Chapter 6. Default And Sale For Delinquency of California Streets And Highways Code >> Division 7. >> Part 5. >> Chapter 6.

(a) Whenever payment upon either the principal or the interest of any bond is not made to the bondholder when the coupon therefor is due, the holder of the bond, after sending the notice required by subdivision (b), may demand, in writing, that the treasurer proceed to advertise and sell the lot or parcel of land described in the bond as being that upon which the assessment represented by the bond was levied. If the holder of the bond has complied with subdivision (b) and deposits the required amounts, the treasurer shall proceed to advertise and sell the lot or parcel of land as provided in this chapter. The treasurer may require the holder of the bond to deposit with him an amount of money estimated by the treasurer to be sufficient to reimburse the city for costs incurred in obtaining an abstract of title or title search of the real property to be sold, if the treasurer deems it necessary to determine ownership of the property. Amounts deposited which remain after these expenses have been paid shall be returned to the depositor or his representative.
  (b) At least 30 days prior to demanding a sale by the treasurer for nonpayment of either principal or interest upon any delinquent bond on owner-occupied residential property, a bondholder shall send a notice by first-class mail, postage prepaid, of the delinquent amount along with the following notice to the owner of the property. The notice shall be substantially in the following form and be printed in red ink in at least 14-point boldface type:

IMPORTANT NOTICE Dear Property Owner: Your property located at_________________________
  (address) may be sold by the city (or county) because you have not paid what you owe for ________ improvements made in your area. To be sure to save your property, pay to the city (or county) treasurer the delinquent amount which is overdue or call ____________________ by ________________________. (telephone number of
  (date) city or county treasurer's improvement bond unit)

The treasurer shall mail a notice of sale to the owner of any property to be sold for nonpayment of either principal or interest upon any delinquent bond. The notice shall be sent by certified mail to the owner of the property as shown on the last equalized assessment roll and to any person whose name appears as an owner on the records of the county assessor's office which the county assessor will use to prepare the next assessor's roll. The notice shall be substantially in the following form and the first paragraph shall be printed in at least 14-point boldface type:

IMPORTANT NOTICE Your property located at ________________________
  (address) will soon be sold by the city (or county) unless you pay what you owe for ____ improvement made in your area. To obtain information on how to prevent the sale of your property, immediately call the foreclosure clerk at the city (or county) treasurer's office. The telephone number is ____ to arrange for payment. For more detailed information regarding this matter, read the following: "Notice of Sale of Property Delinquent for Nonpayment of ____ Improvement Bond "You are hereby notified that Bond ____, Series ____, representing a lien against Parcel Number ____ (or the legal description of the property in said bond) located at ____, for an improvement in the City (or County) of____, is delinquent. Unless the amount of the unpaid principal on the bond, together with interest, penalties, and recordation fee for filing notice of pendancy, is paid to the city (or county) treasurer on or before six months after the mailing of this notice, the date of which being this ____ day of____, 19__, or unless the bond is reinstated as provided by Section 6631, the undersigned will proceed to advertise and sell the lot or parcel of land in the manner prescribed by law to satisfy the amount of the bond, interest, penalties, and costs."

(a) If there is surplus money remaining from the sale after payment of the amount due on the bond, plus interest, penalties, and costs of sale, the treasurer shall hold the surplus money in trust during the period of redemption or until the amount due is paid by a redemptioner. In the event of redemption, the treasurer shall pay to the holder of the certificate of sale the amount of principal, interest, and penalties due on the bond, costs paid by the holder, and any surplus money held in trust. In the event that there is no redemption of the bond during the redemption period, the treasurer shall pay the surplus money in the following order:
  (1) To the lienholders of record prior to the issuance of the treasurer's deed, in the order of their priority;
  (2) To the person who was the owner of record prior to the issuance of the treasurer's deed, if he can be found within a three-year period following such sale, or, if such person cannot be found in such period, to each taxing agency in the same proportion that each agency's taxes bear to the total taxes.
  (b)(1) Written notice of the right to claim surplus money shall be sent to the last known address of any person who had a recorded interest in the property at the time of sale. Such notice shall be sent no later than 90 days after the sale of the property.
  (2) If the last known address of a person with a recorded interest in the property is not known, notice shall be published once a week for three successive weeks in a newspaper of general circulation in the county. Such notice shall commence no later than 60 days after the sale of such property.

