California tax sales

Where your money goes

1. Before the sale

   Each county's terms of sale set the registration deposit, the bid increment and the payment deadline. Pay the full price by the deadline or the deposit is forfeited and the parcel is re-offered. sco.ca.gov

2. Sale day

   The minimum bid is at least the amount needed to redeem the parcel, which is the defaulted taxes, penalties and fees, plus the costs of the sale. A parcel that draws no bid may be re-offered at a reduced minimum with the Board's approval. The parcel goes to the highest bidder at or above the minimum price. Cal. Rev. & Tax. Code §3698.5 · Cal. Rev. & Tax. Code §3693

3. After you pay

   The tax collector's deed conveys title free of all encumbrances that existed before the sale, except the few the statute lists. Recording and transfer costs, possession and title work are yours from here. Cal. Rev. & Tax. Code §§3711–3712

4. Money that is not yours

   Money above the taxes, penalties and costs is excess proceeds. The county holds it for a year; lienholders of record, then the former owner, may claim it within one year of the deed recording. None of it goes to the buyer. Cal. Rev. & Tax. Code §§4674–4676

Minimum bids are printed per parcel in the county's sale list, so the price you start from is known before you register.

What the deed gives you

1. Title

   The tax collector's deed conveys title free of all encumbrances that existed before the sale, except the few the statute lists. Cal. Rev. & Tax. Code §§3711–3712

2. What survives

   What survives the sale: tax and assessment installments falling due after it, unpaid special assessments and Mello-Roos taxes, easements, recorded restrictions and offers of dedication, and federal tax liens. Mortgages, deeds of trust and judgment liens are wiped out. Cal. Rev. & Tax. Code §3712

3. Possession

   The deed gives you title, not possession. An occupied parcel means a court unlawful-detainer action or a negotiated move-out, at your cost. common practice

4. The former owner

   There is no redemption after the sale. The former owner's remedies are a challenge to the sale within one year and a claim on any excess proceeds. Cal. Rev. & Tax. Code §3707

5. The first year

   A lawsuit attacking the validity of the sale must be filed within one year of the tax collector's deed. If a sale turns out to have been invalid, the tax collector, with the Board's approval, may rescind it and refund the purchase price. Cal. Rev. & Tax. Code §3725 · Cal. Rev. & Tax. Code §3731

Two ways to play California

What to check before you bid

• Title and recorded liens, including federal tax liens, which can survive a tax sale
• Mortgages, and whether the lender is likely to redeem
• Bankruptcy filings against the owner
• HOA, municipal and utility balances, and special assessments
• Occupancy: owner, tenant or vacant
• Legal access, easements and road frontage
• Zoning, land use, and any demolition or code orders
• Floodplain and environmental conditions
• Property value against the tax balance and any premium
• Other delinquent years on the same parcel
• Whether the parcel was redeemed or withdrawn before the sale
• The county's own registration, deposit and payment rules for this sale

California in particular

• Parcels are sold as is: no access before the sale and no warranty of condition, boundaries, access or buildability. sco.ca.gov
• A federal tax lien is not wiped out by the sale: the United States may redeem the parcel from you within 120 days after it. 26 U.S.C. §7425(d)
• Your bid is final when the auction closes. There is no redemption period after the sale, no cooling-off, and no refund if the parcel is not what you expected. Cal. Rev. & Tax. Code §3707

Common practice, not statute: The deed gives you title, not possession. An occupied parcel means a court unlawful-detainer action or a negotiated move-out, at your cost. A tax deed is not a warranty deed. Title insurers commonly refuse to insure it until the one-year challenge window has passed or a quiet title judgment is recorded, so plan to hold before you resell with insured title.