Related Attorney: H. Jacob Lager
On June 4, 2014, Governor Brown signed into a law AB 1888. This bill will eliminate a common practice previously relied upon by parties who seek to keep purchase prices private.
Historically, California Revenue and Taxation Code Section 11932 required that the amount of documentary transfer tax due be displayed on the face of the recorded instrument. However, the submitting party could request that the tax amount be shown on a separate paper affixed to the document. This separate statement would not be recorded, thus protecting the purchase price from obvious publicity.
The new law will phase out this practice by requiring that any document subject to the documentary transfer tax submitted for recordation after December 31, 2014 display the tax due on the document’s face.
Investors and service providers accustomed to privacy in real estate deals should be made aware of this change before the end of the year.
A copy of AB 1888 can be found here.