Signed by Governor Gray Davis, SB 1122 requires all California property owners to furnish a notice of special assessment to buyers prior to closing escrow, if their property is subject to 1915 Act Assessment Installments. Sellers must fully disclose which special tax and/or assessment districts a property liesin, and provide a detailed breakdown of all costs associated with them.
Among the new information to be provided are current levy amounts, start and ending dates for the assessment and a list of all facilities the monies are used for.
The Mello Roos Community Facilities Act was passed in 1982 as a response to Proposition 13, which taxpayers approved in an effort to limit homeowner taxes. Mello Roos quickly became popular as a means of raising money for additional improvements and services such as schools, fire stations, parks and other needed community services and facilities.
However, negative publicity associated with Mello Roos caused an increase in the use of alternative financing as permitted by the 1915 Bond Improvement Act. While the names may be different, the effect on homeowners is the same. These additional charges can add hundreds, and even thousands of dollars peryear, in additional property taxes.
Additionally, properties located within 1915 Act Special Assessment districts are subject to the same accelerated foreclosure proceedings as Mello Roos districts. Homeowners who are delinquent may have their property foreclosed upon in as little as 180 days.
Surprisingly, when polled last week, many real estate agents, brokers and title companies reported being unaware of this change in the disclosure law. As a result, homeowners statewide may be needlessly in violation of this law and at risk for litigation.
In response to this, Costa Mesa-based California Tax Data Inc. has introduced a streamlined method for obtaining the mandatory information and Official Notices. The company provides sellers with a comprehensive, standardized report and all Official Notices necessary to comply with this new law.
Considering the similarities between the 1915 Act Special Assessments and Mello Roos taxes, it wasn't surprising that the new disclosure was added, according to Company President Peter Placey. California Tax Data is a division of National Tax Data Inc. and has been providing tax data to consumers and private industry since 1986.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
