Agenda

Return

C.81

To:	Board of Supervisors
From:	Robert J. Kochly, District Attorney
Date:	April 7, 2009

Contra

Costa

County

Subject:

UPDATE REAL ESTATE FRAUD PROSECUTION FEES PURSUANT TO GOVERNMENT CODE SECTION 27388

APPROVE	OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR	RECOMMENDATION OF BOARD COMMITTEE

Action of Board On: 04/07/2009

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

AYE:

John Gioia, District I Supervisor
Gayle B. Uilkema, District II Supervisor
Mary N. Piepho, District III Supervisor
Susan A. Bonilla, District IV Supervisor
Federal D. Glover, District V Supervisor

Contact:	Jennifer Marttinen (925) 957-2234
cc:	Clerk-Recorder - Chambers Auditor-Controller District Attorney - Marttinen

I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown.
ATTESTED: April 7, 2009
David Twa,

BY:	, Deputy

RECOMMENDATION(S):

ACKNOWLEDGE that Government Code 27388 requires a County Board of Supervisors to adopt real estate recording fees and associated increases by Board Resolution.

ADOPT Resolution No. 2009/144 increasing fees imposed on the recording of certain real estate instruments from $2 to $3 and impose a fee of $3 on additional real estate instruments as defined in Government Code section 27388.

FISCAL IMPACT:

Though the fee is being increased, Real Estate Fraud Prosecution Fund revenue may not increase due to the downturn in the real estate market.

BACKGROUND:

The Contra County District Attorney's Office Real Estate Fraud Unit investigates and prosecutes serious and significant cases involving fraudulent transactions that can cause unsuspecting victims to lose their life savings and homes. This Unit is funded in part by the fee on Real Estate documents assessed by the Contra Costa County Clerk-Recorder's Office. Given the current economic climate and the collapse of the real estate and credit markets, we have received an increasing number of complaints of egregious fraud committed on homeowners, including foreclosure fraud. The current economic situation is ripe for crooks and thieves who prey on the financial difficulties of homeowners. The proposed additional fee imposed upon real estate documents will assist our efforts to protect the citizens of Contra Costa County and ensure the safety and continuity of their home ownership.

Section 27388 of the Government Code, relating to local government, allowed for the establishment of a Real Estate Fraud Prosecution Trust Fund. The program was established in the District Attorney's Office budget and recording fees were established for real estate instruments, paper, and notices, with fees set at $2 per instrument. Monies collected by the Clerk-Recorder's Office are currently, and shall continue to be, deposited into the interest bearing Real Estate Fraud Prosecution Trust Fund (Fund No. 113300) for the sole purpose of prosecution and investigation of real estate fraud.

Senate Bill (SB) No. 1396 was approved by the Governor of California and filed with the Secretary of State on September 27, 2008. SB1396 authorizes a county Board of Supervisors to impose a fee of up to $3 to be paid at the time of recording every real estate instrument, paper, or notice required or permitted by law to be recorded within that county, except those expressly exempted from payment of recording fees.

A "real estate instrument" was previously defined as a deed of trust, an assignment of deed of trust, a reconveyance, a request for notice, and a notice of default. SB 1396 broadens the definition than previously applied to include a substitution of trustee, a notice of trustee sale, and a notice of rescission of declaration of default. It does not include any deed, instrument, or writing subject to the imposition of a documentary transfer tax as defined in Section 11911 of the Revenue and Taxation Code, nor any document required to facilitate the transfer subject to the documentary transfer tax. Funds from the Real Estate Fraud Prosecution Trust Fund shall be used only in connection with the criminal investigations or prosecutions involving recorded real estate documents.

It should be noted that the County Clerk-Recorder began collecting increased fees of $3 on certain real estate instruments and imposed a new fee of $3 on additional real estate instruments pursuant to SB 3976 beginning on January 1, 2009.