No sale of property shall be made pursuant to this chapter unless the notices are sent pursuant to Sections 6500, 6501, 6505, and 6505.2. The failure of the property owner to receive or accept the notices does not affect the validity of the sale or invalidate any subsequent act or proceeding.

After the expiration of six months from the time of mailing the notice and upon payment by the holder of the bond to the treasurer of the amounts specified in Section 6505.1, the treasurer shall publish a notice of sale in a newspaper of general circulation, published in the city in which the bond was issued, or if no newspaper is published in the city, then in some newspaper having general circulation therein.

The notice of sale shall be in substantially (filling in all blanks) the following form: "Notice of Sale of Property Delinquent for Nonpayment of Bond No. __, Series No. __, Issued for the Improvement of ____ "Default having been made in the payment of the following named coupons (here fill in date and amounts of the coupon or coupons which have not been paid) and the holder of said bond having demanded in writing that the Treasurer of the City (or County) of ____ proceed to advertise and sell the lot or parcel of land mentioned in said bond. Now, therefore, I give notice that I will on the ____ day of ____, 19__, at the hour of ____ o'clock _m., of said day, sell at public auction the lot or parcel of land mentioned in said bond, to wit: Parcel Number ____ (or the legal description of the property in said bond) located at ____, at (here state the place of sale, which shall be at the office of said treasurer or at some public place in said city (or county)) unless the amount due on said bond and the accrued interest thereon together with the costs set forth in the third paragraph of this notice are paid; and that I will so sell the same to the person who will pay the highest price for the entire lot or parcel of land hereinafter described, but not less than the full amount of unpaid principal, interest, and penalties on said bond, together with all costs. In the event there is no bidder for the total amount due on said bond, together with the accrued interest, penalties, and costs of sale, I shall deem said lot or parcel of land sold to the holder of said bond, as provided in Section 6509 of the Streets and Highways Code. The lot or parcel of land mentioned in said bond and to be sold, is more particularly described, to wit: (here set forth the description of the lot or parcel of land as contained in the bond). The amount due on said bond up to the date of this notice is as follows: Due on the principal thereof, ____ dollars ($____); due on account of interest ____ dollars ($____) (here set forth the interest calculated and compounded semiannually up to the date on which the notice is dated at the interest rate named in said bond upon the unpaid principal for the full period for which no interest has been paid) due on account of penalties ____ dollars ($____). Total amount due on said bond (here set forth the total of the foregoing items). "In order to avoid this sale, payment of the total amount above named will be required together with the additional interest accruing up to the date of payment and the following costs: (a) the cost of recording pendency of foreclosure as provided in Section 3121 of the Streets and Highways Code; (b) if incurred, costs of obtaining an abstract of title or title search; (c) the cost of publication of the notice of sale incurred before such payment; and (d) the sum of three dollars ($3) for ascertainment by the treasurer of the name and address of the property owner, as shown on the last equalized roll for taxes, and any person whose name appears as owner on the records of the county assessor's office which the county will use to prepare the next assessor's roll. The bond may be reinstatted and the sale avoided upon payment of the amounts due, interest, penalties, and costs in the manner provided in Sections 3121 and 6631 of the Streets and Highways Code. "In the event of sale, such sale will include interest in addition to the above total amount due accruing up to the date of sale, the costs provided in Section 6505.1 of the Streets and Highways Code, and the fee for recording the certificate of sale. The ____ (here name newspaper) is designated as the newspaper in which this notice shall be published.

Dated _______ _________________________ Treasurer of the City (or ____________ County) of ____________"

(a) The day specified in the notice of sale shall not be less than 45 days from the date of the first publication of the notice.
  (b) At least 30 days prior to the sale, a copy of the notice of sale shall be transmitted by the treasurer by certified mail to the bondholder at his last known address.
  (c) At least 30 days prior to the sale, the treasurer shall mail, by first-class mail, a copy of the notice of sale and the following notice which shall be printed in at least 14-point boldface type to the property owner as shown on the last equalized roll for taxes and to any other person whose name appears as owner on the records of the county assessor's office which the county will use to prepare the next assessor's roll.

