Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2014
 

Revenue and Taxation Code

Property Taxation

Part 7. Redemption

CHAPTER 3. Redemption After Payment of Delinquent Taxes in Installments


Chapter 3. Redemption After Payment of Delinquent Taxes in Installments*

* Constitutionality.—The provisions of this chapter are not void as special legislation, as a denial of equal protection, or as impairing the obligation of assessment bonds upon the property. See Higbie v. Los Angeles County, 47 Cal.App.2d 281.

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Article 1. General Provisions

4186. "Taxes." As used in this chapter, "taxes" includes all taxes and assessments and annual installments of assessments charged on the roll, except for the following:

(a) Special assessments pledged to the payment of debt service on bonds issued pursuant to the Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500) of the Streets and Highways Code) for which the local agency has covenanted to foreclose on behalf of the bondholder pursuant to Section 8830 of the Streets and Highways Code.

(b) Special taxes pledged to the payment of debt service on bonds issued pursuant to the Mello-Roos Community Facilities Act of 1982 (Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code) for which the local agency has covenanted to foreclose on behalf of the bondholder pursuant to subdivision (b) of Section 53356.1 of the Government Code.

History.—Stats. 1989, Ch. 104, in effect January 1, 1990, added text after "on the roll". Stats. 1997, Ch. 946 (AB 1224), in effect January 1, 1998, added "for the following:" after "except" in the first sentence, and created new subdivision (a) with the balance of the former first sentence commencing with "Special assessments" and added subdivision (b).

4187. "Back taxes." As used in this chapter, "back taxes" means all payments required to be made under any provision of law allowing payment of delinquent taxes in installments, except payments of current taxes due on the property and the penalties and costs on the current taxes.

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Article 2. Permanent Installment Plan

4216. "Redemption amount." As used in this article:

(a) "Redemption amount" means the total amount which would be necessary to redeem tax-defaulted property at the time an election is made to pay delinquent taxes in installments under this article.

(b) "Balance of the redemption amount" is the amount equal to the difference between the redemption amount and the total of the portions previously paid which portions were paid as a part of the redemption amount.

History.—Added by Stats. 1968, Ch. 1293, effective January 1, 1969. Stats. 1985, Ch. 316, effective January 1, 1986, added "tax-defaulted" after "to redeem", deleted "from sale for taxes" after "property", and added "an" after "at the time" in subsection (a).

Code commission's note.—Since payments under this article are only compensation for the use of the property and are not legally payments of taxes (see Section 4223), the amount necessary to redeem remains the same regardless of payments made until redemption is actually effected. This fact makes necessary the above definitions.

Redemption.—The only means provided under the statutes to accomplish redemption and avoid a power of sale is to pay the redemption penalties as provided by this section, Section 4102, and Section 4221. Ferreira v. El Dorado County, 222 Cal.App.3d 788.

4217. Election to pay in installments. (a) Any person may elect to pay delinquent taxes in installments under this article at any time prior to 5 p.m. on the last business day prior to the date when the tax collector obtains the power to sell the property, except that if payment of delinquent taxes in installments is started under this article and the amount required to be paid in any fiscal year is not paid as required by this article, payments on property that, but for the installment redemption plan, would have been subject to a power of sale pursuant to Section 3691 during the calendar year in which default on the redemption plan occurs may not again be started under this article. All other payments may be started on or after July 1 of the fiscal year commencing after the fiscal year in which default occurred.

(b) (1) A person electing to pay delinquent taxes in installments may be subject to a fee for processing the person's request.

(2) The fee for payment of delinquent taxes in installments to the tax collector may be established by ordinance by the board of supervisors. The fee shall be governed by the provisions of Chapter 12.5 (commencing with Section 54985) of Part 1 of Division 2 of Title 5 of the Government Code and may be collected on the tax bill.

