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5200-5205 Installment Plans: General Information

5200. HISTORICAL BACKGROUND
Payment of delinquent taxes by installments was first permitted by law in 1931. Several different methods of installment redemption were established during the great economic depression; however, all but one were repealed by 1955.

5201. PROPERTY REDEEMABLE UNDER INSTALLMENT PLAN
An installment plan may be instituted or reinstated on tax-defaulted property until 5 p.m. on the last business day prior to the date when the tax collector obtains the power to sell the property (Rev. & Tax. Code §4217). Installment plans are not permitted on tax-defaulted property that is subject to the power of sale.

The money collected on an installment plan of redemption erroneously initiated on tax-defaulted property subject to sale must be considered "erroneously or illegally collected." It contravenes the provisions of Revenue and Taxation Code section 4217; therefore, a refund of any payments accepted is permissible (Rev. & Tax. Code §5096(b)). See the citations appended to Revenue and Taxation Code sections 5096 and 5097.

If delinquent taxes are being paid under an installment plan of redemption and a specific lien is being satisfied and removed, see M-5141 and M-5142.

The fact that an assessee has a redemption plan in good standing does not prohibit or delay a foreclosure on delinquent 1915 Act bonds (Sts. & Hy. Code §8830) or delinquent Mello-Roos bonds (Gov. Code §53356.1).

5202. WHO MAY INITIATE INSTALLMENT PLANS
Any person may elect to pay delinquent taxes in installments (Rev. & Tax. Code §4217). However, volunteers acquire no rights to the property of another by the payment of taxes (M-5002).

5203. INFORMATION SHEET
An information sheet, similar to form SCO 5-02, should be provided to taxpayers who initiate plans or reinstate defaulted installment plans.

5204. APPLICATION FEE ON INSTALLMENT PAYMENT PLANS
The tax collector may charge a fee for preparing an installment payment plan. Such preparation fee must be established by ordinance of the board of supervisors (Rev. & Tax. Code §4217). The fee shall be in accordance with the provisions of Government Code section 54985 and may be collected upon the initiation of an installment plan.

5205. INITIATION OF INSTALLMENT PLAN

1) Determine whether the property has become subject to the tax collector's power to sell. An installment plan cannot be initiated on property that is subject to sale. Any person may elect to pay delinquent taxes in installments at any time prior to 5 p.m. on the last business day prior to the date when the property becomes subject to the tax collector's power to sell (Rev. & Tax. Code §4217) and (M-5201).

2) All current and supplemental taxes and delinquency penalties due or coming due in the fiscal year in which the first payment is made must be paid before the delinquency date of the last installment of current taxes (Rev. & Tax. Code §§2618, 2705).

EXCEPTION: If initial payment is made on or after the delinquency dates specified in Revenue and Taxation Code sections 2618 or 2705, the current and supplemental taxes, with penalties and costs, shall be paid with or prior to the installment payment (Rev. & Tax. Code §4219).

3) Compute the total amount necessary to redeem (M-5100 et seq.).

4) The first payment must be not less than 20 percent of the total amount necessary to redeem. However, the taxpayer may elect to pay more than 20 percent (Rev. & Tax. Code §4219).