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8140-8147 Public Auction: Authorization to Sell – Procedures and Requirements

8140. RECORD OF SALES
A complete file for each sale should be maintained and include copies of the following:

1) Assessor's parcel map;

2) Copy of the notice of power to sell;

3) Copy of the notice to the board of supervisors of intention to sell;

4) Copy of the board's approval;

5) Copy of the notice to the last assessee and the parties of interest;

6) Parties-of-interest Information; 

7) Copy of the published or posted notice of sale;

8) Copy of the affidavit of publication or posting;

9) Registered or certified letter receipts;

10) Notices returned by the post office (returned envelopes should be left unopened; see M-8162);       

11) Copy of the report of sale;

12) Copy of the tax deed to purchaser; and

13) Correspondence and other documents related to the parcel or the sale.

A tax collector's summary record of sale, similar to Form SCO 8-01, can be used as the top document in the file. It serves as both a checklist that the required steps have been taken and as a record documenting the actions taken and the paperwork generated in preparing and conducting the tax sale.

8141. RECOMMENDED TAX SALE FORMS
Form SCO 8-02 is recommended for requesting the board of supervisors' approval to sell tax-defaulted property that is subject to sale and for re-offering unsold parcels, pursuant to Revenue and Taxation Code section 3692(e).

Form SCO 8-03 is recommended as an attachment to form SCO 8-02 to list the descriptions of the properties to be sold and the minimum price at which it is proposed to sell each property (Rev. & Tax. Code §3698).  Form SCO 8-03 is a multipurpose form.  It is designed to eliminate duplicated information in the preparation of the approvals and reports required for the sale of tax-defaulted property.

The form may also be used to give notice to taxing agencies and nonprofit organizations that have requested notification prior to July 1st of the current year or one year prior to the next scheduled sale (Rev. & Tax. Code §3700) and to serve as the report of sale for the county assessor (Rev. & Tax. Code §3716), the county auditor (Rev. & Tax. Code §3718), and the county treasurer (Rev. & Tax. Code §3718).

Form SCO 8-03 may be completed as follows:

1) For board of supervisors' approval and notice to taxing agencies, complete columns 1 and 2.

2) When columns 1 and 2 have been completed, proofread the information.  Once completed, make enough copies of the original for the purposes specified in paragraph (1) above. Retain the original in the file for future use. 

3) When the tax sale has been completed, fill in columns 3 through 12 of the original form.  Copies of the completed form may be made for the report of sale to the assessor, auditor, and treasurer.

NOTE:  The form does not provide for documentary transfer taxes, which are added to the sales price.

8142. ESTABLISHING MINIMUM SELLING PRICE
Except for mineral rights or unusable parcels that qualify for sale at sealed bid, the first time a parcel is offered for sale, the minimum price for property sold under Chapter 7 cannot be less than the total amount necessary to redeem, plus costs (Rev. & Tax. Code §3698.5(a)(1)).

The "total amount necessary to redeem" is the sum of the following:

1) Amount of defaulted taxes;

2) Delinquent penalties and costs;

3) Redemption penalties;

4) Redemption fee ($15); and

5) Costs described in Revenue and Taxation Code sections 3704.7(c), 4112(a) and (b), and 4672 through 4673.1(b), which include:

a.  Actual and reasonable costs of obtaining names and addresses of parties of interest and of mailing notices to these entities for each parcel (Rev. & Tax. Code §4112(a)(1));

b.  Recording fee;

c.  $1.50 fee to the State (Rev. & Tax. Code §4672);

d.  $150 to cover the cost of conducting the sale (Rev. & Tax. Code §4672.1);

e.  Publication costs, which must be estimated because the publication notice takes place after the minimum selling price is established (Rev. & Tax. Code §4673); and 

f.  Actual and reasonable costs incurred in conducting personal contact and, if necessary, also serving written notice for each parcel that is a primary residence for the last known assessee (Rev. & Tax. Code §3704.7(c)).

Primary residence is determined by:

i.  A valid homeowner's exemption, or

ii. The mailing address on the tax bill and the situs address being the same (Rev. & Tax. Code §3704.7).

Parcels that qualify for sale by sealed bid (Rev. & Tax. Code §3692(d)) may be offered for sale at public auction at less than the minimum selling price (Rev. & Tax. Code §3698.5(b)).

If property or a property interest does not have a welfare exemption and has been offered for sale at least once without an acceptable bid being received, it may be offered at the same sale or the next scheduled sale at a minimum price that the tax collector deems appropriate, with prior approval of the board of supervisors (Rev. & Tax. Code §3698.5(d)).

NOTE:  The amount to redeem does not include charges added to the tax bill for collection, pursuant to Government Code section 54988, and is not included when determining the minimum bid amount.  The lienholder is a party of interest and should be notified, pursuant to Revenue and Taxation Code sections 3701 and 3799.  

