CLTA News Express
An Express Article from the California Land Title Association
Governor Vetoes Restrictive Covenant and Matricula Consular Bills, Signs Buyer’s Choice Act
Bulletin 09/10-35 - October 12, 2009
Restrictive Covenant Bill Vetoed by Governor
AB 985 (De La Torre) was vetoed by the Governor over the weekend. If the bill had been signed into law, it would have required county recorders to create a dual records system made up of "official records" which contain unlawful restrictive covenants and "public records" which are an exact copy of the official record, but with the unlawful restrictions redacted. In addition, the bill would have required title companies, homeowners associations and real estate professionals to hand out potentially unnecessary forms to consumers involved in real estate transactions, loan refi’s, etc., creating unneeded confusion in the escrow process.
Furthermore, the bill provided for a recording fee of up to $2.00 per document in the first year of implementation and did not have a cap on the fee in subsequent years. Under such terms, the County Recorders responsible for charging the fee would have been able to raise the fee by an unspecified amount if they had determined that additional funds were necessary to implement the new mandates.
The bill, which had a tumultuous course through the Legislature and garnered a substantial amount of opposition by the time it reached the Senate, underwent substantial last-minute amendments in an attempt to address opponents’ concerns. Unfortunately, each amendment made the bill worse.
While CLTA made a concerted effort to work with the author’s office to reach an agreement that would improve the existing statutory process for finding and removing these offensive restrictions from antiquated documents, we were unable to reach a reasonable compromise and were forced to request a veto from the Governor’s office. The CLTA helped coordinate the opposition and veto efforts with other groups representing real estate professionals, home owners associations, and anti-tax associations. The association is pleased that its hard work paid off.
Matricula Consular I.D. Bill Vetoed by Governor
AB 442 (Arumbula), legislation on Matricular Consular identification, was one of a group of bills vetoed by the Governor this past weekend. The veto was a result of concerns raised by the California Land Title Association and other associations representing escrow and notary professionals.
The bill had passed both houses of the legislature on partisan votes.
AB 442 was a controversial measure that would have allowed the use of the Matricula Consular identification card, created by the Mexican government, for notarization if the person lacked a California Drivers’ license or other similar photo ID.
The CLTA and other groups opposed to the bill originally sought a carve-out for real estate transactions from the bill, given the potential use of the document in fraudulent transactions. Unfortunately, the author of the bill rejected the amendments, forcing the CLTA to seek a veto of the bill. The CLTA helped coordinate opposition to AB 442 and was joined by the California Escrow Association and the National Notary Association, who also aggressively lobbied the bill and were helpful in getting a veto.
Governor Signs Buyer’s Choice Act into Law
Measure to take Effect Immediately as Urgency Statute
The Governor signed AB 957 (Galgiani), also known as the Buyer's Choice Act, over the weekend amidst a spate of political gamesmanship that put its passage into question. While the bill had almost no opposition in the Legislature before its signing, it nevertheless faced an uncertain future as one of hundreds of bills that could have been vetoed by a Governor unhappy with the progress of talks over water legislation.
The bill, which takes effect immediately as an urgency statute, prohibits a seller who acquired title to residential real property at a foreclosure sale from requiring a buyer to purchase title insurance, or escrow services from a company chosen by the seller as a condition of receiving offers or selling the residential real property. A transaction subject to the act would not be invalidated solely because of the failure of any person to comply with any provision of the Act. The measure is effective only until January 1, 2015, unless extended by the Legislature.
For commonly asked questions surrounding AB 957, please see the CLTA’s Buyer’s Choice Act FAQ.
