Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2014
 

Revenue and Taxation Code

Property Taxation

Part 8. Distribution

CHAPTER 1.3. Distribution of Proceeds From Sale of Tax-Deeded Property

Section 4675

4675. Claim for excess proceeds. (a) Any party of interest in the property may file with the county a claim for the excess proceeds, in proportion to his or her interest held with others of equal priority in the property at the time of sale, at any time prior to the expiration of one year following the recordation of the tax collector's deed to the purchaser.

(b) After the property has been sold, a party of interest in the property at the time of the sale may assign his or her right to claim the excess proceeds only by a dated, written instrument that explicitly states that the right to claim the excess proceeds is being assigned, and only after each party to the proposed assignment has disclosed to each other party to the proposed assignment all facts of which he or she is aware relating to the value of the right that is being assigned. Any attempted assignment that does not comply with these requirements shall have no effect. This paragraph shall apply only with respect to assignments on or after the effective date of this paragraph.

(c) Any person or entity who in any way acts on behalf of, or in place of, any party of interest with respect to filing a claim for any excess proceeds shall submit proof with the claim that the amount and source of excess proceeds have been disclosed to the party of interest and that the party of interest has been advised of his or her right to file a claim for the excess proceeds on his or her own behalf directly with the county at no cost.

(d) The claims shall contain any information and proof deemed necessary by the board of supervisors to establish the claimant's rights to all or any portion of the excess proceeds.

(e) No sooner than one year following the recordation of the tax collector's deed to the purchaser, and if the excess proceeds have been claimed by any party of interest as provided herein, the excess proceeds shall be distributed on order of the board of supervisors to the parties of interest who have claimed the excess proceeds in the order of priority set forth in subdivisions (a) and (b). For the purposes of this article, parties of interest and their order of priority are:

(1) First, lienholders of record prior to the recordation of the tax deed to the purchaser in the order of their priority.

(2) Second, any person with title of record to all or any portion of the property prior to the recordation of the tax deed to the purchaser.

(f) In the event that a person with title of record is deceased at the time of the distribution of the excess proceeds, the heirs may submit an affidavit pursuant to Chapter 3 (commencing with Section 13100) of Part 1 of Division 8 of the Probate Code, to support their claim for excess proceeds.

(g) Any action or proceeding to review the decision of the board of supervisors shall be commenced within 90 days after the date of that decision of the board of supervisors.

History.—Added by Stats. 1976, Ch. 113, p. 177, in effect January 1, 1977. Stats. 1978, Ch. 1084, in effect January 1, 1979, added the second paragraph; added "only to those parties of interest who have claimed such excess proceeds" after "distributed", and added "who have claimed such excess proceeds" after "interest" in the first sentence of the fourth paragraph; and substituted "files" for "file" in the first sentence of the fifth paragraph. Stats. 1979, Ch. 615, in effect January 1, 1980, substituted "recordation" for "execution" in the first sentence of the first paragraph, added the fourth sentence of the second paragraph; and substituted "90" for "30" in the first sentence of the fifth paragraph. Stats. 1980, Ch. 411, in effect July 11, 1980, operative July 1, 1980, substituted "recordation" for "execution" in the first sentence of fourth paragraph; and substituted "superior court" for "board of supervisors" in the first sentence and deleted the second sentence in the fifth paragraph. Stats. 1981, Ch. 1141, in effect October 2, 1981, operative January 1, 1982, substituted the fifth paragraph for the former fifth paragraph. Stats. 1985, Ch. 316, effective January 1, 1986, deleted "at the time of sale by the state" after "property" in the first paragraph; deleted "by the state" after "sold" in the first sentence, and substituted "with" for "by" after "interest" and substituted "the" for "such" throughout the fourth sentence of the second paragraph; substituted "the" for "such" after "Herein," deleted "only to those parties of interest who have claimed such excess proceeds" after "distributed", and substituted "the" for "such" after "claimed" in the first sentence of the fourth paragraph; and substituted subsection (a) of the second sentence of the fourth paragraph for the former subsection (a), which provided that "First, lienholders of record prior to the property becoming tax deeded to the state or to any other taxing agency, in the order of their priority, as to liens that were extinguished by the issuance of the deed to the state; and", and substituted subsection (b) thereof for the former subsection (b), which provided that "Then, any person who would be established with title to all or any portion of the property sold by the state by redemption of such property immediately prior to the sale by the state." Stats. 1986, Ch. 1420, effective January 1, 1987, added ", in proportion to his or her interest held with others of equal priority in the property at the time of sale," after "excess proceeds" in the first paragraph. Stats. 2003, Ch. 199 (SB 1063), in effect January 1, 2004, designated the former first paragraph as subdivision (a); designated the first, second, and third sentences of the former second paragraph as subdivision (b); created subdivision (c) with the fourth sentence of the former second paragraph and deleted "In addition," before "Any person or" therein; designated the former third paragraph as subdivision (d); designated the former fourth paragraph as subdivision (e) and designated former subsection (a) thereof as paragraph (1) and substituted "their priority." for "their priority; and" after "the order of" in the first sentence therein and designated former subsection (b) as paragraph (2) thereof and substituted "Second" for "Then," before "any person with" in the first sentence therein; added subdivision (f); and designated the former fifth paragraph as subdivision (g). Amended by Stats. 2011, Ch. 352 (SB 948), in effect January 1, 2012.

Construction.—A person acquiring a postsale assignment of a property owner's right to excess proceeds from a tax sale is not precluded hereby from claiming such excess proceeds. Mission Valley East, Inc. v. Kern County, 120 Cal.App.3d 89. Since the rights to excess proceeds were created when the proceeds came into existence, the distribution rights are subject to the general rule that when property rights are simultaneously created in several parties, claiming parties do not succeed to the rights of nonclaiming parties. First Corporation Inc. v. Santa Clara County, 146 Cal.App.3d 841.

A judgment creditor's assignee is entitled, as a party of interest under Section 4675(a), to file a claim for excess proceeds from a tax sale of property against which the assignor had recorded an abstract of judgment, even though the assignee never formally filed or recorded the assignment. That portion of the section setting forth requirements for a person or entity which acts on behalf or in place of a party of interest with respect to filing a claim for excess proceeds applies only to situations other than assignments and is intended to apply only to such relationships entered into after the date of the tax sale. Fjaeran v. Board of Supervisors, 210 Cal.App.3d 434. A holder of unrecorded title to property sold at a tax sale is not a "party of interest." Azadoz v. Nikoghosian (2005) 128 Cal.App.4th 1369.