|
DATE: |
December 10, 2024 |
22 |
SUBJECT:
Title
ONLINE PUBLIC AUCTION TAX SALE OF TAX-DEFAULTED PROPERTY (DISTRICTS: ALL)
Body
OVERVIEW
When a property owner fails to pay property taxes by the end of the fiscal year, the property becomes tax defaulted. If the property remains tax defaulted for five years, the property then becomes subject to the Treasurer-Tax Collector’s Power to Sell. Statutory requirements are met pursuant to Revenue and Taxation Code § 3691, et seq. prior to the property being offered at sale. The purpose of offering tax-defaulted property at a tax sale is to collect the unpaid taxes (redemption) and to return the property to a revenue-generating status. This is a request to approve the proposed sale of 749 parcels of tax-defaulted real property at Online Public Auction Tax Sale No. 7095, beginning on March 14, 2025, with final groups closing on March 19, 2025.
RECOMMENDATION(S)
TREASURER-TAX COLLECTOR
1. Adopt the Resolution entitled:
A RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF SAN DIEGO APPROVING AN ONLINE PUBLIC AUCTION TAX SALE OF TAX- DEFAULTED PROPERTY (Attachment A, on file with the Clerk of the Board).
2. Should a parcel not sell at the initial minimum bid as defined in Revenue and Taxation Code § 3698.5, approve the Treasurer-Tax Collector’s discretion under the Revenue and Taxation Code § 3698.5(c), to offer the same property at the same sale or next scheduled sale, at a minimum price that the Treasurer-Tax Collector deems appropriate in light of the most current assessed valuation of that property or property interests, or any unique circumstance with respect to that property or those interests. Any parcel remaining unsold may be re-offered within a 90-day period in accordance with Revenue and Taxation Code § 3692(e) and any new parties of interest shall be notified in accordance with Revenue and Taxation Code § 3701.
EQUITY IMPACT STATEMENT
The Treasurer-Tax Collector recognizes the systemic impacts that inequitable policies may create for residents of the County of San Diego. Impacts have historically included outcomes related to racial justice and issues of belonging that are reflected in the programs, services, and resources allocated to communities. The Treasurer-Tax Collector will conduct an online auction that is widely accessible to all bidders who follow the process to register and submit deposits required to participate in the auction. A bidder may only be banned from participating in the online auction if they have previously forfeited property by way of non-completion of the sale of property for which they have previously won the bid. It is anticipated that these actions will have a positive impact on all people to include Black, Indigenous, People of Color (BIPOC), women, people with disabilities, immigrants, youth, and the LGBTQ community.
SUSTAINABILITY IMPACT STATEMENT
The proposed actions to conduct an online public auction, collect unpaid property taxes and return the properties to a revenue generating status are appropriate as they support the County of San Diego’s Strategic Initiative of Sustainability to align the County’s available resources with services to maintain fiscal stability and ensure long-term solvency. The proposed actions to conduct an online auction that is widely accessible to all bidders who follow the process to register align with the County of San Diego’s Sustainability Goal of providing just and equitable access.
FISCAL IMPACT
Funds received from sales of tax-defaulted property will be used to redeem defaulted and current year taxes and to reimburse the County for all Board approved cost recovery and statutorily required fees and costs of sale imposed under San Diego County Administrative Code § 364.4.
Any excess proceeds remaining will be retained in the defaulted tax sale trust fund for a period of one year following the date of the recordation of the tax deed to the purchaser of the property. During that period, the excess proceeds may be claimed by any party of interest having a recorded interest in the property at the time of the sale. If no valid claims are received, State law provides the excess proceeds would be transferred to the General Fund. There will be no change in net General Fund cost and no additional staff years.
BUSINESS IMPACT STATEMENT
N/A
ADVISORY BOARD STATEMENT
N/A
BACKGROUND
Existing state law provides power for the Treasurer-Tax Collector to sell properties that are tax-defaulted for five or more years, or, in the case of a nuisance abatement, three or more years pursuant to Revenue and Taxation Code § 3691. For property damaged or destroyed by calamity and/or by a state, county, or federal declared disaster such as the California Wildfires of 2020, state law provides that the property is not offered at sale until five years from the date of the state, county or federally declared disaster. The Treasurer-Tax Collector makes a review of the parcels subject to and scheduled for sale to identify and remove properties affected by such declared disasters that are within the five-year time period from the date of disaster from the list of parcels to be offered at sale.
