AB-1466 (McCarty) Racially Restrictive Covenants

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Status: Signed into law September 28, 2021 (Chapter 359, Statutes of 2021)

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Update: March 9, 2022

Source: WFG National Title Company

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Pursuant to AB 1466, as of January 1, 2022 each county recorder’s board of supervisors may impose a $2 fee on all real estate instruments in order to fund the restrictive covenant modification program (certain exemptions apply). Sunset date of the $2 fee is expected to be December 31, 2027 unless renewed by the Board of Supervisors. Please read below for more information on AB 1466.

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Existing law prohibits discrimination in housing based on race, color, religion, sex, gender, and other language which consists of restrictive covenants that have been considered discriminatory. These restrictive covenants (or agreements that restrict property owners not to sell or rent to specific groups because of a person’s race or other immutable characteristics) have been illegal since at least 1948 but many legal documents (such as deeds) still contain the original language. 

AB 1466 now requires all county recorders throughout California to (a) establish a program to identify and redact such restrictive language and (b) ease restrictions on private parties (ie. homeowners) seeking to remove language on their own if the county recorder has not.