(PRWEB) January 21, 2005
Legal Update: Similar to Mello-Roos law, California now requires home sellers to disclose other bond-related hidden taxes.
Over 4 million California property owners have properties that are subject to Mello-Roos and 1915 Bond Act special taxes and assessments. With little fanfare, on the first of the year a new law quietly went into effect altering the way each of these home owners discloses this information to prospective buyers by requiring a new property disclosure.
The new law is directly related to Bonds passed under 1915 Bond Act, which are a very popular method for communities to finance the construction of roads, sewers and other infrastructure, very similar to Mello-Roos bonds. These bonds are repaid, normally over a period ranging from 15 to 40 years, by a tax which is levied on properties nearby which directly benefit from the facility constructed. While offering an inexpensive financing tool for cities and communities, these bonds have many negative ramifications for property owners subject to them, including steep penalties, priority lien status and an accelerated right of foreclosure (foreclosure proceedings can begin only 90 to 180 days if the taxes arent paid).
Previously, home sellers had been permitted to make substantially equivalent disclosures of these taxes, by providing a copy of the previous years tax bill or a general list of these taxes. However, with the passage of this new law, this practice will no longer be allowable and sellers must disclose all of the required information in the form specified by the law.
Peter Placey, president of California Tax Data Inc, Californias leading provider of property tax information and reports, stated how important it is that a buyer understand what these taxes are and how they will affect them in the future.
While failure to pay these taxes on time might not lead directly to a foreclosure sale of the property, Placey said, the accelerated start of foreclosure proceedings can add thousands of additional dollars to what is owed in penalties and legal fees. In addition, failure to properly disclose this information at the time of sale can make the seller liable to financial and other repercussions.
There are nearly 3,000 individual special tax and assessment districts spread across the state, affecting nearly 1 out of every 2 properties sold. The lesson to be learned? If you are thinking of selling your home, make certain that you consult with a professional and are making all of the legally required disclosures. Thinking of buying a home? Make sure you are provided with all of the information you need to be able to make the most educated decision possible in regards to your new home purchase.
About California Tax Data
California Tax Data Inc. is headquartered in Irvine, California. The leading commercial source of Mello-Roos and Assessment District Determination Reports in California, California Tax Data provides bond determination reports and expanded property tax disclosure for use in real estate transactions. The company maintains the only comprehensive database of California property tax data in existence. This data was compiled over a period of ten years and is updated continuously to ensure accurate and up to date reporting. To date, the company has processed over 3 million determinations.
California Tax Data’s mission is to meet the property tax information and risk management needs of all participants in the real estate transaction. The company is committed to providing the highest service level available to property owners, real estate industry professionals and local government officials and staff.
For additional information contact California Tax Data directly at (949) 789-0660 or visit http://www.californiataxdata.com.
California Tax Data
100 Pacifica, Suite 470
Irvine, CA 92618
# # #