SCO Chapter 8 Agreement Sale Guide

Source: https://www.sco.ca.gov/Files-ARD-Tax-Info/Tax-Collector-Ref-Man/Chapter8SaleGuide.pdf

State of California A Guide to Preparing the Chapter 8 Agreement Sale Package

Updated 12/2018

California State Controller’s Office

A Guide to Prepare the Chapter 8 Agreement Sale Package

INTRODUCTION ......................................................................................................................... 3 FLOWCHART ............................................................................................................................... 4 AGREEMENT SALE CHECKLIST ............................................................................................. 5 Checklist A Sample ................................................................................................................... 6 Checklist B Sample ................................................................................................................... 7 NOTICE OF POWER TO SELL .................................................................................................. 8 Notice of Power to Sell Sample ............................................................................................ 9 APPLICATION .......................................................................................................................... 10 Application Sample ............................................................................................................... 11 OBJECTION LETTER .............................................................................................................. 12 Objection Letter Sample ...................................................................................................... 13 AGREEMENT ............................................................................................................................ 14 Public Agency Agreement Sample ................................................................................... 15 Non-profit Agreement Sample .......................................................................................... 19 Exhibit A Sample .................................................................................................................... 25 CHAPTER 8 PURCHASE RESOLUTION ............................................................................. 26 Chapter 8 Purchase Resolution Sample ......................................................................... 27 COUNTY BOARD OF SUPERVISORS RESOLUTION OR MINUTE ORDER ................ 28 County Board of Supervisors Resolution or Minute Order Sample ..................... 29 CHAPTER 7 TAX SALE RESOLUTION ................................................................................ 31 Chapter 7 Tax Sale Resolution Sample ........................................................................... 32 PUBLICATION .......................................................................................................................... 36 Publication Sample ............................................................................................................... 37 ARTICLES OF INCORPORATION ........................................................................................ 39 Articles of Incorporation Sample ..................................................................................... 40 INTENDED USE STATEMENT .............................................................................................. 47 Intended Use Statement Sample....................................................................................... 48 CONTACT INFORMATION .................................................................................................... 49

A Guide to Prepare the Chapter 8 Agreement Sale Package

Introduction

A Guide to Prepare the Chapter 8 Agreement Sale Package is produced by the State Controller’s Office, Local Government Programs and Services Division, Property Tax Standards Unit. This guide is intended to be used as a sample for County Tax Collectors to aid in the assembly of documents needed in a Chapter 8 agreement sale package for submittal to the California State Controller’s Office for approval. This guide can be used along with the County Tax Sale Procedural Manual, which includes step-by-step procedures on Chapter 8 tax sales.

NOTICE: This guide is provided by the State Controller’s Office, Property Tax Standards Unit, as a general resource for California’s County Tax Collectors. Information contained in this guide is to assist the counties in performing their duties under the law. This publication is intended primarily for County Tax Collectors and does not constitute legal advice.

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A Guide to Prepare the Chapter 8 Agreement Sale Package

Flowchart

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A Guide to Prepare the Chapter 8 Agreement Sale Package

Agreement Sale Checklist

General Information:

Checklist – A:

SCO internal checklist used by staff. It is provided to serve as a reference and aid to assembling required documentation. Depending on the type of chapter 8 sale, documents required may vary.

Checklist – B:

SCO sample checklist for completing the entire Chapter 8 process. This is a useful tool for tax collectors and staff.

Sources:

County Tax Sale Procedural Manual Chapter II: Chapter 8 Tax Sales, Section 9: Authorization from the State Controller's Office

State Controller’s Office Sample Form SCO 8-17.1 – Checklist of Mandatory Requirements (Chapter8)

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A Guide to Prepare the Chapter 8 Agreement Sale Package

Checklist A Sample

Agreement Sale Checklist 2015

Documents required for Chapter 8 Agreement Sales

_____ Notice of Power to Sell (RTC §§3691, 3773)

_____ Application (SCO Form 8-16) (RTC §§ 3695.4, 3695.5)

_____ Objection Letter- Required for objections only (RTC §§3695.4, 3695.5)

_____ Agreement (SCO Form 8-13 or 8-15) (RTC §3795)

_____ County Board of Supervisors Resolution or Minute Order Approving the Sale (RTC §3794.3)

_____ Chapter 7 Tax Sale Resolution – Required for objections only (RTC §3694)

_____ Publication (RTC §3702)

Additional Components for Nonprofit

_____ Articles of Incorporation (RTC §§3772.5, 3795.5)

_____ Document listing each parcel and intended use (RTC §§3772.5, 3695.5)

Revised 4/15

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A Guide to Prepare the Chapter 8 Agreement Sale Package

Checklist B Sample

RESOLUTION/AGREEMENT SALE NO. _________________ DATED ______________

The following requirements should be fulfilled by the tax collector to lawfully initiate, process, and complete a tax sale by agreement under Division 1, Part 6 of the California Revenue and Taxation Code. Unless otherwise noted, all code section citations are from the California Revenue and Taxation Code. (Note: Additional details and time lines are located in the County Tax Sale Procedural Manual Chapter II: Chapter 8 Tax Sales.)

