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1720-1724 Escape Assessments: Real Property

1720. LIEN CREATED
Escape assessments on real property are enrolled on the secured assessment roll and create or impose a lien or charge on such real property (Rev. & Tax. Code §531.2).

EXCEPTION: The escape assessment does not create or impose a lien or charge on such real property if, subsequent to July 1 of the year of escape and prior to the date of entry of the escape assessment on the secured roll, the property has either:

1) Been transferred or conveyed to a bona fide purchaser for value; or,

2) Become subject to a lien of a bona fide encumbrance for value (Rev. & Tax. Code §531.2).

NOTE: If a condition exists as described in (1) or (2) above, the escape assessment is entered on the unsecured roll in the name of the person who would have been the assessee in the year in which the property escaped assessment. Thereafter, it is treated and collected like other taxes on the unsecured roll. The tax rate applicable is the secured tax rate of the year in which the property escaped assessment (Rev. & Tax. Code §531.2).

From the date of entry on the unsecured roll, a certificate of lien may be recorded against the assessee who is liable for the taxes, including any penalties and costs, in accordance with Revenue and Taxation Code section 2191.3 (form SCO 2-02 and M-2340). From the date of recording, such a certificate of lien attaches against any personal or real property owned by such person in the county or counties where the certificate is recorded (Rev. & Tax. Code §2191.4).

For information regarding satisfaction and release of the lien, see M-2385.

The tax collector may evidence the release or subordination by recording a written certificate to that effect with the county recorder. See form SCO 2-03, "Release of Certificate of Lien."

1721. PENAL ASSESSMENTS
If real property escapes assessment through a fraudulent act or omission on the part of the taxpayer (or his/her agent, by collusion between the taxpayer (or his/her agent) and the assessor (or his/her deputy), or by an exemption incorrectly allowed upon the willful submission of erroneous or incomplete information, the property shall be assessed by the assessor. The assessor must impose a penalty assessment equal to 25 percent (Rev. & Tax. Code §502) or 75 percent (Rev. & Tax. Code §503) of the value of the property that escaped assessment (Rev. & Tax. Code §§503-504, 531.1).

The assessment and the penalty are entered on the secured roll by the assessor, pursuant to rules prescribed by the State Board of Equalization (Rev. & Tax. Code §505).

The tax and the added interest are computed pursuant to the formulas provided in Revenue and Taxation Code section 506 (M-1705).

1722. PROBATE PROCEEDINGS
When an owner of real property dies, the resulting change in ownership requires revaluation, except when the property is not subject to a change in ownership because it transfers to a surviving spouse, parent or child. When there has been a delay in the assessor's discovery of an individual's death, the assessor can levy an escape assessment against the heirs.

The first notice the assessor may receive occurs when an individual becomes the owner of a property as an heir prior to the lien date but no change in ownership statement is filed.

1723. ESCAPE ENTRY ON THE SECURED ROLL
When the sale of such property occurs after July 1, an entry is made on the secured roll and the escape assessment is transferred to the unsecured roll in the name of the person who would have been the assessee on the lien date, who is the person who inherited the property as of the date of death. This follows the procedure referred to in Revenue and Taxation Code section 531.2.

The heir (the assessee on the lien date) is liable for the escape assessment on the regular roll. Taxes resulting from escape assessments shall be prorated only if the board of supervisors has adopted a resolution approving proration.

Proration shall be between the following entities:

1) The person who would have been the assessee if the change in ownership had not occurred;

2) The person who purchased the property;

3) If the real property has been transferred or conveyed to a bona fide purchaser for value more than once during the year of escape or assessment, each owner of record during that period, who are liable for a pro rata share of taxes, based on the length of time during that period each bona fide purchaser was the owner of record of the real property.

When the assessor has identified the fact and amount of the escape assessment, the assessor shall identify the owners of record during the year of escape or assessment and the date of ownership for each owner.

The auditor shall compute the respective prorated shares of taxes for each owner of record. The share of taxes of the current owner of the real property shall be placed on the secured roll as a lien on the parcel for which the escaped assessment was discovered.

1724. CHANGE IN OWNERSHIP STATEMENT
If a change in ownership statement is filed in a timely manner, the assessor reassesses the property and processes the appropriate assessment prior to the sale of the property. It is the responsibility of the administrator or executor of the decedent's estate to file a change of ownership statement at the time the inventory and appraisement is filed with the court (Rev. & Tax. Code §480).