Bulletin: OR2019002

Date:
December 31, 2019
To:
All Oregon Issuing Offices
RE:
LEGISLATIVE UPDATE - Oregon 2019 State Legislation

Dear Associates:

The following are summaries of some of the bills passed during the 2019 legislative session which are of interest to the title industry:

HB 2001 – Housing density

Generally permits a duplex, triplex, quadplex or townhouse on land zoned for single family dwellings. Existing covenants for single family dwellings remain in place, but makes new restrictions, created after the bills effective date, for single family dwellings unenforceable unless the covenant also provides for duplex, triplex, quadplex or townhouse.
Effective August 8, 2019

HB 2285 – Residential property – city or county receivership proceedings
The court may appoint a receiver at the request of the city or county to perform an abatement on residential property deemed to be unsafe. Provides for a new process which allows the city or county to file a motion for a general judgement against the property in the amount of the estimated costs of abatement, in lieu of receivership proceedings. Such a judgement has lien priority superior to all other liens and encumbrances except for taxes, assessments, mining labor liens, irrigation power liens, and purchase money security interest under limited circumstances.
Effective January 1, 2020

HB 2425 – Recording of documents
Allows county clerk to record electronic document or document bearing electronic signature. County clerk may charge for electronic delivery of images.
Effective January 1, 2020

HB 2459 – Lien information statements for real property subject to an encumbrance
Amends ORS Chapter 105 by adding a provision under which the holder of a lien against real property may request an itemized payoff statement from the holder of another encumbrance against the same real property. The lien holder who receives the request for the statement does not need authorization from the obligor and may provide the information to the requesting lien holder, unless federal or state law requires obligors consent. “Encumbrance” is defined as “claim, lien, charge or other liability that is attached to and is binding upon real property in this state as security for payment of a monetary obligation”. The permitted response time and remedy for failure to respond was not provided.
Effective January 1, 2020

HB 2460 – Liability of transferee for deferred homestead property taxes
Transferee of a tax deferred homestead property is responsible for outstanding deferred property taxes if the transferee is using the homestead property more than 90 days following the death of the qualifying taxpayer, and if transferee is a potential recipient of the homestead property under intestate succession, by devise, from estate of the deceased taxpayer, or by gift or assignment from insolvent taxpayer.
Effective September 29, 2019

HB 2485 – Condominium associations
Creates procedures for the adoption, by a condominium association, of a restated declaration, restated assignment of use of limited common elements and restated bylaws to correct scriveners’ errors or to conform format and style. Additionally, the bill requires the amendment procedures contained in the bylaws of a condominium to be consistent with provisions of law in effect at time of recording. Various other provisions of the bill address re-designation of withdrawable variable property, the termination date of a condominium consisting of nonresidential units, and the amendment of floor plans. New specific provisions governing document submission requirements and procedures for approval by the Real Estate Commissioner, as well as new notice to prospective purchasers.
Effective January 1, 2020

HB 2486 – Condominium reports
Companion bill to HB 2485. Among other things, this bill authorizes the Real Estate Agency to facilitate the condominium reporting process electronically and reduce the number of signatures required on the Condominium Information Report and amendments.
Effective January 1, 2020

HB 2530 – Housing for veterans
Requires persons who send or serve documents related to termination of tenancy, forcible entry or detainer, and residential foreclosures to include certain information regarding assistance that may be available to veterans of United States armed forces.
Effective January 1, 2020

HB 2587 – Homestead property tax deferral program
Prior to passage of this bill, the statute prohibited the owner of homestead tax-deferred property from pledging said property as security for a reverse mortgage. This bill amends ORS 311.700 to provide that real property which secures a reverse mortgage is not eligible for homestead tax deferral. This prohibition does not apply to property securing a reverse mortgage obligation entered on or after July 1, 2011, and before Jan 1, 2017, provided the taxpayer has 40% or more equity in the homestead property at the time of filing the deferral claim.