Prior to Sale, taxing agencies including the County of San Diego and eligible non-profit organizations are notified of the scheduled sale and provided an opportunity to object to the sale of any properties being offered at public auction to acquire that property for public purpose, in accordance with § 3695 and Chapter VIII of the California Revenue and Taxation Code and County of San Diego Board Policy F-1 Screening of Tax-Deeded Land for Possible Public Use.
Prior to auction, the Treasurer-Tax Collector’s office thoroughly researches tax-defaulted property to identify parties of interest. Rigorous efforts are made to contact the owners and other parties of interest to provide them notice of the sale, the effect of the sale on their interest in the property, and their right of redemption. All contact with parties of interest is purposed on facilitating the redemption (payment in full) of defaulted taxes.
Owners of record are sent notices each year starting with the first year of default. These notices consist of a defaulted tax bill in July and the regular tax bill in October, which contains the statement, “IN DEFAULT ON JUN 30 YYYY, PRIOR YRS TAXES DELINQUENT.” Defaulted tax statements for parcels, which are delinquent for five years or more advise the taxpayer of the tax sale status and fees that have attached or will attach to the parcel prior to mailing. All owners mailing addresses are researched prior to mailings for a more current address. Notices of the Tax Collector’s Power to Sell for Defaulted Taxes are recorded, in accordance with § 3691.1, § 3691.2 and § 3691.4 of the Revenue and Taxation Code, and legal advertisement of the property’s Tax Default and Tax Collector’s Impending Power to Sell is made for each of the properties itemized on the attached exhibit. Additionally, prior to any tax sale, notice of the impending sale is mailed out to all known parties of interest, individually, and is also published in a local newspaper with county-wide circulation and on the Treasurer-Tax Collector’s website. It is only after all such means have been exhausted by Treasurer-Tax Collector staff that property is scheduled for auction.
Staff is confident that the actual number of parcels offered at sale will be reduced from the 749 parcels itemized in the attached exhibit. This is a direct result of redemption (payment in full) of the defaulted tax amount and/or withdrawal from sale for reasons which can include but are not limited to: an assessee who is the debtor in bankruptcy; an un-probated estate; and/or the Treasurer-Tax Collector’s determination to offer the property at another sale, subject to and in accordance with all noticing requirements of the Revenue and Tax Code.
Parcels not sold at the Online Public Auction may be re-offered within a 90-day period in accordance with Revenue and Taxation Code § 3692(e) and any new parties of interest shall be notified in accordance with Revenue and Taxation Code § 3701.
Statistics for prior year Public Auction Tax Sales are as follows:
|
SALE NO. |
SALE DATE |
BOARD APRVD |
PAID PRIOR TO SALE |
