BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
AB 1373 (Lieu)
As Amended June 2, 2010
Hearing Date: June 22, 2010
Fiscal: Yes
Urgency: No
BCP:jd
SUBJECT
Advertising: Grant Deed Copy Services
DESCRIPTION
This bill would restrict the activities of grant deed copy
services by:
prohibiting misleading representations about the necessity of
obtaining a copy of a grant deed and that the copy service is
a governmental entity or affiliated with such an entity; and
requiring specific disclosures that would inform homeowners
that they may obtain a copy of their grant deed directly from
the county recorder.
BACKGROUND
When purchasing a home, individuals generally receive a copy of
their "grant deed" at the close of escrow. That deed acts to
transfer the title of property from one individual to another,
is recorded in the county clerk's office, and must be filled out
in the presence of a notary. Concerns have recently arisen
about third party "grant deed copy services" that encourage a
homeowner to pay a significant sum for a copy of their grant
deed - those same deeds can be purchased directly from the
county recorder for a smaller fee.
Regarding the current problem, the Sacramento Bee's June 10,
2010 article entitled "Officials: Beware of companies charging
large fees for public records" reported that:
Sacramento County officials advise people to beware of
private companies charging fees to provide copies of public
(more)
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records that can be obtained for much less directly from the
county offices.
A Southern California-based company is sending notices that
offer its services for fees of $87 to $122 or more for
copies of public records, when copies of those records may
be purchased from the county for an average cost of $15,
according to a county news release.
In response to the above scams targeting homeowners, this bill
seeks to restrict the activities of grant deed copy services by
prohibiting certain misleading representations and requiring
specific disclosures.
CHANGES TO EXISTING LAW
Existing law provides that certain advertising-related practices
are unlawful and makes a violation of those provisions a crime.
(Bus. & Prof. Code Sec. 17530 et seq.)
Existing law states that it is unlawful for any person to make
any untrue or misleading statements in any manner in connection
with the offering or performance of any assessment reduction
filing service, as defined. (Bus. & Prof. Code Sec. 17537.9.)
This bill would state that is unlawful for any person, firm,
corporation, association, or any other business entity to make
any untrue or misleading statements in any manner in connection
with the offering or performance of a grant deed copy service.
This bill would provide that an "untrue or misleading statement"
includes, but is not limited to, any representation with regards
to property identified by its address or assessor's parcel
number that any of the following is true:
that due to property foreclosures and loan modifications
in the county where the property is located, the property
owner should obtain a copy of his or her grant deed or
other record of title;
that a governmental entity, or any other entity that
includes in its name words that could lead a person to
reasonably believe that the entity is affiliated with the
government, has recommended that a property owner should
have a copy of his or her grant deed or other record of
title; or
that the offeror of the grant deed copy service is, or
is affiliated with, any governmental entity. A violation
of this prohibition includes, but is not limited to, the
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following:
o The misleading use of a governmental seal,
emblem, or other similar symbol.
o The use of a business name including the words
"title" or "grant deed" or "public record" and the
word "agency," "bureau," "department," "division,"
"federal," "state," "county," "city," or "municipal,"
or the name of any city, county, city and county, or
any governmental entity.
o The use of an envelope that simulates an
envelope containing a government check, tax bill, or
government notice or an envelope that otherwise has
the capacity to be confused with, or mistaken for, an
envelope sent by a government entity.
o The use of an envelope or outside cover or
wrapper in which a solicitation is mailed that does
not bear on its face in capital letters and in
conspicuous and legible type the following notice:
"THIS IS NOT A GOVERNMENT APPROVED OR AUTHORIZED
DOCUMENT."
o That there is a fee payment deadline to obtain
a copy of a property owner's grant deed or other
record of title.
This bill would provide that it is unlawful to offer to perform
a grant deed copy service without providing a specified
disclosure, in all caps, that the service is not associated with
any governmental entity, that the individual can obtain a copy
of their grant deed from the county recorder, and the fee for
the copy of the grant deed in that county.
This bill would require the above disclosure to be placed at the
top of each page of every advertisement or promotional material
disseminated by an offeror of a grant deed copy service and
printed in 14-point boldface type enclosed in a box formed by a
heavy line. That disclosure must also be recited at the
beginning of every oral solicitation or broadcast advertisement,
and delivered in printed form before any person who responds is
obligated to pay for the service.
This bill would define "grant deed copy service" as any service
performed or offered to be performed for compensation in
connection with obtaining a copy from the county recorder of a
property owner's grant deed or other record of title and
includes a public records copy service.
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COMMENT
1. Stated need for the bill
According to the author:
AB 1373 ends [a] despicable practice by making it illegal
for any person, association, or other business entity to
make any untrue or misleading statements in any manner that
connects with the offering or performing of a Grant Deed
copy service. This is defined as any service performed, or
offered to be performed, for compensation in connection with
obtaining a copy from the county recorder of a property
owner's Grant Deed or other record title.
This bill would also make it illegal to [] send the mailing
without making important disclosures, including clearly
disclosing that they are not affiliated with any government
agency. Under AB 1373, all future solicitations must print
in boldface type, "THIS IS NOT A GOVERNMENT APPROVED OR
AUTHORIZED DOCUMENT." Furthermore, under this bill, these
solicitations would also have to declare that consumers have
the right to obtain their grant deeds from their county
recorder for a nominal charge.
