Home Publications Guides, Manuals, and Reference Materials County Tax Collectors' Reference Manual (2012) Chapter 8000 Sale of Tax-Defaulted Property 8600-8605 Cancellations and Refunds: Under Court Determination

8600-8605 Cancellations and Refunds: Under Court Determination

8600. CHAPTER 7 SALES 
A proceeding based on an alleged invalidity or irregularity of any proceeding pertaining to a public auction or sealed bid sale can only be commenced or maintained in a court if both of the following conditions are satisfied:

1. The petitioner has first petitioned the board of supervisors pursuant to Revenue and Taxation Code section 3731 within one year of the date of the execution of the tax collector’s deed; and 
2. The proceeding is commenced within one year of the date the board of supervisors determines that a tax deed sold under this part should not be rescinded pursuant to Section 3731 (Rev. & Tax. Code §3725).

NOTE:  Amendments to Section 3725 apply to sales completed on or after January 1, 2012.

EXCEPTION:  Code of Civil Procedure sections 351-358 allow limitations or extensions of deadlines for filing or completing civil actions based on conditions such as a defendant being out of state, the death of a person against whom actions may be brought, and various disabilities, including those of minority, insanity or imprisonment.  The time during which the condition applies does not count toward the time limit for bringing a proceeding under Revenue and Taxation Code section 3725.

However, when a refund is due to a purchaser of a tax certificate, the holder who received all or any part of the amount paid by the delinquent taxpayer shall not be obligated to make any refund or repayment of any amount to the purchaser, the county, or any other person.

The tax collector may use amounts on deposit in the Tax Certificate Redemption Fund to make the refund, but only to the extent that those amounts were paid to the holder of the applicable tax certificate (Rev. and Tax. Code §3729).

8601. CHAPTER 8 AGREEMENT OR DEED
A proceeding or a defense based on an alleged invalidity or irregularity of any agreement or deed executed under and pursuant to the provisions of Chapter 8 can be commenced or maintained only within one year after the execution of the instrument (Rev. & Tax. Code §§3809-3810).

EXCEPTION:  Code of Civil Procedure sections 351-358 allow limitations or extensions of deadlines for filing or completing civil actions based upon conditions such as a defendant being out of state, the death of a person against whom actions may be brought, and various disabilities, including those of minority, insanity or imprisonment.  The time during which the condition applies does not count toward the time limit for bringing a proceeding under Revenue and Taxation Code section 3809.

However, when a refund is due to a purchaser of a tax certificate, the holder who received all or any part of the amount paid by the delinquent taxpayer shall not be obligated to make any refund or repayment of any amount to the purchaser, the county, or any other person.

The tax collector may use amounts on deposit in the Tax Certificate Redemption Fund to make the refund, but only to the extent that those amounts were paid to the holder of the applicable tax certificate (Rev. & Tax. Code §3729).

8602. AFTER DESTRUCTION OF ROLLS
Proceedings, defenses, or cross-complaints based on rights or claims established by a purchaser's deed from the tax collector, if such interests do not appear in the abstract list, cannot be maintained or asserted after destruction of the original or delinquent tax rolls.

EXCEPTION:  A claim is not barred if such deed was of record at the time of destruction of the rolls or within one year after the date of the deed, whichever is later.  If such actions are barred, the grantee's only recourse is to seek a refund, pursuant to Revenue and Taxation Code section 3729, within one year after the bar arises (Rev. & Tax. Code §4379).

8603. COURT ORDER
Before a court holds any tax deed issued under Chapter 7 or Chapter 8 procedures void, the court must, in accordance with Revenue and Taxation Code section 3728:

8604. IF UNPAID
If a payment as specified in the court order is not made within six months, the court does not hold the tax deed void but orders the tax collector to issue a new tax deed to the original grantee (purchaser) or his/her successor (Rev. & Tax. Code §§3728-3728.1).

The tax collector then issues the deed, as prescribed in Revenue and Taxation Code section 3728.1.

8605. REFUND AFTER JUDGMENT OF COURT
If a court holds that a tax deed is void, the purchaser is entitled to a refund from the county.  The county refunds the part of the purchase price that is in excess of the amount the purchaser has previously been reimbursed for taxes, penalties, and costs by the former assessee or his/her successor in interest (Rev. & Tax. Code §3729(a)); (M-8603, example (2)).

The refund shall be made in the same manner as an overpayment of tax, except that the claim must be presented within one year after the judgment becomes final (Rev. & Tax. Code §3729).

However, when a refund is due to a purchaser of a tax certificate, the holder who received all or any part of the amount paid by the delinquent taxpayer shall not be obligated to make any refund or repayment of any amount to the purchaser, the county, or any other person.  The tax collector may use amounts on deposit in the Tax Certificate Redemption Fund to make the refund, but only to the extent that those amounts were paid to the holder of the applicable tax certificate (Rev. & Tax. Code §3729(b)).  See M-1610 and M-1620 et seq. for the procedure for refund of overpayments of taxes.