Under Proposition 13, California property is reassessed to current market value when:
Correct Answer
D) There is a change of ownership
Under Proposition 13, property is reassessed to full market value upon a change of ownership (sale or transfer). Annual increases are otherwise capped at 2%.
Why This Is the Correct Answer
There is a change of ownership is correct. Under Proposition 13, property is reassessed to full market value upon a change of ownership (sale or transfer). Annual increases are otherwise capped at 2%. Under Proposition 13, property is reassessed to full market value upon a change of ownership (sale or transfer). Annual increases are otherwise capped at 2%.
Why the Other Options Are Wrong
Option A: Every 5 years automatically
Properties are not automatically reassessed on a cycle. Assessment stays at base year value plus 2% annual increases.
Option B: The property owner makes improvements over $50,000
Improvements can affect assessed value for the new construction portion, but Proposition 13 reassessment to current market value is triggered by change in ownership.
Option C: The county assessor requests it
The assessor cannot unilaterally reassess to market value without a triggering event like a sale.
Memory Technique
CA -> ca-foreclosure-property-servicing-and-debt-collection
Exam Tip
Legacy California general items should be used sparingly; they are kept officially supported for existing content but new MLO growth should focus more on DFPI/DRE, CFL, CRMLA, covered-loan, and usury rules.
Common Mistakes to Avoid
- -Using a national baseline answer when California has agency-specific DFPI or DRE requirements
- -Confusing CFL, CRMLA, covered-loan, usury, servicing, and DRE endorsement rules
- -Relying on legacy California state-exam or education assumptions instead of current NMLS source pages
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