Contributed By Allen Matkins Leck Gamble Mallory & Natsis LLP
Transfer of title in California almost invariably happens through a grant deed. Exceptions would include easements or ancillary rights to real property that are often transferred through a quitclaim deed.
Transfer of full ownership (as opposed to certain partial transfers) triggers city or county transfer taxes. These forms and taxes are typically handled in escrow. The County Recorder collects taxes when the new deed is recorded. This also triggers a tax reassessment of the property.
To avoid state and federal tax withholding, transfers require the seller to disclose its domestic (or non-foreign) status by filing a declaration under the Foreign Investment in Real Property Tax Act (FIRPTA) and California Form 503-C.
There are certain California disclosure requirements in connection with a sale, which can be contractually acknowledged and/or waived, unless there is a public policy reason against it. The buyer acknowledges receipt of all seller disclosures in the purchaser agreement, in order to document satisfaction of the obligation. There are additional obligations in condominium, residential and hospitality transactions.