New Recording Fee under the Building Homes and Jobs Act
Calif. Government Code §27388.1; Calif. Health and Safety Code
- 50470, 50470.5, 50471, 50475, 50475 Added by S.B. 2 Effective date: January 1, 2018
New recording fee
To fund the construction of affordable housing in California under the new Building Homes and Jobs Act, a $75 fee is added to existing fees charged for the legally mandated recording of any real estate document or notice. Total recording fees affected by this new fee are capped at $225.
Documents which will be impacted by this new fee include:
- trust, grant, quitclaim and trustee’s deeds;
- fictitious and assignment deeds of trust;
- requests for notice of default;
- abstracts of judgment;
- subordination agreements;
- declarations and abandonments of homestead;
- notices of default (NODs);
- release or discharge documents;
- notices of trustee sale (NOTS);
- notices of completion;
- UCC financing statements;
- mechanic’s liens;
- maps; and
- covenants, conditions and restrictions (CC&Rs).
The fee does not apply to documents used in:
- the sale of residential property to a buyer occupant; or
- the sale of any land or property valued at $100 or more and subject to the documentary transfer
The county recorder is required to remit all collected fees, less actual administrative costs incurred, to the State Controller quarterly for deposit into the Building Homes and Jobs Trust Fund (the Fund).
Use of collected fees
Of the amounts deposited into the Fund from January 1, 2018 to December 31, 2018:
- 50 percent will be provided to local governments to update planning documents and zoning ordinances to streamline residential development — with 5% available for technical assistance to update these documents; and
- 50 percent will be used by the Department of Housing and Community Development (DHCD) to provide housing assistance to the homeless.
Of the amounts deposited into the Fund on and after January 1, 2019:
- 30 percent will be used by the DHCD for state incentive programs, affordable housing for agricultural workers and mixed income multifamily residential housing for lower income households; and
- 70 percent will be provided to local governments for the issuance of grants to Indian tribes and metropolitan areas to alleviate poverty and overcrowding in accordance with federal regulations and through competitive grant programs.
20 percent of all money in the Fund must be used for affordable owner- occupied workforce housing.
To qualify for these grant programs, a local government needs to:
- submit a plan to the DHCD detailing how the funds will be used to meet regional housing needs;
- have a compliant housing element with the state;
- submit an annual report to the DHCD providing the status of funds; and
- prioritize use of funds that increase housing to households at or below 60 percent of the area median income.
Money allocated to local governments are required to be used for the purposes of:
- the development or rehabilitation of multifamily rental housing affordable to low- and moderate-income households;
- affordable rental and owned housing to meet the needs of a workforce earning up to 120 percent of the area median income or 150 percent of area median income in high-cost areas;
- matching portions of funds placed in local and regional housing trust funds, and available through the Low and Moderate Income Housing Asset Fund;
- capitalized reserves for services related to the creation of permanent supportive housing for veterans and the homeless;
- assisting persons at risk of being homeless through providing rapid rehousing, rental assistance, emergency shelters and transitional housing;
- accessibility modifications;
- programs to acquire and rehabilitate foreclosed or vacant homes;
- promoting homeownership, including down payment assistance; and
- fiscal incentives to local agencies that approve housing for low- to moderate- income households.
A local government may use no more than five percent of funds received for administrative costs.
Posted by First Tuesday Editorial Staff
Editor’s note — This is one of several bills passed by the California legislature to address the state’s housing shortage.