Agreement Processing: □ Obtain required documents from the purchasing entity. Application to purchase tax defaulted property (SCO 8-16) (§3695.4, §3695.5); An objection letter if the parcel is scheduled for a Chapter 7 Tax Sale (§3695, §3695.4, §3695.5) A Chapter 8 purchase resolution from the purchaser’s governing body (§3695); A signed/dated Agreement to Purchase Tax Defaulted Property (§3695.4, §3695); and Other documentation as required by the county (§3795.5). □ If the purchaser is the State or the county, obtain approval of the purchase price from the county board of supervisors and the State Controller. In addition, if the property is within a city's limits, approval from the city is required (§3775). See the State Controller's Office sample form, Agreement to Purchase Tax Defaulted Property (SCO 8-13). □ Submit to the State Controller for approval the executed agreement and any other required documents (§3795). □ Following agreement approval from the State Controller and direction from the State Controller the tax collector shall give notice of the agreement (§3796, §3797). □ Mail a copy of the notice to each assessee and party of interest not less than 45 but no more than 60 days prior to the effective date of the agreement (§3799). □ Mail the notice of agreement sale to the IRS (26 U.S. Code §7425). □ Publish and/or post the notice of agreement. The first publication and/or posting shall be started not less than 21 days prior to the effective agreement date (§3798, §3802). □ The agreement becomes effective no sooner than 5:01 pm on the 21st day after the first publication of the notice of agreement (§3802). □ Prepare an affidavit showing notice of agreement has been given as prescribed. The affidavit shall be filed in the office of the county tax collector (§3801).

On or Following Effective Date of Sale: □ Execute a deed to the purchaser once terms for property transfer as outlined in the agreement are met (§3804, §3805). □ Record the deed with the county recorder (the recorder shall record the deed without charge) (§3804). □ Send a conformed copy of the deed to the State Controller (the recorder shall prepare the conformed copy of the deed without charge) (§3804). □ Deposit money received from the sale like tax collection (§3808). □ Transmit a report of sale to the State Controller, auditor, and assessor (§3811). □ Distribute necessary funds prior to determining excess proceeds (§4672-§4673.1). □ Mail the notice of the right to claim excess proceeds to the last known mailing address of parties of interest if the excess proceeds exceed one hundred and fifty dollars ($150). If the last known address of a party of interest cannot be obtained, the notice shall be published (§4676). □ Distribute the excess proceeds to any parties of interest no sooner than one year following the recordation of the tax collector’s deed to the purchaser (§4675).

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A Guide to Prepare the Chapter 8 Agreement Sale Package

Notice of Power to Sell

General Information:

An official county document that describes a property and its default status and that the county has the statutory authority to sell the property in order to recoup past taxes due. This document is recorded with the county clerk. All properties listed in a sale should have a corresponding Notice of Power to Sell to confirm status. One notice per parcel must be included for the application to be considered complete. Double check the parcel number(s) to ensure accuracy.

Sources:

Revenue and Taxation Code §3691, §3773

County Tax Collectors’ Reference Manual: Chapter 7000 Sections 7100-7133

County Tax Sale Procedural Manual Chapter I: Chapter 7 Tax Sales, Section 1: Overview of Chapter 7 Tax Sales Chapter II: Chapter 8 Tax Sales, Section 3: Identifying the Purchasing Entity

State Controller’s Office Sample Forms SCO 7-01.1 – Notice of Power to Sell – Five & Three Year Schedule SCO 7-01.2 – Notice of Power to Sell – Five Year Schedule by County Ordinance or Resolution SCO 7-01.3 – Notice of Power to Sell – Three Year Schedule

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A Guide to Prepare the Chapter 8 Agreement Sale Package

Notice of Power to Sell Sample

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A Guide to Prepare the Chapter 8 Agreement Sale Package

Application

General Information:

A standard form issued by the Controller’s Office which consolidates pertinent information and serves as official registration as to the purchaser’s interest and intention, as required by statute. This form is completed by the purchaser and submitted to the tax collector.

Currently Scheduled for a Chapter 7 Sale

The application must be filed (dated) prior to the first publication of the notice of intended sale. An objection letter is required for the application to be considered valid. Double check the parcel number(s) to ensure accuracy.

NOT Currently Scheduled for a Chapter 7 Sale

This is NOT an objection. Therefore, no objection letter or objection is required. Double check the parcel number(s) to ensure accuracy.

Multiple Parcels

One application can be used to purchase multiple parcels. Attach an exhibit for the property information when the space provided is insufficient.