IMPORTANT NOTICE

Because you have not paid the money you owe to the city (or county) treasurer for ____ improvements made in your area, the treasurer has arranged to sell your property. You must pay off this debt by (day before sale) or your property will be sold. If you wish to stop this sale and save your property, call the foreclosure clerk at the treasurer's office, telephone number ____, to arrange for payment of this debt. See the attached notice for further details regarding this sale.

The treasurer shall be under no obligation to publish or mail notice of sale as provided in Sections 6503, 6504, 6505, and 6505.2 unless the bondholder deposits with the treasurer, prior to the issuance of the notice, the following sums and documents:
  (a) A receipt from the county recorder for the cost of recording notice of pendency of foreclosure as provided by Section 3121.
  (b) A fee to reimburse the city or county for its estimated reasonable cost of obtaining the name and last known mailing address of, and for mailing notices required by Section 6505.2 to, parties of interest as defined by Section 6505.4.
  (c) The sum of three dollars ($3) for ascertainment by the treasurer of the name and address of the property owner, as shown on the last equalized assessment roll for taxes, and any person whose name appears as owner on the records of the county assessor's office which will be used by the county to prepare the next assessor's roll.
  (d) Cost of publication of the notice of sale.
  (e) Treasurer's fee for issuance of certificate of sale which is hereby fixed at seven dollars ($7).
  (f) Sheriff's travel fees, as provided in Section 26746 of the Government Code.

(a) Not less than 45 days nor more than 60 days prior to the date of sale, the treasurer shall send notice by registered mail to the last known mailing address, if available, of parties of interest, as defined in Section 6505.4. The content of the notice shall include the date, time, and place of the proposed sale, the amount required to redeem prior to the time of sale, and information regarding the rights of persons to claim surplus money, as defined in Section 6501.1, if the property is sold and surplus money results from the sale.
  (b) The treasurer shall make a reasonable effort to obtain the name and last known mailing address of parties of interest.
  (c) The validity of any sale under this chapter is not affected if the treasurer's reasonable effort fails to disclose the name and last known mailing address of parties of interest or if a party of interest does not receive the mailed notice.

For the purpose of giving notice, as required by Section 6505.2, parties of interest are all of the following:
  (a) Lienholders of record prior to the issuance of the treasurer's deed.
  (b) Any other person who would be vested with title to all, or any portion, of the property to be sold by redemption of the property.

Any affidavit of publication setting forth a copy of the publication and stating that the publication was made in the newspaper named on specified dates shall be filed with the treasurer and shall be prima facie evidence of the publication of the notice.

The treasurer shall collect the sum of seven dollars ($7) for the issuance of the certificate of sale, which sum shall belong to and be subject to the disposition of the city or county.

If at any time prior to the sale any person interested in the lot or parcel of land described in the notice of sale pays the whole amount of the unpaid principal of the bond, the interest thereon compounded semiannually up to the date of such payment, at the rate named in the bond upon the amount of the principal remaining unpaid for the whole period for which interest has not been paid, and all penalties which have accrued, together with the sums specified in Section 6505.1, except for the fee for the issuance of the certificate of sale, the bond shall be canceled. If redemption of the bond is made by the property owner prior to publication of notice of sale, but after the treasurer has incurred any expense for such publication, the property owner shall pay to the treasurer such expense incurred by the treasurer.

Prior to the sale of any owner-occupied residential property, the treasurer or his or her designee shall, in person, make every reasonable effort to meet with the owner-occupant in the office of the treasurer or his or her designee or otherwise speak with the owner-occupant. During this contact, the treasurer or his or her designee shall, in language understandable to the owner-occupant, explain that the property will be sold unless the delinquency is paid. The explanation shall also include a full explanation of the right of redemption. Failure to comply with this section shall not invalidate any sale pursuant to this act.

(a) If such payment is not made, the sale shall be made as advertised, and the lot or parcel described in the bond shall be sold to the purchaser who will pay the highest price for the entire lot or parcel of land to be sold, but not less than the higher of (1) the amount due on the bond, together with accrued interest, penalties, and all of the sums specified in the notice of sale that are due in the event of sale, or (2) an amount equal to not less than 50 percent of the fair market value of the property.
  (b) In the event there are no bidders, the bondholder shall be liable for the minimum sales price. Payment to the treasurer at the time of sale need not exceed the amount specified in paragraph (1) of subdivision (a), and the balance, if any, shall be payable at the time the deed is issued.
  (c) In the event there are no bidders, a certificate of sale for the entire lot or parcel of land described in the bond shall be issued to the bondholder after surrender of the bond, including all unpaid principal and interest coupons, to the treasurer and after payment to the treasurer of the fee of the recorder for recording such certificate, and, if incurred, and if no deposit was made pursuant to Section 6500, the cost of an abstract of title or title search of the real property sold under foreclosure; and also at that time the costs of the sale and other fees previously paid to the treasurer pursuant to Section 6505.1.
  (d) For the purpose of this section, "fair market value" means the amount, as defined in Section 110 of the Revenue and Taxation Code, as determined pursuant to an appraisal of such property by the county assessor within one year immediately preceding the date of the sale, inclusive of the cost of appraisal, notice, recording, and the cost of an abstract of title or title search of such real property, if any. The fair market value as determined by the assessor pursuant to appraisal shall be conclusively presumed in favor of any purchaser or encumbrancer for value of such property.

If through error or otherwise the total amount for which the sale is made is less than that required by the provisions of this chapter, and the holder of the bond either is the purchaser at the sale and elects to accept the certificate of sale hereinafter mentioned, or accepts from the treasurer the sum derived from the sale made to some other purchaser, the fact that the sale was made for less than the amounts specified in this chapter shall not affect or invalidate the sale, and the acceptance of the certificate or of the sum derived from the sale shall be a waiver on the part of the holder of the bond, and in such case the amount received on the sale shall be the amount upon which redemption from the sale shall be calculated the same as if the sale had been made for the full amount authorized by this chapter.

The treasurer, before delivering any certificate of sale, shall enter the following data in a book kept in his office for that purpose:
  (a) The date, number, and series of the bond.
  (b) A description of the land sold corresponding with the description of the certificate of sale.
  (c) The date of sale, the purchaser's name, and the amount paid. He shall regularly number the descriptions on the margin of the book, and put a corresponding number on each certificate. He shall enter on the record of the bond the words: "Canceled by sale of the property," giving the date of such sale.

Such book shall be open to public inspection during office hours when not in actual use.

The treasurer shall issue for each sale an original and a duplicate certificate of sale containing:
  (a) The date, number and series of the bond under which the sale was made,
  (b) A description of the land sold, and
  (c) The date of the sale, the purchaser's name, a statement that the property was sold in accordance with the provisions of Section 6509, and the number of the certificate.

The treasurer shall deliver the original certificate of sale to the purchaser and shall record the duplicate in the office of the recorder of the county in which the land sold is situated.

At any time after its delivery to him the legal holder of the certificate of sale may pay any general taxes, street improvement assessments, or any other tax or statutory lien upon the property described in the certificate of sale which may be prior to his lien or he may redeem the property from any sale made in the collection or enforcement of such general taxes, or foreclosing street improvement assessments or other tax or statutory liens.

Upon production by the holder of the certificate of sale of the official receipt for the amounts so paid by him, the treasurer shall make an indorsement upon the certificate of sale showing that receipts have been so produced and stating the nature of the tax or lien paid, and the amount thereof. He shall also make a like entry in the book containing the bond record and shall collect the amount so entered as a part of the amount represented by the certificate of sale together with interest thereon at the same rate as provided on the purchase money for redemption.

Immediately on the sale, the purchaser shall become vested with a lien on the property sold to him, to the extent of his bid. He may only be divested of that lien by redemption.

The holder of a certificate of sale, upon assignment of such certificate shall immediately notify the treasurer thereof, giving the name and address of the assignee and shall endorse such assignment on the certificate of sale.