Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2014
 

Revenue and Taxation Code

Property Taxation

Part 7.5. Tax Certificates

CHAPTER 3. Sale of Tax Certificates


Chapter 3. Sale of Tax Certificates.

4521. Offers for sale. Commencing no earlier than the date the property is declared in default, the tax collector may offer for sale as provided in Section 4511 tax certificates for those defaulted taxes in connection with that secured roll property or that property on the supplemental roll, along with any defaulted taxes for any previous year that have not previously been sold.

4522. Receipt by the tax collector. For purposes of Chapter 1A (commencing with Section 4653) and Chapter 3 (commencing with Section 4701) of Part 8, the receipt by the tax collector of the proceeds of the sale of a tax certificate shall be deemed to be the receipt by the tax collector of the due and unpaid taxes and assessments specified in that tax certificate and, if in excess of that amount, the related delinquency penalty set forth in Section 2617, 2618, 2704, 2705, 2759, 2760, 2761, or 2762. The provisions of this part shall not be construed as removing any lien for taxes or extinguishing any unpaid taxes or assessments or fees, penalties, costs, or other amounts related thereto.

4523. Application of proceeds. The proceeds from the sale of a tax certificate shall be applied as follows:

(a) (1) To the Tax Certificate Redemption Fund, in an amount equal to a minimum of 3 percent of the proceeds from that sale. However, if the amount of the Tax Certificate Redemption Fund is equal to or greater than 3 percent of the then current amount of taxes and assessments assigned under all outstanding tax certificates, those proceeds shall be applied as provided in subdivision (b). The amount deposited under this paragraph shall be in lieu of any amount otherwise required pursuant to Chapter 3 (commencing with Section 4701) of Part 8.

(2) Any amount on deposit in the Tax Certificate Redemption Fund shall be invested at the direction of the county treasurer as required by law. All interest earned on the Tax Certificate Redemption Fund shall be paid to the county.

(b) The balance of the proceeds shall be applied as follows:

(1) Except as provided in paragraph (2), the balance shall be distributed in the same manner as amounts received from the collection of taxes and assessments and costs, fees, penalties, and other amounts related thereto.

(2) In the case of a county that has elected the alternative procedure for the distribution of property tax levies pursuant to Chapter 3 (commencing with Section 4701) of Part 8 of Division 1, the balance shall be distributed to the county general fund.

History—Stats. 1996, Ch. 699, in effect January 1, 1997, substituted "a minimum of 3 percent" for "3 percent" after "amount equal to" in the first sentence, and added the third sentence commencing with "The amount deposited" in paragraph (1) of subdivision (a).

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4524. Cancellation of the tax certificate. (a) Upon the receipt by the tax collector of the entire amount of the taxes, assessments, and assigned penalties assigned by a tax certificate, the tax collector shall pay that amount to the holder of the tax certificate, cancel the tax certificate, and enter the fact of the cancellation in the tax certificate record opposite the entry of the sale of the tax certificate. The tax collector shall make the payments from amounts it receives of those taxes, assessments, and assigned penalties, whether those amounts are received by the tax collector by payment of those amounts, by redemption pursuant to Part 7 (commencing with Section 4101), by sale of the parcel pursuant to Chapter 2 (commencing with Section 3436) of Part 6, or otherwise.

(b) If, pursuant to Section 2636, 2708, 2772, or 4143 or otherwise, the tax collector receives only an installment or portion of the amounts in respect to the taxes, assessments, and assigned penalties (or interest in the case of an installment plan of redemption) assigned by a tax certificate, the tax collector shall pay that amount to the holder of the tax certificate and make a corresponding adjustment to the amounts set forth in the tax certificate and the tax certificate record.

(c) If, pursuant to Chapter 3 (commencing with Section 2801) of Part 5 or Chapter 2 (commencing with Section 4131) of Part 7, part of an assessment of tax on a parcel specified in a tax certificate is paid or redeemed, the tax collector shall pay to the holder of the tax certificate that portion of the payments relating to the amounts assigned under the tax certificate and shall adjust the information in the tax certificate and the tax certificate record accordingly.

