BILL ANALYSIS Ó AB 1974 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 1974 (Gallagher) As Amended August 19, 2016 Majority vote -------------------------------------------------------------------- |ASSEMBLY: |79-0 |(May 5, 2016) |SENATE: |39-0 |(August 23, | | | | | | |2016) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: L. GOV. SUMMARY: Establishes procedures for the re-recording of recorded documents. The Senate amendments revise and recast the provisions of the bill to provide for a more comprehensive procedure for re-recording documents and to specify documents that are exempt from this procedure but are, instead, subject to more limited requirements. FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. COMMENTS: AB 1974 Page 2 1)Bill Summary. This bill establishes procedures for the re-recording of recorded documents. The bill 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 existing law; b) The document is presented solely to correct a recording sequence; or, c) The document is presented solely to make a minor correction. This bill specifies, pursuant to b), above, that the intent of the parties with regard to the priority of recorded documents shall be controlling regardless of the sequence of recording by a county recorder or the sequence of recording specified in instructions given by a submitter to a county recorder. This provision is declaratory of existing law, and any re-recording of documents to change the sequential numbers assigned to a document by the recorder shall not require the document to be executed and acknowledged or verified as a new document. A document presented solely to make a minor correction must be accompanied by a corrective affidavit, which must be attached to the original recorded instrument, paper, or notice; set out the information corrected; be certified by the party submitting the affidavit under penalty of perjury; and, be acknowledged pursuant to existing law. The bill defines "minor correction" to include any of the following: AB 1974 Page 3 a) An incorrect or missing address of the party to which the instrument, paper, or notice is to be returned following recording pursuant to existing law; b) A clarification of illegible text pursuant to existing law; c) An incorrect or missing printed or typed name of an individual or entity near the signature pursuant to existing law; or, d) An incorrect or missing documentary transfer tax amount due pursuant to existing law. This bill requires each re-recorded instrument, paper, or notice to include a cover sheet that complies with existing law governing the format of documents submitted for recording and states the reason for re-recording. This bill makes conforming changes to existing law, and provides that no reimbursement is required by the bill. This bill is sponsored by the County Recorders Association of California. 1)Author's Statement. According to the author, "Under current law, there is no codified way to re-record documents in county recorder offices. This bill would set a standard procedure for re-recording documents. This bill will ensure records remain accurate when being re-recorded and will help in keeping local government efficient." 2)Background. County recorders are responsible generally for examining and recording all documents that deal with establishing ownership of land in counties. This includes the recording of title documents, notes, and home loan payoffs by AB 1974 Page 4 homeowners, title companies, mortgage companies and government agencies involved in real estate transactions. Documents such as deeds, loan documents, easements, power of attorney, liens, and other documents which affect title to or possession of real property need to be re-recorded when there is an error in a previously recorded document or there needs to be a change in name or other details. There is no formal procedure in statute to re-record documents. According to the County Recorders Association of California, sponsor of this measure, county recorders each have their own procedure, which creates uncertainty over the accuracy and correct procedure for re-recording. 3)Arguments in Support. The County Recorders Association of California, sponsor of this measure, writes, "AB 1974 would create a formal procedure for re-recording documents. This will end consumer confusion when fixing errors in previously recorded documents." 4)Arguments in Opposition. None on file. Analysis Prepared by: Angela Mapp / L. GOV. / (916) 319-3958 FN: 0004776