Bulletin: LA2021001

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Bulletin: LA2021001

Bulletin Document
V 1
Date: August 02, 2021
To: All Louisiana Issuing Offices
RE: LEGISLATIVE UPDATE - Louisiana 2021 Legislation

Dear Associates:

The following is a summary of legislation that was passed during the 2021 Regular Session.

ABANDONED MANUFACTURED HOMES - LANDOWNER REMEDY

Act 25. This law enacts R.S. 9:3259.3 and Code of Civil Procedure Article 4912(A)(3) and provides privileges to a landowner/lessor to possess and sell an abandoned manufactured home and personal property inside when the lessee vacates due to breach of the lease agreement with landowner. It also provides the step by step procedures which the landowner must take to exercise this privilege and obtain court authorization to sell. The abandoned manufactured home must be valued at a current market value of $5000.00 or less and not be encumbered by any security interest.

What you should know/do: When a manufactured home or mobile home is not permanently attached, an exception to the manufactured home on Sch. B is required. This provides a remedy for landowner/lessors to sell and remove the abandoned Manufactured Home and not have exceptions on Sch. B due to it being located on the property. (Effective August 1, 2021)

PARTITIONS OF PROPERTY BY PRIVATE SALE - MANDATORY STEPS

Act 27. This law amends and reenacts Civil Code Article 811 and Code of Civil Procedure Articles 4607, 4622, 4624, and 4625 as to partitions of property by private sale and requires an order to give first priority to the existing co-owners, over third parties, as well as making requirements as to absentee or non-consenting co-owners. When there are absentee or non-consenting co-owners, the sale must be for the appraised value and have a court-appointed representative for the absentee or non-consenting co-owner(s). This act should satisfy any Mennonite notice issues if followed correctly. Mennonite Board of Missions v. Adams, 462 U.S. 791 (1983).

What you should know/do: Be aware that the changes are mandatory. Careful review of the court proceedings as it relates to judgments by private sales, and sales with absentee or non-consenting co-owners is required. A checklist ensuring the mandated steps for these sales was followed is a strong recommendation, as failure to complete the steps could make the sale void/voidable. (Effective August 1, 2021)

SMALL SUCCESSION AFFIDAVITS AND SAFETY DEPOSIT BOXES

Act 44. This law amends and reenacts R.S. 6:767(F) and 768(D) and (E) and Code of Civil Procedure Art. 3434, and to enact R.S. 6:325(E), 767(G), and 768(F), to provide liability protection for federally insured depository institutions and mutual associations that transfer money, property, and property held in safety deposit boxes of deceased customers to the heirs or legatees of the deceased customer and the surviving spouse in community when relying on a small succession affidavit.

What you should know/do: Given that we rely on small succession affidavits in our industry, we wanted to highlight that they have enforceable effects outside of just the immovable property of a decedent’s estate. (Effective June 1, 2021)

DEFAULT JUDGMENTS - SIMPLIFIED

Act 174. This law amends and reenacts Code of Civil Procedure Articles 253.3(A)(3), 284, 928(A), 1001, 1002, 1471(A)(3), 1702, 1702.1, 1703, 1704, 1843, 1913(B) and (C), 2002(A)(2), 4904, 4921, 4921.1(C), and 5095, R.S. 13:3205(introductory paragraph) and 4990, and R.S. 23:1316.1(A) and repeals Code of Civil Procedure Article 1701 and R.S. 6 23:1316, eliminates preliminary defaults and confirmation of preliminary defaults process and provides for the rendition of default judgments.  If a defendant in the principal or incidental demand fails to answer or file other pleadings within the time prescribed by law or by the court, and the plaintiff establishes a prima facie case by competent and admissible evidence that is admitted on the record, a default judgment in favor of the plaintiff may be rendered provided that notice the plaintiff intends to obtain a default judgment is sent when required or notice is waived.

