Foreclosure By Action - The Improvement Bond Act Of 1915 - CA Streets And Highways

Section § 8830

This law explains what happens when property assessments or similar taxes, including interest and penalties, aren't paid on time. If they remain unpaid, the government can take action in court to get that money by foreclosing on the property lien. Before issuing bonds, the government can agree to start foreclosure actions if the payments that secure these bonds fall behind, and they can transfer this responsibility to a trustee. If more payments become overdue during the court process, the court can add them to the existing case. The law also states the government can act like a board of supervisors to manage unpaid taxes and that trustees aren't required to accept bonds to settle unpaid taxes unless allowed. Finally, it outlines legal steps for verifying the legality of bonds or agreements made by joint powers agencies, with appeals needing to happen quickly after a decision.

(a) As a cumulative remedy, if any assessment or reassessment or installment thereof, or of any interest thereon, together with any penalties, costs, fees, and other charges accruing under applicable taxation provisions are not paid when due, the legislative body may order that the same be collected by an action brought in the superior court to foreclose the lien thereof as provided by this part.

(b) The legislative body may, by resolution adopted prior to issuance of bonds under this division, covenant for the benefit of bondholders to commence and diligently prosecute any foreclosure action regarding delinquent installments of any assessments or reassessments which secure the bonds that are to be issued, and, at any time, may assign the causes of action arising from the foreclosure to a trustee to do so on behalf of the bondholders. The resolution may specify a deadline for commencement of the foreclosure action and other terms and conditions as the legislative body may determine to be reasonable regarding the foreclosure action.

(c) Except as provided in Section 8836, all installments, interest, penalties, costs, fees, and other charges that are delinquent at the time of the ordering of a foreclosure action shall be collected in the action. If a lot or parcel of property has not been sold pursuant to judgment in the foreclosure action at the time that subsequent installments and interest become delinquent, the court may include the subsequent installments, interest, penalties, costs, fees, and other charges in the judgment or modified judgment.

(d) For purposes of financing delinquent assessments pursuant to Section 26220, the legislative body may act as if it were a board of supervisors.

(e) Notwithstanding any other provision of this chapter, no trustee or joint powers authority shall be obligated to accept the tender of bonds in satisfaction of any obligation arising from a delinquent assessment, although either may do so if authorized to do so by the legislative body.

(f) An action to determine the validity of any bonds issued, any joint powers agreement entered into, and any related agreements entered into, by a joint powers agency acting pursuant to this section may be brought by the joint powers agency pursuant to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure. Any appeal from a judgment in the action shall be commenced within 30 days after entry of judgment.

foreclosure action delinquent installments superior court bondholders trustee assignment cumulative remedy property assessments tax liens judgment modification delinquent taxes joint powers agency property lien foreclosure government bonds tax penalties tax resolution

(Amended by Stats. 1997, Ch. 946, Sec. 8. Effective January 1, 1998.)

Section § 8831

If a city takes legal action to foreclose on a property, the court will decide and approve what costs are involved. This can include attorney’s fees, interest, penalties, and any reasonable administrative costs the city faced during the foreclosure process. These approved costs will be part of the final judgment.

Costs in the action shall be fixed and allowed by the court and shall include a reasonable attorney’s fee, interest, penalties and other charges or advances authorized by this division, including reasonable administrative costs incurred by the city in pursuing the foreclosure, and when so fixed and allowed by the court the costs shall be included in the judgment.

foreclosure costs attorney's fees reasonable administrative costs court-approved costs interest and penalties property foreclosure judgment inclusion legal action expenses city foreclosure proceedings foreclosure process expenses

(Amended by Stats. 1991, Ch. 966, Sec. 8.)