Sources:

Revenue and Taxation Code §3695.4 -§3695.5

County Tax Collectors’ Reference Manual: Chapter 8000 Sections 8320-8325

County Tax Sale Procedural Manual Chapter II: Chapter 8 Tax Sales, Section 4: Public Agency Purchase Eligibility Review Chapter II: Chapter 8 Tax Sales, Section 6: Nonprofit Organization Purchase Eligibility Review

State Controller’s Office Sample Forms SCO 8-16 – Application SCO 8-14 – Exhibit A

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A Guide to Prepare the Chapter 8 Agreement Sale Package

Application Sample

This application must be completed by an eligible purchasing entity to commence purchase of tax defaulted property by agreement sale from the county under applicable provisions of the California Revenue and Taxation Code. Complete the following sections and supply supporting documentation accordingly. Prior to purchase approval the county may require the applicant submit additional information or documentation. Completion of this application does not guarantee purchase approval.

For county use only: 1. Date application received: (date) 2. If applicable, date written objection to Chapter 7 tax sale was received: (date)

Applicant must complete Sections A through D.

A. Purchaser Information 1. Name of Organization:___________________________________________________ 2. Corporate Structure: □Nonprofit Organization □Public Agency (please select type of public agency) □A taxing agency, revenue district, or special district □The State or County

B. Property Status and Use Information 1. Is the parcel currently (at the time of application) approved for a Chapter 7 tax sale? □Yes □No If yes, a written objection must be included with the application. If a written objection was submitted to the county prior to application, what is the date of the objection? (date of objection)

2. The purpose of the purchase: (check one box only)
□For low income housing □To otherwise serve low income persons
□To preserve open space □To preserve a lien
□For public purpose: (describe public purpose)

C. Property Information Provide the following information. (If more space is needed exhibits may be attached)

1. County where the parcel(s) is located: (county)

2. Assessor’s Parcel Number (APN): (list all APNs applying to purchase):

D. Acknowledgement
Identification and signature of the purchasing entity’s authorized officer:
______________________________________ __________________________________
Print Name Print Title
______________________________________ __________________________________
Authorized Signature Date

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A Guide to Prepare the Chapter 8 Agreement Sale Package

Objection Letter

General Information:

A letter or document declaring an objection to certain parcels being sold at a currently scheduled county public auction. An objection letter is only required if the parcel(s) in question is currently scheduled for a Chapter 7 sale. The objection must be filed (dated) prior to the first publication of the notice of intended sale. Double check the parcel number(s) to ensure accuracy.

Sources:

Revenue and Taxation Code §3695.4 -§3695.5

County Tax Collectors’ Reference Manual: Chapter 8000 Sections 8232-8233

County Tax Sale Procedural Manual Chapter II: Chapter 8 Tax Sales, Section 4: Public Agency Purchase Eligibility Review Chapter II: Chapter 8 Tax Sales, Section 6: Nonprofit Organization Purchase Eligibility Review

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A Guide to Prepare the Chapter 8 Agreement Sale Package

Objection Letter Sample

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A Guide to Prepare the Chapter 8 Agreement Sale Package

Agreement

General Information:

Also known as the Agreement Contract or Agreement to Sell Tax–Defaulted Property. Agreements must be approved by the board of supervisors. Date on the first page of agreement should match date from the County Board of Supervisor Resolution or Minute Order approving the sale. A contract between the county and the purchaser. This document is a standard format and contains a preamble stating the date of the contract and defining the parties involved. The document also outlines the payment conditions, as well as any specific requirements and stipulations of the sale, including purpose and intended use of the property, along with a list of the property involved. All signatures required must be present before application will be considered valid. Double check the parcel number(s) and purchase price to ensure accuracy.

Sources

Revenue and Taxation Code §3793, §3795

County Tax Collectors’ Reference Manual: Chapter 8000 Sections 8330-8352

County Tax Sale Procedural Manual Chapter II: Chapter 8 Tax Sales, Section 5: Public Agency Application Requirements Chapter II: Chapter 8 Tax Sales, Section 7: Nonprofit Organization Application Requirements

State Controller’s Office Sample Forms SCO 8-13 – Agreement to Purchase Tax-Defaulted Property (Public Agency) SCO 8-14 – Exhibit A SCO 8-15 – Agreement to Purchase Tax-Defaulted Property (Non-Profit)

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A Guide to Prepare the Chapter 8 Agreement Sale Package

Public Agency Agreement Sample This agreement is made this (day) day of (month), (year) by and between the (county) County Board of Supervisors and (purchasing entity), in accordance with provisions of California law. The County (“SELLER”), subject to the State Controller’s approval, does hereby agree to sell to (purchaser) (“PURCHASER”) the real property described in Exhibit ‘A’ of this agreement. The real property situated within said county, hereinafter set forth and described in Exhibit ‘A’ of this agreement, is tax defaulted and is subject to the power of sale by the tax collector of said county for the nonpayment of taxes.

The PURCHASER agrees to pay the sum of $(price) and which is tendered in the form of (cash/negotiable paper/etc) with this document. The following is a sample listing of terms and conditions, any of which may be included in Chapter 8 Sale Agreements at the discretion of the County. This list is not inclusive and pursuant to California Revenue and Taxation Code sections 3795.5 and 3794.3 the board of supervisors may establish conditions of sale.

