California Tax Sale Definitions

Abandonment of Homestead: An Abandonment of Homestead is a document that when recorder at the County Recorder's Office terminates a Homestead.
Abstract of Judgment: An Abstract of Judgment summarizes of the essential provisions of a money judgment obtained by a judgment creditor against a judgment debtor. Upon recordation at a California county recorder's office, it creates a monetary lien for the dollar amount owed on the money judgment that immediately attaches all of the real property owned by the judgment debtor, or that the judgment debtor comes into ownership prior to the satisfaction of that judgment, that is located in the county where the abstract is recorded.
Affidavit of Death of Joint Tenant: If the grantees on a vesting document hold title as joint tenants and one of those grantees dies, any surviving joint tenant can record at the County Recorder's Office of the county where the right property is located a document termed an Affidavit of Death of Joint Tenant. For a free copy of this document in .pdf format, click here.
Assessment Appeal: A taxpayer may file an appeal for reduction of the annual assessed value with the Clerk, Board of Supervisors during the regular filing period each year, July 2 until September 15. For supplemental or escape assessments, appeals must be filed within 60 days of the mailing of the tax bill or receipt of the notice, whichever is earlier.
Base Year: Under Proposition 13 the assessment year 1975-76 serves as the original base year. Thereafter, any assessment year in which real property, or a portion thereof, is purchased, is newly constructed or changes ownership shall become the base year used in determining the full value for such real property, or a portion thereof.
Change of Ownership: The conveyance of an interest in real property from one person or entity to another that triggers reappraisal of the real property under Proposition 13.
Change of Ownership Exclusions: Some changes in ownership may be excluded from reappraisal if a timely claim is filed with the Assessor's Office that meets specific qualifications. Examples include the transfer of real property between parents and children or the replacement of a principal residence by senior citizens over age 55.
Covenant: A covenant is a promise written in a Deed or other document (such as Covenants, Conditions and Restrictions (termed CC&Rs) where a party to the document agrees to perform (termed an affirmative covenant) or not perform (termed a negative or restrictive covenant) certain acts or requiring (affirmative covenant) or preventing (termed a negative or restrictive covenant) certain uses of a property.
Covenant Against Encumbrances (also spelled Incumbrances): If a Covenant Against Encumbrances is included in a Deed, the Grantor warrants that title to the property is free of all encumbrances, other than those specifically excepted in the Deed.
Covenant Against Further Encumbrances (also spelled Incumbrances): If a Covenant Against Further Encumbrances is included in a Deed, the Grantor warrants that that person has not caused any encumbrances to be placed against the property, other than those specifically excepted in the Deed.
Covenant for Title: If a Covenant for Title is included in a Deed, the Grantor warrants that the Grantor has the very estate in quality and quality that is purported to be conveyed.
Covenant of Further Assurance (or Assistance): If a Covenant of Further Assurance (or Assistance) is included in a Deed, the Grantor agrees to bear the expenses of defending the title to the property conveyed against the claims of others.
Covenant of Quiet Enjoyment: If a Covenant of Quiet Enjoyment is included in a Deed, the Grantor warrants the the Grantee will enjoy the property free of claims made by anyone else.
Covenant of Right to Convey: If a Covenant of Right to Convey is included in a Deed, the Grantor agrees that that person has the right to convey (or transfer) title to the property being conveyed.
Covenant of Seisin: If a Covenant of Seisin is included in a Deed, the Grantor agrees that that person is the owner of the property and has the right to convey title to the property.
Covenant of Warranty of Title: If a Covenant of Warranty of Title (also called a Covenant of General Warranty of Title) is included in a Deed, the Grantor agrees to bear the expenses of defending the title to the property conveyed against the claims of others.
Credit Transaction: The term Credit Transaction when used in conjunction with a California county tax-defaulted real property sale means a real property tax-defaulted sale conducted pursuant to Taxation and Revenue Section 3693.1, which provides the following:
3693.1. Notwithstanding Section 3693, the tax collector may make the sale of any property sold under this chapter a cash or deferred-payment transaction. If the tax collector approves the sale as a deferred-payment transaction, the tax collector may require a deposit in the amount of five thousand dollars ($5,000) or 10 percent of the minimum bid price, whichever is greater. The balance of the purchase price shall be paid by any method of payment authorized by Section 2502, 2503.2, or 2504, as specified by the tax collector and within a period specified by the tax collector not to exceed 90 days from the date of the close of auction as a condition precedent to the transfer of title to the purchaser. If the purchaser was required to pay a deposit prior to the date of the sale, the deposit shall be applied toward the purchase price of the property. Failure on the part of the successful bidder to consummate the sale within the period specified by the tax collector shall result in the forfeiture of the deposit and all rights he or she may have with respect to that property. Any forfeiture of deposit shall be distributed to the county general fund and shall not apply to outstanding delinquent taxes. Upon forfeiture the right of redemption shall revive.
