Bulletin: ID2016002

Dear Associates:

The following is a summary of the laws that were passed in the 2016 legislative session. Overall it was a very quiet session as far as our industry was concerned. There were 632 bills introduced - 377 passed. Below is a list of the Bills that may be of interest.

H.B. 511. This Bill protects the private property rights of homeowners by ensuring their right to rent their property is preserved. If a homeowner bought a home at a time when renting the home was allowed by an HOA, the HOA may not create new Covenants, Conditions and Restrictions (CCR's) that change the existing right to rent without written consent of the homeowner. This Bill does not impact CCR's that were in place prior to the time a homeowner purchased the property.

SB 1217. This Bill provides that HOAs may only seek attorney's fees and costs from a property owner after the property owner has had the opportunity to cure any violation. A court may determine the reasonableness of attorney's fees assessed by an association. The prevailing party in a dispute may be awarded attorney's fees and costs.

SB 1388. The purpose of this Bill is to clarify the scope and effect of Idaho's statutes governing tax deeds. In the case of Regan v. Owen, the Idaho Supreme Court addressed whether a tax deed issued pursuant to Section 63–1009, Idaho Code, has the effect of extinguishing an otherwise valid private easement across the subject property. Similar legislative language exists with respect to counties in Section 31-808, Idaho Code, with respect to irrigation entities in Section 43-720, Idaho Code, and with respect to cities in Section 50-1823, Idaho Code. The Court did not decide the issue, but remanded to a lower court. The lower court subsequently ruled that, despite the harsh result, the statute has this effect. While a private access easement was at issue there, the reasoning would also result in the elimination of public utility easements, ditch rights, public highways and rights-of-way, conservation easements, and all manner of third party rights in the land. With this legislation, the Idaho Legislature modifies that conclusion. This Bill does the following: (i) requires notice to other parties of interest in order to prime their interest; and (ii) preserves certain interests that lawfully exist prior to the notice of deficiency.

HB 503. This Bill amends I.C. 45-1502 by adding clarifying language to the definition of "Trustee". The Bill (1) closes the gap and resolves any conflicts between the trust deed statutes and the mechanic's lien statutes by clarifying that a trustee under a deed of trust is not the "owner or reputed owner" of the property subject to the deed of trust, and (2) resolves the title industry's remaining concerns about the scope of title held by the trustee by codifying the limited conveyance of title to the trustee. The Bill provides: “Trustee means a person to whom title to real property is conveyed by trust deed, for the limited purpose of the power of sale contained in this chapter … and the obligation to reconvey the deed of trust ….  All other incidents of ownership of such real property shall remain with the grantor.  A trustee is not a party requiring notice of sale”.

HB 431. Homestead Exemption modification. The index on the Idaho homestead exemption was removed and the exemption value was established at $100,000 or 50 percent of assessed value, whichever is less.

HB 491. This Bill prohibits nonconsensual common law liens, repeals Chapter 17, Title 45, and creates I.C.A. 45-811. The Bill defines a nonconsensual common law lien and then prohibits the same. The Bill further provides for an expedited judicial proceeding that can be accessed by the land owner to have the lien judicially removed. Any person who causes to be recorded a nonconsensual lien and refuses to withdraw the document is liable to the property owner for $5,000 or for actual damages, whichever is greater, plus court costs and attorney’s fees.

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