Unlawfully restrictive covenants: affordable housing.

Existing law permits a person who holds or is acquiring an ownership interest of record in property that the person believes is the subject of an unlawfully restrictive covenant based on, among other things, the number of persons or families who may reside on the property, to record a restrictive covenant modification. Existing law entitles the owner of an affordable housing development to establish that an existing restrictive covenant is unenforceable by submitting a restrictive covenant modification document that modifies or removes any existing restrictive covenant language. Before recording the modification document, existing law requires the owner to submit to the county recorder a copy of the original restrictive covenant and any documents the owner believes necessary to establish that the property qualifies as an affordable housing development for purposes of these provisions. As part of this process, existing law requires the county counsel to determine, among other things, if the property qualifies as an affordable housing development and if a modification document may be recorded. If the county counsel has authorized the county recorder to record the modification document, that authorization is required to be noted on the face of the modification or on a cover sheet affixed to it. This bill would require the county recorder to notify the owner or submitting party of the county counsel's determination without delay, so that notice may be given by the owner regarding the authorization to record the modification document. The bill would permit the owner, upon receipt of that notification, to mail copies of the modification documents and related materials by certified mail to anyone who the owner knows has an interest in the property or the restrictive covenant. The bill would also establish a process by which notice by the owner to the intended recipient would be deemed given. The bill would provide that notice by the owner is optional and failure to provide it does not invalidate a recorded restrictive covenant modification document. Existing law prohibits the county recorder from recording the modification document if the county counsel finds that the original restrictive covenant document does not contain a prohibited restriction, or if the county counsel finds that the property does not qualify as an affordable housing development. This bill would additionally prohibit the owner from recording the modification document if the owner of the property is not yet its record title owner but is instead a beneficial owner, as specified, until the owner closes escrow on the property and becomes its record title owner. For purposes of these provisions, the bill would define "owner" to mean any record title owner of the property, beneficial owner of the property, or individual controlling the property for purposes of developing an affordable housing project, as specified. Existing law requires the county recorder to charge a standard recording fee to an owner who submits a modification document for recordation pursuant to these provisions. This bill would, instead, authorize the county recorder to charge the above-described standard recording fee. This bill would additionally require a suit that challenges the validity of a restrictive covenant modification document that is filed by a party that has been given notice as described above to be filed within 35 days of that notice. The bill would make conforming changes to these provisions. By placing additional duties on county officials, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.