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5500-5505 Corrections: Payment of Wrong Property

5500. TRANSFER OF PAYMENT BEFORE CHANGE OF TITLE
The tax collector must cancel the credit on the unintended property and transfer the credit to the intended property when by substantial evidence a redemptioner convinces the tax collector that a redemption payment was mistakenly credited to unintended property or the redemptioner intended payment for a property other than that to which it was applied (Rev. & Tax. Code §4911).

A transfer should be made when all of the following conditions have been met:

1) The right of redemption has not been terminated on the intended property;

2) Two years have not elapsed since the date of payment; and

3) A policy of title insurance has not been issued on the unintended property.

If the payment resulted in redemption of the unintended property, the redemption must be canceled and the unintended property restored to its tax-defaulted status in the delinquent abstract list (Rev. & Tax. Code §4920(a)) and M-1403 et seq.

The owner of the property on which credit for payment is being canceled must be notified as soon as possible, by registered mail (Rev. & Tax. Code §4913).

See M-5502 and forms SCO 5-11 and 5-12.

5501. TRANSFER OF PAYMENT AFTER CHANGE OF TITLE
The tax collector must cancel the credit on the unintended property and transfer the credit to the intended property when, by substantial evidence, a redemptioner demonstrates that a redemption or installment plan payment by the redemptioner was mistakenly credited to unintended property (Rev. & Tax. Code §4911.1).

Such transfer shall be made only when the following conditions have been met:

1) The right of redemption has not been terminated on the intended property;

2) Two years have not elapsed since the date of payment; and

3) A policy of title insurance has been issued on the unintended property.

When such a transfer is made, credit the intended property with the payment. The person owning the unintended property immediately before issuance of a policy of title insurance becomes personally liable for the amount transferred (Rev. & Tax. Code §4920(b)(4)).

The owner of the property on which credit for payment is being canceled should be notified as soon as possible, by registered mail (Rev. & Tax. Code §4913).

NOTE: Whenever any notice or other communication is required to be mailed by registered mail, the mailing of such notice or other communication by certified mail shall be deemed to be sufficient to comply with the requirements of law (Rev. & Tax. Code §36).

To enforce collection of the amount transferred, the debit must be transferred to the current unsecured roll and every effort made to collect it in the manner specified for collection of taxes on the unsecured roll. Obtaining a summary judgment may be the best method by which to proceed. (See procedures contained in Revenue and Taxation Code sections 3101-3107, and M-2354, M-2310, M-2364 and M-2376.) Of course, any other enforcement procedure provided by law may be used (Rev. & Tax. Code §4920(b)) and M-5502.

5502. FILING OF CANCELLATION VOUCHER
Before action is taken as described in M-5500 and M-5501, an attempt should be made to have the redemptioner submit a signed, verified statement containing complete details of the transaction. If the transfer is made, reference to the voucher must be made on the delinquent roll opposite the unintended property or on the abstract sheet. The voucher should be preserved in a permanent file (Rev. & Tax. Code §4921). (Form SCO 5-11 is recommended.)

Form SCO 5-12 is designed to be used as a recapitulation sheet and as a guide in enumerating the various steps taken in this procedure.

5503. NOTICE AND HEARING
The assessee (of the unintended property) should be notified, by either registered or certified mail, of the cancellation and proposed transfer. The notice should explain that the assessee is personally liable for the amount being transferred. The notice must also state the amount subject to collection and that it will be collected in the manner specified for unsecured taxes. The notice should be mailed to the assessee's last known address. If the address is unknown, send the notification to his/her attention at the county seat (Rev. & Tax. Code §4922).

The notice to the last assessee of the unintended property shall state that, within ten days after the mailing of the notice, he/she may demand a hearing before the board of supervisors. If the written demand is made, a copy of it must be filed with the tax collector (Rev. & Tax. Code §4923).

"The board of supervisors shall set a time for the hearing and its decision on the matter is final" (Rev. & Tax. Code §4923).

5504. PAYMENT OF BALANCE
If the amount paid by the redemptioner to redeem the unintended property is less than the amount necessary to redeem the intended property (or to initiate an installment plan of redemption to maintain an existing plan in good standing), the balance due shall be paid before the transfer is made (Rev. & Tax. Code §4924).

NOTE: The "balance due" means the difference between the amount necessary to redeem the unintended property and the amount necessary to redeem the intended property. The redemption amount of the intended property should be computed as of the same date the redemption amount of the unintended property was computed.

5505. REFUND OF EXCESS
If the amount paid by the redemptioner exceeds the amount necessary to redeem the intended property, the applicant is entitled to a refund of the excess, per Revenue and Taxation Code section 5097.2 (Rev. & Tax. Code §4925).

NOTE: A refund may be made if the application is processed within 90 days from the date of payment (Rev. & Tax. Code §§4925). Otherwise, the refund may be processed pursuant to Revenue and Taxation Code section 5097.2.