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1998 State Legislative Report - Kansas

Contact: John W. Dozier, Jr.

I CIVIL ACTIONS
Statute of Limitations
House bill - 2763 -- The bill would increase the time period for automatic release of a mortgage from 30 years to 42 years. Just last year a bill was passed setting the period at 30 years, it appears that somebody was not paying attention when the bill was passed last year and came back this year to increase the sunset time period. The bill becomes law on July 1, 1998. Enforcement of Tax Lien
Senate bill - 384 -- This bill would create the Kansas statutory lien act. The bill lists types of liens that would not be subject to the terms of the act such as, but not limited to, liens created by a mortgage, contract for deed or written agreement involving real estate, tax liens, federal liens, and judgment liens. Between the 1997 and 1998 sessions, the KLTA testified in opposition to the inclusion of real estate mechanics liens in the bill. Our request to remove real estate was granted and as far as we know, the current version of the bill would not cover real estate mechanics liens. (See HB 2606) II ENVIRONMENTAL ISSUES

III. ESCROWS

IV. INSURANCE / BUSINESS ISSUES Forms/Rates Regulation/TOP/Commission Splits

House bill - 2966 -- The bill would provide for regulation of the escrow business by the Kansas Insurance Commissioner. Some of the highlights of the bill are as follows, to-wit:

Escrow agent not allowed to retain interest on money held in an interest bearing account, unless the agent has written permission of all parties to the transaction.

The escrow agent cannot commingle personal funds and escrow funds.

An annual audit of the escrow and closing accounts, but only for title insurers in counties with a population of more than 40,000.

A biennial audit for agents in counties with population of less than 40,000.

This bill is currently in the Senate Financial Institutions and Insurance committee.

Limited Liability Companies Senate bill - 472 -- Changes the current limited liability company law so that one person may form an L.L.C. and changes the presumption that the L.L.C. is dissolved upon the death of one member to a presumption that the L.L.C. would continue. The bill will become law on July 1, 1998.

Controlled Business

House bill - 2692 -- The bill would repeal the current prohibition on controlled business arrangements in the title industry in Kansas by removing the requirement that not more than 20% of the title insurer's/agent's gross revenue come from controlled business, but only in counties with a population below 10,000 or above 200,000. We knew the bill was coming this year, and the proponents were prepared to push the bill very hard. They succeeded in getting it through the House only after adding the amendment that set the 10,000/200,000 population requirement. Under the current version of the bill, controlled business arrangements would be allowed with the following disclosure requirements, to-wit:

The disclosure must be in writing;

It must state that the producer or their associate has a financial interest in the title insurer;

It must state that the consumer is not obligated to use the title insurer;

It must include the names and phone numbers of at least three other title insurers/agents operating in the county. If there are less than three other insurers/agents, then the disclosure must give the names and numbers of all other companies doing business in the county;

The disclosure must be signed by the consumer prior to any commitment to the title insurer/agent.

Further, the name of the title insurer/agent may not be pre-printed in the contract used by the producer. The bill is in the Senate Financial Institutions and Insurance committee.

V. STATUTORY LIENS Mechanics’ Liens

Senate bill - 653 -- The bill would change current law regarding a sub- contractor's right to file a mechanics lien. If the owner of the real estate paid the general contractor, then the sub-contractors could not file mechanics liens against the real estate. The bill is in the Senate Commerce committee.

Mechanics’ Liens

House bill - 2041 -- This bill would allow a subcontractor six months to file a mechanics lien against (commercial) nonresidential real estate. KLTA testified in opposition to the bill. The contractors argued that allowing six months for filings would actually reduce the number of liens filed, because it would allow a longer time to collect the unpaid bills. The bill has not passed the House.

Mechanics’ Liens

House bill - 2228 -- This bill would allow "design professionals" such as architects, engineers and surveyors, to file mechanics liens in real estate. The KLTA testified in opposition to this bill and the bill is still in the House Judiciary committee.

Mechanics’ Liens

House bill - 2606 --The bill is identical to SB 384, except it contains no reference to mechanics liens on real estate. The proponents of the statutory lien act felt it would be easier to start in the House and then move the Senate. The bill is still in the House Judiciary committee.

Judgment Liens

Senate bill - 216 -- This bill requires the district court clerk to re-number a chapter 61 case that has been converted to a chapter 60 case with a new chapter 60 number. Court clerks across the state have not followed a uniform procedure of assigning a new chapter 60 number, thus resulting in the risk that the judgment would become a lien when converted to a chapter 60 case, but an abstractor could not pick it up because it did not appear as a new chapter 60 filing. This bill will require the clerk to assign a chapter 60 number and should avoid the problem. Late in the 1997 session, the provisions of the bill were amended into HB 2007 and passed into law. The law became effective on July 1, 1997.

Judgment Liens

House bill - 384 -- This bill would create the Kansas statutory lien act. The bill lists types of liens that would not be subject to the terms of the act such as, but not limited to, liens created by a mortgage, contract for deed or written agreement involving real estate, tax liens, federal liens, and judgment liens. Between the 1997 and 1998 sessions, the KLTA testified in opposition to the inclusion of real estate mechanics liens in the bill. Our request to remove real estate was granted and as far as we know the current version of the bill would not cover real estate mechanics liens, see HB 2606.

Judgment Liens

House bill - 408 -- Allows the owner of real estate to file a motion for judicial review of the validity of lien placed against the real estate. Allows a court to act ex-parte, which means without notice of any kind, and enter an order declaring the lien as bogus and thus null and void. The bill has been presented to the Governor for signature.

Child Support Liens

House bill - 2465 -- This bill would remove the statute of limitations for child support judgments. The KLTA contacted the representative that introduced the bill to voice our concern that removing the statute of limitations from any judgment lien is probably not a good idea, even if we agree that people who owe child support should pay it. The bill is currently in the House Judiciary committee.

VI. TAXES

VII. PUBLIC ENTITIES

VIII. REAL PROPERTY INTERESTS Adverse Possession Senate bill - 355 -- This bill would allow an action for adverse possession only against a tract of land less than 160 acres and would require that the adverse possessor pay the taxes for at least five years prior to filing the action. This bill is currently in the Senate Judiciary committee.

IX. DEEDS AND SECURITY INTERESTS Obligations Senate bill - 500 -- Another tax reduction bill that would change the Kansas inheritance tax and also remove the sale tax from residential construction. The bill will increase the exemption from inheritance tax from current levels to equal the federal exemption. The bill has been signed by the Governor and will become effective on July 1, 1998.

X. RECORDING Secretary of State Senate bill - 474 -- The bill deletes the requirement that articles of incorporation for a corporation be filed with the register of deeds office in the county where the corporation is domiciled. The bill will become law on July 1, 1998.

Recording Requirements

Senate bill - 100 -- Allows digital storage of court and county records. The bill has been presented to the Governor for signature and, if signed, will become law on July 1, 1998.

Recording Requirements

House bill - 2856 -- The bill would allow county and court use of digital storage decvices. The bill is currently in the House Judiciary committee

Recording Fees

House bill - 2786 -- The bill would raise the recording fees that register of deeds could change for assignments, notice and releases of tax liens, and machine liens. The bill would increase the fee for assignments from $5.00 to $6.00 for the first page and $2.00 for each additional page. The bill failed to pass the House and remains in committee.



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