Consultation with county counsel is recommended before establishing conditions of sale

In consideration of the mutual promises herein set forth, the parties mutually agree as follows:

Approval by the State Controller. California Revenue and Taxation Code section 3795 requires this agreement to be submitted to and approved by the California State Controller before it becomes final. This agreement is not in effect until the California State Controller’s authorization is received and the noticing process is complete.

Purchase and Evidence of Title. Within 21 days from the effective date of this agreement, the PURCHASER agrees to pay a sum sufficient to redeem the delinquent property taxes pursuant to California Revenue and Taxation Code section 3793.1(a) or a reduced price in accordance with section 3793.1(b). The approval and notice process will determine the effective date of the sale and the final purchase price. The PURCHASER agrees to pay the amount specified in Exhibit ‘__’ for the properties described in Exhibit ‘A’. Payment shall be in cash or certified funds payable to the (county) County Tax Collector. Upon receipt of said sums by the Tax Collector, the Tax Collector shall execute and record a deed conveying the title to said property to PURCHASER and after recordation the deeds will be returned to the purchaser by the County Clerk/Recorder.

No Representation. The SELLER makes no representation concerning the condition of title to the subject property. The SELLER does not warrant title to the property or make any representations concerning the title. Additionally, the SELLER makes no representation concerning the physical condition of the subject property and the PURCHASER acknowledges that it is not relying upon any statements or representations of the SELLER concerning the subject property and is purchasing the subject property in its ‘as is’ condition.

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A Guide to Prepare the Chapter 8 Agreement Sale Package

Other Expenses: The PURCHASER shall pay the other expenses in addition to the purchase price of the property, including but not limited to: the cost of giving notice of the notice of agreement, the cost of publishing or posting the notice of agreement, the cost of proceeding to obtain a clear title to the property, and the expenses incurred in the payment, compromise, or other method of removal of any liens or adverse claims against the property.

Intent of Use. The public purpose and specified intent of use set forth by the PURCHASER for the purchased property is as follows:

---

Jurisdiction Boundaries. If the PURCHASER is a ‘district’ as defined by Government Code 56036(a) the purchased property must be within their jurisdiction, unless a letter from purchasers’ legal counsel stating that either the influence has been extended by the Local Agency Formation Commission (LAFCo) to include the property or the property may be purchased without conflict with sphere of influence parameters.

Real Property Taxes, Fiscal Year (current)-(current): The purchase price does not include the property taxes for Fiscal Year (current)-(current). The PURCHASER shall be responsible for payment in full of the Fiscal Year (current)-(current) property taxes for the property in addition to the purchase price.

Treated as a Single Transaction: The SELLER shall sell the property(s) listed in Exhibit ‘__’ as a single transaction to the PURCHASER in consideration of the receipt of the payments listed in this agreement.

Redemption: If any of the properties listed in Exhibit ‘__’ are redeemed prior to the effective date of this agreement, this agreement shall be null and void as to that property or properties. Notwithstanding the foregoing, the agreement shall be binding and shall remain in full force and effect with respect to any remaining property (s).

Void/Incomplete Purchase: This agreement shall become null and void and the right of redemption restored upon the failure of the PURCHASER to comply with the terms and conditions of this agreement prior to the tax deed recordation. The PURCHASER will be required to reimburse the Tax Collector for the costs for producing notice, publication, and actual costs incurred for preparing and conducting the agreement sale if these expenses have already been incurred.

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A Guide to Prepare the Chapter 8 Agreement Sale Package

Indemnity: The PURCHASER shall indemnify the SELLER from and against any and all liability, loss, costs, damages, attorney’s fees, and other expenses which the SELLER may sustain or incur by reasons of a challenge to validity of the tax default sale of the property described in Exhibit ‘__’. Pursuant to California Revenue and Taxation Code section 3809, a proceeding based on alleged invalidity or irregularity of any proceeding instituted can only be commenced within one year after the date of execution of the Tax Collector’s deed.

Environmental Condition of Property. The property acquired pursuant to this agreement may contain hazardous wastes, toxic substances, or other substances regulated by federal, state, and local agencies. The SELLER in no way whatsoever assumes any responsibility, implied or otherwise, and makes no representations that the property (s) are in compliance with federal, state, or local laws governing such substances. The SELLER in no way assumes any responsibility, implied or otherwise, for any costs or liability of any kind imposed upon or voluntarily assumed by the PURCHASER or any other owner to remediate, clean up, or otherwise bring into compliance according to federal, state, or local environmental laws property purchased.