HB 3006 – Probate – no assets
Modifies probate process for estate with no known assets. Allows personal representative of estate with no assets to file statement in lieu of accountings if distributees of the estate consent in writing.
Effective January 1, 2020

HB 3007 – Probate – small estates
Modifies provisions relating to small estate statutes. Regarding a sale to a third party, the affiant may complete a sale if each heir or devisee who otherwise would succeed to the interest conveyed joins in the conveyance. Such a sale shall be completed before two years and four months after the filing of the small estate affidavit or amended affidavit. For real property distributed to the inheriting parties, the affiant shall convey the property by a bargain and sale deed after the allowed claims are paid. The conveyance is subject to liens and encumbrances against the decedent or the estate.
Effective January 1, 2020

Additional remarks for HB 3007:
This bill revises sections of the probate code concerning small estates. A small estate is an estate in which not more than $75,000 of the fair market value of the estate is attributable to personal property and not more than $200,000 of the fair market value of the estate is attributable to real property. If it is later discovered that the set limits are exceeded, an amended affidavit may not be filed and the affiant’s authority with respect to the estate terminates except for the duty to turn over the personal property to a personal representative (See Sec. 4.)

A warning notice of small estate filing must appear on the affidavit’s first page. The notice must be in at least 14-point bold type and must contain the same or a substantially similar text as the text set out in the statute. Also new in the section is a requirement that an affidavit state that no personal representative has been appointed or that the estate is not currently being administered in Oregon. The affidavit also must state the mailing address for presentment of claims, and if the affiant wishes to authorize creditors to present claims by email or fax, the affidavit must state the email address or fax number tor the presentment of claims. Other elements that must be filed include a certified copy of the death record of the decedent, the original will, or certified copy of the will if filed in an estate proceeding in another jurisdiction, and proof that the will meets the requirement of ORS 113.005 (See Sec. 7.)

The bill sets out a procedure for the affiant to seek payment of debts and to obtain possession or control over personal property of the estate. (See Sec. 9.) A procedure is also set out for presentment of claims and for allowance or disallowance of claims. (See Sec. 9 and 10.) The bill sets out the procedures for a summary determination, that is, and adjudication by the probate court of a contested claim. A summary determination of the disputed claim may not be appealed but may be enforced by filing a petition for summary review under ORS 114.550. (See Sec. 12.) An affiant is required to retain records of the administration of the estate until the later of the expiration of the two year period established by ORS 114.550 or the conclusion of any summary review proceeding under ORS 114.550. (See Sec. 13.)

The bill contains a separate section for sales and transfers to third parties. The affiant may transfer or sell any real property if each heir or devisee who would succeed to the interest conveyed joins in the conveyance. Any transfer or conveyance under the section to a purchaser in good faith and for a valuable consideration transfers or conveys the stated interest free of any interest of the claiming successors, and the purchaser has no duty with respect to application of the sales proceeds. (See Sec. 15.) The bill sets out matters that are liabilities of the affiant. (see Sec. 16.) The bill sets out the procedures for a summary review of a disallowed claim or for compelling an affiant to distribute property of the estate. (See Sec. 17.)

The bill contains directions for the distribution of estate assets. When such property is distributed it is subject to liens and encumbrances against the decedent and the estate as well as to rights of creditors until expiration of the two year period established in ORS 114.550. When the affiant transfers an interest in real property under this section, the affiant will do so by recording a bargain and sale deed to the person entitled to the property. (See Sec. 19.)

In general the changes apply to decedents who die on or after the effective date of the bill, that is, January 1, 2020.

SB 11 – Rights of redemption
Requires a purchaser of residential real property after a foreclosure complaint has been filed and before the end of redemption period to provide warning notice to the seller regarding the seller’s relinquishment of rights and interests in connection with conveyance of the real property, including redemption rights and rights to surplus funds derived by a sheriff’s execution sale. Prior to purchasing the property, the purchaser must record an affidavit confirming compliance with the new notice requirements, and the affidavit may be attached to the deed transferring the real property. The text of the warning is set out in the bill, and it must be in clear and conspicuous type of 14-point or larger. The buyer is obligated to execute and record an affidavit of compliance with the notice requirement. The affidavit may be affixed to the deed to the buyer. A similar warning must be included in the notice of execution sale posted on the sheriff’s website and published by a qualified newspaper. A third similar warning must be included as an attachment to a complaint to foreclose a residential trust deed. The text of these other two warnings notices is set out in the bill. The third notice, besides referring to property rights and rights to surplus funds, must contain certain contact information for assistance on responding to a foreclosure. The requirement for the second notice applies to sheriff’s notices posted on or after January 1, 2020. The requirement for the third notice applies to complaints filled on or after January 1, 2020.
Effective January 1, 2020

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References

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