Homestead Declaration: A Declaration of Homestead may be declared and recorded by owners of real property on their principal place of residence. Signatures on the Declaration of Homestead must be notarized. Declaration of Homestead can be purchased at most office supply or legal stationery stores. For a free copy of a Declaration of Homestead form in a .pdf format, click here.
Deed: A deed is a written document that conveys (or transfers) ownership of real property from one person or persons (termed the grantor or grantors) to another person or persons (termed the grantee or grantees). The most commonly used deeds in California are the Grant Deed and the Quit Claim Deed.
Documentary Transfer Tax: See Revenue and Taxation (R & T) Code Sections 11902 through 11934. See particularly R & T Code Section 11911 which states the following:
(a) The board of supervisors of any county or city and county, by an ordinance adopted pursuant to this part, may impose, on each deed, instrument, or writing by which any lands, tenements, or other realty sold within the county shall be granted, assigned, transferred, or otherwise conveyed to, or vested in, the purchaser or purchasers, or any other person or persons, by his or their direction, when consideration or value of the interest or property conveyed (exclusive of the value of any lien or encumbrance remaining thereon at the time of sale) exceeds one hundred dollars ($100.00) a tax at the rate of fifty-five cents ($0.55) for each five hundred dollars ($500.00) or fractional part there of.
Easement: An easement is the right to use another person's property.
Excess Proceeds: Excess Proceeds are generated whenever the amount paid by the high bidder at a county tax-defaulted real property sale exceeds the total amount that would have been required to redeem the property prior to the termination of the right of redemption plus other enumerated distributions provided for in Revenue and Taxation Code Sections 4672, 4672.1, 4672.2, 4673, and 4673.1. These excess proceeds are available to be distributed to qualified parties of interest.
Exemption: An exemption is a deduction from the taxable assessed value of property as prescribed by law, generally based on the property's use.
Encumbrance (also spelled Incumbrance): An encumbrance is any right or interest that exists in someone other than the owner of an estate that restricts or impairs the transfer of the estate or lowers its value. An encumbrances includes all liens, deed restrictions, leases, easements and encroachments.
Fiscal Tax Year: The California Fiscal Tax Year begins on July 1 of each calendar year and ends on June 30 of the following calendar year.
General Warranty Deed: A General Warranty Deed provides the greatest protection to the Grantee and contains the following six covenants:; 1. Covenant of Seisin,; 2. Covenant of Right to Convey,; 3. Covenant of Against Encumbrances (also spelled Incumbrances),; 4. Covenant of Quiet Enjoyment,; 5. Covenant of Further Assurance (or Assistance) and; 6. Covenant of Warranty of Title (or of General Warranty)

Geographic Information System (GIS): A Geographic Information System is a software program used to capture, store, manage, analyze and manipulate data (termed Spatial Data) that has a geographic location associated with it. Examples of this type of date are the following:; 1. Assessor Parcel Maps,; 2. Flood Plan Maps,; 3. Zoning Maps,; 4. County and Municipal Boundary Lines,; 5. Public Land Survey System (PLSS) Township and Section Lines and; 6. Road Maps.
Grant Deed: A Grant is the form of deed typically used in California for conventional escrows where a title insurance policy is issued. It is a warranty deed that contains no warranty language; however California Civil Code Section 1113 provides that using of the word "grant" in a deed implies, under California law, two Covenants of Title. One, "that [the] grantor has not [previously] conveyed the same estate, or any right, title, or interest therein, to any person other than the grantee" and, another, that the estate granted was "free from incumbrances done, made, or suffered by the grantor, or any person claiming under him." To view and obtain a free copy of a standard Grant Deed in .pdf format, click here.
Indexed Base Year Value: If you owned your property before March 1, 1975, the "full cash" value will be the value as it appeared on the 1975-76 assessment roll increased a maximum of 2% per year in accordance with Proposition 13. If you acquired or constructed the property since March 1, 1975, "assessed" value is the value at the time you took title or completed construction, plus a maximum of 2% each year thereafter.
Joint Tenancy: California Civil Code Subsection 683(a) states in part the following:
Subsection 683(a). A joint interest is one owned by two or more persons in equal shares, by a title created by a single will or transfer, when expressly declared in the will or transfer to be a joint tenancy, or by transfer from a sole owner to himself or herself and others, or from tenants in common or joint tenants to themselves or some of them, or to themselves or any of them and others, or from a husband and wife, when holding title as community property or otherwise to themselves or to themselves and others or to one of them and to another or others, when expressly declared in the transfer to be a joint tenancy, or when granted or devised to executors or trustees as joint tenants.
Lease: A lease is a contractual possessory interest in real property for a specific term.