CERCLA. The SELLER and the PURCHASER agree that under United States Code, title 42, section 9601(20,d), the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) expressly excludes local and state governments from clean up liability for properties they acquire as a result of tax delinquencies. Notwithstanding this provision, the PURCHASER shall defend, indemnify, and hold harmless the SELLER, its board of supervisors, officers, claims, actions, liabilities, losses, damages, and costs , including reasonable attorneys’ fees, arising out of or resulting from the performance of this agreement, regardless of whether caused in part by a party indemnified hereunder, including but not limited to allegations that the SELLER and/or the SELLER’s officers, directors, agents, employees, or volunteers are liable for costs or other charges related to the remediation, clean up, or other work necessary to bring any property purchased under this agreement into compliance with deferral, state, or local environmental laws.

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A Guide to Prepare the Chapter 8 Agreement Sale Package

The undersigned hereby agree to the terms and conditions of this agreement and are duly authorized to sign for said agencies.

Note: If more than one executed copy is required, add the following statement above the signature block:

This document is being executed in counterpart each of which constitutes an original

ATTEST: ______________________________________ By: ________________________________ PURCHASER

ATTEST: ______________________________________ By: ________________________________ CLERK OF THE BOARD OF SUPERVISORS

By: ________________________________ By: ________________________________ DEPUTY

Note: If the purchaser is the State or the county and is located within the boundaries of a city, add this signature block:

Pursuant to the provisions of Revenue and Taxation Code section 3775, the governing body of the City of (city) hereby agrees to the selling price as provided in this agreement.

ATTEST: CITY OF

---

________________________________ By: ________________________________ DEPUTY

Note: If the purchaser is the State or the county, use this signature block for the State Controller:

Pursuant to the provisions of Revenue and Taxation Code section 3775, the Controller agrees to the selling price hereinbefore set forth and, pursuant to the provisions of section 3795, approves the foregoing agreement this this (day) day of (month), (year) is approved.

MALIA M. COHEN, CALIFORNIA STATE CONTROLLER By:____________________________________________

Note: For agreements with agencies other than the State or the county, use this signature block for the State Controller:

Pursuant to the provisions of Revenue and Taxation Code section 3795, the Controller approves the foregoing agreement this this (day) day of (month), (year) is approved.

MALIA M. COHEN, CALIFORNIA STATE CONTROLLER By:____________________________________________

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A Guide to Prepare the Chapter 8 Agreement Sale Package

Non-profit Agreement Sample This agreement is made this (day) day of (month), (year) by and between the (county) County Board of Supervisors and (purchasing entity), a nonprofit corporation organized in accordance with provisions of California law. The County (“SELLER”), subject to the State Controller’s approval, does hereby agree to sell to the nonprofit corporation (“PURCHASER”) the real property described in Exhibit ‘A’ of this agreement.

As set forth in Purchaser’s Articles of Incorporation within Exhibit ‘A’ of this agreement, the PURCHASER is formed for the purpose of either rehabilitating or constructing dwellings and selling to, or otherwise using the property to serve, qualified low-income persons as defined in Health and Safety Code section 50093, or for dedication of that vacant land to public use pursuant to the provisions of Division 1, Part 6, Chapter 8 of the California Revenue and Taxation Code.

The real property situated within said county, hereinafter set forth and described in Exhibit ‘A’ of this agreement, is tax defaulted and is subject to the power of sale by the tax collector of said county for the nonpayment of taxes.

The PURCHASER agrees to pay the sum of $(price) and which is tendered in the form of (cash/negotiable paper/etc) with this document.

The following is a sample listing of terms and conditions, any of which may be included in Chapter 8 Sale Agreements at the discretion of the County. This list is not inclusive and pursuant to California Revenue and Taxation Code sections 3795.5 and 3794.3, the board of supervisors may establish conditions of sale, including reporting, to ensure maximum benefit to low-income persons.

Consultation with county counsel is recommended before establishing conditions of sale

In consideration of the mutual promises herein set forth, the parties mutually agree as follows:

Any violations of the terms and conditions of this agreement shall constitute an event of default.

Use by Low Income Persons. Low income persons are defined in Health and Safety Code section 50093. The property may not be transferred, sold, leased, rented, or made use of by persons who do not qualify as low income persons as defined by Health and Safety Code section 50093.

Approval by the State Controller. California Revenue and Taxation Code section 3795 requires this agreement to be submitted to and approved by the California State Controller before it becomes final. This agreement is not in effect until the California State Controller’s authorization is received and the noticing process is complete.

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A Guide to Prepare the Chapter 8 Agreement Sale Package

Purchase and Evidence of Title. Within 21 days from the effective date of this agreement, the PURCHASER agrees to pay a sum sufficient to redeem the delinquent property taxes pursuant to California Revenue and Taxation Code section 3793.1(a) or a reduced price in accordance with section 3793.1(b). The approval and notice process will determine the effective date of the sale and the final purchase price. The PURCHASER agrees to pay the amount specified in Exhibit ‘’ for the properties described in Exhibit ‘’. Payment shall be in cash or certified funds payable to the (county) County Tax Collector. Upon receipt of said sums by the Tax Collector, the Tax Collector shall execute and record a deed conveying the title to said property to PURCHASER and after recordation the deeds will be returned to the purchaser by the County Clerk/Recorder.