Section § 8832

This section lays out the process for handling liens and foreclosure sales on properties that have unpaid assessments or reassessments. The court can order a lien on the property and its sale, with certain conditions. Notice of sale can be given 20 days after a levy is served if the property isn't a small residential dwelling. If the property doesn't sell for the minimum required price at a foreclosure auction, there can be another sale without re-levying. The sale price must at least cover the judgment amount, costs, and interest. The city can bid on the property and use credits towards the judgment but must pay certain costs upfront. If the city buys the property, it has timelines and conditions for paying into a special fund to cover various claims. The city isn't required to pay more into the fund than needed to clear the outstanding debt and interest. If someone else buys the property, the city uses sale proceeds to cover prior expenses and reimburse funds. Certain fees, like attorney costs, aren't paid into these funds. The process follows specific state and division laws.

(a) The court shall have the power to adjudge and decree a lien against the lot or parcel of property covered by the assessment or reassessment for the amount of the judgment and to order the premises to be sold on execution as in other cases of the sale of real property by the process of the court except:

(1) Notwithstanding Section 701.545 of the Code of Civil Procedure, notice of sale of any lot or parcel included in the judgment may be given pursuant to Section 701.540 of the Code of Civil Procedure any time after the expiration of 20 days after the date notice of levy on the interest in real property was served on the judgment debtor or debtors, provided that the lot or parcel to be sold is not a dwelling for not more than four families.

(2) Whenever notice of sale may be given after the expiration of 20 days after the date notice of levy was served as provided in paragraph (1), the 30-day time period contained in subdivision (h) of Section 701.540 of the Code of Civil Procedure shall be reduced to 10 days.

(3) Upon proof that the lot or parcel to be sold is not a dwelling for not more than four families, pursuant to Section 716.020 of the Code of Civil Procedure, the court shall order that paragraphs (1) and (2) apply to any judgment previously entered.

(4) Subdivision (b) of this section shall apply instead of subdivision (a) of Section 701.620 of the Code of Civil Procedure.

(5) Notwithstanding subdivision (c) of Section 701.620 of the Code of Civil Procedure, if the minimum price required to be paid for a lot or parcel pursuant to subdivision (b) is not obtained at a foreclosure sale, upon written request of the city, the levying officer shall retain the writ of sale and, provided that the writ of sale has not been returned to the court pursuant to paragraph (1) of subdivision (a) of Section 699.560 of the Code of Civil Procedure, give notice of sale pursuant to Section 701.540 of the Code of Civil Procedure without relevying on the property.

(6) As provided elsewhere in this division.

(b) Except as provided in Section 8836, the lot or parcel may not be sold unless the amount to be paid pursuant to the bid equals or exceeds the sum of all of the following amounts:

(1) The amount of the judgment with costs and interest thereon.

(2) Costs and interest on the judgment accruing after issuance of the writ pursuant to which the sale is conducted.

(3) The levying officer’s costs.

(4) Any other amounts which are required by law to be bid in order that the lot or parcel may be sold.

(c) The city may bid at the price provided for by subdivision (b) by giving the levying officer a written receipt crediting all or part of the amount required to satisfy the judgment, except that the city shall pay all of the following amounts in cash or by certified or cashier’s check:

(1) The levying officer’s costs remaining unsatisfied.

(2) The amount of any preferred labor claims.

(3) Exempt proceeds.

(4) Any other claim that is required by law to be satisfied.

(d) If the city becomes the purchaser pursuant to bid as provided for by subdivision (c), the city shall pay the amount that is required to satisfy the judgment into the redemption fund within 24 months of the date of the foreclosure sale. From the amount that the city is required to pay into the redemption fund, the city shall reimburse the special reserve fund, if any, the amount, if any, of funds advanced from the special reserve fund to the redemption fund to cover delinquent installments of the assessment or reassessment and interest with respect to the lot or parcel of property which is sold. To the extent that the city has advanced funds other than, or in addition to, funds from a special reserve fund and the funds are included in the judgment, the obligation of the city to pay into the redemption fund is reduced by a corresponding amount.

(e) Notwithstanding subdivision (d), the city is not required to pay into the redemption fund any amount that exceeds in the aggregate the sum of all of the following:

(1) The amount required to bring current delinquent installments of the assessment or reassessment and interest with respect to which the lot or parcel of property is sold.

