CLTA Bulletin
Bulletin 08/09-87 -- February 18, 2009
TO: CLTA REGULAR MEMBER HOMEOFFICES, BOARD OF GOVERNORS & COMMITTEE MEMBERS
FR: CRAIG C. PAGE, EXECUTIVE VICE PRESIDENT AND COUNSEL
RE: POST-SB 133 MARKETING LIMITATIONS & PROPOSED REGULATIONS
The Department’s current view of existing law and regulations regarding property profiles and farm packages:
The Department of Insurance (“CDI”) has expressed an interest in the breadth of the property profile and farm information provided by the title insurance industry to potential referral sources. Specifically, it is concerned that what has been distributed may exceed the statutory exception found in Insurance Code Section 12404.1. The relevant portion of this statute provides, in essence, that title companies are permitted to provide only:
- Names of owners of record
- Descriptions of real property
- Property characteristics of the kind maintained by the County Assessor, which includes, but is not limited to the following:
- The year of construction of improvements to the property
- Their square footage
- The number of bedrooms and bathrooms of all dwellings
- The property's acreage, and
- Other attributes of or amenities to the property, such as swimming pools, views, zoning classifications or restrictions, use code designations, and the number of dwelling units of multiple family properties
It is important to note that if this section is interpreted consistent with the view(s) of some within the CDI, the law would effectively prohibit the industry from providing deeds, deeds of trust and other documents found in the County Recorders’ Office.
The CDI is requesting proposed regulatory language from CLTA:
In response to the regulator’s interest, a small CLTA delegation met on several occasions with the CDI’s executive, legal and enforcement groups. Most recently, this delegation met with Special Counsel to the Commissioner, the General Counsel of the Department of Insurance and its enforcement staff February 2, 2009.
It was during this meeting that we heard for the first time that the Department was willing to entertain the possibility of implementing a clarifying regulation drafted by the CLTA. The proposed regulation would be narrowly tailored to allow for the non-discriminatory distribution of property profiles.
The profiles would contain basic information such as a typical cover sheet, the vesting deed, and open deeds of trust that would be delivered to the recipients in a non-customizable format printed with the company’s logo on each page. Implicit in the CDI’s suggested language is its belief that anything that can be “manipulated” or goes beyond it (e.g., aerial photos, school information, and demographics) would be considered a violation of Insurance Code Section 12404.
The CDI’s invitation to CLTA to craft proposed regulatory language did not include any suggestion that there would be consideration of a provision allowing for the distribution of farm information beyond that specifically set forth in the narrow exception discussed above. Apparently, the CDI currently believes that any data provided beyond the exception or provided based on databases housed outside the individual Assessors’ Offices (i.e., County Recorders’ Offices) could be viewed as a possible violation of the law, resulting in an enforcement action against both the title company and its certified marketing representative.
The Department has asked the CLTA SB 133 Committee to provide it with a draft of the proposed rule within the next two (2) weeks and the CLTA Board of Governors authorized the Committee to complete the task. At the meeting, it was also decided that the Association would provide its members with a summary of the Department meeting.
CLTA is currently crafting potential regulatory language and is seeking industry feedback:
Given the short turn-around time requested by the CDI, CLTA is trying to formulate regulatory language that clarifies the above-mentioned issues so that both the CDI, and title companies operating in California, have a clear understanding about what are, and are not, allowable activities.
If you have proposed language or suggestion for inclusion in this language, please forward your written comments to mail@clta.org.
