Governor Brown Signs Legislation Increasing Recording Fees; CLTA Takes Steps Towards Implementation
Tuesday, October 3, 2017
October 3, 2017
In a large signing ceremony attended by legislators and affordable housing advocates, Governor Brown signed Senate Bill 2 (Atkins), as well as a package of other bills intended to address the issue of affordable housing, into law. SB 2 imposes a surcharge on recorded documents in order to raise funds for affordable housing.
The bill passed the Legislature over the objections of a coalition of industry groups led by CLTA, buoyed by intense lobbying from the Governor and Democratic leadership. A final vote on the bill was delayed until the very end of the legislative session, allowing supporters to round up enough votes for passage.
The new recording fee surcharge is effective commencing January 1, 2018. The current recording fee will increase by $75 per real estate instrument, per each single transaction per parcel of real property. This is in addition to other recording fees that may apply to a document. The maximum extra fee allowable in connection with SB 2 is $225 per single transaction, per parcel.
There are, however, two exemptions to the new surcharge: the first exemption is for any real estate instrument recorded in connection with a transfer subject to the documentary tax; the second exemption is on any real estate instrument recorded in connection with a transfer of real property that is a residential dwelling to an owner-occupant. Unfortunately, the term “in connection with” is not defined. And in fact, it is unclear whether a county recorder will know if a document, whenever it is recorded, is recorded in connection with an exempt transfer. Under the new law a real estate instrument is defined to include, but not be limited to, a list of 22 documents.
Under the direction of its Executive Committee, CLTA staff has sent a letter to the County Recorders’ Association of California asking them to join the CLTA in a working group to discuss how to best implement SB 2 in all 58 counties. The CLTA’s goal is to attempt to craft, as much as possible, a uniform approach to implementing the new legislation to best serve consumers, recorders and the settlement service providers acting on behalf of consumers. The CLTA believes that a recorder / title industry partnership will facilitate the sharing of expertise and assist in the development of a practical and effective implementation plan.
In the meantime, the CLTA’s new Settlement Committee, chaired by Nancy Tarr of First American, has been asked by CLTA President Jeff Kerns to start evaluating SB 2 and provide ideas for implementation.