Prior to enactment of this new law, it has been standard practice in commercial real estate transactions to note the amount of documentary transfer tax via an unrecorded declaration to prevent the final purchase price from being readily accessible. This practice had been allowed by the California Documentary Transfer Tax Act, where a declaration need not be recorded and can instead be attached to the deed after the permanent record has been created upon request by the submitting party.
Beginning January 1, 2015, deeds in counties that have imposed a transfer tax must include a “declaration with a statement that the consideration or value on which the tax due was computed either was, or was not, exclusive of the value of a lien or encumbrance remaining on the interest or property conveyed at the time of sale.”
The location of the property must also be shown on the face of the deed. Pending purchase or sales transactions are not exempted from this requirement.
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