42-200.G. Real Property Temporary Exemption

Table of Contents

The Real Property Temporary Exemption section includes the following information:

 

Topic

Temporary Exemption

Completing The Lien

Agreement To Sell Property

Liens As Allowable Encumbrance

Good Faith Effort To Sell

Determining Repayable Aid

Repayable Aid Example

Out of County/ Country Property

 

 

 

Temporary Exemption

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Real property that is not otherwise excluded is eligible to a one-time only, nine-month exemption from consideration in the resource limit provided the assistance unit (AU) signs a lien and agrees to make a good faith effort to sell the property. The exemption is for nine consecutive months regardless of whether the recipient remains on aid for the full nine months.Unless the property becomes unavailable (i.e., property is tied up in litigation), the exemption period is interrupted.Once the property becomes available again, the remainder of the exemption period would resume.

 

EXAMPLE 1:Month 1, the AU agrees to the conditions of the exemption.The recipient goes off aid in the third month of the exemption.The person reapplies in month five.The exemption expires at the end of the original nine-month period.A new exemption period is not granted. The recipient is not eligible after the original nine months.

EXAMPLE†† 2: Month 1, the AU agrees to the conditions of the exemption.In month 3 the property becomes unavailable.In month 8 the property becomes available, the exemption period is to continue for 6 more months.

 

Requirements for Eligibility

 

As a condition of receiving aid during the exempt period and prior to the granting of aid, the applicant/recipient will:

 

  Grant the County a lien against the property, using a CW81 Lien Agreement Form, which will be payable to the County when the property is sold; and

  Agree in writing to begin immediately to make a good faith effort to sell the property by completing the CW82, Agreement to Sell Property.If the applicant/recipient elects not to sell the property at any time prior to the expiration of the nine months, the property will no longer be exempt from consideration in the resource limits.

 

Documents in a foreign language cannot be recorded.The CW81 in Spanish is provided for translation purposes only.The English CW81 must be the one that is signed and notarized.

Completing The Lien

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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  The Lien Agreement form (CW81) will be completed by the applicant/recipient.However the Human Services specialist (HSS) will assist if requested.NOTE:The HSS must remind the applicant/recipient that liens are legal documents. They must be completed in black ink.There must be no strikeovers or whiteout.

  The applicant/recipient shall grant the lien against the property which shall be payable to the County of San Diego when the property is sold.

  The lien must clearly contain the legal description of the property against which the lien is placed.This description can be obtained from the Tax Assessorís roll of the County where the property is located, current tax bill or Grant Deed.

  State the name(s) of the owner(s) of the property as it appears on the County Assessorís roll or the current tax bill.

  It is the applicantís/recipientís responsibility to have the lien (CW81) notarized.The applicant/recipient must appear before a notary public, obtain the notaryís signature and seal on the CW81 and return the form to the HSS within ten days.

  The HSS, upon receipt of the completed and notarized CW81, will make two copies.The original is to be sent to Revenue and Recovery (Mail Stop D-60).One copy is retained in the casefile and one copy is given to the applicant/recipient.

  No lien will be attached to the property if the encumbrance on the property is more than the assessed value.The net value of the property must be over the property limit before a lien can be attached or start a nine month period.

Agreement To Sell Property

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Each applicant completing a Lien Agreement (CW81) must also complete the Agreement to Sell Property (CW82) in duplicate.The original of the CW82 is to be filed in the case file and the copy given to the applicant. Under the terms of the agreement, the applicant/recipient agrees to make a good faith effort to sell the property. The coversheet of the CW82 explains this agreement.The applicant/recipient also agrees to try to sell the property at no more than the approximate fair market value.

 

The CW82 Coversheet includes a checkbox element that must be checked and completed by the HSS, if appropriate.This checkbox element must be checked and completed if the resource total of the AU falls below the property/resource limit in any one month of the nine-month period of exemption.

 

After the applicant has agreed to sell the property not otherwise excluded and has signed the lien agreement, the HSS shall notify the applicant, via the approval NOA, that his/her request for cash aid has been approved for nine months as long as otherwise eligible.

 

The approval NOA shall also state that at the end of nine months the assistance unit will be ineligible if the property has not been sold and the combined value of real and personal property continues to exceed the property limit.

Liens As Allowable Encumbrance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Property liens filed to repay CalWORKs grants will be counted as allowable encumbrances when determining the net equity value of the property during eligibility determinations.

 

When establishing the lien, a calculation must be made when the AU is likely to become resource eligible.

The calculation as to when the AU is likely to become resource eligible is made by subtracting the amount of the MAP, for each month during the nine-month exemption period, from the AUís net non-exempt resource total.

If the resource total falls below the property limit in any month of the nine-month period, the HSS must set a TIC to determine resource eligibility for that month.