(d) Any amount collected shall be first applied to the oldest outstanding certificate. The taxpayer shall still be considered delinquent with respect to any unredeemed certificate on that property.

(e) Notwithstanding any other provision of law, any partial payment with respect to a tax certificate, including annual payments from installment plan of redemption, shall be applied to the monthly penalty (or interest in the case of an installment plan of redemption) amount first.

(f) This section shall apply notwithstanding any other provision of Chapter 1C (commencing with Section 4656) or Chapter 1.3 (commencing with Section 4671) of Part 8 or any other provision of this code to the contrary.

History—Stats. 1996, Ch. 699, in effect January 1, 1997, substituted "only an installment or portion" for "only a portion" after "tax collector receives", and added "(or interest in the case of an installment plan of redemption)" after "and assigned penalties" in subdivision (b); and added ", including annual payments from installment plan of redemption," after "a tax certificate", and added "(or interest in the case of an installment plan of redemption)" after "the monthly penalty" in subdivision (e).

4525. Tax collector may stop collection. The tax collector may stop the collection of amounts in respect of a delinquency by the holder of a tax certificate at any time by canceling that tax certificate and paying to the holder of that tax certificate from amounts on deposit in the Tax Certificate Redemption Fund the amount owed in respect of that delinquency. This action may be taken at the sole discretion of the tax collector.

History—Stats. 1996, Ch. 699, in effect January 1, 1997, added the second sentence commencing with "This action may".

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4526. Situs. A tax certificate shall not be considered as having any situs in the county in which the real property is located for which the tax certificate is issued.

4527. Payment to holder of certificate. (a) The tax collector shall pay to the holder of a tax certificate, from amounts on deposit in the Tax Certificate Redemption Fund, an amount equal to the purchase price of the tax certificate, together with interest thereon at a rate equal to the rate the county would have to pay on any refund to a taxpayer for the same fiscal year, that rate to be applied to all amounts paid with respect to the certificate from the date of the sale of the tax certificate, and shall cancel the tax certificate if any of the following occur:

(1) The taxes and assessments assigned by the tax certificate had been paid prior to the sale of the tax certificate.

(2) After the sale of the tax certificate, the taxes and assessments assigned by the tax certificate are canceled for any reason other than the payment of the taxes and assessments.

(3) The lien on the parcel specified in the tax certificate is removed, other than pursuant to Section 2195 or 4105.2, or by order of the federal bankruptcy court, prior to the time the holder of the tax certificate has received all amounts due under the tax certificate.

(4) The parcel specified in the tax certificate is deeded to a taxing agency pursuant to Chapter 8 (commencing with Section 3771) of Part 6.

(5) Upon the request of the holder of the tax certificate, when there has been a violation of Section 3441 with respect to the parcel specified in the tax certificate.

(b) Promptly after obtaining knowledge of any occurrence described in subdivision (a), the tax collector shall notify, in writing, the holder of the applicable tax certificate.

(c) If the delinquency penalty assigned by a tax certificate is canceled pursuant to Section 2610.5 or Section 4985.2, or for any other reason other than the payment in full of the penalty, then, at the option of the holder of the tax certificate, the tax collector shall, from amounts on deposit in the tax certificate redemption fund, do either of the following:

(1) Pay to the holder of the tax certificate an amount equal to the purchase price of the tax certificate, together with interest thereon at a rate equal to the rate the county would have to pay on any refund to a taxpayer for the same fiscal year, that rate to be applied to all amounts paid in respect of the certificate from the date of the sale of the tax certificate, and cancel the tax certificate.

(2) Pay to the holder of the tax certificate an amount equal to the difference between the purchase price of the tax certificate and the total amount of taxes and assessments assigned by the tax certificate, together with interest on that amount at a rate equal to the rate the county would have to pay on any refund to a taxpayer for the same fiscal year, that rate to be applied to all amounts paid in respect of the certificate from the date of the sale of the tax certificate, and adjust the information contained in the tax certificate and the tax certificate record accordingly.

