A California property is owned by an LLC with two members who each hold a 50% interest. Member A sells his 50% interest to a new investor. Under California Revenue and Taxation Code, does this transfer trigger a Prop 13 reassessment of the property?
Correct Answer
B) No, because only transfers of more than 50% of the entity's interests (cumulatively) trigger reassessment, and this is exactly 50%
Under California Revenue and Taxation Code §64(c), a change in ownership occurs when more than 50% of the ownership interests in a legal entity are cumulatively transferred. A transfer of exactly 50% does not exceed the threshold and therefore does not trigger a reassessment. If any additional interest were transferred (even 0.1% more), it would cross the threshold and trigger reassessment.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Actual notice means a person has direct, personal knowledge of a fact or interest in real property. This can come from being told, seeing something firsthand, or any form of direct awareness.
Adverse possession is a legal doctrine that allows a person to claim ownership of land by occupying it continuously for a statutory period under specific conditions, without the true owner's permission.
A bargain and sale deed implies that the grantor holds title and possession of the property but does not include warranties against encumbrances or title defects.
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- → A buyer records a deed at the county recorder's office. What is the primary purpose of recording?
- → A buyer drives past the property and sees someone other than the seller living there and maintaining the yard. This observation should put the buyer on what type of notice?
- → In a covered purchase transaction, the borrower receives a final form showing the loan terms, cash to close, and settlement charges shortly before consummation. What form is this?
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