Lien Date: The date when taxes for a upcoming fiscal year become a lien on property and when property is valued for tax purposes. The lien date for California property is 12:01 a.m. on January 1.
Market Value For Property Tax Purposes: The amount of cash or its equivalent that property would bring if exposed for sale in the open market under conditions in which neither buyer nor seller could take advantage of the exigencies of the other, and both the buyer and seller have knowledge of all of the uses and purposes to which the property is adapted and for which it is capable of being used, and of the enforceable restrictions upon those uses and purposes.
Newly Constructed: The construction of new buildings, or the addition to or the alteration of existing buildings if the alteration converts the property to another use or extends the economic life of the improvements.
Notice of Intended Sale: A Notice of Intended Sale of Tax-Defaulted Real Property is the published notice of an upcoming county tax-defaulted real property auction sale. Pursuant to California Revenue and Taxation Code Section 3702, a notice of intended sale must be published as follows:
Section 3702. The tax collector shall publish the notice of intended sale once a week for three successive weeks in a newspaper of general circulation published in the county seat and in a newspaper of general circulation published in the judicial district in which the property is situated. If the same newspaper of general circulation is published in both the county seat and in such district, or if the publication of the notice of sale is made in a newspaper which is determined pursuant to Section 3381 as most likely to afford adequate notice of the sale, a publication in such paper shall satisfy the requirements for publication set forth in this section. If there is no newspaper published in the county seat or in the judicial district, then publication may be made by posting notice in three public places in the county seat or in the judicial district, as the case may be, where no such newspaper is published. The publication shall be started not less than 21 days prior to the date of the sale.
Further, pursuant to California Revenue and Taxation Code Section 3704, a notice of intended sale must include the following provisions:
Section 3704. The notice of intended sale shall include all of the following:
(a) The date, time, and place of the intended sale, including the electronic address if the intended sale is by public auction via the Internet or other electronic media.
(b) The locations of computer workstations that are available to the public and instructions on accessing the public auction and submitting bids if the intended sale is conducted via the Internet or other electronic media.
(c) A description of the property to be sold.
(d) The name of the last assessee of the property.
(e) The minimum acceptable bid of the property to be sold.
(f) A statement that if the property is not redeemed before the close of business on the last business day prior to the date of the sale, the right of redemption will cease.
(g) A statement that if the property is sold, parties of interest, as defined in [Revenue and Taxation] Section 4675, have the right to file a claim with the county for any proceeds from the sale which are in excess of the liens and costs required to be paid from the proceeds.
(h) A statement that if excess proceeds result from the sale, notice will be given to parties of interest, pursuant to law.
(i) A statement that if the parcel remains unsold after the tax sale, the date, time, and location of any subsequent sale.
(j) If applicable, that a deposit is required as a condition to submit bids on the property.
(k) If applicable, a statement that, for any property purchased by a credit transaction, the right of redemption will revive if full payment is not received by the tax collector prior to the close of business on the date, as specified by the tax collector under [Revenue and Taxation] Section 3693.1, that full payment is due.
Personal Property: Any property other than real estate. Includes airplanes, boats, manufactured homes not affixed to permanent foundations and business property such as supplies, office furnishings, machinery or equipment.
Possessory Interest: The possession of, or exclusive right to possession of real property. A private party's possessory interest in real property owned by a tax-exempt public agency may be taxable if sufficiently independent, durable and exclusive of the rights held by others.
Preliminary Change of Ownership Report (PCOR): Pursuant to Revenue and Taxation Code, Section 480.3, the Recorder will not record a document evidencing a change of ownership without the simultaneous filing of a Preliminary Change of Ownership Report signed by one of the Grantees or the payment of a $20.00 recording fee in addition to current regular recording fees. For a free copy of a PCOR in .pdf format that can be used for all 58 California Counties, click here. The following is a list of documents requiring a PCOR:; 1. All Deeds and Indentures except:; 1. Deeds to or from governmental entities,; 2. Trustee's deeds upon sale and; 3. Easements.; 2. All Agreements of Sale and/or Contracts of Sale affecting real estate,; 3. All Affidavits of Death except for a Beneficiary under a Deed of Trust and; 4. All Leases, Memoranda of Leases and Assignments of Leases except Oil and Gas Leases.
Proposition 8: Passed by California voters in November 1978, Proposition 8 allows for a temporary reduction in the assessed value of real property when there is a decline in market value below the property's indexed base year value.
Real Property: Real property (or real estate) consists of land, structural improvements affixed to the land and fixtures.
