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8250-8258 Sealed Bid: Notification of Sale – Procedures and Requirements

8250. DETERMINATION OF ELIGIBLE BIDDERS
It is recommended that the tax collector's records and, if necessary, the assessor's records be searched to determine the names and addresses of all eligible bidders.

8251. OBTAINING NAMES AND ADDRESSES OF PARTIES OF INTEREST
See M-8150 and Guide to the Sale of Tax-Defaulted Property, Volume I, II, III, or IV.

8252. PARTIES-OF-INTEREST SEARCH
See M-8151 for a discussion of how to obtain the names and addresses of parties of interest.

8253. NOTICE TO TAXING AGENCIES
At least 30 days before the date of the first published or posted notice of sale, the tax collector must notify all taxing agencies for which the county does not collect taxes and each city having jurisdiction over each subject property. A copy of the notice to the board of supervisors, along with its approval of the sale, must be included (Rev. & Tax. Code §3700). Such notice should be sent by registered or certified mail with a return receipt requested. The tax collector may proceed with publishing or posting without waiting 30 days if he/she has on file a written consent from each taxing agency (Rev. & Tax. Code §3700). Each city must be notified, but it is not necessary to notify taxing agencies for which the county collects taxes.

8254. GENERAL PARAMETERS OF PUBLIC NOTICE
The tax collector shall, pursuant to Revenue and Taxation Code section 3702, publish a notice of intended sale once a week for three successive weeks in:

1) A newspaper of general circulation published in the county seat; and

2) A newspaper of general circulation published within the judicial district wherein the property is situated.

NOTE: If the same newspaper of general circulation is published in both the county seat and the judicial district, or if the publication of the notice of sale is made in a newspaper that is determined as most likely to afford adequate notice of the sale, pursuant to Revenue and Taxation Code section 3381, publication in that newspaper satisfies the requirements for publication.

If there is no newspaper published in the county seat or in the judicial district, publication may be made by posting notice in three public places in the county seat or in the judicial district where no such newspaper is published. The publication shall be started not less than 21 days prior to the sale.

If, in the judgment of the board of supervisors, any property to be sold will bring at auction less than the cost of publication in a newspaper, the publication of the notice of intended sale may be made in the same manner as if there were no newspaper published in the county seat or the judicial district (Rev. & Tax. Code §3703).

The publication recommendations for a sealed bid sale are found in M-9600. For information on posting notice of impending sale, see M-9614.

8255. MAILING RECOMMENDATIONS
It is recommended that a return date NOT be printed on the envelope of a mailed notice to a party of interest (e.g., "Please return to sender within 10 days if not claimed"). The sale may be voided if a requested return date is shown on the envelope (see Property Tax Law Guide annotations to Revenue and Taxation Code section 3365, Numitor Gold Mining Co. v. Katzer, 83 Cal. App. 161; Sawyer v. Berkeley Securities Co., 99 Cal. App. 545).

All mailed notices returned by the postal service as undeliverable should be retained unopened as proof of mailing if needed for court evidence. If envelopes are opened, it may be difficult to prove what notice was given since the contents no longer remain sealed and intact.

NOTE: When a notice is returned with the assessee shown as deceased, the superior court clerk's office should be checked for a probate and the notice mailed to the administrator or executor of the estate. If a probate cannot be found, the property should be withdrawn from the sale. See M-8129 on escheated and unprobated property.

8256. NOTICE TO PARTIES OF INTEREST
Not less than 45 days nor more than 120 days before the proposed sale, the tax collector must send, by registered or certified mail, notice to parties of interest as defined in Revenue and Taxation Code section 4675. A party of interest is defined as a person vested with title (which includes the current assessee) or a lienholder of record at the time the notice is given.

NOTE: "Parties of interest" may include assignees or successors in interest of former owners, purchasers of contracts of sale, and a wide variety of lienholders. Liens of record filed by an individual or by a governmental agency (federal, state, county, or any political subdivision of a county) identify parties of interest.

The contents of the notice must include: the date, time and place of the sale; the amount required to redeem the property; the fact that the property may be redeemed up to the close of business on the last business day prior to the date of the sale; and information regarding the rights of parties of interest to claim excess proceeds, pursuant to Revenue and Taxation Code section 4674, if the property is sold and excess proceeds result from its sale (Rev. & Tax. Code §3701).

If it is the tax collector's intent to re-offer unsold parcels at another sale within 90 days, the Notice of Intended Sale of Tax-Defaulted Property shall also indicate the specific date, time and location of the new sale.

NOTE: In addition to the initial parties of interest notification, it is required that a follow-up search for parties of interest be conducted and, if any new parties are discovered, notification pursuant to Revenue and Taxation Code section 3701 be provided (Rev. & Tax. Code §3692(e)).

Form SCO 8-05-1 is recommended for noticing parties of interest in instances where the tax collector has no intention of re-offering unsold parcels pursuant to Revenue and Taxation Code section 3692(e).

Form SCO 8-05-2 is recommended for noticing parties of interest in instances where the tax collector intends to re-offer unsold parcels pursuant to Revenue and Taxation Code section 3692(e).

8257. NOTICE TO BIDDERS
A notice of sealed bid sale and a bid form with the terms and conditions of the sealed bid sale printed on the reverse side should be mailed (by certified or registered mail, return receipt requested) to all eligible potential bidders as described in M-8210 and M-8211. Forms SCO 8-08 or SCO 8-08-1, 8-09 or 8-09-1, 8-10 or 8-10-1, as well as 8-11, are recommended. Attaching a small plat map to the package is advisable.

NOTE: In addition to the notice to bidders specified above, all notices required for public auctions also apply to sealed bid sales. For the required notices, see M-8253, M-8255, M-8251 and M-8258.

The notices of sealed bid sale and the bid forms must be mailed to all eligible potential bidders at least 30 days prior to the date set for the sealed bid sale, not including the day of the sale (Rev. & Tax. Code §3692).

8258. NOTICE OF SALE TO IRS
Upon discovery of an Internal Revenue Service (IRS) lien, a notice of sale must be given in writing to the IRS. The notice must be sent by registered or certified mail or personal service and be received by the IRS not less than 25 days before the sale (Section 7425(c), 26 USC Internal Revenue Code, Attorney General Opinion 12-21-79). A sale may be voided if the IRS notice is not mailed to the IRS district office having jurisdiction over the properties subject to the IRS tax lien. See IRS Publication 4235 (Revision 6-2010) or the Appendix to this publication for the proper address.

The notice must contain the following information, pursuant to Federal Procedures/Internal Revenue Regulations section 48:537:

1) The tax collector's name and office address;

2) A description of the property - A copy of the notice of power to sell and a copy of the assessor's parcel map are sufficient;

3) The date, time, and place of the sale; 

4) The name and address of the assessee;

5) The approximate amount of the principal obligation, including interest, penalties, fees and costs to redeem the property, and a description of any expenses (such as advertising cost, recording fee, state and county fees, and current taxes) that will be chargeable against the sale proceeds;

6) The name of the IRS district; and

7) The date and place the notice of lien was filed.

NOTE: The information listed in items 4, 5, 6, and 7 above are contained in the Notice of Federal Tax Lien. Attaching a copy of the lien to the notice to the IRS is sufficient to fulfill the information requirements of items 4, 5, 6, and 7.