[bearishgurl]

Effective Demand, IMO, our Legislature is “grabbing at straws here.” If the actual bill is written like it is described in your link, it will surely die on the house floor.

It’s full of holes and doesn’t address the huge percentage of defaulters who have two loans or more.

What will compel a squatting trustor to have an in-person conversation with a lender who has filed an NOD on his property? If he does so, he will have to begin to make payments equal to 50% of his mo. mortgage payment. The only “carrot” dangling for the trustor to call his lender is possible “modification” of at least one of his/her mortgage loans. We all know that’s not gonna work because the trustor is too underwater with mostly recourse paper, which he/she has been living off of these past few years.

If it does by some stretch pass, it won’t delay the NOD time frames. The 30-day time limit to call and set up a time to meet with the lender is already built into the NOD’s legal waiting period. They will be concurrent.

I maintain that if all lenders exercised their timely right to foreclosure, we would eventually be able to see the light at the end of the tunnel.

[bearishgurl]

Effective Demand, IMO, our Legislature is “grabbing at straws here.” If the actual bill is written like it is described in your link, it will surely die on the house floor.

It’s full of holes and doesn’t address the huge percentage of defaulters who have two loans or more.

What will compel a squatting trustor to have an in-person conversation with a lender who has filed an NOD on his property? If he does so, he will have to begin to make payments equal to 50% of his mo. mortgage payment. The only “carrot” dangling for the trustor to call his lender is possible “modification” of at least one of his/her mortgage loans. We all know that’s not gonna work because the trustor is too underwater with mostly recourse paper, which he/she has been living off of these past few years.

If it does by some stretch pass, it won’t delay the NOD time frames. The 30-day time limit to call and set up a time to meet with the lender is already built into the NOD’s legal waiting period. They will be concurrent.

I maintain that if all lenders exercised their timely right to foreclosure, we would eventually be able to see the light at the end of the tunnel.

[bearishgurl]

Effective Demand, IMO, our Legislature is “grabbing at straws here.” If the actual bill is written like it is described in your link, it will surely die on the house floor.

It’s full of holes and doesn’t address the huge percentage of defaulters who have two loans or more.

What will compel a squatting trustor to have an in-person conversation with a lender who has filed an NOD on his property? If he does so, he will have to begin to make payments equal to 50% of his mo. mortgage payment. The only “carrot” dangling for the trustor to call his lender is possible “modification” of at least one of his/her mortgage loans. We all know that’s not gonna work because the trustor is too underwater with mostly recourse paper, which he/she has been living off of these past few years.

If it does by some stretch pass, it won’t delay the NOD time frames. The 30-day time limit to call and set up a time to meet with the lender is already built into the NOD’s legal waiting period. They will be concurrent.

I maintain that if all lenders exercised their timely right to foreclosure, we would eventually be able to see the light at the end of the tunnel.

[bearishgurl]

[quote=pemeliza]This guy was very blunt and basically said if you don’t agree you need to file an appeal immediately and go in front of a board that will ultimately decide the value. . . I have to say the conversation with this guy was refreshing because at least he didn’t beat around the bush.

I am seriously tempted to try and take my story to the media. I think buyers have the right to know that if they buy a REO through the normal real estate process with a buyer’s agent and bidding wars that they are still going to be under a completely different level of scrutiny by the tax assessor. I also think the realtors involved in REOs should have an obligation to disclose this potential problem to buyers. Ironically, this would add further stigma to buying REOs and probably push tax valuations down even further. To be clear we are not talking about chump change here and the additional tax grows exponentially every year.[/quote]

pemeliza, I can identify with you. I don’t believe these realtors who handle REO’s are even aware of this themselves. Perhaps this *new* method of valuation counties are using to assess properties purchased from “distress sales” will invite more (writ of mandates) lawsuits and appeals. It will be interesting to see how the law evolves over the years on this issue. However, I don’t see the any CA justice panels using PAST PRACTICE in their interpretation of the law in this area.

Counties are taking it in the shorts right now in zips where there was a preponderance of foreclosures from “bubble-era” lending. The local government has grown to accomodate the influx of population in these new areas and now has to lay off. The MR bonds only paid for police/fire/schools/libraries/parks in *their own* neighborhoods but does not compensate the overall administration of a city (or county) because it’s population has grown from <80K in 2000 to 250K+ today, such as in Chula Vista. In addition, we only have 2.5 domestic courts down here to accomodate this huge population and it now takes 18 - 24 mos. to go to trial on a domestic case and the trial hours are NOT together but divided up into two consecutive Fridays, or even further apart. It's a mess.

I know the diff. is not "chump change." The assessor has probably been told by county counsel to play "hardball" in cases where a new owner got an "awesome" deal in a coveted area to keep their most *prized* tax base "shored up."

pemeliza, has there ever been any work done on the history of property you bought? Do you think it could qualify for a Mills Act application? I know the City of SD is broke and is probably not entertaining any MA applications right now, but maybe you could start with SOHO and figure out if you have a chance in the future, should the City's coffers become more stable. Are you or any co-buyers 55 years of age or older and sold a previous property in CA they owned to buy your property?? If so, you/they may qualify for their taxes to be lowered to the assessment of the property you/they recently sold, pursuant to Propositions 60 and 90.

Just some ideas while you're playing the waiting game on appeal.

[bearishgurl]

[quote=pemeliza]This guy was very blunt and basically said if you don’t agree you need to file an appeal immediately and go in front of a board that will ultimately decide the value. . . I have to say the conversation with this guy was refreshing because at least he didn’t beat around the bush.

