Mello-Roos tax check

A city, county, school district, or other local agency can form a CFD to pay for public facilities or added services. The special tax may support roads, schools, parks, utilities, fire service, or other work named in the district papers. It is not part of the one-percent base property tax.

The tax follows the parcel after a sale. It is also a lien on the property. If it goes unpaid, the local agency can use a faster foreclosure process to collect it. Treat the line as a real housing cost, not an optional neighborhood fee.

Get this year's levy, the current maximum levy, and the rule for later years. The statutory Notice of Special Tax can name the current maximum, an annual increase, the facilities-tax end year, and any service tax that can continue. The Rate and Method of Apportionment gives the full formula.

Suppose this year's CFD line is $2,400 and the current maximum is $3,000. The present budget is $200 a month, while the present maximum is $250 a month. If the formula permits a two-percent increase, next year's maximum could rise by $60. That does not mean the district must levy the maximum.

A facilities tax may have a final year tied to bonds or construction. A service tax for maintenance, fire protection, or another ongoing service can have a different end date or no matching bond end date. Read both parts before calling the tax temporary.

Some formulas let an owner prepay all or part of a facilities obligation. Others do not, and a service tax may remain after a facilities prepayment. Ask the named CFD office for a written prepayment quote and the charge that would still remain.

The levying agency must name an office that keeps the parcel roll and gives estimates of future special-tax levies. Bring the parcel number, CFD name, tax bill, and planned closing date. Ask for the current levy, maximum levy, escalation rule, end year, prepayment terms, and delinquency status.

The county bill tells you what is charged now. The district formula tells you what may change. A lender estimate or real-estate listing can miss both the maximum and a direct-charge line, so keep the district's written reply with the purchase file.

Some subdivision sales come with a short right to cancel. The window is three days after personal delivery of the tax notice. It is five days after mailing. The buyer must cancel in writing. The notice and sale papers should say how and when to do it.

This rule does not give every buyer a cooling-off period. Many resales fall outside the subdivision rule. In those deals, the purchase contract and other disclosure laws control. Read the notice before you count on a date.