(This material is for discussion purposes only and has not been
approved by the Legislative, Equal Opportunity or Executive Committees nor
by the Board of Directors)
Should C.A.R. sponsor legislation setting up a pilot program to encourage a
county recorder to test the use of software programs to remove historic
unconstitutional restrictions from real property records?
1. Do Nothing. Existing policy would oppose legislation requiring removal
at time of sale.
2. Support legislation of others. Both the California Land Title
Association and the county clerks association have expressed interest in
proactive legislation to “scrub” title records in a way that does not add
prohibitive costs to the recording process.
3. Sponsor or Co-Sponsor C.A.R. legislation to either mask or redact the
The title records of older housing stock sometimes contain offensive
restrictive covenants that attempt to impose a "whites only" ownership
limitation, or other unconstitutional limitations, on ownership or
occupancy. While these covenants have been illegal for decades and
unenforceable since the 1950s, they may none the less give offense to
owners or prospective owners that discover them in the course of
researching title. This year C.A.R. successfully opposed legislation (AB
2204, De La Torre) imposing a time of sale purging requirement that was
estimated to cost hundreds of millions of dollars. Absent some resolution
of the issue, similar legislation is likely to continue to be proposed.
C.A.R. has been approached to consider co-sponsoring title "clean-up"
legislation with the California Land Title Association.
At the October 2008 Committee meeting staff was directed to explore
collaborating with other groups on legislation creating a proactive
alternative to time of sale redacting proposals that have been defeated in
the past. CLTA is unwilling to sponsor legislation, but will support a
C.A.R. proposal. A medium sized county recorder is willing to test a
software approach (with a $1 per document fee). The question remains as to
whether C.A.R. should sponsor legislation to create the pilot
The AB 1168 Approach. In 2007 Assemblyman Jones introduced legislation,
which eventually became law, that required county recorders to use a new
software program to "scrub" their electronic records and remove Social
Security Numbers (SSNs). The legislation effectively creates a new property
data base that is made available to the public, and which will not include
the SSN in a reported title document. In light of the potentially enormous
cost of hand processing property records to remove unconstitutional
covenants, some recorders have speculated that the same sort of software
might be used to screen out illegal covenants as well. At least one county
recorded has indicated that he would be willing to attempt such a process
on a pilot basis.
It also appears that the CLTA is unwilling to sponsor legislation creating
the program, but would be supportive of legislation of others (i.e. C.A.R.
or the recorders assn.) to do so.
The question for REALTORS is whether the issue is important enough C.A.R.
to sponsor if it is not important enough for CLTA (which is even more
immediately effected) to sponsor.
The History. Restrictive covenants have been the subject
of corrective action since 1948, when racially restrictive covenants were
struck down by the U.S. Supreme Court as unconstitutional.
The issue has been the subject of frequent legislation as well. In fact,
C.A.R. was the first interest group in California to successfully sponsor
legislation (SB 716, Lockyer, Chap. 500, Stat.s of 1987) on the subject.
That legislation, by operation of law, eliminated racial restrictions from
real estate documents. Unfortunately, the illegal restrictions are still in
the historical record, and continue to inspire legislation. Indeed, just
since 1999 the legislature has passed at least four different measures on
the subject. The area appears ripe for further activity, because
appearances continue to trump legal reality.
Existing law (Government Code 12956.1) requires deeds, governing documents
and other documents delivered in a transaction to have a cover sheet or
stamp that says:
"If this document contains any restriction based on race, color, religion,
sex, sexual orientation, familial status, marital status, disability,
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."
Existing law also provides a standardized form for a property owner to use
in recording a corrected set of CC&Rs that eliminates the restrictive
Recent Legislation. The problem presented by recent
legislation is twofold:
First, they attempt to "fix" the problem at time of sale, and don't take a
comprehensive approach that avoids burdening escrows with untimely delays
Second, no matter what, the old illegal documents are ultimately
discoverable in the property record if the owner wants to search back far
Possible guiding principles for a legislative solution. An ideal solution
for protecting the sensibilities of property owners and activists would
have (at least) the following features:
1. It would be comprehensively applied, and not be triggered by a
2. It would not excessively increase costs or create delays of title or
transfers. Sponsors will have to decide what level of cost is acceptable,
but a $1 or $2 per document cap has been suggested.
3. It will actually “redact” or remove the offensive language from the
public data base, and not just put additional language on top of it in the
chain of title.
4. It will not unduly burden county recorders and result in costs that
ultimately fall to transactions.
5. It will be self-executing and not require property owner
What about other restrictions on access to property records? If recorders
were to develop an automated system that is powerful enough to detect
racial restrictions, it might prove valuable for other sorts of searches
too. For example, current law forbids the release of a government
official’s home address over the internet. Because there is no practical
way for recorders to keep track of and restrict just those records, they
have been forced to restrict internet access for all. If government
officials that wished to mask their home address could do so by request, it
could free up significant resources of the recorder by making the public
database available on line. With appropriate controls, an electronic public
database could also lend itself to requests to mask the home address not
only of officials, but public safety employees and victims of stalking or
domestic violence as well.
A final note on the value of history - the restrictive
covenants that exist today are artifacts of an earlier, less enlightened
time. They are potentially offensive reminders of conduct that is now
neither allowed nor enforceable. Is it appropriate to remove these
evidences of the past, or should they be preserved as reminders of a past
that should not be repeated? C.A.R. has no policy on the point, but the
question has been raised in previous discussions.