RCRC, together with the California Association of County Treasurers and Tax Collectors, is co-sponsoring Assembly Bill 2705 authored by Assemblymember Diane Dixon (R-Newport Beach). This measure seeks to establish important consumer protections and simplifies the process for an interested party to receive the excess proceeds from the sale of a tax-defaulted property.
Specifically, AB 2705 will protect consumers by establishing a uniform statewide framework for agreements to locate, recover, deliver, or assist in filing excess proceeds claims, including disclosures that the consumer may file their claim directly with the county for no cost, and information on how to do so. The bill would also require written agreements between the parties, prohibit the collection of fees prior to the approval and payment of a claim, and limit fees to no more than 10% of the excess proceeds awarded for those who do choose to file their claim with the assistance of another party.
Current law allows any party of interest in a tax-defaulted property sold at auction to file a claim with the county for excess proceeds of more than $150 within one year of the tax collector’s deed being recorded. Private “asset finder” companies have moved into this space, offering a “middle man” service to consumers to file these claims, on which they collect a fee, when consumers are able to file a claim with the county themselves free of charge. In many cases, these companies charge significant or excessive fees for what is largely an administrative process, and consumers may not be aware that they can recover these funds on their own at no cost.
RCRC supports AB 2705 to provide consistent statewide standards governing these practices. Modeled after existing safeguards in state unclaimed property law, these provisions provide a tested and balanced framework to protect consumers while still allowing legitimate service providers to operate.
Introduced on February 20, AB 2705 will be heard in the Assembly Revenue & Taxation Committee on Monday, April 27. RCRC’s most recent letter can be found HERE.
RCRC encourages counties to send support letters to the Assembly Revenue & Taxation Committee. A template is available HERE.
Counties are highly encouraged to submit the letter through the legislative portal (see here). For assistance or additional information, please contact RCRC Senior Policy Advocate, Sarah Dukett.