2. Proposed restrictions on grant deed copy services
This bill seeks to restrict the ability for grant deed copy
services to mislead homeowners into requesting a document, the
"grant deed," which can be requested directly from their county
recorder's office for between $10 and $15. The author further
asserts that one company is charging the owner $167 for a copy
of these documents, that Riverside County alone has received 459
requests already this year, and that "[a]t $167.00 per
homeowner, the so-called Title Compliance Office has already
collected $76,653.00 in fees from homeowners to date." The
consumer protections implemented by AB 1373 come in the form of
specific prohibitions and required disclosures.
a. Prohibitions
This bill would make it unlawful for a business entity to make
any untrue or misleading statements in connection with
offering, or performing, a grant deed copy service. This bill
would codify three specific activities as non-exclusive
examples of those statements: (1) that due to foreclosures and
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loan modifications, the owner should obtain a copy of their
deed; (2) that a government entity has recommended that a
property owner should have a copy of their deed; and (3) that
the offeror is, or is affiliated with, any government entity.
For purposes of affiliation with a government entity, the bill
provides that it is a violation to misleadingly use a
governmental symbol, use a business name containing specified
words, use an envelope that may be confused with that of a
governmental entity, or use an envelope that does not state:
"THIS IS NOT A GOVERNMENT APPROVED OR AUTHORIZED NOTICE."
All of those prohibitions appear to directly address the scam
facing Riverside, Sacramento, and other counties. As an
example of the problem facing homeowners, the author's office
provided the Committee with an actual solicitation letter -
that letter informs the resident that the company, whose name
sounds like an official federal entity, recommends that owners
should have an official or certified copy of their grant deed,
and that the deed will demonstrate that they have an ownership
interest in the property. The fee charged for that service is
$167, and includes a fee payment deadline. Although the
letter does state that the company will obtain an official
certified copy of the grant deed from the County Recorder's
office, and that the company is a private non-governmental
entity, it does not inform consumers that they have the
ability themselves to request a copy of their deed for a
fraction of the cost.
It should also be noted that these homeowners should already
have a copy of their grant deed, and that actually requesting
another copy of their deed appears to be unnecessary in most
circumstances. If a homeowner does desire a copy of their
deed - this bill would not prohibit them from purchasing one
from these companies, but it would just ensure that they are
informed of their ability to directly request a copy from the
county recorder (for a significantly lower price). Homeowners
who do go directly to the county recorder would pay around
$15, as opposed to $167, for a copy of a document that they
already received when they closed escrow.
b. Disclosure requirements
To help ensure that homeowners understand that they can, on
their own, request a copy of a grant deed from the county
recorder for around $15, the bill includes several disclosures
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that must be provided to the homeowner, be placed in
advertisements, and be recited at the beginning of every oral
solicitation. That disclosure language would state:
THIS SERVICE TO OBTAIN A COPY OF YOUR GRANT DEED OR OTHER
RECORD OF TITLE IS NOT ASSOCIATED WITH ANY GOVERNMENTAL
AGENCY. YOU CAN OBTAIN A COPY OF YOUR GRANT DEED OR OTHER
RECORD OF TITLE FROM THE COUNTY RECORDER IN THE COUNTY
WHERE YOUR PROPERTY IS LOCATED FOR [AMOUNT OF FEE FOR THE
COPY OF A GRANT DEED OR OTHER RECORD OF TITLE IN THAT
COUNTY].
While this bill would not prohibit grant deed copy services
from operating in California, the above clear disclosure,
combined with the prohibitions discussed in Comment 2(a) would
act to address the arguably misleading statements currently
being provided to homeowners. If those individuals are fully
informed, including having knowledge of the actual cost for
them to go to the county recorder and request the deed, those
individuals can make a decision about whether or not to pay
for that service. As a practical matter, a homeowner would be
unlikely to respond to a solicitation from a company offering
to provide a copy of their grant deed for $167 when the actual
disclosed cost of that deed is significantly less.
3. Entities covered by AB 1373
The prohibitions contained within this bill would apply to a
"grant deed copy service," which is defined as "any service
performed or offered to be performed for compensation in
connection with obtaining a copy from the county recorder of a
property owner's grant deed or other record of title and
includes a public records copy service." The grant deeds and
other records of title at issue in this bill may be copied by
different types of companies (including the above mentioned
scammers) - those parties could include title companies and
escrow companies that may copy grant deeds through their normal
course of business.
The California Land Title Association, in opposition, expresses
concern that AB 1373 "could have the inadvertent effect of
arguably prohibiting title companies from providing grant deeds
and other documents to consumers, lenders, appraisers, Realtors,
local government, etc." To ensure that the bill targets the
scams at-issue while not impacting legitimate title copy
services, the author offers the following narrowing amendment:
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Author's amendment:
On page 4, strike out likes 18 through 22, and insert:
(c) For purposes of this section, "grant deed copy service"
means any person or entity that mails a solicitation to a
property owner that includes an offer to obtain, for
compensation, a copy of the property owner's grant deed, or
other record of title.
Support : County Recorders' Association of California
Opposition : California Land Title Association
HISTORY
Source : Author
Related Pending Legislation : None Known
Prior Legislation : AB 992 (Lieu, Chapter 496, Statutes of
2009), recasted provisions relating to a property assessment
appeal filing service to instead make them applicable to an
assessment reduction filing service, as defined, and placed
additional restrictions on the activities of an assessment
reduction filing service.
Prior Vote : Not Applicable, bill was a gut-and-amend on June 2,
2010.
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