(d) If a redemption certificate is issued pursuant to Section 4105.2 with respect to a parcel specified in a tax certificate, and all amounts assigned under the tax certificate, including, without limitation, amounts due under Section 4103, are not paid to the holder of the tax certificate, the tax collector shall immediately pay to the holder of the tax certificate, from amounts on deposit in the Tax Certificate Redemption Fund, any amount so assigned but not paid.

(e) The tax collector may use amounts on deposit in the Tax Certificate Redemption Fund to make the payments permitted under Sections 3729, 3731, 4920, and 5103.

History—Stats. 1996, Ch. 699, in effect January 1, 1997, substituted "are canceled" for "are reduced or canceled" after second "the tax certificate" in paragraph (2), added "or by order of the federal bankruptcy court," after "Section 2195 or 4105.2," in paragraph (3), deleted "or the parcel is not as represented" after second "the tax certificate" in paragraph (5), deleted former paragraph (6) which provided that "Upon the request of the holder of the tax certificate, if the taxes and assessments assigned by the tax certificate are permitted to be paid in installments pursuant to Chapter 3 (commencing with Section 4186) of Part 7." and deleted former paragraph (7) which provided that "Upon the request of the holder of the tax certificate, if the taxpayer files an appeal pursuant to Section 80, a claim or suit for refund pursuant to Chapter 5 (commencing with Section 5096) of Part 9, or any other claim permitted by this division that disputes the amount of the tax, assessment, or any amount in connection with that tax or assessment. Nothing in this paragraph shall create any new or additional rights of appeal for a taxpayer." of subdivision (a).

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4528. Method of sale. (a) (1) The tax collector may sell tax certificates by any form of public or private sale, including, but not limited to, an auction, a negotiated sale, or a bulk sale. Except as provided in subdivision (c), the price received for a tax certificate shall not be less than the amount of taxes and assessments being assigned thereby. Prior to any sale of any tax certificates, the tax collector shall do all of the following:

(A) Determine the size of the offering and the parcels to be included in the sale.

(B) Determine the fees necessary to conduct the sale and maintain adequate tax certificate records.

(C) Establish rules and procedures for the making of offers on any tax certificate.

(D) Publish the determinations, fees, rules, and procedures described in this paragraph.

(E) Make these determinations, fees, rules, and procedures available to any person upon request.

(2) The tax collector has the right to accept or reject any or all bids in his or her sole discretion, subject to the determinations, fees, rules, and procedures described in paragraph (1).

(b) Except as provided in subdivision (c), the tax collector may not sell a tax certificate if any of the following apply:

(1) The parcel is not on the secured roll or supplemental roll.

(2) The parcel is owned by a governmental agency.

(3) The total amount of taxes and assessments to be assigned thereby is less than one hundred dollars ($100), unless the parcel is included in a bulk sale.

(4) The parcel has a recorded public notice concerning pollution or contamination to the degree that the parcel poses a public health concern or environmental hazard.

(5) The parcel was subject to a proceeding in federal bankruptcy court prior to the sale of the tax certificate.

(6) The parcel was subject to any condemnation proceedings prior to the sale of the tax certificate.

(c) Notwithstanding subdivisions (a) and (b), the tax collector may sell or resell tax certificates for parcels described in paragraphs (3), (4), (5), and (6) of subdivision (b), any certificate subject to the Sailors and Soldiers Relief Act, and for parcels described in paragraph (5) of subdivision (a) of Section 4527, at a discount, in accordance with the determinations, fees, rules, and procedures published by the tax collector.

(d) If, pursuant to Section 4521, the tax collector is required to offer for sale a tax certificate for which there exists an outstanding tax certificate for the assignment of taxes and assessments for a previous year, until the date occurring six months after the date specified in Section 4521, the tax collector shall offer to sell the tax certificate to the holder of the outstanding tax certificate. The tax collector shall notify the holder of the outstanding tax certificate by certified mail of the default requiring the issuance of an additional tax certificate with respect to the same parcel, and of the tax certificate holder's right until the date one month after the receipt of this notice, to purchase the additional certificate on the same terms as the outstanding certificate. In addition, the holder of the outstanding tax certificate shall have the right of first refusal to purchase the tax certificate with respect to the same parcel at the highest bid amount until all tax certificates with respect to that parcel are redeemed or canceled. During the six-month period, at the option of the holder of the most recently issued outstanding tax certificate, the tax collector shall sell the tax certificate to the holder of the outstanding tax certificate on the same terms as that outstanding tax certificate.