I am seriously tempted to try and take my story to the media. I think buyers have the right to know that if they buy a REO through the normal real estate process with a buyer’s agent and bidding wars that they are still going to be under a completely different level of scrutiny by the tax assessor. I also think the realtors involved in REOs should have an obligation to disclose this potential problem to buyers. Ironically, this would add further stigma to buying REOs and probably push tax valuations down even further. To be clear we are not talking about chump change here and the additional tax grows exponentially every year.[/quote]

pemeliza, I can identify with you. I don’t believe these realtors who handle REO’s are even aware of this themselves. Perhaps this *new* method of valuation counties are using to assess properties purchased from “distress sales” will invite more (writ of mandates) lawsuits and appeals. It will be interesting to see how the law evolves over the years on this issue. However, I don’t see the any CA justice panels using PAST PRACTICE in their interpretation of the law in this area.

Counties are taking it in the shorts right now in zips where there was a preponderance of foreclosures from “bubble-era” lending. The local government has grown to accomodate the influx of population in these new areas and now has to lay off. The MR bonds only paid for police/fire/schools/libraries/parks in *their own* neighborhoods but does not compensate the overall administration of a city (or county) because it’s population has grown from <80K in 2000 to 250K+ today, such as in Chula Vista. In addition, we only have 2.5 domestic courts down here to accomodate this huge population and it now takes 18 - 24 mos. to go to trial on a domestic case and the trial hours are NOT together but divided up into two consecutive Fridays, or even further apart. It's a mess.

I know the diff. is not "chump change." The assessor has probably been told by county counsel to play "hardball" in cases where a new owner got an "awesome" deal in a coveted area to keep their most *prized* tax base "shored up."

pemeliza, has there ever been any work done on the history of property you bought? Do you think it could qualify for a Mills Act application? I know the City of SD is broke and is probably not entertaining any MA applications right now, but maybe you could start with SOHO and figure out if you have a chance in the future, should the City's coffers become more stable. Are you or any co-buyers 55 years of age or older and sold a previous property in CA they owned to buy your property?? If so, you/they may qualify for their taxes to be lowered to the assessment of the property you/they recently sold, pursuant to Propositions 60 and 90.

Just some ideas while you're playing the waiting game on appeal.

[bearishgurl]

[quote=pemeliza]This guy was very blunt and basically said if you don’t agree you need to file an appeal immediately and go in front of a board that will ultimately decide the value. . . I have to say the conversation with this guy was refreshing because at least he didn’t beat around the bush.

I am seriously tempted to try and take my story to the media. I think buyers have the right to know that if they buy a REO through the normal real estate process with a buyer’s agent and bidding wars that they are still going to be under a completely different level of scrutiny by the tax assessor. I also think the realtors involved in REOs should have an obligation to disclose this potential problem to buyers. Ironically, this would add further stigma to buying REOs and probably push tax valuations down even further. To be clear we are not talking about chump change here and the additional tax grows exponentially every year.[/quote]

pemeliza, I can identify with you. I don’t believe these realtors who handle REO’s are even aware of this themselves. Perhaps this *new* method of valuation counties are using to assess properties purchased from “distress sales” will invite more (writ of mandates) lawsuits and appeals. It will be interesting to see how the law evolves over the years on this issue. However, I don’t see the any CA justice panels using PAST PRACTICE in their interpretation of the law in this area.

Counties are taking it in the shorts right now in zips where there was a preponderance of foreclosures from “bubble-era” lending. The local government has grown to accomodate the influx of population in these new areas and now has to lay off. The MR bonds only paid for police/fire/schools/libraries/parks in *their own* neighborhoods but does not compensate the overall administration of a city (or county) because it’s population has grown from <80K in 2000 to 250K+ today, such as in Chula Vista. In addition, we only have 2.5 domestic courts down here to accomodate this huge population and it now takes 18 - 24 mos. to go to trial on a domestic case and the trial hours are NOT together but divided up into two consecutive Fridays, or even further apart. It's a mess.

I know the diff. is not "chump change." The assessor has probably been told by county counsel to play "hardball" in cases where a new owner got an "awesome" deal in a coveted area to keep their most *prized* tax base "shored up."

pemeliza, has there ever been any work done on the history of property you bought? Do you think it could qualify for a Mills Act application? I know the City of SD is broke and is probably not entertaining any MA applications right now, but maybe you could start with SOHO and figure out if you have a chance in the future, should the City's coffers become more stable. Are you or any co-buyers 55 years of age or older and sold a previous property in CA they owned to buy your property?? If so, you/they may qualify for their taxes to be lowered to the assessment of the property you/they recently sold, pursuant to Propositions 60 and 90.

Just some ideas while you're playing the waiting game on appeal.

[bearishgurl]

[quote=pemeliza]This guy was very blunt and basically said if you don’t agree you need to file an appeal immediately and go in front of a board that will ultimately decide the value. . . I have to say the conversation with this guy was refreshing because at least he didn’t beat around the bush.

I am seriously tempted to try and take my story to the media. I think buyers have the right to know that if they buy a REO through the normal real estate process with a buyer’s agent and bidding wars that they are still going to be under a completely different level of scrutiny by the tax assessor. I also think the realtors involved in REOs should have an obligation to disclose this potential problem to buyers. Ironically, this would add further stigma to buying REOs and probably push tax valuations down even further. To be clear we are not talking about chump change here and the additional tax grows exponentially every year.[/quote]

pemeliza, I can identify with you. I don’t believe these realtors who handle REO’s are even aware of this themselves. Perhaps this *new* method of valuation counties are using to assess properties purchased from “distress sales” will invite more (writ of mandates) lawsuits and appeals. It will be interesting to see how the law evolves over the years on this issue. However, I don’t see the any CA justice panels using PAST PRACTICE in their interpretation of the law in this area.

