Bulletin: CO000017

Date:
July 08, 1997
To:
All Stewart Title Owned Offices and Agents in Colorado
RE:
Legislative Summary 1997

Dear Associates:

A copy of the final Legislative Report Summary prepared for the Colorado Land Title Association is available through the Colorado Office. You will note that many of these bills were either "killed" or "postponed indefinitely", meaning that they never became law. Any reference to those bills is informational only.

The following is a summary of significant bills enacted by the 1997 Colorado Legislature and subsequently signed into law by Governor Romer which have some impact, either directly or indirectly, on the business of title insurance in Colorado. Unless otherwise noted, the effective date of each of these bills is July 1, 1997.

House Bill 97-1026 (Concerning the Standards Required for Documents Received by County Clerk and Recorders)

This bill requires documents recorded or filed with the county clerk and recorder to contain a top margin of at least one inch and a left, right and bottom margin of at least 1/2 of an inch. It allows the clerk and recorder to refuse to record or file documents not conforming to the specified requirements. The effective date of this bill is September 1, 1997. Landata is reviewing all documents formatted in the AIM System to be sure that they comply.

Company Policy: To effectively notify our customer's of this change in the requirements of the County Clerk and Recorder the following notation should be placed on title commitments:

Note: Effective September 1, 1997, CRS 30-10-406 requires that all documents received for recording or filing in the Clerk and Recorder's office shall contain a top margin of at lest one inch and a left, right and bottom margin of at least one-half inch. The Clerk and Recorder may refuse to record or file any document that does not conform.

House Bill 97-1143 (Concerning Spurious Documents Affecting Title to Property)

This bill defines a spurious lien as one not authorized by statute, agreed to by the owner of the property, nor imposed by order of an authorized state of federal court. It defines a spurious document as one that is forged, groundless, fraudulent, or otherwise patently invalid. It authorizes any state or local employee to either accept or reject for recording or filing any spurious lien or spurious document. It relieves any state or local employee from any liability for either accepting or rejecting for recording or filing any document the employee believes in good faith to be spurious lien or spurious document.

The bill limits the validity of any spurious lien or spurious document to 30 days after its recording or filing and authorizes a new procedure for an action to declare a spurious lien or spurious document invalid. The bill describes the requirements for an order to show cause under the new procedures and requires the court to enter judgment for costs, including reasonable attorney fees, in favor of the prevailing party in such action.

It also repeals the class 1 misdemeanor crime for knowingly recording or filing a forged, groundless, fraudulent, or otherwise invalid document.

Allows title insurance companies not to disclose to proposed insureds the existence of spurious liens, spurious documents, or other documents that do not encumber or are not an impairment of the record of the property proposed to be insured.

Company Policy: Although this bill would appear to allow us to ignore a spurious lien or spurious document, no agent affiliated office is authorized to ignore such a document without first obtaining approval from Stewart Title Guaranty Company underwriting personnel.

House Bill 97-1205 (Concerning the Child Support Responsibilities affected by the federal "Personal Responsibility and Work Opportunity Reconciliation Act of 1996", and Making an Appropriation Therefor.)

Although the bill referred to in the Legislative Report allows for an automatic lien for child support CLTA was successful in adding amendments which require recording of a statement of lien prior to its attachment to real estate.

House Bill 97-1325 (Concerning Regulation of the Business Activities of Title Insurers Undertaken in Conjunction with Closing and Settlement Services . . .)

This is the controlled business bill that was defeated in the 1997 Legislative session but is likely to be reintroduced in another form in the 1998 legislature. We will continue to keep you informed.

Senate Bill 97-155 (Concerning the Central Indexing System)

This bill amends several of the provisions of the Central Indexing System. Real Estate filings are not affected by the Central Indexing System. In other words, a mortgage filed as a fixture filing in the real estate records would not be affected by the Central Indexing System. The Central Indexing System will only affect individuals and firms conducting UCC searches. It is not necessary to continue any fixture filing, mineral filing or timber filing, unless the party also wants the filing to be indexed on the central index.

Senate Bill 97-213 (Concerning the Indemnification of Public Trustees when Original Evidence of Debt is Not Provided in Certain Transactions.)

This bill provides that in circumstances where deeds of trust are to be fully or partially released, an expanded list of financial institutions including, but not limited to, Finance Companies and FHA Mortgagees, may submit a statement to the public trustee that the original evidence of debt is not being produced. It stipulates that the financial institution submitting such statement shall indemnify the public trustee for any damages, costs, liabilities, and reasonable attorney fees incurred in reliance on said statement and clarifies that the submission of the statement shall be necessary. It also limits the proper venue for any action based upon such indemnification to the county in which the public trustee receiving a statement is located.

This memorandum in intended to provide general information on new statutes affecting title insurance in Colorado. As additional issues or questions arise regarding specific procedures to be followed in each case, please don't hesitate to contact Rand Zimmerman, Mike Cranmer or Bob Adams. We will be forwarding additional information and clarification as it becomes available.

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