History.—Stats 1941, p. 3118, in effect September 13, 1941, added "fiscal" preceding "year." Stats. 1947, p. 2022, in effect September 19, 1947, substituted "until July 1st of the second succeeding fiscal year after that" for "during the fiscal year." Stats. 1957, p. 2181, in effect September 11, 1957, substituted "prior to the deed to the State" for "before the right of redemption is terminated." Stats. 1959, p. 2482, in effect September 18, 1959, deleted "entitled to redeem real estate from tax sale" after "person." Stats. 1972, p. 658, in effect March 7, 1973, substituted "prior to 5 p.m. . . . and prior to the deeding to the state" for "prior to the deed to the State" in the first sentence. Stats. 1978, Ch. 430, in effect January 1, 1979, added the following words between the words "payments" and "may" "on property subject to deed during the current calendar year". Also deleted the following phrase after the words "this article", "until July 1st of the second succeeding fiscal year after that in which such default occurs." Also added the last sentence. Stats. 1980, Ch. 411, in effect July 11, 1980, operative January 1, 1981, added "in which default occurs" after "calendar year" in the first sentence. Stats. 1985, Ch. 1367, effective January 1, 1986, substituted "became tax defaulted" for "was sold to the state and prior to the deeding to the state" after "property," substituted "which, but for the instrument redemption plan . . . Section 3691 during the" for "subject to deed during the current" after "property", and added "on the redemption plan" after "default" in the first sentence of the first paragraph; and added the second and third paragraphs. Stats. 1991,Ch. 532, in effect January 1, 1992, substituted "30" for "30th" after "June" in the first sentence of the first paragraph and added "and may be collected on the tax bill" after "Code" in the second sentence of the third paragraph. Amended by Stats. 2004, Ch. 944 (AB 2144), in effect January 1, 2005.

Note.—Stats. 1972, p. 658, provided that it was the intent of the Legislature that if June 30 falls on a nonbusiness day, the time to pay delinquent taxes in installments does not extend to the next business day.

Constitutionality.—The constitutionality of the 1947 amendment cannot be challenged by a person who began installment payments prior to the amendment but defaulted on all subsequent payments, since electing to pay in installments gives no right unless the statute is complied with. Hubbard v. Delta Co., Ltd., 108 Cal.App.2d 172.

Delinquent assessments.—Failure to credit.—Refunds.—When a portion of the installment payments represents delinquent assessments for bonds of an improvement district, and in the refunding proceedings instituted by a city no credit is given for such portion, the taxpayer is not entitled to any refund from the county on account of the same, since there is no statute permitting such a refund. Id.

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4218. Effect of payments. (a) During the time payments are made under this article:

(1) The property subject to the installment plan shall not become subject to a power of sale pursuant to Section 3691.

(2) The right of redemption shall not be terminated.

(b) Subdivision (a) does not prohibit or delay foreclosure pursuant to Section 8830 of the Streets and Highways Code.

(c) Subdivision (a) does not prohibit or delay foreclosure pursuant to Section 53356.1 of the Government Code.

History.—Added by Stats. 1939, Ch. 1076, effective January 1, 1940. Stats. 1985, Ch. 316, effective January 1, 1986, deleted ", there shall not be" after "this article" in the first paragraph; substituted subsection (a) for former subsection (a) which stated "A deed to the State for taxes", and substituted "the" for "any termination of the" before "right" and added "shall not be terminated" after "redemption" in subsection (b). Stats. 1989, Ch. 104, in effect January 1, 1990, added the subdivision letters, substituted "(1)" for "(a)" and "(2)" for "(b)" in subdivision (a), and added subdivision (b). Stats. 1997, Ch. 946 (AB 1224), in effect January 1, 1998, added subdivision (c).

Construction.—The right to redemption of property which has been sold to the state for nonpayment of taxes exists only during the period when installment payments of delinquent taxes are timely made. Johnston v. Sanchez, 121 Cal.App.3d 368.

4219. Amount of first payment. Election to pay delinquent taxes in installments is made by payment, in the same manner as a redemption, of 20 percent, or more, of the redemption amount. All current taxes, with penalties thereon, due or coming due in the fiscal year in which this first payment is made shall be paid before the delinquency date of the last installment of current taxes, except that if the election to pay delinquent taxes in installments is made on or after the delinquency date of the last installment of current taxes in any fiscal year, the current taxes, with penalties and costs thereon, shall be paid with or prior to the installment payment.

History.—Stats. 1953, p. 2267, operative as to payments made on and after July 1, 1954, substituted "10th" for "20th" in both places in last sentence. Stats. 1963, p. 1795, in effect September 20, 1963, added the words "with penalties and costs thereon." Stats. 1968, p. 1526, in effect November 13, 1968, substituted "the delinquency date of the last installment of current taxes" for "April 10th" in two places in the second sentence.

4220. Succeeding amounts. In each succeeding fiscal year the redemptioner shall pay all current taxes and penalties coming due in that fiscal year before the delinquency date of the last installment of current taxes.

Supplemental assessment tax installments that became delinquent after April 10 shall not default the installment plan of redemption, if paid on or before June 30.

History.—Added by Stats. 1968, p. 1527, in effect November 13, 1968. Stats. 1986, Ch. 1420, effective January 1, 1987, added the second paragraph.

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4221. Succeeding amounts. In each succeeding fiscal year the redemptioner shall pay, before the delinquency date of the last installment of current taxes, the sum of the following:

(a) That amount which is computed to be not less than the difference between the amounts previously paid under the provisions of this article, excepting amounts paid as interest, and

(1) 40 percent of the redemption amount when the payment is made during or prior to the first fiscal year following the year in which election was made to pay delinquent taxes in installments.

(2) 60 percent of the redemption amount when the payment is made during or prior to the second fiscal year following the year in which election was made to pay delinquent taxes in installments.

(3) 80 percent of the redemption amount when the payment is made during or prior to the third fiscal year following the year in which election was made to pay delinquent taxes in installments.

(4) 100 percent of the redemption amount when the payment is made during or prior to the fourth fiscal year following the year in which election was made to pay delinquent taxes in installments.

(b) On parcels tax defaulted prior to June 15, 1974, interest shall be computed at the rate of percent per month accruing on the first day of each month following the preceding payment, on the balance of the redemption amount.

(c) On parcels tax defaulted on and after June 15, 1974, interest shall be computed at the rate of 1 percent per month accruing on the first day of each month following the preceding payment, on the balance of the redemption amount.

(d) On parcels tax defaulted on and after June 15, 1982, interest shall be computed at the rate of 1 percent per month accruing on the first day of each month following the preceding payment, on the balance of the redemption amount.

Payments made under this section shall be computed and paid in the same manner as a redemption, and the receipts for those payments shall show that the payments are for the use of the real estate under this plan for payment of delinquent taxes in installments.

History.—Added by Stats. 1968, p. 1527, in effect November 13, 1968. Stats. 1973, Ch. 152, p. 450, in effect January 1, 1974, substituted "On parcels sold to the state prior to June 15, 1974, interest shall be computed" for "Interest, computed" in subdivision (b); added subdivision (c); and added "made" after "Payments" in the first sentence of the second paragraph. Stats. 1981, Ch. 366, in effect January 1, 1982, added subdivision (d). Stats. 1985, Ch. 316, effective January 1, 1986, substituted "tax defaulted" for "sold to the state" after "On parcels" in subdivisions (b), (c), and (d); and substituted "those" for "such" after "receipts for" in the first sentence of the second paragraph.

Redemption.—The only means provided under the statutes to accomplish redemption and avoid a power of sale is to pay the redemption penalties as provided by this section, Section 4102, and Section 4216. Ferreira v. El Dorado County, 222 Cal.App.3d 788.

4222. Effect of default. If all payments are not made on or before the dates prescribed, the property may become subject to a power of sale pursuant to Section 3691 in the same manner as if no election to pay delinquent taxes in installments had been made. In the event that the default occurs at the time the second or subsequent installment is due and the assessee or agent of the assessee can, by substantial evidence, convince the tax collector that the payment was not made through any fault of the assessee, the tax collector may reinstate the account upon receipt of a payment in an amount reflecting the installment due plus interest under Section 4221 to the date of reinstatement, provided the payment is physically received by the tax

collector prior to the time the property becomes subject to the tax collector's power to sell or prior to June 30 of the current fiscal year, whichever occurs earlier.

History.—Stats. 1978, Ch. 430, in effect January 1, 1979, deleted the capitalization of the word "state" in the first sentence, and added the second sentence. Stats. 1985, Ch. 316, effective January 1, 1986, substituted "become subject . . . Section 3691" for "be deeded to the state" after "may" in the first sentence, and substituted "becomes subject to a power of sale" for "is deeded to the state" after "property" in the second sentence. Stats. 1987, Ch. 1184, in effect January 1, 1988, operative July 1, 1988, substituted "physically received by the tax collector" for "made" after "payment is", and substituted "the tax collector's power to sell" for "a power of sale" after "subject to" in the second sentence. Stats. 1988, Ch. 830, in effect January 1, 1989, deleted "or the right of redemption may be terminated" after "Section 3691" in the first sentence; added a comma after ". . . any fault of the assessee" in the second sentence.

Application.—Taxpayers who defaulted in 1977 on an installment payment plan to redeem property which had been sold to the state for nonpayment of taxes are entitled to apply for relief under this section, as amended in 1978, to preclude any possible injustice. Johnston v. Sanchez, 121 Cal.App.3d 368.

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4222.5. Deferral; defaulted taxes paid on installment plan. (a) Notwithstanding any other provision of this article, the tax collector of any county which was designated by the Governor to be in a state of disaster as the result of the fires which occurred in 1987, may defer for a period of one year payments under an installment plan if all of the following conditions are met:

(1) The installment plan was already in existence at the time deferral is requested by the assessee or the agent of the assessee.

(2) The assessee or the agent of the assessee can establish to the satisfaction of the tax collector that the assessee incurred substantial business losses of at least five thousand dollars ($5,000) in connection with his or her property as a result of the 1987 fires.

(3) The assessee or the agent of the assessee files an application for deferral with the tax collector on or before September 1, 1988.

(4) The assessee is not receiving any other disaster relief relating to the 1987 fires.

(b) This section does not preclude the assessment of interest in connection with the deferral of any installment payment. Any interest so assessed shall be due and payable together with the deferred installment payment.

(c) For purposes of this section, "substantial business losses" means net business losses incurred by the assessee after accounting for the assessee's receipt of any federal disaster aid, state disaster aid, related insurance loss claim payments, or property tax relief under Chapter 6 (commencing with Section 197) of Part 2.

History.—Added by Stats. 1988, Ch. 439, in effect August 22, 1988.

4223. Payments not redemption. Payments under this article are not a redemption or partial redemption.

History.—Added by Stats. 1939, Ch. 1076, effective January 1, 1940. Stats. 1985, Ch. 316, effective January 1, 1986, deleted "and do not affect the state's interest in the real estate" after "partial redemption" in the first sentence, and deleted the former second sentence, which provided that "the payments are compensation for the use of the real estate".

4225. Redemption certificate. The redemption certificate for a redemption under this article shall show:

(a) The amounts used to arrive at the redemption amount at the time of an election to pay delinquent taxes in installments;

(b) The portions of the redemption amount and interest previously paid, including all credits allowed;

(c) The portion of the redemption amount and interest required to make the redemption.

