Senate Bill Report, E2SHB 1335 — Recorded documents with unlawful racial restrictions (March 18, 2021)

Summary

Senate Bill Report on E2SHB 1335, as of March 18, 2021, titled An act relating to review and property owner notification of recorded documents with unlawful racial restrictions, prepared for the Senate Committee on Business, Financial Services & Trade. The brief summary says the bill requires the University of Washington and Eastern Washington University to review existing deeds and covenants for unlawful racial or other discriminatory restrictions and provide notice to property owners and county auditors. It also adds a notice to the seller disclosure statement and provides a process for striking unlawful provisions after a property owner files an action in superior court. The report states that the bill takes effect on January 1, 2022, and includes a staff summary of public testimony.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Issuer: Congressional materials
Document type: Report
Date: 2021-03-23
Case: 2021 03 23 A28898 D232847 Bill Report 1335 S2 E Sbr Bfst Ta 21

Cite this document

“Senate Bill Report, E2SHB 1335 — Recorded documents with unlawful racial restrictions (March 18, 2021).” Original at app.leg.wa.gov, dated 2021-03-23. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2021-03-23-2021-03-23-a28898-d232847-bill-report-1335-s2-e-sbr-bfst-ta-21/, SHA-256 ccb068d1f8393f17bcfd8a38eaced83853bbb2dfed570509141501f21087ca96.

Full text

SENATE BILL REPORT
E2SHB 1335

As of March 18, 2021

Title: An act relating to review and property owner notification of recorded documents with
unlawful racial restrictions.

Brief Description: Concerning review and property owner notification of recorded documents
with unlawful racial restrictions.

Sponsors: House Committee on Appropriations (originally sponsored by Representatives
Valdez, Rude, Berry, Fitzgibbon, Morgan, Santos, Shewmake, Davis, Berg, Gilday,
Bergquist, Fey, Bateman, Lekanoff, Lovick, Callan, Riccelli, Rule, Pollet, Senn and Harris-
Talley).

Brief History: Passed House: 3/4/21, 97-1.
Committee Activity: Business, Financial Services & Trade: 3/18/21.

Brief Summary of Bill
• Requires the University of Washington and Eastern Washington
University to review existing deeds and covenants for unlawful racial or
other discriminatory restrictions and provide notice of such restrictions
to property owners and county auditors.
• Adds to the seller disclosure statement a notice to the buyer of real
property that covenant or deed restrictions based on race or other
protected classes are unlawful and provides the methods by which such
restrictions can be struck.
• Provides a process for striking and removing unlawful provisions from
the record and chain of title after a property owner files an action in
superior court.

SENATE COMMITTEE ON BUSINESS, FINANCIAL SERVICES & TRADE

This analysis was prepared by non-partisan legislative staff for the use of legislative
members in their deliberations. This analysis is not part of the legislation nor does it
constitute a statement of legislative intent.

Senate Bill Report -1- E2SHB 1335
Staff: Clinton McCarthy (786-7319)

Background: Washington Law Against Discrimination. The Washington Law Against
Discrimination (WLAD) prohibits discriminatory practices in employment; places of public
resort, accommodation, or amusement; real estate transactions; and credit and insurance.
The law protects persons from discrimination based on their race, creed, color, national
origin, citizenship or immigration status, families with children, sex, marital status, sexual
orientation, age, honorably discharged veterans, or military status. The law also protects
persons from discrimination based on the presence of any sensory, mental, or physical
disability or the use of a trained dog guide or service animal by a person with a disability.

WLAD declares void any provision in a written instrument relating to real property that
purports to forbid or restrict the conveyance, encumbrance, occupancy, or lease of the
property to individuals within a protected class. If a written instrument contains a provision
void under WLAD, the owner, occupant, or tenant of the property or the homeowners'
association board may bring an action in superior court to have the provision struck from
the public records, or may record a restrictive covenant modification document with the
county auditor.