Recorder: The County Recorder is responsible under California law to keep the following records:; 1. Official Public Records (that is, recorded documents that affect title to real property or liens secured by real property),; 2. Vital Documents, which include Marriage, Birth and Death Certificates,; 3. Final Subdivision Maps (creating subdivisions of more than 5 parcels), Parcel Maps (creating subdivisions of less than 5 parcels), Records of Survey, Corner Records and other miscellaneous maps.; 4. Fictitious Business Name Statements,; 5. Certain Uniform Commercial Code (UCC) Financing Statements and; 6. Military Discharges (DD214).
A UCC Financing Statement is a security agreement where personal property is the collateral. If real property is affected by the Financial Statement (as would be the case with fixtures and as-extracted collateral (oil, gas or other minerals) or timber to be cut), then the Financing Statement is filed at the County Recorder's Office in the county where the real property collateral is located; otherwise Financing Statements are filed with the California Secretary of State.; A list of Internet links to the 58 California County Recorder's Offices together with addresses, phone and fax numbers can be found here.
Sealed Bid Tax-Defaulted Real Property Sale: A Sealed Bid Tax-Defaulted Real Property Sale is a county tax-defaulted sale conducted pursuant to Subsections (b), (c) and (d) of Revenue and Taxation Code Section 3692.

(b) When oil, gas, or mineral rights are subject to sale for nonpayment of taxes, the tax collector may offer the interest at minimum bid to the holders of outstanding interests where the interest subject to sale is a partial interest or, where the interest subject to sale is a complete and undivided interest, to the owner or owners of the property to which the oil, gas, or mineral rights are appurtenant.
(c) When parcels that are rendered unusable by their size, location, or other conditions are subject to sale for nonpayment of taxes, the tax collector may offer the parcel, at a minimum bid, to owners of contiguous parcels or to a holder of record of either a predominant easement or a right-of-way easement. If the parcel is sold to a contiguous property owner, the tax collector shall require that the successful bidder request the assessor and the planning director to combine the unusable parcel with the bidder's own parcel as a condition of sale.
(d) Sealed bid sale procedures shall be used when offers are made pursuant to subdivision (b) or subdivision (c), and the property shall be sold to the highest eligible bidder. The offers shall remain in effect for 30 days or until notice is given pursuant to Section 3702, whichever is later.
Secured Property: Property on which the property taxes are a lien against real estate.
Social Security Number: Social Security Numbers: Effective January 1, 2008, Section 1798.89 of the Civil Code was added and reads as follows: Unless otherwise required to do so by the state or federal law, no person, entity, or government agency shall present for recording or filing with a county recorder a document that is required by any provision of law to be open to the public if that record displays more than the last four digits of a social security number.
Special Assessments: Direct charges against property which are included in the total amount of your tax bill but which are not property taxes in the sense of being based on the Assessor's valuation. A sewer service charge is an example of this type of assessment.
Supplemental Assessment: When property is assessed due to a change in ownership or completed new construction, a supplemental assessment is issued. It is the difference between the new assessed value and any prior assessments for an assessment year.
Tax-Defaulted Real Property: Tax-Defaulted Property is defined by California Revenue and Taxation Code Section 3436 as follows:
Section 3436. At 12:01 a.m. on July 1, the taxes, assessments, penalties, and costs on real property except tax-defaulted property and possessory interests, which have not been paid shall by operation of law be declared in default.
Tax-Defaulted Real Property Sale: Tax-Defaulted Real Property Sale is the term used to describe a California real property tax sale.
Tax Rate: The County levies an ad valorem property tax at a rate equal to 1% of the taxable value. In addition, the rate will include an amount equal to the amount needed to make payments for the interest and principal on general obligation bonds or other indebtedness approved by the voters.
Termination of the owner's right of redemption:: The termination of an owner's right of redemption is the exact date and time that a property owner loses ownership to a property for non-payment of real property taxes. In California, the termination of the right of redemption is governed by California Revenue and Taxation Code Section 3707, which provides the following:
Section 3707
(a) (1) The right of redemption terminates at the close of business on the last business day prior to the date of the sale.
(2) If the tax collector approves a sale as a credit transaction and does not receive full payment on or before the date upon which the tax collector requires pursuant to Section 3693.1, the right of redemption is revived on the next business day following that date.
(b) Notwithstanding any other provision of law, any remittance sent by mail for redemption of tax-defaulted property must be received in the tax collector's office prior to the time established in paragraph (1) of subdivision (a).
(c) The sale shall be deemed complete when full payment has been received by the tax collector.
(d) The right of redemption revives if the property is not sold.
Tax Rate Area (TRA): The tax rate area (TRA) is a specific geographic area that has the exact same combination of local taxing agencies for the current fiscal tax year.
Unsecured Property: Property on which the property taxes are not a lien against real estate (office furniture, machinery, equipment, boats, airplanes, etc.) Note: Business inventory is exempt from taxation.
Warranty Deed: A Warranty Deed is a deed that contains one or more Covenants of Title.

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The following are definitions of terms associated with tax sale investing in the State of California: