How California tax-defaulted property sales work

From unpaid taxes to tax-defaulted

California secured property taxes are paid in two installments. If they are still unpaid when the fiscal year closes on June 30, the property becomes tax-defaulted. Nothing changes about ownership yet: the owner keeps the property and can redeem by paying the defaulted taxes, penalties, interest, and fees, or by entering an installment plan.

The power to sell

After a property has been tax-defaulted for five years, the Tax Collector has the power to sell it. For nonresidential commercial property the period is three years, unless the county has adopted the five-year schedule by ordinance or resolution (Rev. & Tax. Code 3691). Counties publish a notice of impending power to sell each year.

Reaching power to sell does not mean a parcel will be auctioned soon. Counties choose which parcels to offer, send notices to the owner and other parties of interest, and obtain Board of Supervisors approval for the sale.

Agreement sales can pull parcels first

Before an auction, public agencies and qualifying nonprofits can ask to buy tax-defaulted property for a public purpose through a Chapter 8 agreement sale. Approved parcels leave the auction list. This, along with redemption and bankruptcy filings, is why California auction lists shrink between first publication and the sale.

The public auction

Most California counties now auction tax-defaulted property online through platforms such as Bid4Assets or GovEase. Each county sets its own registration deadline, deposit, and payment terms, so read the terms for the specific sale. Los Angeles County, for example, runs several auctions a year and has moved between platforms; San Bernardino County runs its own sale site.

The minimum bid generally covers the amount needed to redeem plus the costs of the sale. Parcels that do not sell can be reoffered at a later sale, sometimes at a lower minimum.

The redemption cutoff

The owner's right to redeem ends at the close of business on the last business day before the tax sale begins. The sale's start date counts as the sale date, even if bidding on a particular parcel ends later. A redemption payment sent by mail must arrive by that cutoff (Rev. & Tax. Code 3707).

Unlike Florida or Michigan, there is no redemption after the sale. If a buyer on a credit sale fails to pay in full on time, the right of redemption revives.

What the buyer receives

The Tax Collector records a tax deed to the buyer. A tax deed clears most private liens, but some interests can survive, including certain easements, some government liens, and restrictions of record. County sale terms commonly warn that the county does not guarantee title, condition, access, or boundaries.

Expect to need a quiet title action or a waiting period before a title insurer will insure the property.

Excess proceeds

If a parcel sells for more than the minimum, the extra is excess proceeds. Lienholders and the former owner (parties of interest) can claim them. A claim must be filed, or postmarked, within one year after the tax deed is recorded. Assigning the right to claim after the sale requires a dated written agreement with specific disclosures (Rev. & Tax. Code 4675).

Claim forms are available from the county at no cost. Be cautious with services charging large fees to recover excess proceeds.

Research checklist before a California tax sale

Most California tax sale parcels are vacant land, often in remote areas. Do the research that the list cannot.

• Locate the parcel on the assessor's map by its APN; many listings have no street address.
• Confirm legal access to a public road; many desert and mountain parcels are landlocked.
• Check zoning, minimum lot size, and whether the parcel is buildable.
• Look for code cases, abatement liens, and special assessments with the city or county.
• Read the county's sale terms: deposit, payment deadline, and what happens if you default.
• Recheck the list just before bidding opens; redemptions are common up to the cutoff.