Counties are taking it in the shorts right now in zips where there was a preponderance of foreclosures from “bubble-era” lending. The local government has grown to accomodate the influx of population in these new areas and now has to lay off. The MR bonds only paid for police/fire/schools/libraries/parks in *their own* neighborhoods but does not compensate the overall administration of a city (or county) because it’s population has grown from <80K in 2000 to 250K+ today, such as in Chula Vista. In addition, we only have 2.5 domestic courts down here to accomodate this huge population and it now takes 18 - 24 mos. to go to trial on a domestic case and the trial hours are NOT together but divided up into two consecutive Fridays, or even further apart. It's a mess.

I know the diff. is not "chump change." The assessor has probably been told by county counsel to play "hardball" in cases where a new owner got an "awesome" deal in a coveted area to keep their most *prized* tax base "shored up."

pemeliza, has there ever been any work done on the history of property you bought? Do you think it could qualify for a Mills Act application? I know the City of SD is broke and is probably not entertaining any MA applications right now, but maybe you could start with SOHO and figure out if you have a chance in the future, should the City's coffers become more stable. Are you or any co-buyers 55 years of age or older and sold a previous property in CA they owned to buy your property?? If so, you/they may qualify for their taxes to be lowered to the assessment of the property you/they recently sold, pursuant to Propositions 60 and 90.

Just some ideas while you're playing the waiting game on appeal.

[bearishgurl]

[quote=pemeliza]This guy was very blunt and basically said if you don’t agree you need to file an appeal immediately and go in front of a board that will ultimately decide the value. . . I have to say the conversation with this guy was refreshing because at least he didn’t beat around the bush.

I am seriously tempted to try and take my story to the media. I think buyers have the right to know that if they buy a REO through the normal real estate process with a buyer’s agent and bidding wars that they are still going to be under a completely different level of scrutiny by the tax assessor. I also think the realtors involved in REOs should have an obligation to disclose this potential problem to buyers. Ironically, this would add further stigma to buying REOs and probably push tax valuations down even further. To be clear we are not talking about chump change here and the additional tax grows exponentially every year.[/quote]

pemeliza, I can identify with you. I don’t believe these realtors who handle REO’s are even aware of this themselves. Perhaps this *new* method of valuation counties are using to assess properties purchased from “distress sales” will invite more (writ of mandates) lawsuits and appeals. It will be interesting to see how the law evolves over the years on this issue. However, I don’t see the any CA justice panels using PAST PRACTICE in their interpretation of the law in this area.

Counties are taking it in the shorts right now in zips where there was a preponderance of foreclosures from “bubble-era” lending. The local government has grown to accomodate the influx of population in these new areas and now has to lay off. The MR bonds only paid for police/fire/schools/libraries/parks in *their own* neighborhoods but does not compensate the overall administration of a city (or county) because it’s population has grown from <80K in 2000 to 250K+ today, such as in Chula Vista. In addition, we only have 2.5 domestic courts down here to accomodate this huge population and it now takes 18 - 24 mos. to go to trial on a domestic case and the trial hours are NOT together but divided up into two consecutive Fridays, or even further apart. It's a mess.

I know the diff. is not "chump change." The assessor has probably been told by county counsel to play "hardball" in cases where a new owner got an "awesome" deal in a coveted area to keep their most *prized* tax base "shored up."

pemeliza, has there ever been any work done on the history of property you bought? Do you think it could qualify for a Mills Act application? I know the City of SD is broke and is probably not entertaining any MA applications right now, but maybe you could start with SOHO and figure out if you have a chance in the future, should the City's coffers become more stable. Are you or any co-buyers 55 years of age or older and sold a previous property in CA they owned to buy your property?? If so, you/they may qualify for their taxes to be lowered to the assessment of the property you/they recently sold, pursuant to Propositions 60 and 90.

Just some ideas while you're playing the waiting game on appeal.

[bearishgurl]

[quote=CA renter] . . .
http://www.boe.ca.gov/proptaxes/pdf/r2.pdf
———————–

BG,

I know you’re well informed about this topic, but I’ve never heard anything about the previous owner’s assessment having any bearing on the new owner’s assessment. IOW, this should have nothing to do with the DVAP. Am I missing something?

It sounds to me like Pemeliza has a solid argument against this “fake” assessment. The property taxes should be based on the sales price, not on some value the Assessor’s office “wants” it to be.[/quote]

Yes, CAR, your post above is an excerpt from RevTax 110(a). Here is the section in its entirety.

http://www.leginfo.ca.gov/cgi-bin/waisgate?WAISdocID=4998751609+5+0+0&WAISaction=retrieve

I went over the entire section three times last night and cannot find any language in it precluding a local government from using a variety of methods (incl. income approach, cost approach or comparable sales approach) to determine a new base value upon chg. of ownership. The burden of proof is on the property owner/appellant if they wish to contest the assessment. The PAST PRACTICE of the government has been to use the last SALES PRICE when assessing a property but in all the cycles I’ve witnessed, there has never been a downturn in values such as the one we are experiencing today.

In my experience, I’ve discovered that most of the CA RevTax and Government Code is written deliberately vague to give the government leeway to act in their best interests which may or may not be in the best interest of the citizens.

See this case from fn. 10 of the “Shrock” paper I posted the link to above.

Dennis v. County of Santa Clara (1989) 215 Cal.App.3d 1019

The subject property in the case is commercial where the tax appellant filed a writ of mandate on the assessor’s adverse decision on assessing his newly purchased property higher than his purchase price. The trial court judge sided with appellant that it his property (from the date of COE) should have been assessed at the price he paid. The 6th DCA overturned the trial court’s decision and found in favor of County on their interpretation of RevTax 110(b)(c). I DID shepardize the case and could not find any reason why it wouldn’t still be good law today. Therefore I believe the law is on the side of the government when it comes to valuation methods used upon change of ownership. I haven’t looked for cases dealing with SFR’s but would presume the same law applies.

