Clearing Title: How to eradicate the monuments of racial territoriality from your title

As a property owner or real estate professional you have likely stumbled upon something in a deed or title report that made you recoil. “Can they really SAY that?” Well, not anymore. “DID they really say that?” Of course they did. The history of racially discriminatory covenants and their ultimate demise seems to some like, well “history,” but the ghosts of redlining and residential exclusion continue to haunt title reports, title policies, and deed references. Washington State courts have recently addressed the question of how (and if) to stop the cycle of passing these discriminatory covenants on from owner to owner, and now the same issue is before the legislature.

Racially Discriminatory Covenants and Restrictions are Void and May be Stricken

The Supreme Court of the United States declared racially discriminatory real estate covenants unenforceable under the Fourteenth Amendment to the United States Constitution in 1948. Shelley v. Kraemer, 334 U.S. 1, 23, 68 S. Ct. 836, 92 L. Ed. 1161 (1948). Even after the fair housing laws passed in the late 1960s, racist housing practices – documented or otherwise – persisted.

In 1969, the Washington State Legislature declared any existing racially restrictive property covenant invalid and declared that inserting such discriminatory provisions in real estate documents was an (illegal) unfair practice. RCW 49.60.222. However, despite these legislative and judicial efforts, property sellers still inserted new racially discriminatory covenants in subdivisions and property deeds that county auditors continued to record. In response, the Washington Legislature implemented a procedure for property owners, tenants, occupants, or a HOA to strike the voided provisions from the public record and/or title.  RCW 49.60.227. But if they were stricken, why do we still come across them in our title report or our CCRs?  That all depends on your definition of “strike.”

What Does it (Currently) Mean to “Strike” Discriminatory Language under RCW 49.60.227?

There are two methods for “striking” voided covenants under RCW 49.60.227: (1) bringing an in rem declaratory judgment action (in other words, a lawsuit) requesting the provision be stricken from the public records and eliminating it from the title or lease; and (2) recording a restrictive covenant modification document with the county auditor where the property is located that states the following:

The referenced original written instrument contains discriminatory provisions that are void and unenforceable under RCW 49.60.224 and federal law.  This document strikes from the referenced original instrument all provisions that are void and unenforceable under law.

RCW 49.60.227 (2)(c).  But what does it mean to have something stricken? A quick read of the first option provides little clarity: the discriminatory language is “stricken” by seeking a court order “striking” the void provisions. What?

In May v. Spokane County, Mr. May, a property owner, initiated a declaratory judgment action to strike the following racial restrictive covenant (inserted in 1953) from his title and the public record:

No race or nationality other than the white race shall use or occupy any building on any lot, except that this covenant shall not prevent occupancy by domestic servants of a different race or nationality employed by an owner or tenant.

37179-4-III, 2021 WL 685899, at *1 (Wash. Ct. App. Feb. 23, 2021). Although the covenant is unenforceable and void as a matter of law, it makes a modern reader shutter.  Mr. May sought a court order requiring the Spokane County Auditor to redact the racist language from the public record pursuant to RCW 49.60.227 (1). However, the Spokane County Auditor contended documents cannot be physically altered once recorded and, instead, proposed to record a correction document (a modification or a court order) that references and corrects the “error.”  Mr. May argued that “correcting” isn’t striking.  The words are still there to be discovered by the next reader/homeowner.

Ultimately, the Superior Court and the Court of Appeals both concluded that “striking” the otherwise void provision from public records under RCW 49.60.227 (1) does not require physical alteration/redaction of the record itself.  Rather, they held that a court order “striking” the “voided provision in a recorded instrument is self-executing; i.e., no action beyond entry of the order is necessary to eliminate the existence of the discriminatory provision.”

Under the Courts’ recent holdings, the two options under the statute have the same result: an order/modification document will be included in the official property record, but the original language, and all the degradation it carries, remains on record as a racist monument.

What’s Next?

The majority’s decision in May v. Spokane Cty, may not be the last word on this issue. Judge Fearing’s 26-page dissent, rooted in comprehensive statutory interpretation and study of legislative intent, provides a thought-provoking analysis on this issue and a strong framework for Mr. May to use for an appeal to the Washington State Supreme Court.

This issue and Mr. May’s case have not gone unnoticed by the Legislature. A new bill proposing to revise the statute recently passed in the House and is in committee in the Senate. 2021 Washington State House Bill 1335. Bill 1335 would allow, among other things, an owner, occupant, tenant, or HOA to obtain a court order that includes physically redacted copies of the documents the Auditor records into the public record. This redacted version will be the primary official record (in the index and chain of title). Notably, the Auditor may send a copy of the original documents (with discriminatory language) to the secretary of state archives division for historical purposes.

The Bill also includes a grant program for higher education institutions to review existing recorded covenants and deed restrictions to identify the recorded documents with racial (or other) discriminatory provisions that violate the statute. Each property owner and county auditor would be notified of the specific provisions and given information about how to strike such provisions if they choose to do so.

We still don’t know whether Mr. May will appeal to the Washington State Supreme Court and/or whether the Washington State Legislature will revise the statute, but we will track the progress of this issue and provide periodic updates as new information becomes available. Ultimately, you should feel excited, welcome, and confident during the home-buying process, not degraded by the very document evidencing the milestone of your new ownership: your title.

If you have any questions about your title, racial covenants, and/or how to strike racially discriminatory covenants, please contact an attorney in our real estate practice group, including Karly Clendenen (kclendenen@montgomerypurdue.com).