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8330-8339 Sale by Agreement: Purchasing Application – Information Requirements

8330. GENERAL INFORMATION
Since there are several representative types of public entities eligible to acquire tax-defaulted property by agreement sale, any such entity may negotiate with the county board of supervisors to acquire property. The purchasing agency may also negotiate with any other public entities having a tax equity in the same property, for the purpose of acquiring their tax-sold or tax-deeded interests.

Form SCO 8-13 is a standard agreement form and may be used for all agreement sales between the eligible purchasing agencies and the county board of supervisors. The form should not be used when a nonprofit organization wishes to purchase tax-defaulted property by agreement sale. If a nonprofit organization wishes to purchase tax-defaulted property, recommended instructions are described in M-8345.

The blank spaces to be filled in on the Agreement to Purchase Tax-Defaulted Property (form SCO 8-13) are keyed to the descriptions on the following pages.

NOTE: An "exhibit" containing the legal description of the property to be sold should be attached to the agreement form. See form SCO 8-14.

8331. DATE OF AGREEMENT
This is the date on which the purchasing agency and county board of supervisors agreed to the purchase.

8332. NAME OF COUNTY (AND CITY)
The name of the county is typed in the blank space preceding the word "county" (e.g., "Yuba", "San Francisco City and").

8333. PURCHASING AGENCY
The name of the purchasing agency should be entered on the agreement form in the same manner in which the agency is to acquire the title to the property. It is recommended that the taxing status of the agency be shown directly after the name of the agency. For example:

1) The State of California, acting by and through its Department of General Services, as a taxing agency

2) The City of Watsonville, a municipal corporation, as a taxing agency

3) The Sacramento County Flood Control District, as a Revenue District

4) The East Los Angeles Redevelopment Agency

NOTE: When two agencies are making a joint purchase agreement, the names of both purchasing agencies must be listed. The names of the purchasers may be entered on an exhibit page if the space provided for the name of the purchaser is too small. A reference to the exhibit page should be noted on the agreement.

8334. COST OF GIVING NOTICE
The cost of giving notice of the agreement sale must be paid by the purchasing agency (Rev. & Tax. Code §3800). This includes the cost of publication and the cost of mailing notice to the last assessee and the parties of interest.

8335. PURCHASE PRICE
When completed, the agreement form must include the amount that is to be paid for the property.

If a taxing agency has objected to the sale pursuant to Chapter 7, Revenue and Taxation Code sections 3695 or 3695.4, the sale price must be equal to the minimum bid that was approved by the board.

If a taxing agency that is also a revenue district has objected to the sale pursuant to Chapter 7, Revenue and Taxation Code sections 3695 or 3695.4, the purchase price must not be less than the minimum bid approved by the board.

If the property has not been authorized for sale pursuant to Chapter 7, the purchase price may be negotiated between the purchasing agency and the board of supervisors. However, the price may not be less than the amount needed to redeem plus costs (Rev. & Tax. Code §3793.1).

NOTE: The purchase amount does not include the cost of notice (Rev. & Tax. Code §3800). That is the responsibility of the purchasing agency.

NOTE: If the property has been offered for sale at least once and no bids were received, the tax collector may, with the approval of the board of supervisors, offer the property at a minimum price that he/she deems appropriate (Rev. & Tax. Code §3793.1).

8336. DATE OF PAYMENT OF THE PURCHASE PRICE
To minimize questions concerning a person's right of redemption because the purchase price has not been paid, the acquiring agency should tender full payment at the time the agreement is to be effective. Fourteen days is recommended as a standard period within which the purchasing entity must pay the purchase price plus costs.

If the purchasing agency fails to pay within the agreed-upon time, the deed to the purchasing agency should not be executed. The right of redemption is then restored to the last assessee or his/her successor in interest.

The board of supervisors may permit a nonprofit organization to purchase property or a property interest by installment payments. If installment payments are permitted, the terms and conditions for the payments should be included as part of the agreement (Rev. & Tax. Code §3793.1).

8337. DISTRIBUTION OF PROCEEDS STATEMENT
When a taxing agency, as defined by Revenue and Taxation Code section 3791, objects to the sale of tax-defaulted property (that is subject to sale by the tax collector), the agency is not entitled to share in the distribution of the sale proceeds (Rev. & Tax. Code §3720). Therefore, the following statement must be added to the agreement form:

3. that said PURCHASER will not share in the distribution of the payment required by this Agreement.

NOTE: A revenue district may be precluded from sharing in the distribution of proceeds under certain conditions. Revenue and Taxation Code section 3793 allows the board of supervisors to set terms and conditions to any agreement. If the board feels that the purchase price for the property is insufficient to cover the amount of delinquent taxes, the revenue district may be precluded from sharing in the proceeds. See M-8396 and M-8500 for information on the distribution of sale proceeds.

8338. ADDITIONAL CONDITIONS TO THE AGREEMENT
A subparagraph may be added to provide for any conditions that the board of supervisors wishes to impose regarding conveyance and use of the property by the acquiring agency. A condition may be imposed that the property be used by the purchasing agency for a public use (Rev. & Tax. Code§§3793 and 3805). See M-8340 regarding terms of agreements generally.

8339. INTEREST OF OTHER TAXING AGENCIES IN THE PROPERTY
If an agency chooses not to participate in the agreement, its interest remains against the property and the agency will not share in distribution of the proceeds. If the property that is to be acquired by the purchasing agency is subject to the tax-sold or tax-deeded interest of a taxing agency, a statement to that effect may be added to the agreement.

that the PURCHASER is acquiring the interest of ________________ in said property, which has been sold for taxes, for two or more years (or has been deeded for delinquent taxes and/or assessments) of said (taxing agency, or city if it is not also a revenue district).

This statement may be added when a taxing agency that is giving up its interest in the property wishes to participate in the agreement sale. In giving up its interest in the property, the taxing agency is eligible to share in the sale proceeds to satisfy its lien against the property.