The key questions of law here are, Was the sale conducted at “arms-length?” What constitutes an “arms-length” sale? Is the purchase of an REO consumated under conditions “in which neither buyer nor seller could take advantage of the exigencies of the other . . .?” (RevTax 110(a).)

I’m NOT particularly on the side of the county here but am fully cognizant that they will interpret any laws on the books in their favor and fight their interpretation into oblivion (read: passel of lawyers “on staff” 8-5 pm).

[quote=pemeliza]I will start with a sales history taken from zillow.com

03/27/2009 Sold $665,000 -2.2% Public Record

02/07/2009 Listed for sale* $679,999 -31.7% NRT Califo

03/07/2005 Sold $995,000 53.8% Public Record

06/17/2002 Sold $647,000 68.5% Public Record

02/04/1994 Sold $384,000 — Public Record

Next, I give the first part of the description used for the listing to show that this is indeed a REO.

“BANK OWNED! 3 BR/3 BA contemporary home in wonderful Mission Hills. ”

So far we know that the buyer of this house got a good deal basically paying a 2002 price in a prime area. But notice at the time there wasn’t even that much demand as the buyer didn’t even have to pay full price.

Now we get to the supplemental bill generated by the property transfer which is also available online.

“This is a supplemental tax bill on the above described property per R&T code section 75. This is a notice of value change on 03/27/09. This bill was mailed on 10/9/2009.”

New Assessed Value 600000 200000 800000
Prior Tax Rolls Value 600000 200000 800000
Increase In Assessment 0 0 0[/quote]

Pemeliza, your example here on the history of this (now recent REO resale) property confirms my suspicion that the owners who lost the property (or the REO lender) successfully appealed their property taxes for FY 08/09. If “Zillow” is correct on the new assessment (and I would only rely on the assessor’s own computer at Pac Hwy, Westlaw or Realist), then the $200K land value and $600K improvement value (both round numbers) were put there recently by the assessor after appeal, because that is NOT what the property sold for on 3/27/09. Using the common “sales price base value” approach and ignoring the HOEX of $7K, if the assessment on this property had never been successfully appealed, it would have been:

F/Y 04/05: $686,602 ($647K x 1.02 x 1.02 x 1.02)

F/Y 05/06: $995,000

Supp. Assmt. F/Y 04/05: $308,398

F/Y 06/07: $1,014,900

F/Y 07/08: $1,035,198

F/Y 08/09: $1,055,902

Supp. Assmt. F/Y 08/09: <$390,902> (triggered poss. refund to new owners of escrow overpymt)

F/Y 09/10: $665,000

It looks to me like the assessor may have used the “escape tax” loophole on this one to maintain the previously appealed and lowered value of $800K. This is just my .02 based on the info you provided.

pemeliza, it’s worth a try to proffer your other REO comps to the county appraiser but also be ready to address recent market sales in your local area which were NOT distressed as the assessor will want to use those also if they are comps to yours in size, etc. Find out how they came up with the assessment on your supp. bill.

If the county doesn’t satisfy you here, file an appeal within 60 days of the date of the bill and pay whatever of the supplemental bill you still owe by the deadline. I’m rooting for you!

[bearishgurl]

[quote=CA renter] . . .
http://www.boe.ca.gov/proptaxes/pdf/r2.pdf
———————–

BG,

I know you’re well informed about this topic, but I’ve never heard anything about the previous owner’s assessment having any bearing on the new owner’s assessment. IOW, this should have nothing to do with the DVAP. Am I missing something?

It sounds to me like Pemeliza has a solid argument against this “fake” assessment. The property taxes should be based on the sales price, not on some value the Assessor’s office “wants” it to be.[/quote]

Yes, CAR, your post above is an excerpt from RevTax 110(a). Here is the section in its entirety.

http://www.leginfo.ca.gov/cgi-bin/waisgate?WAISdocID=4998751609+5+0+0&WAISaction=retrieve

I went over the entire section three times last night and cannot find any language in it precluding a local government from using a variety of methods (incl. income approach, cost approach or comparable sales approach) to determine a new base value upon chg. of ownership. The burden of proof is on the property owner/appellant if they wish to contest the assessment. The PAST PRACTICE of the government has been to use the last SALES PRICE when assessing a property but in all the cycles I’ve witnessed, there has never been a downturn in values such as the one we are experiencing today.

In my experience, I’ve discovered that most of the CA RevTax and Government Code is written deliberately vague to give the government leeway to act in their best interests which may or may not be in the best interest of the citizens.

See this case from fn. 10 of the “Shrock” paper I posted the link to above.

Dennis v. County of Santa Clara (1989) 215 Cal.App.3d 1019

The subject property in the case is commercial where the tax appellant filed a writ of mandate on the assessor’s adverse decision on assessing his newly purchased property higher than his purchase price. The trial court judge sided with appellant that it his property (from the date of COE) should have been assessed at the price he paid. The 6th DCA overturned the trial court’s decision and found in favor of County on their interpretation of RevTax 110(b)(c). I DID shepardize the case and could not find any reason why it wouldn’t still be good law today. Therefore I believe the law is on the side of the government when it comes to valuation methods used upon change of ownership. I haven’t looked for cases dealing with SFR’s but would presume the same law applies.

The key questions of law here are, Was the sale conducted at “arms-length?” What constitutes an “arms-length” sale? Is the purchase of an REO consumated under conditions “in which neither buyer nor seller could take advantage of the exigencies of the other . . .?” (RevTax 110(a).)

I’m NOT particularly on the side of the county here but am fully cognizant that they will interpret any laws on the books in their favor and fight their interpretation into oblivion (read: passel of lawyers “on staff” 8-5 pm).

[quote=pemeliza]I will start with a sales history taken from zillow.com

03/27/2009 Sold $665,000 -2.2% Public Record

02/07/2009 Listed for sale* $679,999 -31.7% NRT Califo

03/07/2005 Sold $995,000 53.8% Public Record

06/17/2002 Sold $647,000 68.5% Public Record

02/04/1994 Sold $384,000 — Public Record

Next, I give the first part of the description used for the listing to show that this is indeed a REO.

