County Tax Sales Information for Bidders
What You Should Know Before Buying
The Role of the State Controller
The State Controller has general supervision over county tax collections and provides tax levying and collecting procedures, including those for the sale of tax-defaulted lands.
The primary purpose of a tax sale is to return tax-defaulted property to the county tax rolls, either through redemption or by sale to a responsible owner.
Property on which taxes remain unpaid at 12:01 a.m. on July 1 becomes tax-defaulted land. Property that is tax-defaulted after five years (or three years in the case of property also subject to a nuisance abatement lien) becomes subject to the county tax collector's power to sell that property in order to satisfy the defaulted taxes. The county tax collector must attempt to sell the property within four years after it becomes subject to sale.
The county tax collector may offer the property for sale at public auction, through a sealed bid sale, or through a negotiated sale to a public agency or qualified nonprofit organization.
Public auctions are the most common way of selling tax-defaulted property. The auction is conducted by the county tax collector, and the property is sold to the highest bidder.
California counties do not sell tax lien certificates.
Where to Obtain Tax Sale Information
Information on upcoming tax sales may be obtained from the individual counties. Most of the counties have Web sites and post their tax-sale information there.
Starting at least three weeks prior to a county tax sale, the tax collector must publish a list of the properties three times in a newspaper of general circulation within the county.
Answers to Frequently Asked Questions
The owner of a tax-defaulted property has the right to redeem the property up until 5:00 p.m. or the close of business on the last business day prior to the tax sale.
The minimum bid amount set by law is the amount to redeem the property plus the costs incurred by the county.
The auctions are generally held in person and are conducted by the county tax collector. Some counties require advance registration and a deposit. Bid cards are usually assigned to aid in identifying bidders during the course of the sale. Payments are made in cash or certified funds. Personal checks usually are not accepted.
The successful bidder must pay, in addition to the bid amount, a county transfer tax of $0.55 per $500 of the sale price.
There is a one-year statute of limitations to bring an action to overturn a tax sale. Title companies will generally not issue title insurance until after the statute of limitations has expired.
BUYER BEWARE: Research before you invest. Counties do not guarantee the condition of property, nor are they responsible for its conformance to codes, permits, or zoning ordinances. Property is sold AS IS.
Liens and Encumbrances
The sale of tax-defaulted property by the county tax collector is free and clear of all encumbrances existing before the sale, with the following exceptions:
Any lien for installments of taxes and special assessments, which installments will become payable on the secured roll after the time of the sale.
A lien for taxes or assessments or other rights of any taxing agency that does not consent to the sale.
Liens for special assessments levied on the property that were, at the time of the sale, not included in the amount necessary to redeem the tax-defaulted property, and where a tax agency that collects its own taxes has consented to the sale.
Easements constituting servitudes upon or burdens to the property; water rights; title that is held separately from title to the property; and restrictions of record.
Unaccepted, recorded, irrevocable offers of dedication of the property to the public or a public entity for a public purpose, and recorded options of any taxing agency to purchase the property or any interest therein for a public purpose.
Unpaid assessments under the Improvement Bond Act of 1915 that are not satisfied as a result of the sale.
Any Internal Revenue Service liens that are not discharged by the sale.
Unpaid special taxes under the Mello-Roos Community Facilities Act that are not satisfied as a result of the sale.