History—Stats. 1996, Ch. 699, in effect January 1, 1997, numbered the first three sentences as paragraph (1), substituted "tax certificates, the tax collector shall do all of the following:" for "tax certificate, the tax collector shall publish rules and procedures for the making of offers on any tax certificate and shall make those rules and procedures available to anyone upon request." after "sale of any" in the third sentence; added subparagraphs (A), (B), (C), (D), and (E); and numbered the former fourth sentence as paragraph (2) and substituted "the determinations, fees, rules, and procedures described in paragraph (1)" for "those rules and procedures" after "subject to" in subdivision (a); deleted "the" after "secured roll or" in paragraph (1), added ", unless the parcel is included in a bulk sale" after "($100)" in paragraph (3), substituted "has a recorded public notice concerning pollution" for "is found to be polluted" after "The parcel" and substituted "the parcel" for "is" after "the degree that" in paragraph (4), substituted "The parcel was" for "The parcel is then" before "subject to a" and substituted "federal bankruptcy court prior to the sale of the tax certificate" for "bankruptcy" after "a proceeding in" in paragraph (5), and substituted "parcel was subject" for "parcel is subject" before "to any condemnation" and substituted "proceedings prior to the sale of the tax certificate" for "proceeding" after "to any condemnation" in paragraph (6) of subdivision (b); substituted "paragraph (5)" for paragraphs (5), (6), and (7)" before "of subdivision (a) of Section 4527," and substituted "determinations, fees, rules," for "rules" after "in accordance with the" in subdivision (c); deleted "relating to a parcel" after first "a tax certificate" in the first sentence, added the second sentence commencing with "The tax collector shall", and substituted "In addition, the holder" for "The holder" in the third sentence of subdivision (d). Stats. 1997, Ch. 17 (SB 947), in effect January 1, 1998, substituted "has" for "shall have" in the first sentence of paragraph (2) of subdivision (a), substituted "may" for "shall" in the first sentence of subdivision (b), and substituted "contamination" for "contaminated" after "pollution or" in the first sentence of paragraph (4) of subdivision (b).

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4529. Tax certificate record. The tax collector shall make and maintain the tax certificate record which shall be a list of all the tax certificates sold, showing the date of the sale, a description of the parcel, the name of the purchaser (or the successor), the purchase price, the amount of any payments received by the holder, and how those amounts were applied to the taxes, assessments, and assigned penalties.

4530. Transfer of tax certificate. Any tax certificate may be transferred at any time before it is canceled by endorsement by the tax collector, if the tax certificate is held in physical form, or by electronic transfer, if that tax certificate is held on book-entry form. The tax collector shall modify the tax certificate to indicate the new holder. The official endorsement of a tax certificate by the tax collector with the date and its entry on the tax certificate record, together with a notation showing the new holder, shall be sufficient evidence of the assignment of the tax certificate.

4531. Duplicate certificates. (a) A holder of a tax certificate may apply to the tax collector for a duplicate certificate if the original certificate has been lost or destroyed. The tax certificate holder shall give an affidavit to the tax collector stating that the affiant is the owner of the tax certificate and that the tax certificate was lost or destroyed. The tax certificate holder shall pay a fee for the issuance of the duplicated tax certificate in an amount as determined by the tax collector.

(b) The tax collector shall issue a duplicate tax certificate, and shall plainly mark or stamp that tax certificate as a duplicate, and enter the fact of the duplicate in the tax certificate record opposite the entry of the sale for which the lost or destroyed tax certificate was issued. He or she shall enter in the same place a notation of the alleged loss or destruction, whether or not the duplicate certificate is issued.

History—Stats. 1996, Ch. 699, in effect January 1, 1997, substituted "a fee for the issuance of the duplicated tax certificate in an amount as determined by the tax collector" for "a fee of five dollars ($5) for issuance of the duplicate tax certificate" after "holder shall pay" in the third sentence of subdivision (a).

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