Use of Residential Property. In the case of residential property, PURCHASER (the nonprofit organization) shall rehabilitate and sell or rent to, or otherwise use the property to serve, low- income persons. The property may not be transferred, sold, leased, rented, or made use of by persons who do not qualify as low income persons as defined by Health and Safety Code section 50093.

Intent of Use. The public purpose and specified intent of use set forth by the PURCHASER for the purchased property is as follows:_______________________________________

Review of Use. The intended use of each property involving a low-income housing project will be reviewed by the appropriate county housing agency and determined, in writing, to be consistent and in compliance with the local jurisdiction’s consolidated plan or community development plan. A detailed list of the intended use for each property will be included as Exhibit ‘__’.

Time to Completion. The PURCHASER agrees to complete the rehabilitation or construction of residential dwellings on the property and sale within a reasonable period of time and the maximum benefit to low-income persons. The reasonable period of time for completion determined by the PURCHASER and the SELLER is specified in Exhibit ‘__’.

Code Compliance. The PURCHASER shall maintain any existing structures and ensure compliance with all applicable county code provisions (e.g., substandard housing, building, and zoning). Within six months of transfer of title, the PURCHASER shall remediate any outstanding code violations and correct and repair any dangerous, unsightly, or blighted condition which reduces the aesthetic and property values in the neighborhood, is offensive to the senses, or is detrimental to the health, safety, and welfare of the public. Within six months of transfer of title, the PURCHASER shall also remove overgrown, diseased, dead, or decayed trees, weeds, or other vegetation, exterior trash, debris, junk, rubbish, graffiti, and abandoned and/or inoperable vehicles. The PURCHASER shall also ensure the property and all building entry points including doorways, windows, or other openings are closed, maintained, or secured to prevent entry by persons or animals. The property shall be fenced if appropriate.

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A Guide to Prepare the Chapter 8 Agreement Sale Package

Contractors. The PURCHASER will ensure that the contractor building or rehabilitating the housing is a licensed general contractor in good standing with the California Contractor State Licensing Board, and a member of the development team. The contractor shall have constructed or rehabilitated, as appropriate to the Chapter 8 request, at least two residential dwellings listing their dates of completion and their complete addresses. The contactor shall not be a member of the board of the nonprofit corporation.

Manufactured Homes. In the case of manufactured homes, the PURCHASER shall ensure that the manufactured home is attached to a permanent foundation.

Current Incorporation. The PURCHASER shall be currently incorporated and shall provide a copy of its articles of incorporation filed with the Secretary of State, stating that the organization is incorporated for at least one of the purposes specified in the California Revenue and Taxation Code section 3772.5(b).

Progress Updates. The PURCHASER shall report back to the (county) Board of Supervisors regarding the progress of the low-income housing project at the following intervals:

When building or rehabilitation begins; If rehabilitation or construction of residential dwellings on the property will not be completed by the agreed upon timeline and a modification of the rehabilitation/construction timeline is needed; When the property is leased with documentation that the leasee is qualified for low-income housing; When the property is sold with documentation for the sale of the home including: o That the home was sold to a qualified low-income person(s), o That the sale price of the house is in compliance with the accepted maximum estimated sales prices established by the United States Department of Housing and Urban Development for low-income household incomes pursuant to Health and Safety Code section 50093.

Non-discrimination. The PURCHASER shall not discriminate in the selection of low-income persons because of color, race, creed, national origin, religion, gender, sexual orientation, age, or physical or mental handicap in accordance with Title VI of the Civil rights Act of 1964 (42 U.S.C. section 2000D), the Americans with Disabilities Act (42 U.S.C. section 12131 et seq.), and all other applicable laws and regulations prohibiting discrimination. Purchaser shall include this nondiscrimination provision in all contracts for services in the construction, rehabilitation and sale of the property related to this agreement.

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Default: The PURCHASER shall fully comply with the terms and conditions of this agreement. The following shall constitute events of default to the purchase agreement:

Any violation of the terms and conditions of this agreement; Transfer and/or lease of the property to a person who does not qualify as a low-income person as defined in Health and Safety Code section 50093; In the event that a petition of bankruptcy shall be filed by or against the PURCHASER, and the petition has not been dismissed or discharged within 180 days of its filing; Failure to maintain the property improvements and the property to the minimum housing standards of the County, to keep the property free from any accumulation of debris, waste materials and/or to maintain all landscaping in a healthy condition; Failure to complete the rehabilitation of construction of the residential dwelling(s) on the property within the reasonable period of time as agreed upon in the purchase agreement.

Breach: In the event the PURCHASER is in default, the SELLER shall give written notice of default to the PURCHASER specifying the event of default. The PURCHASER must commence to cure, correct, or remedy the default within five days of receipt of notice of default and must fully cure, correct, or remedy the default within 30 days of receipt of notice of default.

