Did the Legislature Revive Racial Restrictions?
By Lawrence E. Green
I. Introduction
As illogical as it may sound, the California Legislature seems to have revived racial restrictions, while at the same time, establishing a method to remove them from public records. Chapter 589 of the Statutes of 1999 (Senate Bill 1148, Burton and Pacheco), is the new law that arguably revived racial restrictions which were omitted by operation of law in 1989. It also created a new procedure to cast them out. According to the Senate Bill analysis prepared by the Office of Senate Floor Analysis, the source of the bill is the U.S. Department of Housing and Urban Development (HUD). SB 1148 required County recorders to remove “blatant racial restrictions” when requested to do so by anyone having an interest on the property. Nowhere, however, are blatant racial restrictions defined. Apparently on the assumption that affirmative steps would be taken to compel county recorders to remove blatant racial restrictions, SB 1148 provided that after January 1, 2001, the mere existence of a restrictive covenant is discrimination.
Then, in the 2000 Legislative session, the Legislature followed up on SB 1148 by enacting Chapter 291 of the statutes of 2000 (AB 1493 – Nakano). AB 1493 enacted a new procedure involving the California Department of Fair Employment and Housing. A person may now apply to the Department for a determination that a restriction is racial and a statement to be recorded.
II. Was any Legislation Necessary to Remove Racial Restrictions?
The question exists as to why, with respect to racial restrictions in deeds, any legislation was necessary in the first place. Racial covenants in deeds have been unenforceable by court as a matter of public policy since 1948. Shelley v. Kraemer (1948) 334 U.S. 1. In 1961, the California Legislature addressed restrictive covenants by adding Section 53 to the Civil Code. That section provides that real property restrictions based on sex, race, color, religion, ancestry, national origin, or disability, are void. Also in 1961, the Legislature added Section 782 to the Civil Code to make void such restrictions imposed by way of the payment of a penalty, forfeiture, reverter, or otherwise.
In 1987, then Senator, now Attorney General Lockyer, authored legislation to omit, by operation of law, racial restrictions (Chapter 500, Statutes of 1987, SB 716). This legislation added Section 782.5 to the Civil Code to provide that deeds or other written instruments, including CC&Rs, relating to real property which contain a racial restriction were deemed to be revised to omit that provision.
Regardless of the fact that racial restrictions were omitted by operation of law over ten years ago, under SB 1148 a responsibility was created for anyone having an interest in the property to affirmatively seek to have a restriction deleted. Any person who held any interest in a property subject of a restriction (which was omitted by law in 1987) was authorized to require the county recorder to remove any “blatant racially restrictive covenants.” Then the Legislature preceded to amplify on the responsibility created when it enacted AB 1493. Now an omitted restriction must be addressed through an application process. Yet, the racial covenant is the one covenant that has been deemed omitted by operation of law. Other restrictions which are prohibited by state and federal law but which are not omitted by Section 782.5 of the Civil Code, cannot be removed under the new law. Thus, a restriction which does not exist, because it has been omitted by operation of law, is the only one which was authorized to be removed through a complicated application process to the state.
III. Requirements of SB 1148
Amendment of Common Interest Development Documents and Declarations
Civil Code Section 1352.5 was added by SB 1148 to provide that the board of directors, without approval of the owners, shall “delete” (i.e. redraft the document without the offensive restriction and rerecord it) the restrictive covenant contained in any governing document and declaration in violation of the 12955 of the Government Code (i.e. no covenant or restriction based upon sex, color, race, religion, ancestry, national origin, familial status, marital status, disability, source of income).
Disclosure and Removal of Restriction
Government Code Section 12956.1 was added by SB 1148 (and subsequently amended by AB 1493). As initially enacted by SB 1148 the new section made the following additions to the law:
(1) Require recorders, title insurance companies, escrow companies, real estate brokers and agents, and associations to put a face page (with 20-point red lettering warning) on the front of “governing documents” and “declarations” as defined in Section 1351 of the Civil Code, and “deeds”. The notice must state that restrictions based on the race, color, etc., are void and the person may petition the recorder to “remove” them;
(2) Allow anyone who holds an interest in the property to apply, in writing, to the county recorder requesting that the “blatant” racial restriction be “removed”. The requester must ask for this in writing, and pay the fee set by the county recorder to have this done. The terms “interest,” “blatant” and “removed” are not defined within the bill;
(3) Any person who “files” a document for the express purpose of adding a racially restrictive covenant is guilty of a misdemeanor.
Existence of Restrictions is Discrimination
Section 12955 of the Government Code was also amended by SB 1148 to provide that discrimination includes the existence of a restrictive covenant, regardless of whether it is accompanied by a statement that the restrictive covenant is repealed or void. This statement of the existence of discrimination merely because of the existence of the restriction ignores whether the restriction is omitted by Section 782.5. This provision became operative on January 1, 2001.
IV. How AB 1493 changed the SB 1148 procedure
AB 1493 (1) eliminated the requirement of red ink, (2) changed the required print type from 20 point to 14 point and (3) added the following additional language to the notice enacted by SB 1148:
“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.”
The Legislature in 2000 then also decided to create a greater role for the state in the process rather than merely authoring someone to require the county recorder to remove a blatant racial restriction. AB 1493 amended Government Code §12956.1 to provide a new procedure, replacing the local recorder with the Department of Fair Employment and Housing.
Under AB 1493 Any person who holds an ownership interest of record in property that they believe is the subject of a restrictive covenant, may file an application with the Department of Fair Employment and Housing requesting a determination of whether the restrictive covenant violates the fair housing laws and is void. The department is required to process all applications within 90 days. Any application must be in writing, contain a copy of the document, and identify the location within the document where the restrictive covenant is located. Then, if the department determines that the document contains a restrictive covenant that violates the law, it is required to provide the applicant with a written statement entitled "RESTRICTIVE COVENANT MODIFICATION" that sets forth the determination.
The statement provided by the Department must include the page and line numbers of any void restrictive covenant and may be recorded with the document. It must also include the following language which the applicant may complete and sign for purposes of recording: I (We) __________ have an ownership interest of record in the property located at __________ (Address) that is the subject of this document. The Department of Fair Employment and Housing has determined that this document contains a restrictive covenant that violates the law and is void. Pursuant to Section 12956.1 of the Government Code, this document is being recorded solely for the purpose of eliminating that restrictive covenant as shown on page(s) __ of the document recorded on __ (Date) in book __ and page __, or instrument number __ of the official records of the County of _____. No other changes have been made. If executed at any place, within or without this state: I certify (or declare) under penalty of perjury under the laws of the State of California that the foregoing is true and correct.
____(date and place)______ ____Owner(s) Signature(s)____
The applicant may strike out a void restrictive covenant identified by the department, complete and attach a copy of the written statement from the department to the front of the document, and cause the modified document to be recorded.
VI. Revisiting the law
An alternative to continuing state involvement, pursuant to an application process which highlights specific racial restrictions, would be a single county wide recording. Each county district attorney or recorder could file one notice deleting all void and unenforceable restrictions wherever they appear in recorded documents. A blanket recorded deletion would acknowledge, on the public record, the omission of these offensive and void restrictions from public records. Rather than a piecemeal approach, this could target all void and unenforceable restrictions and send a strong affirmative message that the government takes action to place a statement in the public records repudiating such restrictions. The governmental authorities rather than individuals are better suited to make a statement of public policy applicable to all restrictions wherever and whenever recorded.
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