Laws, Regulations & Annotations

W

880.0000 WELFARE EXEMPTION

(a) IN GENERAL

Annotation 880.0063

880.0063 Construction in Progress. Construction is not considered "abandoned" if delayed due to reasonable causes and circumstances beyond the assessee's control, that occur notwithstanding the exercise of ordinary care and the absence of willful neglect. A delay in obtaining financing from the United States Department of Housing and Urban Development may be considered a reasonable delay, because awaiting a governmental entity's processes, while diligently ensuring that the project meets all of the governmental entity's requirements for funding approval, can constitute circumstances that are outside of the assessee's control.

Moreover, Revenue and Taxation Code sections 214.1 and 214.2 do not specify that property must be owned by the same legal entity during the entire course of construction in order for the underlying property to continue to qualify as property used exclusively for religious, hospital or charitable purposes. Rather, sections 214, 214.1 and 214.2 require that the facility itself be in the course of construction, owned and operated by eligible organizations that intend to use the property exclusively for religious, hospital, or charitable purposes. Therefore, it is the activity occurring on the property that is primarily at issue, not necessarily the continuity of ownership. As long as the lessee corporation is organized and operated for exempt purposes and has actually continued, and not abandoned or intentionally delayed any efforts in moving the project forward for exempt purposes, the construction of a facility to be used for exempt purposes is not considered abandoned upon assignment of the land lease that includes the requirement to construct and operate such a facility on the subject parcel. C 3/17/2014.