“BANK OWNED! 3 BR/3 BA contemporary home in wonderful Mission Hills. ”

So far we know that the buyer of this house got a good deal basically paying a 2002 price in a prime area. But notice at the time there wasn’t even that much demand as the buyer didn’t even have to pay full price.

Now we get to the supplemental bill generated by the property transfer which is also available online.

“This is a supplemental tax bill on the above described property per R&T code section 75. This is a notice of value change on 03/27/09. This bill was mailed on 10/9/2009.”

New Assessed Value 600000 200000 800000
Prior Tax Rolls Value 600000 200000 800000
Increase In Assessment 0 0 0[/quote]

Pemeliza, your example here on the history of this (now recent REO resale) property confirms my suspicion that the owners who lost the property (or the REO lender) successfully appealed their property taxes for FY 08/09. If “Zillow” is correct on the new assessment (and I would only rely on the assessor’s own computer at Pac Hwy, Westlaw or Realist), then the $200K land value and $600K improvement value (both round numbers) were put there recently by the assessor after appeal, because that is NOT what the property sold for on 3/27/09. Using the common “sales price base value” approach and ignoring the HOEX of $7K, if the assessment on this property had never been successfully appealed, it would have been:

F/Y 04/05: $686,602 ($647K x 1.02 x 1.02 x 1.02)

F/Y 05/06: $995,000

Supp. Assmt. F/Y 04/05: $308,398

F/Y 06/07: $1,014,900

F/Y 07/08: $1,035,198

F/Y 08/09: $1,055,902

Supp. Assmt. F/Y 08/09: <$390,902> (triggered poss. refund to new owners of escrow overpymt)

F/Y 09/10: $665,000

It looks to me like the assessor may have used the “escape tax” loophole on this one to maintain the previously appealed and lowered value of $800K. This is just my .02 based on the info you provided.

pemeliza, it’s worth a try to proffer your other REO comps to the county appraiser but also be ready to address recent market sales in your local area which were NOT distressed as the assessor will want to use those also if they are comps to yours in size, etc. Find out how they came up with the assessment on your supp. bill.

If the county doesn’t satisfy you here, file an appeal within 60 days of the date of the bill and pay whatever of the supplemental bill you still owe by the deadline. I’m rooting for you!

[bearishgurl]

[quote=CA renter] . . .
http://www.boe.ca.gov/proptaxes/pdf/r2.pdf
———————–

BG,

I know you’re well informed about this topic, but I’ve never heard anything about the previous owner’s assessment having any bearing on the new owner’s assessment. IOW, this should have nothing to do with the DVAP. Am I missing something?

It sounds to me like Pemeliza has a solid argument against this “fake” assessment. The property taxes should be based on the sales price, not on some value the Assessor’s office “wants” it to be.[/quote]

Yes, CAR, your post above is an excerpt from RevTax 110(a). Here is the section in its entirety.

http://www.leginfo.ca.gov/cgi-bin/waisgate?WAISdocID=4998751609+5+0+0&WAISaction=retrieve

I went over the entire section three times last night and cannot find any language in it precluding a local government from using a variety of methods (incl. income approach, cost approach or comparable sales approach) to determine a new base value upon chg. of ownership. The burden of proof is on the property owner/appellant if they wish to contest the assessment. The PAST PRACTICE of the government has been to use the last SALES PRICE when assessing a property but in all the cycles I’ve witnessed, there has never been a downturn in values such as the one we are experiencing today.

In my experience, I’ve discovered that most of the CA RevTax and Government Code is written deliberately vague to give the government leeway to act in their best interests which may or may not be in the best interest of the citizens.

See this case from fn. 10 of the “Shrock” paper I posted the link to above.

Dennis v. County of Santa Clara (1989) 215 Cal.App.3d 1019

The subject property in the case is commercial where the tax appellant filed a writ of mandate on the assessor’s adverse decision on assessing his newly purchased property higher than his purchase price. The trial court judge sided with appellant that it his property (from the date of COE) should have been assessed at the price he paid. The 6th DCA overturned the trial court’s decision and found in favor of County on their interpretation of RevTax 110(b)(c). I DID shepardize the case and could not find any reason why it wouldn’t still be good law today. Therefore I believe the law is on the side of the government when it comes to valuation methods used upon change of ownership. I haven’t looked for cases dealing with SFR’s but would presume the same law applies.

The key questions of law here are, Was the sale conducted at “arms-length?” What constitutes an “arms-length” sale? Is the purchase of an REO consumated under conditions “in which neither buyer nor seller could take advantage of the exigencies of the other . . .?” (RevTax 110(a).)

I’m NOT particularly on the side of the county here but am fully cognizant that they will interpret any laws on the books in their favor and fight their interpretation into oblivion (read: passel of lawyers “on staff” 8-5 pm).

[quote=pemeliza]I will start with a sales history taken from zillow.com

03/27/2009 Sold $665,000 -2.2% Public Record

02/07/2009 Listed for sale* $679,999 -31.7% NRT Califo

03/07/2005 Sold $995,000 53.8% Public Record

06/17/2002 Sold $647,000 68.5% Public Record

02/04/1994 Sold $384,000 — Public Record

Next, I give the first part of the description used for the listing to show that this is indeed a REO.

“BANK OWNED! 3 BR/3 BA contemporary home in wonderful Mission Hills. ”

So far we know that the buyer of this house got a good deal basically paying a 2002 price in a prime area. But notice at the time there wasn’t even that much demand as the buyer didn’t even have to pay full price.

Now we get to the supplemental bill generated by the property transfer which is also available online.

