(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)
Issue: Should C.A.R. sponsor legislation setting up a
program to remove historic unconstitutional restrictions from real property
Options: 1. Do Nothing. The restrictive
covenants that remain in title records are unenforceable and it may be very
expensive, especially at time of sale, to search them out and remove
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 offensive covenants.
Status/Summary: 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
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
The problem presented by AB 2204 and related legislation is
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
3. It will actually “redact” or remove the offensive language and not just
put additional language in front 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
The Social Security Number model. In 2007 the legislature passed AB
1168, Jones, a bill that requires “truncation” or elimination of Social
Security Numbers (SSNs) in the publicly accessible record. In the portion
of the bill regarding recorded documents, the county recorders were
required to create two databases of recorded documents. The first is the
existing database which will consist of existing (and new) recordings
stored as electronic images. Those images will be reviewed or “scrubbed” by
a software program to detect and remove SSNs. The processed documents then
become a “public” database, which is the only place (except under court
order) where a processed document is accessible to the public. The program
is phased into operation as documents are processed and the legislation’s
fee authority is due to sunset in 2017. The program may be funded out of
existing recorder modernization funds, or it may be funded by a new $1
surcharge on all recorded documents.
Would a $1 surcharge on recordings be an acceptable limit on costs for
redacting racially restrictive covenants as well?
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 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.
The California Land Title Association, which opposed AB 2204 along with
C.A.R., is interested in possible joint sponsorship of proactive
legislation to purge title records of illegal restrictions. CLTA also
favors broadening the usability of the AB 1168 "scrubbing" process.
A 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.
Should C.A.R. sponsor legislation to purge title records if it
meets the criteria expressed above?