Bulletin: LA2020002

Dear Associates:

The following is a summary of legislation that was passed during the 2020 Regular Session. (There is a Special Session called by the Governor in progress, so there may be more legislation and another Bulletin later this summer.)

Act 19. This statute amends and reenacts Civil Code Arts. 895, 1495, and 1505. It also amends and reenacts Civil Procedure Arts. 2952 and 3396, enacts a new Civil Code Art. 1495.1 and repeals R.S. 9:2401. The main purpose is to clarify how to calculate the “forced portion” in the situation when a child has predeceased a parent, leaving multiple grandchildren. There was lack of clarity as to whether such grandchildren would get one forced portion divided amongst them, or more. The answer now is that the grandchildren would divide the forced portion of their deceased parent.

Additionally, the Act provides a formal way by Judge’s order to seal the descriptive list of a succession from the prying eyes of the public.

What you should know/do: You will have to carefully calculate the forced portion when title is passed by a Judgment of Possession, remembering that R.S. 9:5630 gives an heir two years to make a claim against a third-party purchaser for being deprived of an inheritance. (Effective August 1, 2020)

Act 20. This Act provides that the purchasers through a bond for deed are not homeowners for purposes of the homestead exemption, and repeals R.S.9:2948 and Civil Code Art. 477(B) as unconstitutional. (Effective August 1, 2020)

What you should know/do: When prorating taxes in such a transaction, make sure the property is not calculated as homestead exempt for the next year in which the assessor will change the assessment. (Effective August 1, 2020)

Act 50. This statute amends R.S. 12:1-501 relating to the requirements of corporate registered agents. The Act requires that any entity acting as agent for a foreign entity must itself be authorized to do so in its articles and must have an office in the State. Additionally, the Secretary of State is no longer required to record a revocation of an entity in local parish records.

What you should know/do: When examining title, always check the Secretary of State’s site to make sure the entity you are examining still is in existence. (Effective June 5, 2020).

Act 59. This law enacts a new R.S. 9:1256 and 9:1257, in order to provide more detail with regard to servitudes of drain. First, a revocation or alteration of a natural servitude of drain can be accomplished by agreement if such an agreement is not against the public’s interest. Second, in physically clearing a conventional servitude of drain, the dominant owner may temporarily leave behind debris and silt, causing the least damage possible and removing them as soon as possible.

What you should know/do: This new law is a reminder that drainage servitudes often materially affect the use and enjoyment of a property and must be exceptions. Also, be aware that the parties affected by a natural servitude of drainage do not have the unbridled authority to alter or cancel a natural servitude. (Effective August 1, 2020)

Act 109. This new statute amends La. R. S. 13:3733.1 and enacts 13:3733.3 to provide that electronic signatures used by financial institutions “are enforceable to the full extent of the law.”  The Legislature “encourages” the use of electronic signatures “to facilitate commerce.”

What you should know/do: The language of the law strengthens and protects financial institutions which use electronic signatures in their contracts. The law does not address executory process, but “full extent of law” implies that use of electronic signatures might not be a bar to executory process. (Effective August 1, 2020)

Act 131. This new act enacts La. R. S.35:701 and 35:702 relative to the effect of remote notarizations during certain emergencies and disasters. The Act ratifies the Governor’s recent proclamations regarding remote notarizations, during the COVID-19 emergency between March 11 through April 30, 2020. The Act provides that appearances before a notary and/or witnesses via electronic means (with the ability to communicate by sight and sound) as if in physical presence of each other, is sufficient. (This does not apply to testaments, trusts, donations, matrimonial agreements, or authentic acts.) The Legislature says that this statute “shall be construed to effect its purposes.”

