Restrictive Covenant Modification Program
Pursuant to the 2021 legislation set forth in Assembly Bill (AB) 1466 and California Government Code Section 12956.3 (GC §12956.3), the Nevada County Clerk-Recorder’s Office has developed a Restrictive Covenant Modification (hereinafter RCM) Program Implementation Plan. It has been developed on the principle of identifying any unlawful language contained within our records, most notably the restrictive covenants, and once located, we will record redactions consistent with AB1466.
AB 1466 Introduction
Unlawfully discriminatory restrictive property covenants are provisions written into property records that prohibit ownership, occupation, and use of the property based on characteristics such as race and religion. Until they were ruled unlawful in the late 1960s, such covenants were primarily used to exclude African Americans, Asian-Americans, and Jewish people.
Racially restrictive covenants refer to contractual agreements that prohibit the purchase, lease, or occupation of a piece of property by a particular group of people.
For example: F. -No persons of any race other than the Caucasian race shall use or occupy any building or any lot, except that this covenant shall not prevent occupancy by domestic servants of a different race domiciled with an owner or tenant.
Although frequently associated in the public mind with southern, Jim Crow segregation, such discriminatory covenants are actually and disturbingly quite common in California property records. Although racially exclusionary covenants are now unenforceable, their enduring consequences still inflict profound harm.
First, this government-backed housing segregation restricted access to opportunity in ways that originated from the laws, but ultimately became baked into financial, social, and geographic disparities that reproduce themselves independently of the law. As a result, a significant amount of the racial inequality that characterizes the United States today can be directly traced to residential racial covenants and the deliberate, government-backed policies that encouraged their proliferation.
Second, the actual racial covenants themselves – their offensive words and hateful message – remain etched in property records throughout California. As a result, Californians examining property records are frequently subjected to stumbling upon these covenants, most commonly right as they are on the cusp of purchasing that property to be their home. The experience can be jarring for anyone, but it is especially painful and traumatic for many homebuyers of color. Indeed, many reports suggest that buyers have walked away from the closing table rather than sign or receive documents with offensive language, even if that language is no longer enforceable.
AB 1466 seeks to hasten the removal of the offensive covenants in three ways. First, this bill seeks to enhance the existing RCM process by allowing any person, not just an owner, to file an RCM with the county recorder's office if they have knowledge of the unlawful restriction.
Second, the bill makes it easier for a person with an ownership interest to record an RCM by waiving fees and requiring title companies, realtors, and specified others who know of such restriction to notify an owner or prospective owner of the existence of the restriction and to inform them of their right to use the RCM process to remove the unlawful restriction.
Third, and most important, the bill requires all county recorders throughout the state to establish a program to identify and redact unlawfully restrictive covenants and make regular reports on its progress to the Legislature. The bill also authorizes counties to impose a $2 recording fee on all property recordings in order to fund the redaction program.
Why Covenants Matter Today
- Covenants divided our communities by race. These residential segregation patterns persist today. And this physical segregation undergirds our contemporary racial disparities.
- “While the covenants are there, there is still room for people to think that although it cannot be legally enforced it is nonetheless a promise that they are morally obligated to keep. And that’s an argument in my view for removing them.” Evan McKenzie, Professor of Political Science, University of Illinois at Chicago
- Advocates for the removal of racially restrictive covenants reason that the restrictions, even if illegal, provide justification for subtle racism.
Restrictive Covenant Modification Program
Our Restrictive Covenant Modification program consists of the following steps:
- Locate all documents containing unlawful restrictive covenants.
- Manually review documents to identify those documents to be sent to County Counsel
- Create a RCM and prepare the document for redaction
- Present the document to County Counsel for review and approval of redaction
- Record the RCM
Land Records Primer
The role of the County Recorder is to create a permanent, unaltered record of land transactions that is maintained in-perpetuity. Each of the records included in the recorder’s office represent a claim to an interest in a parcel of land. The recorder is not charged with determining the validity or enforceability of any of these claims. Rather, the public record provides notice that someone is asserting a claim. The recording act itself does not effectuate or validate a property claim or any associated action such as a covenant. The efficacy of any specific claim is determined by the courts.
It is a fundamental principle of the public land records that the recorder maintains the records without alteration. Even if a claim asserted in a specific document is found to be invalid, the document itself is never removed from the record. Instead, a new document clarifying the status of the claim is entered into the public record to provide notice that the claim is not valid.
The accumulation of these documents creates a chain of title that provides the foundation of real property rights in the United States. Without an unalterable chain of title, buying, selling, and collateralizing real property becomes much more difficult and expensive.
The Restrictive Covenant Modification Program is designed for us to redact unlawful restrictive covenants found in our Official Records, subject to county counsel approval, by rerecording a copy of the original document with the unlawful restrictive language redacted so that it is not readable or visible, using a Restrictive Covenant Modification Form substantially similar to the form set forth in Government Code Section 12956.2(f).
The modification document shall be indexed in the same manner as the original document being modified. It shall contain a recording reference to the original document in the form of a book and page or instrument number, and the date of recording.
The original document stays unaltered in our property records.
Milestones and Timelines
The Nevada County Recorder is the custodian of approximately three (3) million documents, dating back to 1856. Our goal is to complete the review of our existing three million documents by December 2027.
Government Code Section 12956.3 (g) says: The failure of a county recorder to identify or redact illegal restrictive covenants, as required by this section, or the county recorder’s identification or redaction of any restrictive covenants that are later determined not to be illegal, shall not result in any liability against the county recorder or the county.
In order to document and monitor the subdivisions, parcels, maps, and/or owner names of each RCM prepared, we will create a database to store relevant details. This database will also contain an image of the prepared document, the date it was submitted to County Counsel for review and the last day County Counsel must finish their review. Once we receive the reviewed document from County Counsel, we will add the information regarding the date it was returned from County Counsel, the decision made by County Counsel, document number if it is recorded, or the date it was returned to submitter (if a member of the public).
Approaches - Manual and Automated
While most of our approximately 3 million records are in typed and digital (different from digitized) format, there are a significant number of the records that are handwritten and in books. They will require more labor-intensive review and process. The office, plan to review these records using technology capable of Optical Character Recognition (OCR); however, in order to utilize OCR, we must first have all of our images digitized. While the use of technology will significantly assist our efforts, we will not wait for the images to be digitized before proactively initiating our review of the records. Initially, our office has a manual process in place to locate and review the documents with the unlawful language. This process will be later refined through the use of technology. At a much later stage, the enhanced use of both the manual and automated processes will be utilized to achieve the optimum level of implementing this program.
Requests and Submissions From The Public
Our office remains ready to work with any member of the public who notifies our office of a potential restrictive covenant containing unlawful language. We will locate the original document, prepare an RCM and prepare the document for redaction and then send the document to County Counsel. If County Counsel approves the redaction, the RCM will be recorded with no fee. For further details, contact our office at 530-265-1221 NC.Recorder@co.nevada.ca.us.