Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2017

Revenue and Taxation Code

Property Taxation

Part 6. Tax Sales

CHAPTER 7. Sale to Private Parties After Deed To State

Section 3728

3728. Payments by former owner. Before holding any tax deed heretofore or hereafter given under this chapter or Chapter 8 (commencing with Section 3771), former Chapter 3 (commencing with Section 3475), former Chapter 4.3 (commencing with Section 3534), or former Sections 3897 and 3897d of the Political Code to be void, the court shall determine the correct amount of taxes, penalties and costs that should be paid upon redemption to discharge the tax and assessment liens of all taxing agencies and revenue districts had the purported tax sale not been held and the court shall order the former owner or other party in interest to pay that amount within six months as follows:

(a) To the purchaser, or his or her grantee or successor in interest, the amount of taxes, penalties and costs expended by him or her as determined by the court in pursuit of title to the property, and when the purchaser at that sale or the grantee in any deed for taxes or his or her grantee or successor in interest is in possession of that property in good faith and claiming the property under a tax deed, which is regular upon its face, and has made permanent improvements thereon, the court shall not make that decree until there has also been repaid to the purchaser or his or her grantee or successor in interest a sum, as determined by the court, equal to the amount by which the value of the property has been enhanced by those permanent improvements; and

(b) To the county tax collector, the balance, if any, of the correct amount as determined by the court that should be paid upon redemption, which shall be distributed by the county to the taxing agencies and revenue districts as redemption money.

If the amounts are not paid in accordance with the order the court shall not hold the tax deed void.

History.—Original section required reimbursement of purchaser as now specified in subdivision (a) before a forfeiture be decreed. Stats. 1945, p. 1024, in effect September 15, 1945, repealed original section and added present provisions. Stats. 1949, p. 1494, in effect October 1, 1949, amended subdivision (a) by adding "or his grantee or successor in interest" following "to the purchaser" and adding the balance of the subdivision commencing "and when the purchaser." Stats. 1983, Ch. 1281, in effect September 30, 1983, substituted "Chapter 8 . . . Political Code" for "Chapters 3, 4.3 or 8 of this part or former Political Code Sections 3897 and 3897d" after "chapter or" in the first sentence; added "or her" after every "his" or "him" in subsection (a), and made grammatical changes throughout the section. Stats. 1985, Ch. 316, effective January 1, 1986, deleted "the state's" which followed "in pursuit of" in subdivision (a).

Construction.—This section and Section 3728.1 do not apply when the tax-deeded land is owned by the state and exempt from taxation. People v. Chambers, 37 Cal.2d 552.

Does not cover expenditures subsequent to tax deed.—Inasmuch as this section applies only to amounts paid "in pursuit of the state's title to the property," it does not permit a recovery of taxes levied subsequent to the sale and paid by the purchaser (Butterfield v. Union Hollywood Water Co., 39 Cal.App. 605), or of amounts expended by the purchaser for improvements or betterments (Numitor Gold Mining Co. v. Katzer, 83 Cal.App. 161), or for repairs, maintenance, and management of the property. Clayton v. Schultz, 18 Cal.2d 328. In a proceeding to compel the purchaser to account for the rentals received by him, however, he is entitled to offset all amounts expended by him for taxes and for the maintenance and management of the property. Clayton v. Schultz, supra.

Cf. Holland v. Hotchkiss, 162 Cal. 366 and Squire v. Estey, 33 Cal.App. 287, holding, prior to the enactment of any statutory provision on the subject, that the owner was not entitled to a judgment quieting his title except upon the condition that he reimburse the purchaser for "the taxes, penalties, interest and costs justly chargeable upon the land and which the purchaser has paid at the sale, or afterward upon the faith of it."

Purchaser cannot compel reimbursement.—The owner is compelled to reimburse the purchaser only as a condition to securing affirmative relief against the void tax sale. Newcomb v. City of Newport Beach, 12 Cal.2d 235; Biaggi v.Mainero, 60 Cal.App. 608; Roma v. Elbert, Ltd., 73 Cal.App.2d 338. Upon the owner's failure to reimburse the purchaser the latter is not entitled to an adjudication that he owns the land, but the court should merely deny any relief to the owner. Newcomb v. City of Newport Beach, supra. See, however, Section 3728.1.

Must account for rentals.—The purchaser is accountable for rentals collected during his period of possession. Clayton v. Schultz, 4 Cal.2d 425; 18 Cal.2d 328.