In September 2021, California’s Governor Newsom signed AB-1466 into law and kicked off the need for the State’s County Recorders to find a way to remove “restrictive covenants” in their official records.
With a quick turn of each county having a plan to follow the law by July 2022, many counties started looking for ways to comply with the new law. What does the bill require? How do we comply? Are there companies that can provide us with services to comply? These questions and more began to percolate in the California County Recorders’ conversations.
Based on our work with a multitude of California County Recorders, we’ve put together an AB-1466 primer to help folks understand how we can help you comply with the bill.
What Is A Restrictive Covenant?
A restrictive covenant, as it relates to housing in California, is a phrase within Official Records meant to discriminate against a person or party in the sale, lease, rental, or use of a property. The discrimination may be based on race, color, religion, sex, gender, marital status, veteran or military status, or other information.
California Assembly Bill No. 1466 (“AB-1466”) was recently signed into law to remove the historical discrimination of selected groups of people as it relates to property transactions.
At a high level, the bill requires that each of the 58 California County Recorders develop a plan to locate, review, and remove these restrictive covenants by creating a redacted version of each document that includes restrictive covenant language. Once a redacted version of the document is created, it is to be re-recorded and become part of the Official Records of the County Recorder’s office.
How Do You Comply With AB-1466?
As simple as it sounds, the process to comply with AB-1466 is more complicated.
County Recorders could have hundreds of thousands to millions of images related to property records, and finding specific language on these images depends on how the data is aggregated. Since most of these records are on microfilm, the first step is to digitize those documents. Once digitized, they’ll need to run through a multi-layered text identification process that will allow words and phrases to be located.
Once the documents are searchable, finding certain words that would indicate there’s a restrictive covenant isn’t too difficult: you search for things like “race,” “color,” or “veteran” and if the results include language that says someone can’t purchase property because of that status, you’ve found it!
But when there are tens of thousands of results, how do you do this efficiently? It’s not just the words you need to find; you also need to verify that the actual context of the words is part of a restrictive covenant phrase. For example, if you search for the word “Japanese” and find a result, that doesn’t mean you’ve found a restrictive covenant. In many recorded documents, you’ll find a phrase that says “Japanese tea room” or something similar; that’s not restricting anything, so it shouldn’t be redacted. No, you need to locate and verify that there’s actually a restrictive covenant.
Once a restrictive covenant is located and verified, it needs to be copied (duplicate the document), redacted, and provided to County Counsel for review. Within this task, you’ll provide the redacted version of the entire document along with an unredacted copy of the original version.
Here’s an example in which you find a phrase that would be considered a restrictive covenant. The steps to follow are:
- Verify that the language actually is a restrictive covenant.
- Redact the restrictive covenant language.
- Organize the entire document (not just the pages that include the restrictive covenant).
- Ensure all restrictive covenants in that document have been located, verified, and redacted.
- Provide an original (unredacted) and redacted copy of the document, with index data, to the County Counsel for compliance review.
- Track the County Counsel’s approval or rejection of the modified document.
If the modified document is approved by County Counsel, re-record the redacted version into your recording document management system (RDMS).
The short video below provides an overview of this process:
Methods To Identify & Redact Restrictive Covenant Language
Locating restrictive covenant language is the first step. Using OCR (optical character recognition) technology paired with artificial intelligence/machine learning, locating specific words and phrases can be done quite effectively. In most cases, similar phrases will be used consistently and certain years will contain the preponderance of the restrictive covenant language (the 1940s, for example).
Identification and verification is where it gets a bit harder, because you need an actual person (in most cases) to confirm if the word or phrase falls into the category of “restrictive covenant.” Just having an individual word like “Caucasian” or “African” does not mean that there’s a restrictive covenant. There’d have to be something like “do not sell this lot to anyone other than a person of Caucasian descent.” Caucasian by itself is not restrictive, but once you add in the other language, it is a restrictive covenant.
Finding these words is fairly simple, but someone will have to look at the context of the word and confirm or reject it as part of a restrictive covenant.
Once a restrictive covenant is identified and verified, it needs to be copied and the duplicate copy redacted; in many interpretations, it seems that the entire sentence or paragraph will be redacted, not just an individual word or a short phrase. The extent of redaction will vary depending on the analysis and interpretation of your County Counsel and Recorder.
If we work with you, you’ll get the benefit of our experience with numerous other counties utilizing the same or similar services. As more projects are executed, our AI and machine learning processes will continue to improve restrictive covenant location and identification, reducing review costs and generating more accurate results. This system of progressive improvement will be run against your dataset of images during the initial project as well as into the future, as new restrictive covenant words and phrases are identified.
Can Someone Do All Of This For You?
Short answer, sort of. It’s up to each County Recorder to identify which words and phrases will be considered restrictive covenants, work with your County Counsel to approve or reject document modifications, and re-record approved document modifications.
But we can help you get there. When it comes to the technology and method of getting this done, we’ll set up the software platform and workflow to identify, verify, redact, and create documents to help you comply with AB-1466.
Are you looking for a way to comply with AB-1466? Give us a call at 800.359.3456 or send an email to email@example.com and we’ll work with you to make this process as smooth and simple as possible.
Take a look at the articles below for more information about scanning official records, redaction, and QA processes.
“Your Guide To Document Scanning & Redaction” is a brief overview describing redaction, what types of records generally require redaction, and the process to make it happen.
“Quality Assurance & Digital Conversion” defines QA as it applies to digital conversion, describes various types of QA, and illustrates some options to consider when you go forward with a scanning project.
“Digitally Preserving Historical Land Records” gives you an overview of ways to scan and digitally preserve your records.