W/DRAWN PRIOR TO SALE |
PARCELS OFFERED |
SOLD |
% SOLD |
TOTAL SALES PRICE (total recovered) |
PARCELS W/NO BID |
REGISTERED BIDDERS |
SUCCESSFUL BIDDERS |
W/MULTIPLE PURCHASES |
|
7091B |
5/17/24-5/22/24 |
493 |
6 |
51 |
287 |
90 |
31.36% |
$503,800.00 |
140 |
969 |
30 |
12 |
|
7091 |
3/22/24-3/27/24 |
493 |
90 |
33 |
468 |
59 |
12.61% |
$3,605,100.00 |
277 |
3614 |
69 |
18 |
|
7086B |
5/12/23-5/17/23 |
513 |
9 |
0 |
189 |
149 |
78.84% |
$780,500.00 |
17 |
337 |
30 |
15 |
|
7086 |
3/10/23-3/15/23 |
513 |
121 |
31 |
476 |
134 |
28.15% |
$1,906,700.00 |
179 |
1564 |
68 |
27 |
|
7083B |
5/13/22-5/18/22 |
508 |
6 |
8 |
237 |
181 |
76.37% |
$887,800.00 |
38 |
201 |
47 |
19 |
|
7083 |
3/11/22-3/16/22 |
508 |
129 |
19 |
490 |
101 |
20.61% |
$2,623,400.00 |
195 |
839 |
70 |
28 |
|
7079B |
5/14/21-5/19/21 |
763 |
6 |
0 |
279 |
199 |
71.30% |
$889,400.00 |
73 |
337 |
50 |
26 |
|
7079 |
3/12/21-3/17/21 |
763 |
203 |
24 |
737 |
231 |
31.30% |
$1,296,100.00 |
237 |
1544 |
291 |
37 |
|
7076 |
2/28/20-3/4/20 |
546 |
136 |
19 |
505 |
69 |
13.70% |
$1,980,500.00 |
273 |
695 |
48 |
15 |
|
7071B |
7/12/19-7/17/19 |
786 |
2 |
0 |
313 |
163 |
61% |
$129,200.00 |
101 |
601 |
25 |
13 |
|
7071 |
04/26/19-05/1/19 |
786 |
196 |
37 |
731 |
287 |
52% |
$2,630,200.00 |
259 |
601 |
71 |
24 |
|
7067B |
7/20/18-7/25/18 |
1276 |
2 |
4 |
694 |
389 |
56.10% |
$1,949,000.00 |
300 |
253 |
44 |
23 |
|
7067 |
5/4/18-5/9/18 |
1276 |
99 |
7 |
1170 |
322 |
27.60% |
$5,555,600.00 |
691 |
869 |
99 |
35 |
|
7063B |
7/13/17-7/26/17 |
1631 |
2 |
4 |
1014 |
340 |
33.90% |
$2,164,700.00 |
657 |
213 |
67 |
32 |
|
7063 |
5/5/17-5/8/17 |
1631 |
227 |
49 |
1565 |
345 |
25.50% |
$5,652,700.00 |
977 |
369 |
116 |
45 |
|
7056 |
3/24/2015 |
481 |
243 |
52 |
186 |
85 |
45.70% |
$2,924,000.00 |
101 |
240 |
40 |
13 |
|
7047 |
3/19/2014 |
495 |
266 |
82 |
147 |
54 |
36.73% |
$1,404,300.00 |
85 |
196 |
39 |
11 |
|
7039 |
3/13/2013 |
295 |
163 |
42 |
90 |
62 |
68.88% |
$3,493,850.00 |
28 |
298 |
37 |
14 |
|
7036 |
2/24/2012 |
290 |
167 |
54 |
69 |
48 |
70.00% |
$1,518,600.00 |
21 |
126 |
31 |
7 |
|
7032 |
3/18/2011 |
592 |
185 |
99 |
309 |
76 |
24.60% |
$534,175.00 |
233 |
125 |
43 |
13 |
|
7028 |
2/26/2010 |
379 |
120 |
64 |
195 |
58 |
29.74% |
$319,200.00 |
137 |
198 |
38 |
14 |
|
7025 |
2/25/2009 |
211 |
79 |
24 |
108 |
37 |
34.30% |
$184,600.00 |
71 |
189 |
26 |
9 |
|
7022 |
2/28//08 |
189 |
74 |
32 |
83 |
59 |
71.08% |
$564,300.00 |
19 |
272 |
45 |
9 |
LINKAGE TO THE COUNTY OF SAN DIEGO STRATEGIC PLAN
Today’s proposed action to approve an online public auction sale of tax-defaulted property supports the Community and Sustainability initiatives in the County of San Diego’s 2024-2029 Strategic Plan by collecting validly assessed tax revenue which is turned over to the General Fund and made available to fund county programs.
Respectfully submitted,
Dan Mcallister
Treasurer-Tax Collector
ATTACHMENT(S)
1. A Resolution of the Board of Supervisors of the County of San Diego Approving an Online Public Auction Tax Sale of Tax-Defaulted Property
2. Authorization and Report of Sale Public Online Auction No. 7095