(2) Simple interest on all the amounts from the dates of delinquencies until the date of sale, at the rate or rates of the bonds.

(f) If the lot or parcel of property is sold at the execution sale to a purchaser other than the city, the city shall pay the sale proceeds that it receives into the redemption fund. From the amount that the city is required to pay into the redemption fund, the city shall reimburse the special reserve fund, if any, the amount, if any, of funds advanced from the special reserve fund to the redemption fund to cover delinquent installments of the assessment or reassessment and interest with respect to the lot or parcel of property which is sold. If the special reserve fund, if any, is thereby reimbursed, the city may reimburse other funds advanced by the city to cover delinquent installments and interest, and may pay interest and penalties, costs, fees, and other charges, to the extent that they are included in the sale proceeds received.

(g) Notwithstanding subdivision (f), attorney fees and costs awarded by the judgment and postjudgment interest are not required to be paid into the redemption fund.

(h) The foreclosure action shall be governed and regulated by this division, and where not in conflict with this division, by the applicable laws of this state.

property lien foreclosure sale unpaid assessments judgment payment levy notice property execution minimum sale price city bid credit bidding redemption fund reimbursement special reserve fund delinquent installments sale proceeds attorney fees

(Amended by Stats. 1997, Ch. 946, Sec. 9. Effective January 1, 1998.)

Section § 8833

If a local agency decides to start foreclosure proceedings on overdue property tax installments, they have to either record a special notice or follow an alternative notification method before removing the installment from the tax roll. This notice provides details about the property and who to contact for more information. It also changes who collects the debt, shifting it from the county tax collector to whoever handles the foreclosure. Specific methods differ for San Bernardino and Riverside counties, which can provide an alternative notification directly on the tax roll. Costs incurred by the county or local agency can be recovered through the foreclosure process. Additionally, if certain actions were taken before January 1, 1997, specific notice requirements apply.

(a) When any foreclosure actions are ordered by the local agency or legislative body, or when subsequent installments and interest that are also to be made the subject of a foreclosure action thereafter become delinquent, and the foreclosure action is not commenced and a notice of pendency of action is not concurrently recorded, prior to the actual removal of the delinquent installment from the tax roll, the local agency or legislative body responsible for the foreclosure action on the delinquent installment shall do one of the following:

(1) Prior to the actual removal of the delinquent installment from the tax roll, the local agency or legislative body shall record or cause to have recorded in the county recorder’s office in the county in which the real property is located, a Notice of Intent to Remove Delinquent Assessment Installment from the Tax Roll, which contains the information set forth in subdivision (b). If action is taken under this paragraph, all of the following apply:

(A) Upon presentation of written proof of the recordation and a request for removal by the local agency or legislative body, the county auditor shall remove the delinquent installments from the tax roll. “Proof of recordation” includes, but is not limited to, a certified copy of the notice set forth in subdivision (b), or a copy of the recorded notice containing the county recorder’s assigned document number, or a copy of the recorded notice containing a copy stamp from the office of the county recorder.

(B) From the date of the recordation, the county tax collector shall be credited upon the current assessment roll with the amount charged against him or her on account of the delinquent assessments or reassessments. If any person pays the delinquent installment referred to in the Notice of Intent to Remove Delinquent Assessment Installment from the Tax Roll to the county auditor prior to or subsequent to the actual removal of that delinquent installment from the tax roll, the county tax collector shall forward that payment to the local agency or legislative body responsible for the foreclosure action.

(C) From the date of recordation pursuant to this section, the assessment or reassessment or installment thereof or interest thereon, and penalties, costs, fees, and other charges accrued under applicable statutes, that are to be collected in a foreclosure action, shall no longer be collectible by the county tax collector.

(D) The county tax collector, in addition to the costs recovered in foreclosure, may charge the actual costs incurred in removing these sums from the tax roll or the performance of any other related duties as set forth in this section.

(E) Installments, interest, penalties, costs, fees, and other charges that do not become the subject of a foreclosure action shall remain collectible by the county tax collector as otherwise provided by applicable law.