“This is a supplemental tax bill on the above described property per R&T code section 75. This is a notice of value change on 03/27/09. This bill was mailed on 10/9/2009.”

New Assessed Value 600000 200000 800000
Prior Tax Rolls Value 600000 200000 800000
Increase In Assessment 0 0 0[/quote]

Pemeliza, your example here on the history of this (now recent REO resale) property confirms my suspicion that the owners who lost the property (or the REO lender) successfully appealed their property taxes for FY 08/09. If “Zillow” is correct on the new assessment (and I would only rely on the assessor’s own computer at Pac Hwy, Westlaw or Realist), then the $200K land value and $600K improvement value (both round numbers) were put there recently by the assessor after appeal, because that is NOT what the property sold for on 3/27/09. Using the common “sales price base value” approach and ignoring the HOEX of $7K, if the assessment on this property had never been successfully appealed, it would have been:

F/Y 04/05: $686,602 ($647K x 1.02 x 1.02 x 1.02)

F/Y 05/06: $995,000

Supp. Assmt. F/Y 04/05: $308,398

F/Y 06/07: $1,014,900

F/Y 07/08: $1,035,198

F/Y 08/09: $1,055,902

Supp. Assmt. F/Y 08/09: <$390,902> (triggered poss. refund to new owners of escrow overpymt)

F/Y 09/10: $665,000

It looks to me like the assessor may have used the “escape tax” loophole on this one to maintain the previously appealed and lowered value of $800K. This is just my .02 based on the info you provided.

pemeliza, it’s worth a try to proffer your other REO comps to the county appraiser but also be ready to address recent market sales in your local area which were NOT distressed as the assessor will want to use those also if they are comps to yours in size, etc. Find out how they came up with the assessment on your supp. bill.

If the county doesn’t satisfy you here, file an appeal within 60 days of the date of the bill and pay whatever of the supplemental bill you still owe by the deadline. I’m rooting for you!

[bearishgurl]

[quote=CA renter] . . .
http://www.boe.ca.gov/proptaxes/pdf/r2.pdf
———————–

BG,

I know you’re well informed about this topic, but I’ve never heard anything about the previous owner’s assessment having any bearing on the new owner’s assessment. IOW, this should have nothing to do with the DVAP. Am I missing something?

It sounds to me like Pemeliza has a solid argument against this “fake” assessment. The property taxes should be based on the sales price, not on some value the Assessor’s office “wants” it to be.[/quote]

Yes, CAR, your post above is an excerpt from RevTax 110(a). Here is the section in its entirety.

http://www.leginfo.ca.gov/cgi-bin/waisgate?WAISdocID=4998751609+5+0+0&WAISaction=retrieve

I went over the entire section three times last night and cannot find any language in it precluding a local government from using a variety of methods (incl. income approach, cost approach or comparable sales approach) to determine a new base value upon chg. of ownership. The burden of proof is on the property owner/appellant if they wish to contest the assessment. The PAST PRACTICE of the government has been to use the last SALES PRICE when assessing a property but in all the cycles I’ve witnessed, there has never been a downturn in values such as the one we are experiencing today.

In my experience, I’ve discovered that most of the CA RevTax and Government Code is written deliberately vague to give the government leeway to act in their best interests which may or may not be in the best interest of the citizens.

See this case from fn. 10 of the “Shrock” paper I posted the link to above.

Dennis v. County of Santa Clara (1989) 215 Cal.App.3d 1019

The subject property in the case is commercial where the tax appellant filed a writ of mandate on the assessor’s adverse decision on assessing his newly purchased property higher than his purchase price. The trial court judge sided with appellant that it his property (from the date of COE) should have been assessed at the price he paid. The 6th DCA overturned the trial court’s decision and found in favor of County on their interpretation of RevTax 110(b)(c). I DID shepardize the case and could not find any reason why it wouldn’t still be good law today. Therefore I believe the law is on the side of the government when it comes to valuation methods used upon change of ownership. I haven’t looked for cases dealing with SFR’s but would presume the same law applies.

The key questions of law here are, Was the sale conducted at “arms-length?” What constitutes an “arms-length” sale? Is the purchase of an REO consumated under conditions “in which neither buyer nor seller could take advantage of the exigencies of the other . . .?” (RevTax 110(a).)

I’m NOT particularly on the side of the county here but am fully cognizant that they will interpret any laws on the books in their favor and fight their interpretation into oblivion (read: passel of lawyers “on staff” 8-5 pm).

[quote=pemeliza]I will start with a sales history taken from zillow.com

03/27/2009 Sold $665,000 -2.2% Public Record

02/07/2009 Listed for sale* $679,999 -31.7% NRT Califo

03/07/2005 Sold $995,000 53.8% Public Record

06/17/2002 Sold $647,000 68.5% Public Record

02/04/1994 Sold $384,000 — Public Record

Next, I give the first part of the description used for the listing to show that this is indeed a REO.

“BANK OWNED! 3 BR/3 BA contemporary home in wonderful Mission Hills. ”

So far we know that the buyer of this house got a good deal basically paying a 2002 price in a prime area. But notice at the time there wasn’t even that much demand as the buyer didn’t even have to pay full price.

Now we get to the supplemental bill generated by the property transfer which is also available online.

“This is a supplemental tax bill on the above described property per R&T code section 75. This is a notice of value change on 03/27/09. This bill was mailed on 10/9/2009.”