8143. ESTABLISHING MINIMUM SELLING PRICE - WELFARE EXEMPTION
If tax-defaulted property has been granted a property tax welfare exemption, the minimum price at which the property may be offered for sale pursuant to this chapter is the higher of:  (1) 50 percent of the fair market value, or (2) the total amount necessary to redeem, plus costs.

1) Fifty percent of the fair market value of the property -- For the purposes of this section, "fair market value" means the amount as determined, pursuant to an appraisal of the property, by the county assessor within one year immediately preceding the date of the public auction.  From the proceeds of the sale, there shall be distributed to the county general fund an amount to reimburse the county for the cost of appraising the property.  The value of the property as determined by the assessor, pursuant to an appraisal, shall be conclusively presumed to be the fair market value of the property for the purpose of determining the minimum price at which the property may be offered for sale (Rev. & Tax. Code §3698.7(a)(1)). 

2) The total amount necessary to redeem, plus costs; i.e., the "total amount necessary to redeem" is the sum of the following:

a. Amount of defaulted taxes;

b. Delinquent penalties and costs;

c. Redemption penalties;

d. Redemption fee; and 

e. Costs as described in Revenue and Taxation Code sections 3704.7(c), 4112(a) and (b), and 4672 through 4673.1(b), which include:

i. The cost of obtaining names and addresses of parties of interest and of mailing notices to these entities for each parcel  (Rev. & Tax. Code §4112(a)(1);

ii. The recording fee;

iii. $1.50 fee to the State (Rev. & Tax. Code §4672);

iv. $150 fee to the county for the cost of conducting the sale (Rev. & Tax. Code §4672.1); 

v. Publication costs, which should be estimated, because the publication notice takes place several procedures after the minimum selling price is established (Rev. & Tax. Code §4673); and

f. Actual and reasonable costs incurred in conducting personal contact and, if necessary, also serving written notice for each parcel that is a primary residence for the last known assessee (Rev. & Tax. Code §3704.7(c)).

Primary resident is determined by:

i. A valid homeowner's exemption, or

ii. Evidence showing that the mailing address on the tax bill is the same as the situs (Rev. & Tax. Code §3704.7).

If property or a property interest has been offered for sale at least once without an acceptable bid being received, it may be offered at this sale or the next scheduled sale at a minimum price that the tax collector deems appropriate, with the approval of the board of supervisors (Rev. & Tax. Code §3698.7).

8144. PARCEL LIST DISTRIBUTION
In addition to the copy retained by the tax collector's office, sufficient copies of the list of parcels should be prepared to provide one for the board of supervisors (Rev. & Tax. Code §3698), one for each taxing agency, and one for each nonprofit organization that has requested notification prior to July 1 of the current calendar year or one year prior to the next scheduled sale (Rev. & Tax. Code §3700).

8145. APPROVAL BY BOARD OF SUPERVISORS
The tax collector must transmit a notice to the board of supervisors, stating the following information.

1) An intention to sell tax-defaulted property that is subject to sale at public auction.  A public auction and a sealed bid sale may be included in a single notice to the board (M-8200 et seq., for sealed bid sales); (Rev. & Tax. Code §3698(a)).

2) A description of the property to be sold.  For purposes of notice to the board, the assessor's parcel number is sufficient (Rev. & Tax. Code §3698(b)).

3) The proposed minimum selling price or a statement that the minimum price will be set pursuant to Revenue and Taxation Code section 3698.5 or, if the property received a welfare tax exemption, pursuant to Revenue and Taxation Code section 3698.7.  The board of supervisors shall either approve or disapprove the proposed sale. 

4) If the tax collector intends to re-offer unsold parcels at another sale within 90 days, the notice should indicate that any parcel remaining unsold may be reoffered within a 90-day period and any new parties of interest will be notified (Rev. & Tax. Code §3692(e)).  See form SCO 8-02 for recommended language.

The board of supervisors may delete parcels and approve sale of the remainder.  Following approval, the board of supervisors may not delete, withdraw or withhold properties from the public auction, nor rescind its approval (M-8136) (Attorney General Letter 1-23-40).

Forms SCO 8-02 and SCO 8-03 are recommended for this purpose (M-8141).

NOTE:  The lower portion of form SCO 8-02 may be used for the approval.

8146. AUTHORIZATION BY STATE CONTROLLER
This section was deleted on January 1, 1999.

8147. NOTICE OF SALE TO THE STATE CONTROLLER
A notice of the proposed sale must be sent to the State Controller's Office 45 to 120 days prior to the date of the sale.  The notice should indicate the date, the time and place of the sale (Rev. & Tax. Code §3700.5), the number of parcels, the name of a county contact and phone number.  If applicable, indicate the URL if the sale will be conducted via the Internet.  Form SCO 8-05.5 is recommended.