What you should know/do: Be aware of the major exceptions contained in this Act, especially the exception dealing with authentic acts. Authentic acts under this Act may still be effective as acts under private signature. (Effective June 9, 2020)

Act 162. This statute enacts La. R. S. 9:5828 through 5830, to provide for suspension of prescription during the 2020 COVID-19 Public Health Emergency. The act recognizes that the right to enforce any right, claim, or action which would have expired between March 17 through July 5 will expire on July 6. This Act further provides that if a legal deadline has lapsed between March 17 and July 5, parties may seek an extension by motion in court, but such extension cannot go beyond September 30, 2020, and declares that as of September 30, 2020, the suspension has no further effect.

What you should know/do: You should be careful when calculating all time periods during this time. Civil Code Art. 3472 provides that a period of suspension does not count towards the accrual of prescription. After September 30, you may calculate such periods as if there were no suspension. (Effective June 9, 2020)

Act 173. The small succession articles in the Code of Civil procedure have been amended to allow the small succession affidavit to be used where the estate has no real estate, and there is a testament which merely confirms the statutory codal provisions of heirship.

What you should know/do: This expands the use of a small succession affidavit to those cases where there is a will, but the will does not change the heirship which would have occurred without a will. The theory must be that there is no need to probate a testament which merely confirms what the law presently provides when there is no testament.

Act 254. This is an amendment of Civil Code Art. 3344 and R.S. 35.6. It also enacts a new 9:2760 and a new R.S. 35:621 through 35:630. The purpose of Act 254 is primarily to provide for remote online notarizations in a limited setting, and to allow the clerks of court to accept by either receiving a tangible copy certified by a notary to be a true copy of an electronic act or by e-filing such an electronic act. It also provides that remote online notarization in all states and the District of Columbia are not to be deemed authentic acts. It does authorize Louisiana notaries to do remote online notarizations only until Feb. 1, 2022 (but not testaments, authentic acts, donations, matrimonial agreements, and spousal support agreements). Notaries are responsible for verification of identity of parties and witnesses, and for the security of the communication technology. To be authorized to notarize remotely online, the licensed Louisiana notary must fulfill certain requirements. The notary must be in the jurisdiction for which he/she was licensed to remotely online notarize. Any such act must contain a provision that it has been remotely online executed and notarized. These records must be maintained by the notary for ten years, including the audio-visuals of the closing. The Act establishes a “stakeholder committee” to develop further standards which must be adopted by February 1, 2022. After February 1, 2022, the Secretary of State will be in charge of authorizing notaries to perform remote online notarizations, along with required education and training courses, and the blanket authority above to all notaries will no longer be in effect.

What you should know/do: This Act should be read in its entirety, it allows for remote online notarizations beginning August 20 of this year, with the expectation that education and training be required and completed by February 1 of 2020. It imposes responsibilities on notaries. Since it does not allow authentic acts by either Louisiana notaries or out-of-state notaries, it will have limited effect in the real estate area. (Effective August 20, 2020, in part, and February 1, 2020, in part).

Act 281. This act amends the partition articles of the Code of Civil Procedure, and Article 811 of the Civil Code. It empowers a judge to order a partition by private sale, even if one of the parties cannot be notified or if a party disagrees with a private sale, but in such case the sale must be for at least 2/3ds of the appraised price. Absent heirs must be represented by an attorney ad hoc. The amount due to any such owner must be deposited in the court registry, and the court has discretion as to whether to charge such co-owner with costs.

What you should know/do: This expands the ability to sell by private sale a property owned by multiple owners (usually family descendants). (Effective June 11, 2020)

Act 310. This act amends various provisions in the Insurance Code (Title 22) to impose what in informally referred to as a “brick and mortar” requirement for title insurance. Basically, the issuer who is a natural person must be a resident of this state. Each “agency title insurance producer” shall either be a Louisiana entity with a principal place of business in this State, or a foreign entity registered to do business in Louisiana with a principal place of business “suitable for conducting the business of title insurance and real estate closing.” The producer shall employ at least one licensed individual producer.

What you must know/do: If you are a non-resident entity issuing title insurance in Louisiana, you must establish a physical office in Louisiana capable of handling closings and have at least one employee licensed to issue policies at that office, who resides in Louisiana. (Effective January 1, 2021)

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

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