Business & Corporate Articles

New Real Estate Recording Fees in California

On September 29, 2017, Governor Jerry Brown signed into law Senate Bill 2 “Building Homes and Jobs Act” which added section 27388.1 to the California Government Code. As of January 1, 2018, all county recorders in the State of California are required to impose a $75 fee to be paid at the time of recording for “every real estate instrument, paper, or notice required or permitted by law to be recorded, per each single transaction per single parcel of real property, not to exceed $225.” The statute defines “real estate instrument, paper or notice” to include but not be limited to “deed, grant deed, trustee’s deed, deed of trust, reconveyance, quit claim deed, fictitious deed of trust, assignment of deed of trust, request for notice of default, abstract of judgment, subordination agreement, declaration of homestead, abandonment of homestead, notice of default, release or discharge, easement, notice of trustee sale, notice of completion, UCC financing statement, mechanic’s lien, maps, and covenants conditions and restrictions.”

It is important to note that there are exceptions to this fee being charged. The $75 fee will not be charged in connection with the transfer of real property that would normally be subject to the imposition of a documentary transfer tax under Revenue & Tax Code 11911 (i.e. property sales), or in connection with a transfer of real property that is a residential dwelling to an owner-occupier (i.e. transfer between spouses residing in the same property, or transfer into a revocable trust by owner-occupiers).  

Fees collected under this new law will be sent to the State Controller for deposit into the Building Homes and Jobs Fund. According to the legislative summary of the Bill, fees collected for the calendar year of 2018 will be divided equally between local governments to use for “specified purposes” and to the Department of Housing and Community Development to assist with persons at risk of or experiencing homelessness. Starting January 1, 2019, 70% of the fees collected will be provided to local governments, and 30% will go to the department and California Housing Finance Agency for the purpose of creating mixed income multifamily residential housing for low or moderate income households.

-- Ashley Peterson

**This article is for information purposes only and does not contain or convey legal advice.  The information herein should not be relied upon in regard to any particular facts or circumstances without first consulting an attorney. Any views expressed are those of the author only and not of the SDCBA or its Business & Corporate Law Section.**