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Treasurer - Tax Collector - Tax Auction Excess Proceeds

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1. Why does the Butte County sell tax-defaulted property?

The primary purpose of a tax sale is to collect taxes that have not been paid by the property owner for at least five years. Offering property at public auction achieves this by either selling the property or by forcing payment of the property taxes. During those five years, the taxpayer has repeatedly been offered payment plans and still has the ability to remove the parcel from the sale by paying the taxes in full by 5 pm the day before the auction. If the property is sold, lienholders and the former owner may claim proceeds in excess of the taxes and costs of the sale.

2. Can I obtain title to a property on the tax sale list by paying the delinquent taxes prior to the tax sale date? Does the county sell tax lien certificates?

No. Legal title to a tax-defaulted property subject to the Tax Collector's power to sell can be obtained only by becoming the successful bidder at the tax auction. Paying taxes on such property will only serve to remove the parcel from the auction list, benefitting the assessed owner. No California county sells tax lien certificates at this time.

3. Who is notified of the sale?

The law requires the Butte County Tax Collector to attempt to notify the current owner(s), all lienholders, and public agencies.

4. Is a tax sale publicly advertised?

Yes. The legally required notice is published in the Chico Enterprise Record and Oroville Mercury Register three times, in successive seven-day intervals, prior to the tax sale.

5. When does the right to redeem a tax-defaulted property on the auction list cease?

The right to pay the taxes in full to avoid the sale of the property ceases at the close of business, 5 pm, on the last business day prior to the sale. There is no extended right of redemption in the State of California, as exists in some other states.

6. How is the minimum bid on a tax sale property determined?

State law dictates that the minimum bid on a tax-defaulted parcel offered by the Tax Collector at a public auction shall be no less than the total amount to redeem the property, plus costs. The minimum bid may be lowered, at the Tax Collector's discretion, if a parcel does not sell for the original minimum bid.

7. Does Butte County guarantee the property?

All properties are sold as is so it is very important to be an informed bidder. Prior to the auction, prospective bidders are urged to thoroughly research each property on which they plan to bid. Butte County makes no guarantee, expressed or implied, relative to the title, location or condition of the properties for sale. In addition, the County assumes no responsibility, implied or otherwise, that the properties are in compliance with zoning ordinances, mining and reclamation regulations or that they conform to building codes, permit requirements or any other government regulation.

8. Do liens or encumbrances on a tax-defaulted property transfer to the new owner after purchase of the property at a tax sale?

A title search initiated at the purchaser's expense should reveal any liens or encumbrances of record on a property in the tax sale. Per Revenue and Taxation Code Section 3712: "The deed conveys title to the purchaser free of all encumbrances of any kind existing before the sale, except:

• Any lien for installments of taxes and special assessments, which installments will become payable upon the secured roll after the time of the sale. (Note: The defaulted taxes and the current secured property taxes will be paid in full as part of the sale)
• The lien for taxes, assessments or other rights of any taxing agency which does not consent to the sale under this chapter.
• Liens for special assessments levied upon the property conveyed which were, at the time of the sale under this chapter, not included in the amount necessary to redeem the tax-defaulted property, and, where a taxing agency which collects its own taxes has consented to the sale under this chapter, not included in the amount required to redeem from sale to the taxing agency.
• Easements, constituting servitude upon or burdens to the property, water rights, the record title to which is held separately from the 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 (Division 10 (commencing with Section 8500) of the Streets and Highways Code) which are not satisfied as a result of the sale proceeds being applied pursuant to Chapter 1.3 (commencing with Section 4671) of Part 8.
• Any federal Internal Revenue Service liens which, pursuant to provisions of federal law, are not discharged by the sale, even though the Tax Collector has provided proper notice to the Internal Revenue Service before that date. (Note: The IRS has the right to redeem the property from the purchaser up to 120 days after the sale. If the IRS redeems the property, it will reimburse the new owner for the purchase price plus interest at 6% per annum from the date of sale, plus expenses of sale that exceed any income received from the property. If no action is taken within this period, the lien is extinguished.
• Unpaid special taxes under the Mello-Roos Community Facilities Act of 1982 (Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code) that are not satisfied as a result of the sale proceeds being applied pursuant to Chapter 1.3 (commencing with Section 4671) of Part 8."

9. How do I find a property I’d like to bid on at the tax sale?

Vacant land has no street (situs) address. The Butte County Assessor's plat maps and map books can determine its approximate geographical location. Improved properties frequently (but not always) will bear a street address, making it easier to determine the general location. Exact boundary lines of a property can be determined only by a survey of the property undertaken at the purchaser's expense.

Butte County Data Search - More information on each parcel is available through Butte County's Geographic Information Systems website.

10. How can I determine what use I can make of a tax sale property before I purchase it?

No expressed or implied warranty is given with respect to the parcels, and they are sold on an "as is" basis. Bidders are responsible for knowing what they are purchasing. The Department of Development Services can provide zoning, General Plan designation, water source and other information. Examine the Butte County Recorder's records for any recorded easements on a property.

Butte County Data Search - More information on each parcel is available through Butte County's Geographic Information Systems website.

11. How can I find out if a property I am interested in has been withdrawn from the sale (for payment of taxes or any other reason)?

Approximately three months prior to a tax auction, a list of eligible properties will be posted to the Treasurer-Tax Collector's website. As properties are removed from the auction, an updated list will be posted. A reoffer auction may also be scheduled within 90 days of an annual tax sale.

