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10030-10036 Process and Procedures: Tax Clearance Certificates

10030. GENERAL INFORMATION
The Department of Housing and Community Development will not transfer title of a used manufactured home, mobilehome, or floating home subject to local property tax without the presentation of a Tax Clearance Certificate (form SCO 10-01) or a Conditional Tax Clearance Certificate (form SCO 10-02), issued pursuant to either Revenue and Taxation Code sections 2189.8 or 5832 by the tax collector of the county where the manufactured home, mobilehome, or floating home is located (Health & Saf. Code §18092.7).

Form SCO 10-01 and form SCO 10-02 may be used, or, optionally, counties may develop their own forms if they are submitted to the State Controller's Office for approval prior to use. Upon approval, the Controller’s Office will direct HCD to accept the county's approved Tax Clearance Certificate and/or Conditional Tax Clearance Certificate. HCD may not process any forms that have not been approved by the State Controller's Office.

The Tax Clearance Certificate (TCC) and the Conditional Tax Clearance Certificate (CTCC) were developed by the State Controller's Office, pursuant to Revenue and Taxation Code sections 2189.8 and 5832, as a means to enforce the collection of delinquent property taxes and/or registration fees. The TCC or CTCC is not intended to be used for enforcing purely prospective supplemental assessment taxes, e.g., those that would arise from the change in ownership for which the TCC or CTCC is sought. HCD will provide notification when the transfer of ownership has been completed. No change in the tax rolls should be based merely on the fact that a TCC or a CTCC has been issued.

The purpose for the TCC is to provide verification to HCD that, as of the date of issuance, all taxes then discovered have been paid. The CTCC indicates that the county tax collector finds that a tax liability exists; it also represents a release of control over title conveyance on the basis that the county is to receive a specified payment upon completion of escrow.

If the estimated payment on the CTCC proves insufficient to pay the tax obligation, an unsecured lien for the amount of the deficiency remains, and the tax collector may seek to collect the amount owing from the former owner.

NOTE: The tax collector shall not charge a fee for the first issuance of a certificate with respect to a manufactured home. The tax collector shall charge a fee for reissuing a certificate that has expired, in an amount equal to the actual costs of preparing and processing the certificate (Rev. & Tax. Code §5832).

The TCC or CTCC does not relieve a prior owner of the property of liability for payment of any supplemental assessment tax entered in his/her name after issuance of the TCC or CTCC. 

NOTE: When a lien on real property secured the mobilehome assessment, a clearance certificate can safely be issued at any time, because the lien will ultimately be paid after a redemption or a tax sale (Rev. & Tax. Code §2189).

See M-10032 and M-10033 for instructions on completing both a Tax Clearance Certificate and a Conditional Tax Clearance Certificate.

10031. CALCULATING AMOUNT OF TAXES DUE
When a Tax Clearance Certificate or a Conditional Tax Clearance Certificate is requested of the county, the first step is to determine the amount of taxes, delinquent registration fees, and penalties that are due.

NOTE: Escape assessments for the immediately preceding four fiscal years can be processed (M-1700 et seq.).

The current secured and unsecured tax rolls, supplemental rolls, and abstracts should be checked. If the taxes are not enrolled, the tax collector should make a copy of the registration document of the mobilehome/floating home and send it to the assessor's office for an estimate of current value.

10032. PREPARING TAX CLEARANCE CERTIFICATE
The following are the steps required to complete a Tax Clearance Certificate.

1) Upon payment of all in-lieu fees, taxes and penalties by the applicant, the Tax Clearance Certificate is prepared in triplicate. The following information is entered on the certificate.

a. Mobilehome/Floating home Identification:

i. Mobilehome serial number/Floating home hull number;

ii. Decal number(s)/CF number(s); and

iii. Name and address of the current registered owner.

NOTE: This data can be obtained from the HCD or DMV registration records. 

b. Assessor's parcel number;

c. Applicant's name and address;

d. Current location of the mobilehome/floating home;

e. Expiration date of the TCC (M-10034); and

f. Signature of the tax collector or authorized deputy.

2) When the certificate is completed, the original is given to the applicant. One copy is retained in the file and another copy is sent to the assessor.

10033. PREPARING CONDITIONAL TAX CLEARANCE CERTIFICATE
The following steps are required to complete a Conditional Tax Clearance Certificate.

1) After estimating the amount of taxes due, the tax collector prepares the Conditional Tax Clearance Certificate in duplicate. The following information is entered on the certificate:

a. Date requested;

b. Escrow company name and address;

c. Escrow number;

d. Name and phone number of the escrow officer;

e. Current location of the mobilehome/floating home; 

f. Mobilehome/floating home identification:

i. Make/year;

ii. Manufacturer's serial number(s);

iii. Decal (license) number(s); and

iv. Name and address of the current registered owner.

NOTE: This data can be obtained from the HCD or DMV registration records.

g. Assessor's parcel number; 

h. Applicant's parcel number;

i. Location of the mobilehome/floating home after escrow;

j. Assessor's parcel number (after escrow);

k. Expiration date of the CTCC (M-10034); and

l. Signature of the tax collector or authorized deputy.

2) When the certificate is completed, the clearance document should be immediately transmitted to the escrow company. One copy is retained in the file. When payment and a completed copy of the CTCC are received from the escrow company, the CTCC should be forwarded to the assessor after the amount of taxes paid is verified.

10034. EXPIRATION DATE
When issuing a Tax Clearance Certificate, the tax collector should establish an expiration date of no more than 60 days, or January 1, whichever comes first. The reason for the expiration date is twofold:

1) To keep the applicant from registering a mobilehome after the January 1 lien date, when taxes for the upcoming tax year become due and enforceable; and

2) To reduce the chance that the certificate will be used to register a subsequent change in ownership, which could cause the county assessor to overlook one supplemental assessment event.

When issuing a CTCC, the tax collector should establish an expiration date at least a week after the second payment deadline, allowing time for receipt and processing by HCD.

Personal property taxes are due on January 1 (Rev. & Tax. Code §§106, 2192, 2901). When a mobilehome is classified as personal property, the lien for taxes attaches against the owner on January 1. However, when a request for a TCC or a CTCC is submitted after December 1, many tax collectors collect taxes for the upcoming fiscal year. If the mobilehome ownership is transferred after January 1 without taxes being paid, the lien of taxes may not be enforced against the purchaser.

NOTE: If a TCC is issued between November 1 and December 10, the certificate should state, "Void after December 31, 20___," to prevent HCD from transferring title to the mobilehome to a subsequent purchaser after the January 1 lien date.

10035. DELINQUENT TAXES, FEES, OR PENALTIES OWED TO ANOTHER COUNTY
Research for the issuance of a Tax Clearance Certificate may disclose that a mobilehome was moved from another county without notification to either HCD or the respective assessors. When this occurs, it is the responsibility of the involved counties to determine and collect outstanding taxes, fees and penalties prior to issuing documents upon which HCD will act.

The tax collector should contact the mobilehome section of the tax collector’s office in the county in which the mobilehome was previously located. If any outstanding delinquencies owed to that county are discovered, the mobilehome owner should be required to provide evidence of payment of all taxes from such county before a TCC or a CTCC is issued. Issuance of either tax clearance form will indicate to HCD that payment of local property taxes is current.

10036. MOBILEHOMES FROM OUT OF STATE
Through 1986, California honored another state’s or country's registration sticker. Thereafter, an owner must register the mobilehome within 20 days of arrival, if it is to remain in California. If the other state’s or government's registration document does not specify an actual date sold new, mobilehomes first registered anytime in 1980 or later are deemed to be subject to ILT.

An unregistered mobilehome was and is subject to California fees upon entering the state. Such fees become delinquent after 20 days.