Seller's Disclosures. A seller of residential real property must provide a buyer with a
disclosure statement about the property within five business days after mutual acceptance of
a written purchase agreement. The disclosure statement requires the seller to answer yes,
no, or don't know on a list of items, with space provided for more information if necessary.
The seller disclosure statement includes the following categories:
• title;
• water;
• sewer or on-site sewage system;
• structural;
• systems and fixtures;
• homeowners' association or common interests;
• environmental;
• manufactured and mobile homes; and
• full disclosure by sellers.

Within three business days of receipt of the disclosure statement, the buyer may approve
and accept the disclosure statement or rescind the purchase agreement. If the disclosure
statement is delivered late or not delivered, the buyer's right to rescind expires the earlier of
three days after receipt of the disclosure statement or the date the transfer closes.

Summary of Bill: Subject to appropriations, the University of Washington and Eastern
Washington University must review existing recorded covenants and deed restrictions to
identify recorded documents that include racial or other restrictions on property ownership
or use against protected classes that are unlawful under WLAD. For properties subject to
such unlawful restrictions, the universities must notify property owners and the county

Senate Bill Report -2- E2SHB 1335
auditor of the county in which the property is located and must provide information on how
such unlawful restrictions may be struck.

The seller disclosure statement is amended to include a notice to the buyer that covenants or
deed restrictions based on race, creed, sexual orientation, or other protected class are void
and unenforceable, and provides information on how such illegal restrictions can be struck.

A process for striking and removing unlawful restrictions from the record and chain of title
after a property owner files an action in superior court is provided.

The original document containing the unlawful restrictions may be preserved for historical
or archival purposes.

The provisions of the bill apply to real estate transactions entered into on or after January 1,
2022.

Appropriation: None.

Fiscal Note: Available.

Creates Committee/Commission/Task Force that includes Legislative members: No.

Effective Date: The bill takes effect on January 1, 2022.

Staff Summary of Public Testimony: PRO: Racial covenants are some of the most racist
records we have. These records still exist and they are racist. If people knew that the
covenants were placed on their homes, they would want them removed. The cost is likely
to be approximately $250,000 per year. These racist property covenants are both part of our
history and a stain on the character of our state. Eastern Washington University (EWU) is
uniquely positioned to find and analyze these records. They have the researchers and
expertise to do this project. There are 20 counties east of the Cascades. EWU will create an
index of these covenants. Many of these records are not digitized, and cover a land mass
the size of Portugal. Segregation intensified during the early part of the 20th century, and
the restrictions from the covenants enforced this segregation. This is one more step in the
right direction. This bill provides tools for identifying the covenants and a procedure for
removing them. EWU has the experience, the passion, and expertise to see this project
through. There will be significant fieldwork for this bill, and students will be paid for this
meaningful work. This is a better, more feasible bill after having worked with
stakeholders. The amendment to the disclosure that lets people know how to remove the
covenants. This was written to be practical, and provides a valuable learning opportunity
for students.

OTHER: With appropriate funding, this bill can be successful. In 27 counties, the records
to be analyzed are paper and make this an onerous process. This bill clarifies the process

Senate Bill Report -3- E2SHB 1335
for removing the offensive covenants. This bill is a collaboration between a broad set of
stakeholders.

Persons Testifying: PRO: Representative Javier Valdez, Prime Sponsor; Larry Cebula,
Eastern Washington University; Logan Camporeale, Local Historian; Jacob Vigdor,
University of Washington; Nora Burnes, Building Industry Association of Washington;
Sean Holland, Washington Land Title Association; Sam Ligon, Eastern Washington
University; Bill Clarke, Washington Realtors; Katherine Touff, Seattle University School of
Law.

OTHER: Vicky Dalton, Spokane County Auditor, Washington State Association of County
Auditors.

Persons Signed In To Testify But Not Testifying: No one.

Senate Bill Report -4- E2SHB 1335

File and source

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SHA-256: ccb068d1f8393f17bcfd8a38eaced83853bbb2dfed570509141501f21087ca96
Our copy: 2021-03-23_a28898_d232847_bill-report-1335-s2-e-sbr-bfst-ta-21.pdf
Original: app.leg.wa.gov