12. How can I register as a bidder?

Bid4Assets has hosted several of Butte County's tax auctions and will handle all aspects of the bidder registration process. Butte County requires each bidder to submit a deposit of $5000 to Bid4Assets, plus a $35 processing fee, to register for the sale. Details and instructions will be provided by Bid4Assets in mid-May.

13. How does the bidding process work?

The answer to this question is based on the process through Bid4Assets, the tax auction vendor.

14. How can a successful bidder pay for a property at the tax sale?

Successful bidders must pay by cashier's check, wire transfer or electronic funds transfer within three business days after the sale closes. In addition to the purchase price, the documentary stamp tax ($0.55 per $500 of the purchase price) is required. Only a successful bidder has the opportunity to purchase County assets. If the successful bidder defaults, under California State Law, County cannot resort to the second highest bidder, and will be required to take appropriate legal action against the bidder who defaults.

15. If I am the successful bidder, how can I hold title (vesting)?

The vesting on the tax deed will be as listed on the Deed Information form you will complete as a successful bidder. We cannot advise you in this area, but some of the most common ways in which property is vested are listed below. You may wish to consult an attorney. If you would like the property to be deeded to a trust, you will need to supply the name, date and trustees of the trust.

• A Single Man
• A Single Woman
• An Unmarried Man
• An Unmarried Woman
• A Married Man
• A Married Woman
• A Widower (Man)
• A Widow (Woman)
• Husband and Wife as Joint Tenants
• Tenants in Common
• A Married Man as His Sole and Separate Property
• A Married Woman as Her Sole and Separate Property
• A Corporation
• A Public Agency

16. How soon can I take possession of a property after purchase at the tax sale?

The successful bidder may generally take possession after the tax deed to purchase the property has been recorded. Successful purchasers should contact their attorney for information regarding possession. Most title companies will not insure title on properties sold at public auction for at least one year after the tax deed has been recorded. Legal action to challenge a tax sale must be commenced within one year of the tax recording date.

17. What steps should I take if there are occupants living on the property or personal property left on the premises?

This is a civil matter that could involve eviction proceedings or a disposition of personal belongings. You may wish to seek private legal advice.

18. Is property purchased in a tax sale eligible for title insurance?

The former owner has one year, from the date of recording of the tax deed, to challenge the validity of the tax sale (Revenue and Taxation code 177, 3725 and 3726). Please be advised that most title companies will not insure title on property purchased at a tax sale for at least one year after the recordation of the tax deed. A tax sale certificate or quiet title action may be necessary in order to clear title after the one year period.

The County of Butte makes no guarantees, express or implied, relative to the title, location, condition, right of legal access to, or permitted use of, the parcels offered for sale. The County provides no assurance that the properties are in compliance with zoning ordinances, that they conform to building codes or permit requirements, or that the situs address is correct. Parcels offered for sale may contain hazardous wastes, toxic substances, or other substances regulated by federal, state, and local agencies. The County makes no assurance, implied or otherwise, that the parcels are in compliance with federal, state or local laws governing such substances. The County assumes no responsibility, implied or otherwise, for any costs or liability of any kind imposed upon, or voluntarily assumed by, the purchaser, or any other owner, to remediate, clean up, or otherwise bring into compliance according to federal, state, or local environmental laws, any property purchased at this sale. The County assumes no liability for any other possible liens, encumbrances or easements, recorded or not recorded.

It is the purchaser's responsibility to thoroughly research each property and to determine if there are any liens or special assessments, homeowner association requirements, etc. Prospective purchasers are urged to examine the title, location and desirability of the properties available, to their own satisfaction, prior to the sale. It is also the responsibility of the purchaser to determine whether mobile homes are included in the parcel offered for sale. Some bonds, assessments and/or special district liens, which are levied by agencies or offices other than the Treasurer-Tax Collector, may still be outstanding after the tax sale. In addition, the I.R.S. has the option of redeeming, up until 120 days after the sale, any property on which there is an I.R.S. lien recorded.

19. What happens to property that does not sell at the tax sale? Can the property be purchased directly from the county?

The owner’s right to redeem the property revives if not sold. The unsold properties will be offered at subsequent tax sales until redeemed or sold. Properties cannot be purchased directly from Butte County outside of an auction or agreement sale process.

20. How can I get more information?

Additional information on each parcel and links to other resources will be available through Bid4Assets.

21. What happens if I am the successful bidder but decide that I don’t want the property after all?

Be sure you want the property before you bid. All sales are final and there are absolutely no refunds. If you default, under California State Law, the County cannot resort to the second highest bidder and will be required to take legal action against you. Failure to consummate the sale within the specified time shall result in the forfeiture of any deposit made and all rights that the purchaser may have had with respect to the property. Failure to consummate the sale will also bar the bidder from participating in future tax sales in Butte County.

22. How can I determine whether there are outstanding assessments or liens against an auction property?

To determine whether there are outstanding assessments or liens against the property requires researching the Official Records of the County Recorder's Office. Title insurance companies can also provide this service.

Please Note: The Butte County Recorder's Office does not provide property searches. Anyone interested in locating recorded property information is welcome to do so in their office during business hours and research the records. You can also conduct online research by utilizing the Official Records section of their website.

23. Under what circumstances can the former owner challenge the validity of the auction?

Generally, Sections 177 and 3725 et. seq. of the Revenue and Taxation Code limit the time to commence an action to one year from the recording of the tax deed.