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


Chapter 1.3. Distribution of Proceeds From Sale of Tax-Deeded Property*

* Chapter 1.3 was added by Stats. 1974, Ch. 1102, p. 2351, in effect January 1, 1975.

4671. "Taxes." As used in this chapter, "taxes" includes all liens determined by the application of an ad valorem tax rate which were, at the time of declaration of default, included in the amount necessary to redeem the property under Chapter 1 (commencing with Section 4101) of Part 7.

History.—Added by Stats. 1974, Ch. 1102, effective January 1, 1975. Stats. 1985, Ch. 316, effective January 1, 1986, substituted "declaration of default" for "sale by the state" after "at the time of", deleted "from the sale to the state" after "property", and deleted "of this division" after "Part 7".

4671.3. "Assessments." As used in this chapter, "assessments" includes all liens other than taxes which were, at the time of declaration of default, included in the amount necessary to redeem the property under Chapter 1 (commencing with Section 4101) of Part 7, and included in the amount necessary to redeem the property from sale to any taxing agency entitled to share in the proceeds.

History.—Added by Stats. 1974, Ch. 1102, effective January 1, 1975. Stats. 1985, Ch. 316, effective January 1, 1986, substituted "declaration of default" for "sale by the state" after "time of", deleted "from the sale to the state" after "redeem the property", and deleted "of this division" after "Part 7".

4672. Distribution to State. (a) There shall be distributed to the State of California, to be placed in the General Fund, one dollar and fifty cents ($1.50) for all or any portion of each separately valued parcel of real property that is both subject to a power of sale pursuant to Section 3691 and sold to private parties or to a taxing agency.

(b) The one dollar and fifty cents ($1.50) required to be distributed, pursuant to subdivision (a), shall be paid from the total proceeds of the sale. If the total amount of proceeds from the sale is insufficient, the one dollar and fifty cents ($1.50) shall be reduced accordingly.

History.—Stats. 1976, Ch. 1079, p. 4885, in effect January 1, 1977, substituted "deeded" for "deed" in the first sentence of the first paragraph. Stats. 1978, Ch. 430, in effect January 1, 1979, replaced the words "a pro rata division agreement" with "an agreement requiring that the taxing agency resell the property," in the second subsection. Stats. 1985, Ch. 316, effective January 1, 1986, substituted "subject to . . . Section 3691" for "deeded to the state" after "property" in the first subsection. Amended by Stats. 2004, Ch. 407 (SB 1831), in effect January 1, 2005.

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4672.1. Distribution to county for cost of sale. (a) There shall be distributed to the county general fund to reimburse the county for the cost of conducting the sale one hundred fifty dollars ($150) for all or any portion of each separately valued parcel of real property subject to a power of sale pursuant to Section 3691 and sold to private parties or to a taxing agency.

(b) The one hundred fifty dollars ($150) required to be distributed pursuant to subdivision (a), shall be paid from the total proceeds of the sale only after satisfaction of the amount specified in Section 4672. If the amount of proceeds from the sale is insufficient, the one hundred fifty dollars ($150) shall be reduced accordingly.

History.—Added by Stats. 1976, Ch. 113, p. 175, in effect January 1, 1977. Stats. 1978, Ch. 430, in effect January 1, 1979, in the second sentence deleted the words "a pro rata division agreement" and replaced them with "an agreement requiring that the taxing agency resell the property". Stats. 1985, Ch. 316, effective January 1, 1986, substituted "subject to . . . Section 3691" for "deeded to the state" after "property" in the first paragraph, and substituted "the" for "such" after "If" in the second sentence of the third paragraph. Amended by Stats. 2004, Ch. 407 (SB 1831), in effect January 1, 2005.

4672.2. Distribution to county for cost of notice. There shall be distributed to the county general fund any fee collected to reimburse the county for its actual and reasonable costs incurred in giving notice pursuant to Sections 3701 and 3799 for all or any portion of each separately valued parcel of real property subject to a power of sale pursuant to Section 3691 and sold to private parties or to taxing agencies. The notice fee for property sold shall be paid from the total amount to be distributed after satisfaction of the amounts specified in Sections 4672 and 4672.1. If the amount is insufficient, the notice fee shall be reduced accordingly.

History.—Added by Stats. 1980, Ch. 411, in effect July 11, 1980, operative January 1, 1981. Stats. 1985, Ch. 316, effective January 1, 1986, substituted "subject to . . . Section 3691" for "deeded to the state" after "property" in the first sentence, and substituted "the" for "such" after "If" in the third sentence. Amended by Stats. 2011, Ch. 208 (AB 902), in effect January 1, 2012.

4672.3. Cost of personal contact. (a) To reimburse the county for the costs of a personal contact, there shall be distributed to the tax collector a sum equal to the total amount of the actual and reasonable costs incurred by the tax collector in conducting the personal contact pursuant to Section 3704.7, for all or any portion of each separately valued parcel of real property subject to a power of sale and sold to private parties or a taxing agency.

(b) The amount of the costs shall be paid from the total amount to be distributed from the sold property, after satisfaction of the amount specified in Section 4672. If, after satisfaction of the amount specified in Section 4672, there is insufficient funds to pay the costs specified in subdivision (a), the costs shall be reduced accordingly.

History.—Added by Stats. 2003, Ch. 199 (SB 1063), in effect January 1, 2004. Amended by Stats. 2011, Ch. 208 (AB 902), in effect January 1, 2012.

4673. Cost of advertising sales. Amounts to reimburse the county for the cost of advertising sales of tax-defaulted property shall be distributed to the county general fund as provided in Section 3719.

History.—Stats. 1976, Ch. 113, p. 176, in effect January 1, 1977, deleted "received" after "Amounts", and added "as provided in Section 3719" after "fund". Stats. 1985, Ch. 316, effective January 1, 1986, substituted "tax-defaulted" for "tax-deeded" after "sales of".

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4673.1. Distribution of remaining proceeds. After satisfaction of the amount specified in Sections 4672, 4672.1, and 4673, the proceeds shall be distributed as follows:

(a) An amount of the proceeds up to but no greater than the amount required, at the time of sale, to redeem the property from tax default and the sale to any taxing agency entitled to share in the proceeds shall be distributed as follows:

(1) A pro rata share shall be distributed to each assessment fund in an amount bearing the same proportion as the assessment due each fund bears to the total amount of taxes and assessments necessary to redeem the property at the time of sale.

(2) The remaining balance of the proceeds to be distributed under this section shall be distributed to each tax fund in an amount bearing the same proportion to the balance remaining as the tax rate for each fund bears to the total tax rate applicable to the property for the fiscal year preceding that in which the property was sold.

(b) After satisfaction of the amounts specified in subdivision (a), an amount of the proceeds necessary to satisfy current taxes and assessments and applicable penalties and costs thereon for the fiscal year in which the tax sale is held shall be distributed as provided in Chapter 1a (commencing with Section 4653) of this part. Current taxes and assessments referred to herein include taxes and assessments which would have been levied on the property if the property were not tax-deeded to any taxing agency and remains subject to sale by, or redemption from, the taxing agency.

History.—Added by Stats. 1976, Ch. 113, p. 176, in effect January 1, 1977. Stats. 1985, Ch. 316, effective January 1, 1986, deleted "by the state" after "time of sale" and substituted "tax default" for "the sale to the state" after "property from" in subsection (a), deleted "by the state" after "sale" in (1) thereof, and deleted "by the state" after "sold" in (2) thereof, and deleted "to the state or" after "deeded", deleted "other" after "any" and added "and remains . . . taxing agency" after "agency" in the second sentence of subsection (b). Stats. 1990, Ch. 126, in effect June 11, 1990, added a comma after "4672.1" in the first paragraph and added the third sentence to subsection (b). Stats. 1990, Ch. 992, in effect January 1, 1991, added "for the fiscal year . . . is held" after "thereon" in the first sentence of subsection (b). Stats. 1991, Ch. 532, in effect January 1, 1992, deleted the former third sentence of subdivision (b) which provided that "In the case of sales completed between March 1 and July 1, 'current taxes and assessments' shall include amounts representing tax liens disencumbered by the tax sale.".

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4674. Distribution of surplus. [Repealed by Stats. 1976, Ch. 113,p. 176, in effect January 1, 1977.]

