BILL ANALYSIS
SB 878
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Date of Hearing: June 16, 2010
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
SB 878 (Liu) - As Amended: June 10, 2010
SENATE VOTE : 25-7
SUBJECT : Local government: Los Angeles County: notice of
recordation.
SUMMARY : Authorizes the Los Angeles County Recorder (Recorder)
to notify, by mail, the party or parties subject to a notice of
default or notice of sale, including the occupants of that
property, within five days, but in any event no more than 20
days, of recordation. Specifically, this bill :
1)Authorizes the Recorder or a designee, following adoption of
an authorizing resolution by the Los Angeles County Board of
Supervisors (Board), to notify, by mail, the party or parties
subject to a notice of default or notice of sale, including
the occupants of that property, within five days, but in any
event no more than 20 days, of recordation.
2)Authorizes the Recorder to collect a fee from the party filing
a notice of default or notice of sale, unless that party is a
government entity.
3)Provides that the fee shall not exceed the mailing cost of the
notice and the actual cost, if any, to provide information,
counseling, or assistance to a person who receives the notice,
not to exceed seven dollars ($7).
4)Requires on or before January 1, 2014, if the Board adopts an
authorizing resolution to notify the parties subject to a
notice of default or notice of sale, the County of Los Angeles
to submit a report to the Senate Committee on Judiciary and
the Assembly Committee on Local Government.
5)Requires that the report contains the following information:
a) A copy of each type of notice mailed;
b) The number of filed notices of default and notices of
sale for which a fee was collected;
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c) The amount of fees collected for the filing of notices
of default and notices of sale; and,
d) The amount of fees spent to provide the housing
information, counseling, and assistance.
6)Contains a sunset date of January 1, 2015.
EXISTING LAW :
1)Allows the board of supervisors of the Counties of Los Angeles
and Riverside to adopt a resolution authorizing the county
recorder to notify a party of the execution of an instrument
affecting their interest in real property, when the deed does
not involve a governmental entity, within 30 days of the
resolution and in a form, as specified.
2)Allows the recorder of the County of Los Angeles to collect a
fee, not to exceed the cost
of mailing the notice or $7, from the party filing a deed,
quitclaim deed, or deed of trust, other than a governmental
entity.
FISCAL EFFECT : None
COMMENTS :
1)In the early 1990's the Los Angeles District Attorney reported
that approximately 1,151
Los Angeles County (County) residents (mostly elderly, poor, and
uneducated people) were cheated out of an estimated $131
million due to real estate fraud. In response, an anti-fraud
pilot program was established in the County of Los Angeles.
Under that program, the County sent a postcard notice to
signatories of deeds to real property as an alert to property
owners when an instrument affecting their interest had been
recorded. Due to the success of the program, the Legislature
passed SB 1631 (Watson), Chapter 177, Statutes of 1996, which
authorized the Board to adopt a resolution permitting the
county recorder to notify a party of the execution of an
instrument affecting their interest in real property and
allowed the Recorder to charge a fee to cover mailing costs
not to exceed $7.
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2)According to the author, the home foreclosure crisis has
created opportunities for more fraudulent transactions, as
well as displacing renters who had no idea that the home they
occupy was in foreclosure. The County Real Estate
Fraud/Predatory Lending Task Force in 2009 made a series of
recommendations, including adding notices about default and
sale to the existing state law for the County. Default
notices filed with the County increased from 21,316 in 2003 to
106,113 in 2009. SB 878 extends the current recording fee to
also cover notices of defaults and notices of sale. In doing
so, property occupants will then receive a notice in the mail
about the recording of sale or default, so they can be aware
of any proposed changes in ownership.
3)Similar legislation :
a) AB 2618 (Nestande) would allow the board of supervisors
of every county to adopt a resolution authorizing the
county recorder to notify a party of the execution of an
instrument affecting their interest in real property, when
the deed does not involve a governmental entity, within 30
days of the resolution and in a form as specified. This
measure is currently on the consent calendar on the Senate
Floor.
b) SB 1287 (Hollingsworth), Chapter 117, Statutes of 2008,
gave the board of supervisors
of the County of Riverside authority identical to that
provided to the County of Los Angeles without the
authorization to charge a fee to cover mailing costs.
4)Support Arguments : According to the Western Center on Law and
Poverty tenants are often left in the dark when ownership of a
property changes. Tenants have no way to verify these changes
and therefore do not know if they should be paying their rent
to the person who claims to be the new owner or not. Giving
tenants notice on these changes will help alleviate these
problems and reduce fraud.
Opposition Arguments : Opposition might say district attorneys
offices have the authority to combat consumer and real estate
fraud already and this extra layer of bureaucracy is
unnecessary and duplicative. Opposition could also argue that
this information is already public record and can be obtained
at any time by a member of the public.
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REGISTERED SUPPORT / OPPOSITION :
Support
Los Angeles County Board of Supervisors [SPONSOR]
CA Consumer Affairs Association
Consumers Union
CA Rural Legal Assistance Foundation
Los Angeles County District Attorney's Office
Los Angeles County Sheriff's Department
Western Center on Law & Poverty
Opposition
None on file
Analysis Prepared by : Katie Kolitsos / L. GOV. / (916)
319-3958