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8190-8199 Public Auction: Post-Sale Provisions and Requirements

8190. DEED TO THE PURCHASER
After completion of the sale and receipt of good funds, a deed must be prepared, recorded, and issued to the purchaser.  See M-8400 for a discussion of how to prepare the deed to the purchaser.

The deed to the purchaser should be vested according to the instructions of the purchaser.  It is not necessary to file a change of ownership statement when recording the tax deed to the purchaser (Rev. & Tax. Code §480.3).

NOTE:  A deed should not be recorded until the county has received payment in full.  The assessor must be notified of all purchases, even if all deeds have not yet been recorded (Rev. & Tax. Code §3716).  The tax collector must then record the deed.

8191. REPORT TO TREASURER AND AUDITOR
A report of sale must be filed with the treasurer and a copy must be given to the auditor.  The report includes:

1) The cost of advertising the sale (Rev. & Tax. Code §3718(a));

2) The sums received for individual parcels (Rev. & Tax. Code §3718(b));

3) Identification of the parcels by year, page and number of delinquent tax record, and the current roll upon which they appear (Rev. & Tax. Code §3718(c));

4) The cost of recording the deeds (Rev. & Tax. Code §3718(d));

5) The transfer tax collected at the time of the sale (M-8180 and M-8415);

6) The amount of fees due to the state ($1.50 per parcel sold plus $5 redemption); and

7) Sale fees due to the county ($150 per parcel sold).

The auditor must mail a copy to each taxing agency (except for cities, the county or the State) that is entitled to levy taxes or assessment on the property and that had consented to the sale (Rev. & Tax. Code §3720).

8192. REPORT TO ASSESSOR
Within ten days after the sale, the tax collector must report to the assessor (Rev. & Tax. Code §3716).  The report must include the following:

1) The name of each purchaser (Rev. & Tax. Code §3716(a));

2) The date of sale (Rev. & Tax. Code §3716(b));

3) The amount for which each property was sold (Rev. & Tax. Code §3716(c)); and

4) The legal description of each of the parcels conveyed (Rev. & Tax. Code §3716(d)).

8193. REPORT TO STATE CONTROLLER
This section was deleted on January 1, 1999.

8194. DEPOSIT OF PROCEEDS
The tax collector shall deposit money received from a sale into a tax sale trust fund (Rev. & Tax. Code §3718).  The cost of advertising is deposited in the county general fund and the balance, except the recorder’s fee and the transfer tax collected, is deposited in the delinquent tax sale trust fund (Rev. & Tax. Code §3719).  (For distribution of the balance, see M-8500.)  The recording fee and the transfer tax must be deposited in an appropriate fund (such as the Tax Collector's Trust Fund) and a warrant drawn in favor of the county recorder, or the funds must be transferred to the appropriate recorder's fund.

8195. MARKING ROLLS
The tax collector is required to note the fact and date of sale on the delinquent roll (or abstract sheet) and the current roll on which the property sold at tax sale appears (Rev. & Tax. Code §3717.5).

IMPORTANT:  Do not record a Rescission of Notice of Power to Sell or a Cancellation of Notice of Power to Sell for property redeemed as a result of a tax sale.  The recorded Tax Deed to Purchaser is considered public notice that taxes have been satisfied and that the property has been conveyed to a bona fide purchaser.

CAUTION:  Any installments of special assessments that become payable upon the current secured roll after the date of the sale should not be marked off.  Special assessments are defined as levies upon real property for the purpose of paying for improvements, the amount of the levy being based upon the benefits accruing to the property.  For a distinction between special taxes and special assessments, see the State Board of Equalization's Property Taxes Law Guide (Vol. 1) annotations under California Constitution, Article XIII, section 1.

8196. REDUCTION OF TAX CHARGE
The charges against the abstract and the current roll must be reduced by the amount of taxes, costs,penalties (and any applicable fees), special assessments and other liens satisfied by the sale (Rev. &Tax. Code §3717.5).

8197. NOTICE OF EXCESS PROCEEDS TO PARTIES OF INTEREST
When the sale produces excess proceeds exceeding $150, notice of the right to claim the excess proceeds must be given to parties of interest by either mail or publication (Rev. & Tax. Code §4676).  If the last known address of a party of interest cannot be obtained, the county must publish notice of the right to claim excess proceeds in a newspaper of general circulation in the county.  Publication is not required if the cost to publish is equal to or greater than the amount of the excess proceeds (Rev. & Tax. Code §4676).  For details regarding these notices, see M-8511 and M-9800 et seq.

8198. FAILURE TO CONSUMMATE PURCHASE
If the highest bidder neglects or refuses to consummate the purchase, the sale should be voided and the bidder notified.  Failure of the successful bidder to consummate the sale within the period specified results in forfeiture of any deposit, possible criminal prosecution, a ban from future auctions for up to five years, and forfeiture of all rights the bidder may have with respect to the property.  Any forfeited deposit is distributed to the county general fund and not applied to outstanding delinquent taxes.  If it is suspected that circumstances might justify legal action by the county to enforce payment, the county's legal officer should be contacted before voiding the sale.

8199. RETURNED CHECK
When negotiable paper is returned unpaid by the bank, the bid upon which it was accepted shall be voided (as if no bid had been made), and the county shall have a claim against the person tendering the dishonored negotiable paper for the cost of advertising the sale, including but not limited to the published notice required by Revenue and Taxation Code section 3702 (notice of intended sale). The tax collector shall forthwith notify, by registered or certified mail, the person attempting payment with advice that his/her bid has been voided and stating the amount of the county's claim.

If only a part of the payment was dishonored, the cost of the sale should be deducted and the balance refunded. In both cases, the refund and a notice that the bid was voided should be sent to the purported purchaser by registered or certified mail (Rev. & Tax. Code §§3455-3456, and Gov. Code §53062).

Alternatively, an action may be filed for damages in the amount for three times the amount of the dishonored paper but not less than $100 nor more than $1,500, as provided by Civil Code section 1719.  County counsel should be contacted before this option is used (M-1244).

The dishonored paper should be retained as proof of the county's claim.

NOTE:  Voiding the bid restores the right of redemption (Rev. & Tax. Code §3455).