What you should know/do: This change simplifies the multistep default judgment process and makes the default judgment rendered a final judgment. We can insure when there is a final judgment ordered. If you are relying on a default judgment to confirm title, you must review the judicial procedure to make sure it was done properly to insure. (Effective January 1, 2022)

SUIT DEFENSE COSTS PROHIBITED TO REDUCE POLICY LIMITS WITHOUT WAIVER

Act 225. This law enacts R.S. 22:1272 to provide defense costs, to prohibit inclusion of defense costs in insurance contracts under certain circumstances, to provide for waivers, to provide for an effective date, and to provide for related matters relative to property and casualty insurance.

What you should know/do: The liability limits contained in a policy or contract of insurance issued by an authorized insurer shall not be reduced by the expenses of defense in a suit under the policy unless the commissioner executes a written waiver. Be aware of the law, but no changes are required as to agency practices. (Effective August 1, 2021)

SOLAR POWER PROPERTY LEASES, DEVELOPMENT, AND PRODUCTION REGULATIONS

Act 301. This law amends and reenacts R.S. 30:1154(A) and (C), to provide for terms, conditions, and requirements as it relates to leases to explore, develop, and produce solar energy. Further, it provides for the powers and duties of the secretary of the Department of Natural Resources.

What you should know/do: Be aware that this law is going to implement minimum requirements for property leases for the exploration, development, and production of solar energy, including but not limited to acreage, access, and maintenance of the property during the lease, decommissioning, and final site closure upon termination of the lease, and placement of this program within the department. The rules shall be promulgated by the secretary, but not implemented until the secretary identifies funding through fees, federal grants, or other sources. We will update you when the requirements/rules are promulgated. (Effective August 1, 2021)

SHERIFF SALE REQUIREMENT

Act 309. To amend and reenact Code of Civil Procedure Article 2334(A), relative to advertisement of sheriff's sales, that the description must adequately put the public on notice which property is being sold.

What you should know/do: Reading of the notice to the public of the property being offered for sale at minimum, shall include the lot and subdivision or municipal number or by section, township, and range, including some identifying mark, if appropriate, and a reference to the conveyance or mortgage recordation. If the recitation does not reflect it was done according to the new changes the sale would be void/voidable and a resale would be required. (Effective August 1, 2021)

PRESCRIPTIVE PERIOD CHANGES FOR REVOCATORY ACTIONS, ACTIONS FOR REDHIBITION, AND BREACH OF WARRANTY OF FITNESS

Act 414. This law amends and reenacts Civil Code Articles 2041, 2534, and 3463, to provide that revocatory action must be brought within one year from the time the buyer learned or should have learned of the act, or the result of the failure to act, but never after three years from the date of the act or result. An action asserting that a thing is not fit for its ordinary or intended use prescribes in two years from the day of delivery of such thing to the buyer or one year from the day the defect or unfitness was discovered by the buyer, whichever occurs first. An action for redhibition against a seller who knew, or is presumed to have known, of the existence of a defect in the thing sold prescribes in one year from the day the defect was discovered by the buyer or ten years from the perfection of the contract of sale, whichever occurs first. Interruption is considered never to have occurred if the plaintiff abandons the suit, voluntarily dismisses the suit at any time either before the defendant has made any appearance of record or fails to prosecute the suit at the trial.

What you should know/do: Be aware of these new prescriptive periods especially that of a revocatory action. The change eliminates the liberative prescription period of ten years in cases of fraud. (Effective August 1, 2021)

JUDICIAL SALES - WRIT OF FIERI FACIAS PUBLICATION REQUIREMENTS

Act 469. This law amends and reenacts Code of Civil Procedure Article 2331, as it relates to judicial sales via a writ of fieri facias and notice requirements for rescheduled sales.

What you should know/do: Be aware that an initial notice(s) of sale via a writ of fieri facias requires two publications, but if a judicial sale of immovable property is cancelled or postponed and rescheduled for a later date, the subsequent notice of sale of the property shall only be required to be published once in the manner provided by law. Update your checklist accordingly as it relates to notice requirements. (Effective August 1, 2021)

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

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