AB 721: Covenants and restrictions: affordable housing.

Existing law permits a person who holds an ownership interest of record in property that the person believes is the subject of an unlawfully restrictive covenant based on, among other things, source of income, to record a Restrictive Covenant Modification, which is to include a copy of the original document with the illegal language stricken. Before recording the modification document, existing law requires the county recorder to submit the modification document and the original document to the county counsel who is required to determine whether the original document contains an unlawful restriction.

This bill would make any recorded covenants, conditions, restrictions, or limits on the use of private or publicly owned land contained in any deed, contract, security instrument, or other instrument affecting the transfer or sale that restricts the number, size, or location of the residences that may be built on the property, or that restricts the number of persons or families who may reside on the property, unenforceable against the owner of an affordable housing development, as defined, if an approved restrictive covenant affordable housing modification document has been recorded in the public record, as provided, unless a specified exception applies.

The bill would authorize the owner of an affordable housing development to submit, among other things, a copy of the original restrictive covenant and a restrictive covenant modification document, pursuant to the above-described provisions of existing law, that modifies or removes any existing restrictive covenant language to the extent necessary to allow an affordable housing development to proceed. Before recording the restrictive covenant modification document, the bill would require the county recorder to submit documentation received from the owner and the modification document to the county counsel, and would require the county counsel to make specified determinations, including whether the original restrictive covenant document contains an unlawful restriction in violation of these provisions and whether the property qualifies as an affordable housing development.

The bill would specify that its provisions do not apply to restrictive covenants that relate to purely aesthetic objective design standards, provide for fees or assessments for the maintenance of common areas, or provide for limits on the amount of rent that may be charged to tenants. The bill would also specify that its provisions do not apply to conservation easements that meet certain conditions, a recorded interest in land comparable to a conservation easement held by a political subdivision, or any settlement, conservation agreement, or conservation easement for which certain conditions apply. The bill would also specify that its provisions do not apply to any recorded deed restriction, public access easement, or other similar covenant that was required by a state agency for the purpose of compliance with a state or federal law under certain circumstances.

This bill would declare that ensuring access to affordable and supportive housing and the production of additional affordable and supportive housing is a matter of statewide concern, not a municipal affair, and that this bill shall therefore apply statewide to all cities and counties, including charter cities, and to all conditions, covenants, restrictions, or limits on the use of land, whether recorded previous to the effective date of this bill or recorded at any time thereafter.

By imposing additional duties on counties with regard to recorded covenants, the bill would impose a state-mandated 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, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.