(2) As an alternative to the notice requirement set forth in paragraph (1), the Counties of San Bernardino and Riverside may, simultaneously with the removal of the delinquent special assessment installment from the secured tax roll, provide notification on the secured tax roll that the installment has been removed from the roll for each parcel for which the delinquent special tax assessment was removed. The notice shall be displayed in a manner that conveys that the removal has occurred, and shall include the name and telephone number of the person or entity to be contacted to receive further information.

(b) The Notice of Intent to Remove Delinquent Assessment Installment from the Tax Roll shall be completed and recorded by or caused to be recorded by the local agency or legislative body responsible for the foreclosure action, and shall contain all of the following:

(1) The name of the local agency or legislative body, city, or other assessment district responsible for the foreclosure action.

(2) The legal description or assessor’s parcel number of the property affected by the notice.

(3) The specific tax year and installment intended to be removed from the tax roll.

(4) The title, address, and telephone number of the employee, city official, or other authorized official who should be contacted regarding the delinquent assessment installment amount.

(5) The name of the owner shown on the last equalized assessment roll.

(c) Any local agency or legislative body that removed or caused to be removed a delinquent assessment installment from the ad valorem tax roll prior to January 1, 1997, shall record, by July 1, 1997, a Notice of Intent to Remove Delinquent Assessment Installment from the Tax Roll or shall request the tax collector to retain the notice of delinquent assessment installment on the tax roll as set forth in paragraph (2) of subdivision (a). If the foreclosure action has been filed and a notice of pendency of action has been recorded in the county recorder’s office prior to July 1, 1997, this requirement does not apply.

(d) All costs associated with the county tax collector’s and local agency’s responsibilities as set forth in this section shall be recoverable by the local agency or legislative body through the foreclosure action.

(e) The recording of a notice of pendency of action in the county recorder’s office in the county in which the real property is located, concurrent with the commencement of a foreclosure action ordered by the local agency or legislative body and commenced prior to the actual removal from the tax roll of the delinquent installment that is the subject of the foreclosure action, constitutes compliance with the notice requirements of this section.

foreclosure proceedings delinquent tax installments property tax notice of intent San Bernardino County Riverside County tax roll removal local agency responsibilities tax collection county recorder notice requirements assessor's parcel legal description cost recovery property owner information

(Amended by Stats. 2004, Ch. 183, Sec. 339. Effective January 1, 2005.)

Section § 8833.5

This law explains that before a foreclosure judgment, a city can drop a foreclosure case if certain payments are made. These payments include any late assessments with interest and fees, court costs, attorney's fees, and the tax collector's costs. It ensures that taxpayers have the opportunity to resolve outstanding charges before losing their property.

At any time after the tax collector has been relieved of further duty with regard to amounts charged against him or her on account of the assessments or reassessments described by Section 8833 and prior to a judgment of foreclosure, the city shall dismiss the foreclosure action upon payment of the sum of all of the following amounts:

(a) The amount of any delinquent installments of principal or interest of the assessment or reassessment, together with interest and penalties, costs, fees, and other charges accrued thereon to the same extent that they accrue against real property for nonpayment of general property taxes, to the date of payment.

(b) Costs of suit, including, but not limited to, service and recording fees and the costs of abstract or report of search of, or litigation guaranty with respect to, all claims of interest in the land.

(c) Attorneys fees authorized by the city.

(d) The tax collector’s costs authorized by Section 8833.

foreclosure dismissal delinquent assessments interest and penalties court costs attorney fees tax collector costs reassessment payments property tax nonpayment litigation costs settlement payments before foreclosure

(Added by Stats. 1988, Ch. 959, Sec. 9.)

Section § 8834

This law explains how a city or a trustee can start a foreclosure action to collect unpaid assessments or reassessments tied to bonds for public work projects. The foreclosure must occur within four years after the last bond payment is due. The complaint should cover a few key points: when the city council decided on the project, confirmation that the project was done under certain acts, that payments were due but unpaid, details about the bonds like their date and interest rates, and that a foreclosure has been ordered because payments weren't made.

