Bulletin: LA2011004

Date:
September 07, 2011
To:
All Louisiana Issuing Offices
RE:
2011 Legislation Affecting Real Property Transactions in LA

Dear Associates:  

Act 84 - enacts R.S. 9: 1123.113 to require condominium associations to maintain a fidelity bond and to require providing a notice of the bond when requested by interested parties. 

What you should doNothing. Simply be aware of this law

Act 90 – amends La. Code Civ. Proc. Art. 2636(5) to allow for a reproduction of a security agreement certified by a financial institution officer to be deemed authentic for purposes of executory process. 

What you should doNothing. Simply be aware of this law.   

Act 124 – enacts R.S. 9:5166 to create a Uniform Cancellation Affidavit for cancellation of mortgages and vendor’s lien inscriptions. Old forms are not void. This new form cannot be used to cancel judgments, liens or legal mortgages.  It does not prohibit the use of any other method of cancellation provided by law. The affidavit must contain the following: 

  1. The statutory authorization for the cancellation and a statement that the affiant has complied with all the requirements of said statute.
     
  2. It must be notarized but need not be in authentic form or witnessed. 

The filing of the affidavit with the clerk of court shall be authorization for the clerk to cancel the mortgages described in the affidavit. 

The Clerk shall not be liable for any damages resulting to any person or entity resulting from the cancellation. 

The affiant is liable to and must indemnify the Clerk. The affiant is subject to civil and criminal penalties for signing a false or incorrect affidavit. 

The bill provides a sample of the Uniform Cancellation Affidavit. It basically recites the existing methods of cancellation with check boxes for the affiant to check in order to select the method that is being used to effect the cancellation. By signing the affidavit, the affiant attests that he has satisfied all the requirements of the specific law. The Clerk is not required to investigate whether these requirements have actually been met. 

What you should know:  The importance of this law is to provide a standard form of the affidavit to obtain a release from the clerk of court. The affidavit itself is not the release. Clerks are posting this form on their websites and you should consider its use 

Act 164 – amends the Title Insurance Act to require identifying information regarding title insurance and the examining attorney be placed on acts transferring an interest in residential property. The bill amends R.S. 22:513.1 and requires that every act transferring an interest in 1-4 family residential property which is insured by an owner’s title insurance policy and every mortgage encumbering immovable property which is insured by a loan title insurance policy shall contain all of the following information:  

  1. The name, address, and Louisiana license number of the issuing title insurance producer.
     
  2. The name of the title insurance underwriter.
     
  3. The name and bar roll number of the attorney who rendered the title opinion upon which a title policy is based. 

The inclusion of the information shall not create additional liability on those named therein nor will it create a separate cause of action against them. This act is effective January 1, 2012. 

What you should doBe certain that each act and mortgage contains the 3 items set out above. Recall that a part of the purpose of this Act is to provide information as to the attorney who performed the required title examination. 

Act 323 – amends the Code of Civil Procedure Articles 3421, 3431, 3432 and 3434, dealing with Small Successions. It is a succession or ancillary succession of a person who died leaving property in Louisiana having a gross value of $75,000 or less valued as of the date of death. It shall not be necessary to open judicially the succession of a person who died intestate, or domiciled outside of Louisiana whose testament has been probated by court order of another state. The bill eliminates the requirement that the immovable property left by the deceased be only a single lot or contiguous lots on which there exists a residence in which he or his spouse resided. 

What you should know:  We are willing to rely on a small succession affidavit without court order completed in compliance with this Act provided you have no reason to believe that the stated value of the estate has been artificially reduced to avoid a court proceeding, this new affidavit can now be used on any type of real estate. 

Act 325 – amends R.S. 22:512 of the Title Insurance Act dealing with "Definitions" in order to define what an "abstract" is. Abstract shall mean a written history or summary of the recorded instruments indexed in the public records affecting the title to immovable property that is prepared and certified by an abstractor in accordance with the minimum search periods. It includes a photocopy or electronic copy of such instruments or extracts (take-offs) prepared by the abstractor. The abstractor must date and sign the abstract. "Public records" is defined as the mortgage and conveyance records and the property tax records. It allows for an attorney to do a stand-up examination of title. It defines "title insurance business" as including the examining of titles. However, any title insurance policy must be based upon an examination of the public records or a personal examination of an abstract by an attorney. The bill also amends R.S. 37:212(A)(2) dealing with the "practice of law" to state that it includes the certifying or giving opinions, or rendering a title opinion as a basis of any title insurance reports. 

What you should know:  You should comply with this Act. 

Act 342 – amends R.S. 9:5557 to provide for a penalty to be assessed against a lender that does not timely provide a release for a mortgage that has been paid off. It does not apply to a mortgage that has been paid off by the obligor personally, but only to those mortgages paid by a settlement agent. The mortgagee is required to furnish an act of cancellation within 45 days after it receives notice from a settlement agent who has paid the indebtedness or within 45 days of receipt of payment. If the mortgagee does not furnish a cancellation to the settlement agent or cancel the mortgage within 60 days, it is subject to a penalty of $1,000, payable to the borrower. This amount increases by $500 for every 30 days thereafter, up to a maximum of $5,000. If the mortgagee fails to deliver a cancellation within 90 days of the payoff, then the mortgagor may institute summary proceedings against the mortgagee to have the mortgage cancelled. The mortgagor may collect the penalty, costs, attorney fees and damages. The statute is effective for mortgages passed after 2011. 

What you should do:  Be aware that this Act applies only to a settlement agent. It is a good practice to maintain a calendar entry to remind you to check for a proper return of a release of a mortgage that you have paid and to follow up on such release. If not received by the end of the 90 day period to receive a release, you will need to notify the mortgagee and request that they file the proper suit to obtain the release. If such suit is not timely filed, please notify our claims department. 

Act 461 – amends La. Code Civ. Proc. Art. 253 (B) and enacts 253 (C) to establish as the official record of any filed document the electronically stored version.  

What you should doNothing. Simply be aware of this law.  

Attorney General’s opinion 10-0281 – requires clerks to honor documents electronically certified by other governmental officials, effective February 10, 2011.  

What you should doNothing. Simply be aware of this opinion.  

Attorney General’s opinion 08-0340 – authorizes clerks to receive real estate filings electronically. 

What you should doNothing. Simply be aware of this opinion.
 
If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None