If the PURCHASER does not cure the default the PURCHASER shall take one of the

following actions:

Transfer the property to a different Nonprofit Organization that qualifies pursuant to California Revenue and Taxation Code section 3772.5 and that is agreed to by the SELLER; Transfer the property to the SELLER at the sole discretion of the SELLER; At the sole discretion of the SELLER, the SELLER may permit the PURCHASER to sell the property for costs incurred to a new PURCHASER (including a for-profit entity) that agrees to continue the completion of the rehabilitation or construction of residential dwellings on the property to low-income person as outlined in the Terms and Conditions of the Agreement.

In the event of transfer of the property as a result of inability to fully cure default, the

PURCHASER shall relinquish any claim to the property without any compensation or refund. The PURCHASER shall pay any and all costs required to cure a default including the transfer of property.

In addition to any other rights or remedies, the SELLER may institute legal action to cure, correct, or remedy any default, to recover damages for any default, or to obtain any other

remedy consistent with the purpose of the purchase agreement. Such legal action must be instituted in the Superior Court of (county) County.

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A Guide to Prepare the Chapter 8 Agreement Sale Package

No Representation. The SELLER makes no representation concerning the condition of title to the subject property. The SELLER does not warrant title to the property or make any representations concerning the title. Additionally, the SELLER makes no representation concerning the physical condition of the subject property and the PURCHASER acknowledges that it is not relying upon any statements or representations of the SELLER concerning the subject property and is purchasing the subject property in ‘as is’ condition.

Other Expenses: The PURCHASER shall pay the other expenses in addition to the purchase price of the property, including but not limited to: the cost of giving notice of the notice of agreement, the cost of publishing or posting the notice of agreement, the cost of proceeding to obtain a clear title to the property, and the expenses incurred in the payment, compromise, or other method of removal of any liens or adverse claims against the property.

Real Property Taxes, Fiscal Year (current)-(current): The purchase price does not include the property taxes for Fiscal Year (current)-(current). The PURCHASER shall be responsible for payment in full of the Fiscal Year (current)-(current) property taxes for the property in addition to the purchase price.

Treated as a Single Transaction: The SELLER shall sell the property(s) listed in Exhibit ‘__’ as a single transaction to the PURCHASER in consideration of the receipt of the payments listed in this agreement.

Redemption: If any of the properties listed in Exhibit ‘__’ are redeemed prior to the effective date of this agreement, this agreement shall be null and void as to that property. Notwithstanding the foregoing, the agreement shall be binding and shall remain in full force and effect with respect to any remaining property (s).

Void/Incomplete Purchase: This agreement shall become null and void and the right of redemption restored upon the failure of the PURCHASER to comply with the terms and conditions of this agreement prior to the tax deed recordation. The PURCHASER will be required to reimburse the Tax Collector for the costs for producing notice, publication, and actual costs incurred for preparing and conducting the Chapter 8 agreement sale if these expenses have already been incurred.

Indemnity: The PURCHASER shall indemnify the SELLER from and against any and all liability, loss, costs, damages, attorney’s fees, and other expenses which the SELLER may sustain or incur by reasons of a challenge to validity of the tax default sale of the property described in Exhibit ‘__’. Pursuant to California Revenue and Taxation Code section 3809, a proceeding based on alleged invalidity or irregularity of any proceeding instituted can only be commenced within one year after the date of execution of the Tax Collector’s deed.

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Environmental Condition of Property. The property acquired pursuant to this agreement may contain hazardous wastes, toxic substances, or other substances regulated by federal, state, and local agencies. The SELLER in no way whatsoever assumes any responsibility, implied or otherwise, and makes no representations that the property(s) are in compliance with federal, state, or local laws governing such substances. The SELLER in no way assumes any responsibility, implied or otherwise, for any costs or liability of any kind imposed upon or voluntarily assumed by the PURCHASER or any other owner to remediate, clean up, or otherwise bring into compliance according to federal, state, or local environmental laws property purchased.

CERCLA. The SELLER and the PURCHASER agree that under United States Code, title 42, section 9601(20,d), the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) expressly excludes local and state governments from clean up liability for properties they acquire as a result of tax delinquencies. Notwithstanding this provision, the PURCHASER shall defend, indemnify, and hold harmless the SELLER, its board of supervisors, officers, claims, actions, liabilities, losses, damages, and costs , including reasonable attorneys’ fees, arising out of or resulting from the performance of this agreement, regardless of whether caused in part by a party indemnified hereunder, including but not limited to allegations that the SELLER and/or the SELLER’s officers, directors, agents, employees, or volunteers are liable for costs or other charges related to the remediation, clean up, or other work necessary to bring any property purchased under this agreement into compliance with deferral, state, or local environmental laws.

This document is being executed in counterpart, each of which constitutes an original.

ATTEST: BOARD OF SUPERVISORS:

---

By ______________________________ _________________________________ Chairman

---

---

A California Corporation A California Corporation

By ______________________________ By ______________________________ Secretary President/Vice-President

Pursuant to the provisions of California Revenue and Taxation Code section 3795, the foregoing agreement on this (day) day of (month), (year) is approved.

