Trusts and Estates

Ca. Trs. & Estates Quarterly 2018, Volume 24, Issue 3

TIPS OF THE TRADE – SENATE BILL 2 IMPOSES ADDITIONAL RECORDING FEES STATEWIDE: WHAT PRACTITIONERS NEED TO KNOW TO AVOID A SHOWDOWN WITH THE RECORDER

By Yin Ho*

I. INTRODUCTION

Effective January 1, 2018, the California legislature enacted Senate Bill 2 ("SB 2"), authored by Sen. Toni Atkins (D-San Diego), known as the "Building Homes and Jobs Act."1 SB 2 provides "in addition to any other recording fees specified in this code, a fee of seventy-five dollars ($75) shall be paid at the time of recording of every real estate instrument, paper, or notice required or permitted by law to be recorded, except those expressly exempted from payment of recording fees, per each single transaction per parcel of real property. The fee imposed by this section shall not exceed two hundred twenty-five dollars ($225)."2 The purpose of SB 2 is to create a reliable source of funding for affordable housing projects and was passed as part of a comprehensive legislation package aimed at alleviating California’s housing shortage.

The problem with SB 2 is that the bill’s language is so undefined that it raises many more questions than it answers. This has led to confusion among California’s 58 county recorders, each of whom is tasked with interpreting the statute and the exemptions, and collecting the fee. For practitioners, SB 2 has introduced an unwelcome degree of uncertainty to everyday practice, even for seemingly routine recordings. This article describes the bill, the express and implied exemptions, and explores some practical strategies for compliance. Although this article is based upon actual recordings and multiple conversations with various county recorder offices, the application of the exemption requirements by one recorder may be different from others, and differences in application may even occur within the same office.

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