The foreclosure action shall be brought in the name of the city or a trustee employed on behalf of the bondholders pursuant to Section 8830, and may be brought at any time prior to the expiration of four years subsequent to the last maturity of the principal of bonds secured by the assessment or reassessment. The complaint may be brief and include substantially only the following allegations with reference to the assessment or reassessment sought to be collected:

(a) That, on a date stated, the legislative body passed its resolution ordering certain work to be done, without describing the same.

(b) If the assessment was levied pursuant to the Improvement Act of 1911 (Division 7 (commencing with Section 5000)), that work was done pursuant to the resolution.

(c) That an assessment to pay the cost of the work was duly made and was authorized to be collected, but remained unpaid on a stated date.

(d) That certain property (describing it) was assessed or reassessed a stated amount and that bonds upon the security of the assessment or reassessment were duly issued under this division, giving the date or dates of the bonds, their interest rate or rates, and the number of years the last maturity of the bonds were to run, but it is not necessary to state the amount, number, denomination, or other terms of the bonds.

(e) That, on a date stated, a certain sum came due against the described property on the assessment or reassessment and had not been paid and that the legislative body, or a trustee acting on behalf of the bondholders, had ordered the action to foreclose.

foreclosure action bondholders assessment collection reassessment Improvement Act of 1911 resolution ordering work due but unpaid assessment property description bonds issued last maturity date interest rate unpaid sum trustee for bondholders legislative body resolution four-year limitation

(Amended by Stats. 1990, Ch. 446, Sec. 19.)

Section § 8835

This law states that any penalties, costs, and interest that are due must be calculated up until the day the judgment is made.

The amount of penalties, costs and interest due shall be calculated up to the date of the judgment.

penalty calculation costs due interest due judgment date penalties up to judgment calculation of interest legal judgment costs calculation interest calculation judgment financial obligations

(Added by Stats. 1941, Ch. 79.)

Section § 8836

If a property doesn't sell for the required minimum price, a city can ask the court to let them sell it for less. Before the court hears this request, they must notify bondholders and other relevant parties. The court will hold a hearing, and if certain conditions are met, like having bondholder approval or ensuring no loss to bondholders, they might allow the sale at a lower price. This could include checking if no bids meet the minimum price or if refunding isn't possible.

If the sale price is less, the lien on the property is reduced by the difference. Bondholders can take part in the court's decision process. However, owners or other defendants in the foreclosure cannot buy the property at a discount. The court may handle legal fees and does not have to pay them from the sale proceeds.

(a) In the event a lot or parcel of property fails to sell for the minimum price required by Section 8832, the city may petition the court to modify its judgment and authorize the property to be sold at a lesser minimum price or without a minimum price.

(b) Written notice of hearing on the petition under subdivision (a) shall be given by certified or registered mail to all registered owners of any outstanding bonds secured, in whole or in part, by the delinquent assessment or reassessment, to the original purchaser of any of the bonds from the city, to the city treasurer, and to any authenticating agents, transfer agents, registrars, and paying or other agents of the city appointed with respect to any of the bonds. If any of the outstanding bonds are payable to bearer and not registered to other than bearer, notice of the hearing shall also be given by publication at least once in a financial publication with national circulation and additionally as the court shall reasonably require. The hearing shall be held not earlier than 10 days after the notice is given.

(c) The court may, after a hearing held pursuant to notice as provided for by subdivision (b), modify the judgment and authorize the property to be sold at a lesser minimum price or without a minimum price, if the court determines, based on the evidence introduced at the hearing, any of the following:

(1) Sale at the lesser minimum price or without a minimum price will not result in an ultimate loss to the bondholders.

(2) Owners or holders of 75 percent or more of the outstanding bonds, by principal amount, have consented to the petition and the sale will not result in an ultimate loss to the nonconsenting bondholders.

