BROKER RISK MANAGEMENT
WEEKLY PRACTICE TIP
Sale Price is No Long Private
Currently, the sales price of a property can be kept from prying eyes.
The Documentary Transfer Tax Act authorizes the imposition of a Documentary Transfer Tax and for the amount of that tax, based on the sales price, to be either on the face of the Deed or on a separately affixed document. The party submitting the Deed can request, by filing a Declaration, that the amount of tax due can be shown on a separate paper affixed to the document.
This avoids putting the transfer tax on the face of the Deed, thereby preventing the news media and everyone else from learning the sales price.
But, AB 1888, which has been signed into law, repeals that portion of the law. Starting January 1, 2015, the amount of the documentary transfer tax must now appear on the face of every recorded Deed and similar documents on which the transfer tax is paid. The law states:
“A declaration of the amount of tax due, signed by the party determining the tax or his or her agent, shall appear on the face of the document…”
Revenue and Taxation Code 11933
Based on this information, it is a simple matter to determine the sales price in most cases.
PRACTICE TIP
If you have a buyer who is closing escrow after January 1, 2015 and who wants to keep the sale price confidential, be sure to advise him/her that it will no longer be possible to keep the amount of Documentary Transfer Tax off the face of the Deed, and will be accessible by anyone who investigates.
DO NOT FORWARD TO CLIENTS. This Weekly Practice Tip is for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.
© Copyright Broker Risk Management 2014 9/12/14