956.1 to provide a Restrictive Covenant Modification form if the procedural information for appropriate processing is attached to the form. Those forms shall permit multiple submissions on behalf of different homes and for processing homes in batches with respect to a modification document that affects multiple homes or lots.

(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 Section 4100 or 6534 of the Civil Code if the board of directors of that common interest development is subject to the requirements of subdivision (b) of Section 4225 or of subdivision (b) of Section 6606 of the Civil Code.

SEC. 3.

 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.