California Online and Public Tax Deed Auctions

Review On California Online and Public Tax Deed Auctions

California is a tax deed state. Unlike most other states, whose fiscal year mirrors the actual year (January through December), California property taxes are assessed for the period between July 1 and June 30. Therefore, instead of a 2008 tax year, you have a 2007-2008 tax year and a 2008-2009 tax year. A first position lien attaches to all real property on the assessment date each year by law.

California property taxes are due in two equal installments. The first installment is due November 1 and delinquent December 10th. The second installment is due February 1 and delinquent April 10th. Late payments adds a 10% penalty to the property tax bill. Unpaid properties are considered tax defaulted if not paid in full by June 30 of each year. Starting July 1, title to these parcels is vested in the name of the state and interest on any unpaid bill begins to accrue at a rate of 1.5% per month (18% per annum).

Online and Public Auctions

Similar to how California runs its tax year, tax deed sales are a little different in California. The tax deed to a parcel is not put up for sale for at least five years after the property tax bill becomes delinquent. In California, the "redemption period" starts when the property becomes tax defaulted on July 1 of any given year, and ends when the property is offered for sale to investors at a tax deed sale five (or more) years later. In most other tax deed states, tax-defaulted properties go up for sale shortly after they first default, but property owners are given an opportunity to essentially buy back their property even if the tax deed was already sold at a sale. Barring a county error and/or a successful lawsuit by the former property owner, a property in California may not be redeemed once it is sold at a public auction. In other words, there is no extended right of redemption in the State of California.

California tax deed sales use the premium bidding method. The minimum bid is equal to the amount of taxes, interest, penalties, and fees due upon the property. Most counties only hold an auction once during a year; however, some counties hold more than one per year.

Generally, California property owners have up to the day before the tax sale to redeem their property. If possible, investors planning to participate in a California tax deed sale are advised to check the sale list just prior to the sale. This may entail contacting the county tax collector office directly, or checking the county or third-party Web site.

Bid4assets.com is a third-party Web site that holds online auctions for 28 California counties, including Alameda, Fresno, Kern, Santa Cruz, San Francisco, Solano, San Diego, and San Bernardino. Tax sale lists for Bid4Assets counties generally become available three to four weeks before the online auction. The Bid4Assets Web site has all of the information you need about each auction, including contact, registration and deposit information.

California Tax Deed Sale Payment Plans

According to California statute, and at their discretion, California county tax collectors may offer a "payment plan" for properties that sell for over a threshold amount. This "threshold" varies by county and can vary year to year. Generally, in a "payment plan", the county requires the threshold amount and the remaining balance on the tax deed is due within 90 days of the tax deed sale. The property title is not transferred to the tax deed purchaser until the tax collector receives payment in full.

After the Tax Deed Sale

Successful bidders are awarded a Tax Collector's Deed. Pursuant to California Statute, this deed conveys title to the purchaser free of all encumbrances of any kind existing before the sale, with the exception of liens for subsequent taxes and/or special assessments.

When a property has been offered for sale at least once and no acceptable bids have been submitted, the tax collector may re-offer those properties at the next scheduled sale at a minimum bid he/she deems appropriate. The county's Board of Supervisors must approve a drop in the minimum bid. Currently, there are no over-the-counter sales in California.