Bulletin: LA2016003

Dear Associates:

The following is a summary of legislation that was passed during the 2016 Regular Session. 

Act 76. This statute amends La. Civil Code Article 3367 in order to clearly require Clerks of Court in their capacity as recorders to cancel prescribed judgments, pledges or privileges in favor of the State (and all departments, agencies and political subdivisions including municipalities) which either have not been properly re-inscribed or which have prescribed as per La. R.S. 9:5685 (ten years), upon written and signed application. The position of some clerks that they need some sort of acquiescence from a state official is no longer supported by any interpretation of the amended Article.

What you should know/do: If your clerk refuses to cancel such an inscription, show the clerk this act. (Effective 8/1/16)

Act 86. This statute clarifies an academic argument by stating in rewritten La. Civil Code Art.1552 that a gift of a usufruct to one person and of a naked ownership to another person is not a prohibited substitution. It also amends La. C. C. Proc. Art. 3396.9 to allow for the natural tutor of an unemancipated minor to concur in the appointment of a succession administrator, including one for independent administration, without the need for a tutorship proceeding. 

What you should know/do: If your title contains an appointed executor/administrator, and a minor heir’s approval of the appointment is evidenced by a natural tutor’s affidavit, you may accept this and not require a tutorship proceeding. (Effective 8/1/16)

Act 88. This law amends La. R.S. 9:5175(C)(1) and (2)(a) which covers releases relative to bankruptcy debtors. It adds those who have obtained a discharge in bankruptcy pursuant to Chapter 13 to obtain a partial release of inscriptions regarding future acquired property (just as Chapter 7 discharged debtors may do so now). 

What you should know/do: If a purchaser has been recently discharged after a Chapter 13 proceeding in which the purchaser was relieved of debts which were recorded liens or judgments, obtain a partial release from the clerk on the new property by use of an affidavit of release. (Effective 8/1/16)

Act 89. This new statute amends La. R. S. 12:11-1443(B)(4) and states that a liquidated corporation continues in existence in regard to any immovable property it owns and which was not disposed of prior to liquidation, and disposition may be authorized by a resolution of the board of directors. Hence, liquidation does not transfer title to shareholders of undisposed real estate.  

What you should know/do: If your title search finds title in a corporation that you discover to have ceased operations, do not consider that the shareholders own the property unless the articles or an act of transfer so provide. You must obtain a resolution and deed from the last board of directors. (Effective 8/1/16)

Act 147. This new act amends La. R. S. 12;1335.1(A) to prevent a liquidation of an LLC by affidavit if it owns immovable property. Thus, any dissolution of an LLC by affidavit is ineffective as to LLC owned real estate, and the title does not go to the members. 

What you should know/do: If your title search finds title in a limited liability company that you discover to have ceased operations, do not consider that the members own the property, unless the articles so provide. You must obtain a certificate of authority and deed from the last members and manager. (Effective 2/1/17)

Act 170. This statute amends La. R. S. 12:1333(A) and (D) to allow articles of a limited liability company to provide for the transfer or disposition of the membership of a deceased or incompetent individual. In default of a provision in the articles, the member’s succession representative or other legal representative is considered the assignee of the member’s interest. The statutes further provides that the articles may provide for disposition of membership interests if the member is a juridical entity which goes out of existence, and in the absence of such provision, the juridical entity’s successor is considered the member.

What you should know/do: If your title shows such a situation, determine who are the proper members and get a certificate of authority accordingly. (Effective 8/1/16)

Act 244. This act amends La. R. S. 9:1123.115(B) and enacts a new La.R.S. 9:1123(A)(4) by providing a five-year prescriptive period for condominium association liens (instead of one year), but allows a condominium owner who proves that such lien was erroneous in whole or part to recover costs and reasonable attorney’s fees to get the lien released. 

What you should know/do: If your title shows a condominium association, you must get a written statement showing how much is owed to the association and you must pay the entire amount for every sale or refinance. (Effective 8/1/16)

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

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