If the net value of the recipientís total property and resources falls below the property limit at any point during the lien period, the AU becomes resource eligible and is no longer required to sell the property.

The HSS will rescind the nine month exemption period when a recipientís total property value falls below the property limit.The HSS is to mail a NOA notifying the recipient that there is no longer a nine-month time limit on his/her cash aid and the AU is no longer required to sell the property.

Good Faith Effort To Sell

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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In order to make a good faith effort to sell the property, as a condition of receiving aid during the exempt period, the applicant/recipient shall at a minimum, either:

 

List the property for sale with a licensed real estate broker at the propertyís approximate fair market value and be willing to negotiate the terms of the sale with potential buyers; or

Make an individual effort to sell the property which shall include the following:

        Advertising once a week in at least one publication of general circulation that the property is for sale; and

        Place a sign on the property indicating that the property is for sale.Whenever possible the sign should be visible from the street; and

        Offer the property for sale at its approximate fair market value; and

       Be willing to negotiate the terms of the sale with potential buyers and respond to all reasonable inquiries about the property.

In order to monitor and ensure the applicant/recipient is meeting the above criteria, the HSS may require the applicant/recipient provide dated copies of the publication the property is listed in; verify that the sale price of the property is at fair market value by viewing tax statements, contacting real estate agents in the area of the property; and obtain sworn statements that the applicant/recipient has not/will not refuse reasonable offers.

 

For purposes of this section, the fair market value of real property is the applicant/recipientís choice of:

  The assessed value of the property determined by obtaining the current property tax statement identifying the market value (land value plus improvements value) and subtracting allowable encumbrances.

  A valuation of the market value of the property obtained by the applicant/recipient from a licensed real estate broker.

 

In exceptional circumstances, such as when the property is located in a remote area and it is impossible or impractical to obtain a valuation, and the applicant/recipient believes that the assessed value is too high or too low, the HSS and the applicant/recipient may agree on the market value based upon other available information.

Determining Repayable Aid

 

 

 

 

 

 

 

 

 

 

 

 

 

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When the property becomes exempt at the end of the nine months or at anytime prior to the expiration of the exemption period, the HSS will complete the following sections of the 07-25 DSS, Repayable Aid Computation Worksheet:

 

Step

Action

1

Complete Section 1.A. 1 through 9 and Section B.

2

Complete Section 3 for each month in the exemption period.

3

Complete Section 4.B and 4.E.Sections 4.A., C., and F. will be completed by Revenue and Recovery.

4

Revenue and Recovery will complete Section 2.A. through C. to determine the amount to be collected as repayable aid.

 

If the net proceeds from the sale of property plus the value of other countable real and personal property at the beginning of the exempt period are less than the property/resource limit, there is no repayable aid.If the amount of aid paid during the exempt period exceeds the net proceeds of the sale of the property, the amount of repayable aid is the amount of the net proceeds.

 

 

Repayable Aid Example

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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EXAMPLE:The AU owns but does not occupy a house and lot.The County exempts the value of this property from the resource limit as allowed under this section.At the end of nine months, the property is sold for $29,000 and the AU had received $3,960 in aid payments.The net proceeds of the sale were determined to be $3,000.The amount of repayable aid is $3,000 because the net proceeds were less than the amount of aid paid during the exempt period.

 

The net proceeds of the sale are determined by subtracting from the gross amount of the sale the costs verified by the County to be directly related to the sale of the property, such as:

 

  Loans and liens of the seller, including the lien granted to the County under this section, that are secured by the property;

  Title insurance fees paid by the seller;

  Brokers fees paid by the seller;

  Prepaid interest or loan processing fees (points) paid by the seller;

  Appraisal fees paid by the seller;

  Fees paid by the seller to advertise the property (i.e., newspaper ads and for sale signs).

 

The HSS will inform the applicant/recipient at the time this exemption is granted, that it is a time-limited exemption, and at the end of nine months, the AU will be ineligible if the property has not been sold and the combined value of real and personal continues to exceed the property/resource limit.

Out of County/ Country Property

 

 

 

 

 

 

 

 

 

 

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Out-of-County Property

 

Real property located outside of San Diego County may be exempted under this section, if the AU agrees to all of the terms outlined in this section.Revenue and Recovery maintains reciprocal filing agreements with all California counties and will take appropriate action to file the lien.

 

Out-of-Country Property

 

Real property held by an applicant/recipient outside of the United States, will continue to be evaluated under availability regulations.If available, the HSS will allow the nine-month exemption under current regulations.The HSS will follow the procedures outlined in this section.However, the lien should not be submitted to Revenue and Recovery, the lien should be filed in the case.There are no current procedures or guidelines for filing liens for property located out of the country.Eligibility exists under this section, for nine months if all other eligibility criteria is met.