Michael Belote, Esq.

By Michael Belote, Esq., California Advocates, UTA California Lobbyist

Perhaps it stands to reason that California, which takes pride in claiming to be the eighth-largest economy in the world, if we were a country, would also have a prodigious output of new legislation. Every year the California Legislature proposes around 2,500 new pieces of legislation, passing about 40% of these to the Governor for signature. For his part, Governor Brown believes that we over-legislate in California, but he still signed 808 of the bills sent to him. Most take effect in January.

Of the 40 bills introduced in 2015 of interest to UTA, 17 were signed into law and three were vetoed. The following represent a selection of those bills signed into law and taking effect upon the New Year:

• AB 139: Revocable Transfer on Death Deed. This bill adds California to the growing number of states permitting a non-probate transfer upon death of real property, using a Revocable Transfer on Death Deed. This “RTOD” must be signed, dated, acknowledged, and recorded to be effective. The RTOD is void if at time of death, the property is titled in joint tenancy or community property with right of survivorship. The new law includes provisions relating to priority of creditor’s claims. The authority to execute RTODs will expire, or “sunset”, on January 1, 2021.
• AB 807: Private Transfer Fees. AB 807 adds specific provisions to the law relating to private transfer fees included in deeds, security instruments or other documents affecting the transfer of real property executed prior to January 1, 2008. In certain cases, these documents must be re-recorded in order to be enforceable.
• AB 964: Electronic Security Breaches. This bill clarifies the law obligating parties who hold unencrypted personal information to disclose security breaches by clarifying that “encrypted” means information “ rendered unusable, unreadable or indecipherable to an unauthorized person through a security technology or methodology generally accepted in the field of information technology”.
• AB 1267: False Liens and Encumbrances. Expands the current law prohibiting the recordation of false liens or encumbrances against public safety officials to cover such recordings against any person.
• SB 474: Auctions. Eliminates the credit bid exemption from the law requiring disclosure of “shill” bids in real estate auctions. Eliminating this exemption should not affect trustees in nonjudicial foreclosure sales in any way, since trustees are acting pursuant to instructions from lenders-hence, no “shill” bid has occurred.
• SB 588: Wage Liens. Authorizes the state Labor Commissioner to act as levying officer in execution sales to enforce liens for proven allegations of unpaid wages which remain unpaid after a specified period.

An additional bill was enacted which deserves special clarification. AB 731 is an annual “maintenance of the codes” bill, which is intended to make entirely nonsubstantive clean-up changes in the law. This bill repealed duplicative sections of the Homeowner’s Bill of Rights, but some people incorrectly interpreted the bill as having repealed the law itself. Not to be shouting here, but AB 731 DID NOT REPEAL THE HOMEOWNER’S BILL OF RIGHTS, AND DO NOT LISTEN TO ANYONE CLAIMING OTHERWISE!

In terms of vetoes, Governor Brown vetoed measures dealing with mortgage debt forgiveness, because of revenue losses to the state, and a second bill dealing with fines for health and safety violations of local ordinances.

Finally, two important bills from this year will carry over to 2016. AB 1335 is the bill proposing a $75 surcharge on the recording of most real estate documents, in order to fund the development of affordable housing. This bill remains alive for possible action next year. Second, SB 290 is the UTA-sponsored bill providing a remedy when assessment lien foreclosure documents cannot be served on unit owners. UTA has had extensive meetings with interested parties on the bill, and we remain hopeful to find a legislative solution during 2016.