4674. Excess proceeds. Any excess in the proceeds deposited in the delinquent tax sale trust fund remaining after satisfaction of the amounts distributed under Sections 4672, 4672.1, 4672.2, 4673, and 4673.1 shall be retained in the fund on account of, and may be claimed by parties of interest in the property as provided in, Section 4675. At the expiration of one year following the recordation of the tax deed to the purchaser, any excess proceeds not claimed under Section 4675 shall be distributed as provided in paragraph (2) of subdivision (a) of Section 4673.1, except prior to the distribution, the county may deduct those costs of maintaining the redemption and tax-defaulted property files, and those costs of administering and processing the claims for excess proceeds, that have not been recovered under any other provision of law.

History.—Added by Stats. 1976, Ch. 113, p. 176, in effect January 1, 1977. Stats. 1984, Ch. 866, in effect January 1, 1985, added ", except prior to . . . any other provision of law" after "subdivision (a) of Section 4673.1" in the second sentence. Stats. 1985, Ch. 316, effective January 1, 1986, substituted "the" for "such" after "retained in" in the first sentence, and substituted "recordation" for "execution" after "following the" and substituted "tax-defaulted" for "tax-deeded" after "redemption and" in the second sentence. Stats. 1988, Ch. 830, in effect January 1, 1989, added "4672.2," after "4672.1". Stats. 1992, Ch. 523, in effect January 1, 1993, substituted "county" for "tax collector" after "the"; and ", and those . . . proceeds, that" for "which" after "files" in the second sentence.

Construction.—A party which had only a fractional share in property before its sale by the state is entitled only to its fractional share of the excess of proceeds remaining after satisfaction of the costs of sale and the unpaid tax assessments, not the entire excess. First Corporation Inc. v. Santa Clara County, 146 Cal.App.3d 841.

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.

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4675.1. Delegation by Board of Supervisors. The board of supervisors of any county may, by resolution, authorize any county officers to perform on its behalf any act required or authorized to be performed by the board of supervisors under Section 4675.

The resolution shall enumerate the section, or those portions of the section, to which the authorization is to apply, and shall specify administrative rules and procedures concerning any act performed under the authorization.

The resolution shall require that the county auditor record each act performed under the authorization.

The resolution may provide for review by the board of supervisors of any act performed under the authorization, or for periodic reports to the board of supervisors of any or all acts performed under the authorization, or both.

History.—Added by Stats. 1978, Ch. 164, in effect January 1, 1979.

4676. Notice of right to claim excess proceeds. (a) When excess proceeds from the sale of tax-defaulted property exceed one hundred fifty dollars ($150), the county shall provide notice of the right to claim the excess proceeds, as provided in this section.

(b) No later than 90 days after the sale of the property, the county shall mail written notice of the right to claim excess proceeds to the last known mailing address of parties of interest, as defined in Section 4675. The county shall make a reasonable effort to obtain the name and last known mailing address of parties of interest.

(c) If the last known address of a party of interest cannot be obtained, the county shall publish notice of the right to claim excess proceeds in a newspaper of general circulation in the county. Publication is not required if the cost to publish is equal to or greater than the amount of the excess proceeds. The notice shall be published once a week for three successive weeks and shall commence no later than 90 days after the sale of the property.

(d) The cost of obtaining the name and last known mailing address of parties of interest and of mailing or publishing the notices required under this section shall be deducted from the excess proceeds and shall be distributed to the county general fund.

History.—Added by Stats. 1979, Ch. 615, in effect January 1, 1980. Stats. 1985, Ch. 316, effective January 1, 1986, deleted "by the state" after "sale" and substituted "tax-defaulted" for "tax-deeded" after "of" in the first paragraph, and substituted "the" for "such" after "sale of" in subdivision (a). Stats. 2006, Ch. 538 (SB 1852), in effect January 1, 2007, designated the former first paragraph as new subdivision (a) and substituted "in this section" for "herein" after "proceeds, as provided"; relettered former subdivision (a) as new subdivision (b) and substituted "of" for "or" after "known mailing address" in the second sentence therein; relettered former subdivision (b) as subdivision (c) and substituted "the" for "such" after "the sale of" in the second sentence therein; and designated the former second paragraph as subdivision (d) and substituted "under this section" for "herein" after "the notices required" in the first sentence therein. Amended by Stats. 2011, Ch. 352 (SB 948), in effect January 1, 2012.

Note.—Section 8 of Stats. 1979, Ch. 615, provided no payment by state to local governments because of this act.

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