(3) Owners or holders of 75 percent or more of the outstanding bonds, by principal amount, have consented to the petition and all of the following apply:

(A) By reason of determination pursuant to Section 8769, the city is not obligated to advance available funds to cure a deficiency.

(B) No bids equal to or greater than the minimum price have been received at the foreclosure sale.

(C) No funds remain in the special reserve fund, if any.

(D) The city has reasonably determined that a reassessment and refunding proceeding is not practicable, or has in good faith endeavored to accomplish a reassessment and refunding and has not been successful, or has completed reassessment and refunding arrangements which will, to the maximum extent feasible, minimize the ultimate loss to the bondholders.

(E) No other remedy acceptable to owners or holders of 75 percent or more of the outstanding bonds, by principal amount, is reasonably available.

(d) The assessment or reassessment lien upon property sold pursuant to this section at a lesser price than the minimum price shall be reduced by the difference between the minimum price and the sale price.

(e) The court shall permit participation by the bondholders in its consideration of the petition as necessary to its determinations.

(f) Neither the property owner nor the holder of a security interest in the property, nor any other defendant in the foreclosure action, nor any agent thereof, may purchase the property at the foreclosure sale for less than the minimum price determined pursuant to Section 8832. Each purchaser at less than the minimum price shall certify in writing to the levying officer at the sale the purchaser’s compliance with the requirements of this subdivision.

(g) The court may make provisions for the payment of attorney fees and costs incurred in proceedings pursuant to this section as the court deems proper, and need not require that the fees and costs be paid out of the proceeds of any sale authorized pursuant to this section.

property foreclosure city petition minimum price bondholders notice of hearing court hearing modify judgment property sale outstanding bonds nonconsenting bondholders consent by bondholders sale price reduction participation by bondholders purchase restrictions attorney fees

(Added by Stats. 1988, Ch. 959, Sec. 11.)

Section § 8837

If a property's overdue assessment charges are collected by selling it through a tax sale, two outcomes are possible. First, if the sale covers the full amount needed to reclaim the property plus costs, all delinquent charges are cleared. Second, if the sale brings in less, any payment from the sale goes first to interest and penalties, then the remaining amount is still owed. Penalties keep adding up on what's unpaid, which can be added to any existing foreclosure judgment or handled through a new foreclosure case.

This section applies if delinquent assessment installments, together with any penalties, interest, and costs, are collected through the sale of the property by the tax collector pursuant to Chapter 7 (commencing with Section 3691) of Part 6 of Division 1 of the Revenue and Tax Code.

(a) If the property is sold for at least the total amount necessary to redeem plus costs, as defined in Section 3698.5 of the Revenue and Taxation Code, the sale of the property shall extinguish the delinquent assessment installments, interest, penalties, and costs included in the sale price.

(b) If the property is sold for less than the total amount necessary to redeem plus costs, as defined in Section 3698.5 of the Revenue and Taxation Code, the following applies:

(1) The portion of the sales price paid by the tax collector to the local agency on account of the delinquent assessment installments shall be credited by the local agency first to delinquent interest and redemption penalties, and then to delinquent principal.

(2) The remainder of the delinquent assessment installments and redemption penalties, if any, shall remain due and owing.

(3) Redemption penalties shall continue to accrue on remaining unpaid delinquent assessment installments.

(4) The remaining unpaid amount, with penalties, may be added as postjudgment delinquencies to any existing unsatisfied foreclosure judgment against the property, or may be collected in a new foreclosure action filed pursuant to this chapter.

delinquent assessment installments tax sale property sale tax collector redemption amount interest and penalties foreclosure action unsatisfied judgment local agency crediting remaining balance sale proceeds allocation accruing penalties new foreclosure action partial payment consequences

(Added by Stats. 2007, Ch. 670, Sec. 120. Effective January 1, 2008.)

The Improvement Bond Act Of 1915

Part 14FORECLOSURE BY ACTION

Section § 8830

Section § 8831

Section § 8832

Section § 8833

Section § 8833.5

Section § 8834

Section § 8835

Section § 8836

Section § 8837

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