MALIA M. COHEN, CALIFORNIA STATE CONTROLLER By ____________________________________

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Exhibit A Sample

FIRST YEAR DEFAULT PURCHASE

DESCRIPTION DEFAULTED NUMBER PRICE

INTENDED USE

NOTE: TO BE MADE PART OF EACH CHAPTER 8 AGREEMENT

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Chapter 8 Purchase Resolution

General Information:

An official document submitted by the purchaser that shows the authority to make the purchase has been approved by the governing body of the agency or nonprofit. Double check the parcel number(s) and purchase price to ensure accuracy. Unless this is an objection to a parcel(s) that is scheduled for a Chapter 7 sale, the purchaser’s resolution SHOULD NOT include the word “objection.”

Sources:

Revenue and Taxation Code §3695

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Chapter 8 Purchase Resolution Sample

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County Board of Supervisors Resolution or Minute Order

General Information:

A copy of the minutes order, resolution or similar official document from a public hearing showing the county board of supervisors has approved the proposed sale. Make sure to double check the parcel number(s) and purchase price to ensure accuracy.

Sources:

Revenue and Taxation Code §3794.3

County Tax Collectors’ Reference Manual: Chapter 8000 Sections 8340-8346

County Tax Sale Procedural Manual Chapter II: Chapter 8 Tax Sales, Section 8: Requesting Approval from the Board of Supervisors

State Controller’s Office Sample Form SCO 8-02.2 – Request for Approval to Sell Tax Defaulted Property Subject to the Power of Sale (Chapter 8)

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County Board of Supervisors Resolution or Minute Order Sample

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Chapter 7 Tax Sale Resolution

General Information:

A copy of the county board of supervisor’s resolution approving the Chapter 7 tax-sale. This document is only needed when the parcel(s) requested for purchase is currently approved and scheduled for a Chapter 7 tax sale. The list of parcels approved must be included showing the parcels in question (see sample)

Sources:

Revenue and Taxation Code §3694, §3698

County Tax Collectors’ Reference Manual: Chapter 8000 Sections 8210-8217

County Tax Sale Procedural Manual Chapter I: Chapter 7 Tax Sales, Section 7: Requesting Approval from the Board of Supervisors Chapter II: Chapter 8 Tax Sales, Section 5: Public Agency Application Requirements Chapter II: Chapter 8 Tax Sales, Section 7: Nonprofit Organization Application Requirements

State Controller's Office Sample Forms SCO 8-02 – Request for Approval to Sell Tax Defaulted Property Subject to the Power of Sale (Chapter 7) SCO 8-03 – Authorization and Report of Sales

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Chapter 7 Tax Sale Resolution Sample

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Publication

General Information:

A copy of the notice of intended sale as published in the newspaper with affidavit of publication dates attached. This document is only needed when the parcel(s) requested for purchase is currently approved and scheduled for a Chapter 7 tax sale. If the publication is large, it is required to only send the specific pages listing the parcels in question (see sample).

Sources:

Revenue and Taxation Code §3702

County Tax Collectors’ Reference Manual: Chapter 8000 Section 8222

County Tax Collectors’ Reference Manual: Chapter 9000 Sections 9500-9504, 9510-9512

County Tax Sale Procedural Manual Chapter II: Chapter 8 Tax Sales, Section 15: Publishing/ Posting Notice of Sale

State Controller's Office Sample Form SCO 9-02 – Affidavit of Posting Notice of (Public Auction/ Sealed Bid) Sale

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Publication Sample

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Articles of Incorporation

General Information:

Outline of the objectives or purpose of the nonprofit. For the purpose of Chapter 8 tax sales, the nonprofit’s objectives must be consistent with one or more of the requirements defined in §3772.5. This document is required for NON-PROFITS ONLY. Copy submitted must be certified by the Secretary of State. All amendments filed must be included.

Sources

Revenue and Taxation Code §3772.5, §3795.5

Corporations Code §5130-§5134

County Tax Collectors’ Reference Manual: Chapter 8000 Sections 8313, 8325, 8344, and 8351

County Tax Sale Procedural Manual Chapter II: Chapter 8 Tax Sales, Section 7: Nonprofit Organization Application Requirements

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Articles of Incorporation Sample

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Intended Use Statement

General Information:

This document is required for NON-PROFITS ONLY. The non-profit must be incorporated for reasons similar to the public purpose proposed in the intended use statement. This document can be an official letter from the purchasing non-profit, or it can be included on the application submitted to the tax collector.

Sources:

Revenue and Taxation Code §3772.5, §3795.5

County Tax Collectors’ Reference Manual: Chapter 8000 Sections 8313, 8325, and 8351

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Intended Use Statement Sample

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Contact Information

State Controller’s Office Local Government Programs and Services Division Government Compensation and Property Tax Standards Section Post Office Box 942850 Sacramento, California 94250-5875 propertytax@sco.ca.gov

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