BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       AB 1974|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |
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                                   THIRD READING 


          Bill No:  AB 1974
          Author:   Gallagher (R)
          Amended:  8/19/16 in Senate
          Vote:     21 

           SENATE GOVERNANCE & FIN. COMMITTEE:  7-0, 6/15/16
           AYES:  Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach,  
            Pavley

           SENATE APPROPRIATIONS COMMITTEE:  Senate Rule 28.8

           ASSEMBLY FLOOR:  79-0, 5/5/16 (Consent) - See last page for  
            vote

           SUBJECT:   County recorder: recordation of documents


          SOURCE:    County Recorders Association of California


          DIGEST:  This bill specifies procedures for the re-recording of  
          recorded documents.


          Senate Floor Amendments of 8/19/16 narrow the cases in which a  
          document may be re-recorded and makes other related and  
          technical changes.


          ANALYSIS:  


          Existing law:








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          1)Establishes a recorder in each county that is responsible for  
            examining and recording all documents that deal with  
            establishing ownership of land in counties, such as title  
            documents.


          2)Prescribes procedures for the recording of documents,  
            specifically:


             a)   A document must be submitted to a county recorder along  
               with the necessary recordation fees. 


             b)   If the document meets the requirements in statute or  
               local ordinance that apply to that type of document, the  
               recorder must record it.  


             c)   The recording statutes specify in minute detail the form  
               and requirements that documents must meet.  


          3)Requires some recorded documents to be acknowledged-affirmed  
            by the parties to the transaction as their action-and allows  
            the recording of other documents to be done without  
            acknowledgement.


          This bill:


          1)Requires a document that is presented to a county recorder for  
            re-recording to be executed and acknowledged or verified as a  
            new document, unless any of the following apply:


             a)   The document is exempt from acknowledgement and  
               execution under current law, 


             b)   The document is presented solely to correct a recording  







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                                                                    Page  3


               sequence, or


             c)   The document is presented solely to make a minor  
               correction without acknowledgement or execution if the  
               document is presented along with a corrective affidavit  
               that sets out the information corrected, is certified by  
               the party submitting the affidavit under penalty of  
               perjury, and is acknowledged by the person presenting it.


          2)Defines minor corrections to include changes to:


             a)   An incorrect or missing address if the rerecorded  
               document will be returned to the party whose information is  
               being corrected, 


             b)   An incorrect or missing amount of tax due upon the  
               recording of the document, and


             c)   A clarification of illegible text.  


          3)Requires the re-recorded document to include a cover sheet  
            that states the reason for re-recording.


          4)Clarifies that changing the sequential numbers assigned to a  
            document do not require the document to be executed as a new  
            document.


          5)Provides that, when correcting a recording sequence, the  
            intent of the parties regarding the priority of recorded  
            documents shall be controlling regardless of the sequence of  
            recording, and state that this provision is declaratory of  
            existing law.  


          Background








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                                                                    Page  4



          Recorded documents sometimes need to be re-recorded in order to  
          correct an error in a previously recorded document or to change  
          a name or other details.  The County Recorders Association  
          estimates that annually about 3,500 documents in California are  
          re-recorded.  There is no formal procedure to re-record  
          documents in statute, leading county recorders to establish  
          their own procedures for doing so that can vary across counties.  
           Some counties have allowed minor corrections to recorded  
          documents without requiring acknowledgement and execution of a  
          new document, while others require the document to be recorded  
          as if it were a new document.  Entities such as mortgage  
          brokers, lenders, and escrow officers may do business in  
          multiple counties, so the County Recorders Association wants to  
          standardize this process across all counties.


          Comments


          1)Purpose of the bill.  Recorded documents are used to inform  
            determinations of property rights and other legal matters.   
            But errors in recorded documents occasionally occur, and state  
            law does not specify a process for re-recording documents in  
            order to correct those errors.  This lack of a defined process  
            leads to potential uncertainty over the accuracy or veracity  
            of the re-recorded documents.  In addition, lenders and other  
            entities that frequently record documents in multiple counties  
            face a lack of consistency across counties when trying to  
            correct errors in recorded documents.  AB 1974 establishes a  
            standardized process for county recorders to follow when  
            re-recording documents and provides a streamlined process for  
            correcting minor errors, such as an incorrect name.  This  
            streamlined process avoids the need to track down all parties  
            to a recorded document for a new acknowledgement and  
            execution, saving time and money.  At the same time, AB 1974  
            includes a strong safeguard to ensure that this process is not  
            abused by requiring certification under penalty of perjury  
            that the information is true.  AB 1974 is a commonsense fix to  
            provide a guarantee of accuracy by codifying practices that  
            many county recorders are already following.










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          2)Balancing act.  The streamlined process in AB 1974 reduces the  
            time and money needed to make minor corrections, relative to  
            requiring the document to be re-recorded as new.  But that  
            process only applies to a narrow set of circumstances, such as  
            some incorrect addresses.  There are other corrections that  
            this bill does not authorize to be changed through the  
            streamlined process, such as corrections to parcel numbers,  
            that are seen as uncontroversial by some.  In their view,  
            completing an entirely new recording for these changes could  
            have significant costs and could delay the ability of  
            assessors to promptly and correctly assess property.  Others  
            see the potential for significant consequences if those  
            changes are fraudulently made.  Historically, county recorders  
            and county counsels have followed the processes that they feel  
            are necessary to insure the integrity of recorded documents.  


          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   Yes


          SUPPORT:   (Verified8/22/16)




          County Recorders Association of California (source)
          California Land Surveyors Association




          OPPOSITION:   (Verified8/22/16)


          None received




          ASSEMBLY FLOOR:  79-0, 5/5/16
          AYES:  Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,  
            Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,  
            Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,  







                                                                    AB 1974  
                                                                    Page  6


            Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier,  
            Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,  
            Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger  
            Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey,  
            Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes,  
            McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,  
            O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,  
            Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,  
            Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
          NO VOTE RECORDED:  Beth Gaines

          Prepared by:Anton Favorini-Csorba / GOV. & F. / (916) 651-4119
          8/22/16 22:41:11


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