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5220-5229 Installment Plans: Conditions and Provisions

5220. EFFECT OF INSTALLMENT PAYMENTS
While an installment plan of redemption is in good standing, the property may not become subject to the tax collector's power to sell (Rev. & Tax. Code §4218(a)). This protection ceases if the required subsequent installment payments are not made before the delinquency date (April 10) of the last installment of current taxes in each succeeding fiscal year or if current or supplemental taxes remain delinquent after April 10 (Rev. & Tax. Code §§4220, 4222). However, supplemental assessment tax installments that become delinquent on April 30 or May 31 shall not default the installment plan of redemption, if they are paid on or before June 30 (Rev. & Tax. Code §4220).

COMMENT: The first installment of current taxes may become delinquent without defaulting the installment plan. However, the tax and penalty must be paid before the delinquency deadline for the second installment (M-5228).

5221. REINSTATEMENT AFTER DEFAULT IN CURRENT YEAR
If default occurs when the second or subsequent redemption installment is due, and either the assessee or his/her agent can, by substantial evidence, show that failure to pay in a timely manner was due to reasonable cause or circumstances beyond the assessee's control, the account may be reinstated, under the following condition.

The assessee must pay an amount that includes the installment due, plus interest calculated pursuant to Revenue and Taxation Code section 4222 to the date of reinstatement M-5230 and M-5231. Payment must occur before the property has become subject to the tax collector's power to sell or prior to June 30 of the current fiscal year, whichever occurs earlier (Rev. & Tax. Code §4222).

NOTE: A reinstatement fee can be charged for processing.

5222. DEFAULT: NO REINSTATEMENT
If an assessee defaults on an installment plan and does not want to reinstate the plan, the tax collector can immediately record the Notice of Power to Sell Tax-Defaulted Property without re-advertising in the newspaper.

5223. PAYMENTS ARE NOT A PARTIAL REDEMPTION
Until the final payment has been received on an installment plan of redemption, none of the payments constitute a redemption or a partial redemption (Rev. & Tax. Code §4223). They do not affect the declaration of default made by the tax collector.

5224. REFUND CLAIMS AND ACTIONS
Even though all taxes on a property have not been paid in full, any person defined as qualified to claim a refund pursuant to provisions of Revenue and Taxation Code section 5096.7 (or any other statute) may file a claim for refund. If the claim is denied, an action may be filed to recover the taxes paid (Rev. & Tax. Code §§5096, 5097, 5097.2, 5140-5141); see M-1600 - M-1630 for procedures to be followed.

5225. CURRENT TAXES
When property is to be redeemed under an installment plan, no taxes other than the "amount of defaulted taxes" (Rev. & Tax. Code §4102(a)) can be included in the redemption amount. Current and supplemental taxes must be paid: when the first installment is due or at any time thereafter until the properties on the current roll become tax-defaulted (Rev. & Tax. Code §2607); in the manner provided for in Revenue and Taxation Code section 2703 (the entire tax may be paid when the first half is due); or by an installment plan of redemption (Rev. & Tax. Code §4219).

5226. REDEMPTION FEE
The redemption fee is applied with the final installment payment (Rev. & Tax. Code §4223).

See Revenue and Taxation Code section 4656.6 for information on distribution of redemption fees collected under an installment plan of redemption.

5227. SEGREGATION OF EXISTING PLAN
A parcel may be separated (segregated) from property already under an installment plan for the purpose of redemption, whether the plan is in good standing or in default (Attorney General Opinion 9-25-41).

5228. SUBSEQUENT INSTALLMENT PAYMENTS
In each succeeding fiscal year, the current taxes, plus any applicable delinquency penalties coming due in that fiscal year, must be paid before the delinquency date of the last installment of the current taxes. In other words, the first installment may be allowed to become delinquent but the second may not.

Each installment payment must also include simple interest, accruing monthly, computed as follows:

For property tax-defaulted after June 15, 1982, interest at the rate of one and one-half percent (1.5%) is added on the first day of each month on the balance, after the installment payment is applied (Rev. & Tax. Code §4221 and form SCO 5-03).

5229. DISASTER-DAMAGED PROPERTY ON PAYMENT PLAN
The tax collector may defer an installment payment for one year if an assessee's property was damaged in an emergency or disaster due to a major misfortune or calamity as defined in Revenue and Taxation Code section 194 and if the following conditions are met before granting relief:

1. The installment plan was already in existence;

2. The assessee or the assessee’s agent can prove to the satisfaction of the tax collector that substantial damage was incurred;

3. The assessee or the assessee’s agent files for the deferral on or before September 1 of the following fiscal year; and,

4. The assessee is not receiving any other relief. Interest will still accrue, and it becomes due and payable with the deferred installment payment.