4226. Procedure. Except as provided in this article, the redemption shall be made in the usual manner.

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Article 5. Credits and Distribution

4336. Credit on redemption for installments. When property is redeemed on which delinquent taxes have been paid in installments, there shall be credited on the amount necessary to redeem the total amount of back taxes previously paid, including an allowance for interest paid pursuant to Section 4221. The credit shall be allowed after computation of the amount necessary to redeem.

History.—Stats. 1953, p. 2268, operative as to payments made on and after July 1, 1954, added "on or before April 10th or" and "April 10th or " in last sentence. Stats. 1969, p. 3088, in effect November 10, 1969, added the references to May 10th. Stats. 1971, p. 192, in effect March 4, 1972, substituted all after "taxes previously paid" for "without an allowance for interest on it." in the first sentence. Stats. 1979, Ch. 242, in effect July 10, 1979, deleted "subdivision (b) of" after "pursuant to" in the first sentence; and deleted "or on or before April 20th" after "April 10th", and deleted "or April 20th" after "April 10th" in the third sentence. Stats. 1987, Ch. 1184, in effect January 1, 1988, operative July 1, 1988, substituted "the delinquency deadline . . . in each fiscal year" for "April 10th or on or before May 10th in each fiscal year or which expressly allows quarter-annual payment of installments" after "before", and substituted "June 30th" for "April 10th or May 10th" after "succeeding" in the third sentence. Stats. 1990, Ch. 992, in effect January 1, 1991, deleted the former third sentence, which provided that "If the last payment made of delinquent taxes in installments was under a provision of law which requires that payments be made on or before the delinquency deadline of the last installment of secured taxes in each fiscal year, no credit shall be allowed under this section after five years succeeding June 30th of the first fiscal year when no payment was made as required.".

Construction.—When an installment payment plan default occurs, the amount necessary to redeem, which includes redemption penalties pursuant to section 4102 of the Revenue and Taxation Code, is recomputed, and all previously paid taxes are then credited to that amount. Johnston v. Sanchez, 121 Cal.App.3d 368.

4337. Credit on starting new installment plan. When payment of delinquent taxes in installments on any property was started under any provision of law and payment of delinquent taxes in installments on the property is later started after default in payment, there shall be credited on the amount payable the total amount of back taxes paid during the course of the defaulted plan or plans, including an allowance for interest paid pursuant to Section 4221. This credit is in addition to and not a substitute for the payment of any part of any installment payable and shall be allowed after the first installment is paid.

History.—Stats. 1941, p. 410, operative February 1, 1941, added reference to "same provision of law after default and payment." Stats. 1943, p. 1940, in effect August 4, 1943, added last sentence. Stats. 1953, p. 2268, operative as to payments made on and after July 1, 1954, added "on or before April 10th or" and "April 10th or" in last sentence. Stats. 1969, p. 3088, in effect November 10, 1969, added the references to May 10th. Stats. 1971, p. 192, in effect March 4, 1972, substituted all after "previous provision," for "without an allowance for interest on it." in the first sentence. Stats. 1979, Ch. 242, in effect July 10, 1979, deleted "subdivision (b) of" after "pursuant to" in the first sentence; and deleted "or on or before April 20th" after "April 10th", and deleted "or April 20th" after "April 10th" in the third sentence. Stats. 1987, Ch. 1184, in effect January 1, 1988, operative July 1, 1988, deleted "under another provision of law providing for such payment, or under the same provision of law" after "later started", and substituted "during the course of the defaulted plan or plans" for "under the same or previous provision" after "taxes paid" in the first sentence; and deleted "If the last payment made of delinquent taxes in installments was under a provision of law which requires that payments be made on or before April 10th or on or before May 10th in each fiscal year or which expressly allows quarter-annual payment of installments," before "no credit shall be allowed," and substituted "June 30th" for "April 10th or May 10th" after "succeeding" in the third sentence. Stats. 1990, Ch. 992, in effect January 1, 1991, deleted the former third sentence, which provided that "No credit shall be allowed under this section after five years succeeding June 30th of the first fiscal year when no payment was made as required."

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