New Assessed Value 600000 200000 800000
Prior Tax Rolls Value 600000 200000 800000
Increase In Assessment 0 0 0[/quote]

Pemeliza, your example here on the history of this (now recent REO resale) property confirms my suspicion that the owners who lost the property (or the REO lender) successfully appealed their property taxes for FY 08/09. If “Zillow” is correct on the new assessment (and I would only rely on the assessor’s own computer at Pac Hwy, Westlaw or Realist), then the $200K land value and $600K improvement value (both round numbers) were put there recently by the assessor after appeal, because that is NOT what the property sold for on 3/27/09. Using the common “sales price base value” approach and ignoring the HOEX of $7K, if the assessment on this property had never been successfully appealed, it would have been:

F/Y 04/05: $686,602 ($647K x 1.02 x 1.02 x 1.02)

F/Y 05/06: $995,000

Supp. Assmt. F/Y 04/05: $308,398

F/Y 06/07: $1,014,900

F/Y 07/08: $1,035,198

F/Y 08/09: $1,055,902

Supp. Assmt. F/Y 08/09: <$390,902> (triggered poss. refund to new owners of escrow overpymt)

F/Y 09/10: $665,000

It looks to me like the assessor may have used the “escape tax” loophole on this one to maintain the previously appealed and lowered value of $800K. This is just my .02 based on the info you provided.

pemeliza, it’s worth a try to proffer your other REO comps to the county appraiser but also be ready to address recent market sales in your local area which were NOT distressed as the assessor will want to use those also if they are comps to yours in size, etc. Find out how they came up with the assessment on your supp. bill.

If the county doesn’t satisfy you here, file an appeal within 60 days of the date of the bill and pay whatever of the supplemental bill you still owe by the deadline. I’m rooting for you!

[bearishgurl]

[quote=CA renter] . . .
http://www.boe.ca.gov/proptaxes/pdf/r2.pdf
———————–

BG,

I know you’re well informed about this topic, but I’ve never heard anything about the previous owner’s assessment having any bearing on the new owner’s assessment. IOW, this should have nothing to do with the DVAP. Am I missing something?

It sounds to me like Pemeliza has a solid argument against this “fake” assessment. The property taxes should be based on the sales price, not on some value the Assessor’s office “wants” it to be.[/quote]

Yes, CAR, your post above is an excerpt from RevTax 110(a). Here is the section in its entirety.

http://www.leginfo.ca.gov/cgi-bin/waisgate?WAISdocID=4998751609+5+0+0&WAISaction=retrieve

I went over the entire section three times last night and cannot find any language in it precluding a local government from using a variety of methods (incl. income approach, cost approach or comparable sales approach) to determine a new base value upon chg. of ownership. The burden of proof is on the property owner/appellant if they wish to contest the assessment. The PAST PRACTICE of the government has been to use the last SALES PRICE when assessing a property but in all the cycles I’ve witnessed, there has never been a downturn in values such as the one we are experiencing today.

In my experience, I’ve discovered that most of the CA RevTax and Government Code is written deliberately vague to give the government leeway to act in their best interests which may or may not be in the best interest of the citizens.

See this case from fn. 10 of the “Shrock” paper I posted the link to above.

Dennis v. County of Santa Clara (1989) 215 Cal.App.3d 1019

The subject property in the case is commercial where the tax appellant filed a writ of mandate on the assessor’s adverse decision on assessing his newly purchased property higher than his purchase price. The trial court judge sided with appellant that it his property (from the date of COE) should have been assessed at the price he paid. The 6th DCA overturned the trial court’s decision and found in favor of County on their interpretation of RevTax 110(b)(c). I DID shepardize the case and could not find any reason why it wouldn’t still be good law today. Therefore I believe the law is on the side of the government when it comes to valuation methods used upon change of ownership. I haven’t looked for cases dealing with SFR’s but would presume the same law applies.

The key questions of law here are, Was the sale conducted at “arms-length?” What constitutes an “arms-length” sale? Is the purchase of an REO consumated under conditions “in which neither buyer nor seller could take advantage of the exigencies of the other . . .?” (RevTax 110(a).)

I’m NOT particularly on the side of the county here but am fully cognizant that they will interpret any laws on the books in their favor and fight their interpretation into oblivion (read: passel of lawyers “on staff” 8-5 pm).

[quote=pemeliza]I will start with a sales history taken from zillow.com

03/27/2009 Sold $665,000 -2.2% Public Record

02/07/2009 Listed for sale* $679,999 -31.7% NRT Califo

03/07/2005 Sold $995,000 53.8% Public Record

06/17/2002 Sold $647,000 68.5% Public Record

02/04/1994 Sold $384,000 — Public Record

Next, I give the first part of the description used for the listing to show that this is indeed a REO.

“BANK OWNED! 3 BR/3 BA contemporary home in wonderful Mission Hills. ”

So far we know that the buyer of this house got a good deal basically paying a 2002 price in a prime area. But notice at the time there wasn’t even that much demand as the buyer didn’t even have to pay full price.

Now we get to the supplemental bill generated by the property transfer which is also available online.

“This is a supplemental tax bill on the above described property per R&T code section 75. This is a notice of value change on 03/27/09. This bill was mailed on 10/9/2009.”

New Assessed Value 600000 200000 800000
Prior Tax Rolls Value 600000 200000 800000
Increase In Assessment 0 0 0[/quote]

Pemeliza, your example here on the history of this (now recent REO resale) property confirms my suspicion that the owners who lost the property (or the REO lender) successfully appealed their property taxes for FY 08/09. If “Zillow” is correct on the new assessment (and I would only rely on the assessor’s own computer at Pac Hwy, Westlaw or Realist), then the $200K land value and $600K improvement value (both round numbers) were put there recently by the assessor after appeal, because that is NOT what the property sold for on 3/27/09. Using the common “sales price base value” approach and ignoring the HOEX of $7K, if the assessment on this property had never been successfully appealed, it would have been:

F/Y 04/05: $686,602 ($647K x 1.02 x 1.02 x 1.02)

F/Y 05/06: $995,000

Supp. Assmt. F/Y 04/05: $308,398

F/Y 06/07: $1,014,900

F/Y 07/08: $1,035,198

F/Y 08/09: $1,055,902

Supp. Assmt. F/Y 08/09: <$390,902> (triggered poss. refund to new owners of escrow overpymt)

F/Y 09/10: $665,000

It looks to me like the assessor may have used the “escape tax” loophole on this one to maintain the previously appealed and lowered value of $800K. This is just my .02 based on the info you provided.

pemeliza, it’s worth a try to proffer your other REO comps to the county appraiser but also be ready to address recent market sales in your local area which were NOT distressed as the assessor will want to use those also if they are comps to yours in size, etc. Find out how they came up with the assessment on your supp. bill.

If the county doesn’t satisfy you here, file an appeal within 60 days of the date of the bill and pay whatever of the supplemental bill you still owe by the deadline. I’m rooting for you!

[bearishgurl]

[quote=SK in CV]I’m a bit confused by this. I don’t think the OP is requesting a decline in value assessment. I think it’s the inital assessment usually based on the actual price he paid. I do understand how the assessor can argue that a trustee sale is at something other than fair market value or arms length. Not so with a REO. A seller who typically lists the property in MLS. A buyer who makes an offer. Open market negotiaation. (I do know the reality is sometimes a bit different.) I’m not familar with the regulations on this but it does seem unreasonable for a REO sale to not be subject to the identical property tax valuation process as any other traditional sale. Anyone have any insight?[/quote]

I understand what pemeliza is objecting to and why (s)he may have received a larger assessment than purchase price on her supplemental bill nine mos. after purchase. (It’s not due to the 2% per Prop 13 because those bills for FY 10/11 will not begin to be generated until approx. 9/20/10.) The new assessment kicks in upon the filing of the Change of Ownership Stmt. at COE so his/her Supp. Bill is for F/Y 09/10. I’ll call pemeliza a “she” here for illustration purposes only.

She pd. the tax in escrow for the balance of FY 9/10 but it was based upon with seller’s tax bill. She thought she would be due a refund for the amt. she pd. (diff. between the seller’s tax bill and what her portion of the tax bill was, based on her lower purch. price) and instead rec’d a supp. bill (which ate up some or all of her “overpayment” she made in escrow).

Does that make sense??

I was searching various large counties in CA for their practices in this area when I got sidetracked.

I have combed the CA RevTax Code and cannot find a provision which allows a county assessor to reassess upon Change of Ownership (new Base Year Reassessment) on criteria other than sales price. That’s not to say it isn’t there, but I’m bleary-eyed right now.

See bottom of pg 2: http://www.stroock.com/SiteFiles/Pub772.pdf (dealing with deed-in-lieu transactions).

Since she posted that other nearby REO purchasers were affected as well, it could also be that MH WAS eligible for the DVAP in FY 08/09 so now they are “catching up” in the form of an “escape tax” added to new supplemental bills for the affected parcels.

Pemeliza, could it be that the prev. owner who lost the property to foreclosure had successfully appealed their assessment and was given a lowered assessment (which you pd. tax from in escrow) and thus your new supplemental bill includes a catch-up “escape tax?”

See: http://www.news10.net/news/local/story.aspx?storyid=82198&pr&#8230;

Are the taxes you paid in escrow enough to cover your supplemental bill?

Guess we don’t have enough info here to be able to determine how the assessor valued your property upon change of ownership.

[bearishgurl]

[quote=SK in CV]I’m a bit confused by this. I don’t think the OP is requesting a decline in value assessment. I think it’s the inital assessment usually based on the actual price he paid. I do understand how the assessor can argue that a trustee sale is at something other than fair market value or arms length. Not so with a REO. A seller who typically lists the property in MLS. A buyer who makes an offer. Open market negotiaation. (I do know the reality is sometimes a bit different.) I’m not familar with the regulations on this but it does seem unreasonable for a REO sale to not be subject to the identical property tax valuation process as any other traditional sale. Anyone have any insight?[/quote]

I understand what pemeliza is objecting to and why (s)he may have received a larger assessment than purchase price on her supplemental bill nine mos. after purchase. (It’s not due to the 2% per Prop 13 because those bills for FY 10/11 will not begin to be generated until approx. 9/20/10.) The new assessment kicks in upon the filing of the Change of Ownership Stmt. at COE so his/her Supp. Bill is for F/Y 09/10. I’ll call pemeliza a “she” here for illustration purposes only.

She pd. the tax in escrow for the balance of FY 9/10 but it was based upon with seller’s tax bill. She thought she would be due a refund for the amt. she pd. (diff. between the seller’s tax bill and what her portion of the tax bill was, based on her lower purch. price) and instead rec’d a supp. bill (which ate up some or all of her “overpayment” she made in escrow).

Does that make sense??

I was searching various large counties in CA for their practices in this area when I got sidetracked.

I have combed the CA RevTax Code and cannot find a provision which allows a county assessor to reassess upon Change of Ownership (new Base Year Reassessment) on criteria other than sales price. That’s not to say it isn’t there, but I’m bleary-eyed right now.

See bottom of pg 2: http://www.stroock.com/SiteFiles/Pub772.pdf (dealing with deed-in-lieu transactions).

Since she posted that other nearby REO purchasers were affected as well, it could also be that MH WAS eligible for the DVAP in FY 08/09 so now they are “catching up” in the form of an “escape tax” added to new supplemental bills for the affected parcels.

Pemeliza, could it be that the prev. owner who lost the property to foreclosure had successfully appealed their assessment and was given a lowered assessment (which you pd. tax from in escrow) and thus your new supplemental bill includes a catch-up “escape tax?”

See: http://www.news10.net/news/local/story.aspx?storyid=82198&pr&#8230;

Are the taxes you paid in escrow enough to cover your supplemental bill?

Guess we don’t have enough info here to be able to determine how the assessor valued your property upon change of ownership.

[Author]

Posts