Marin County supervisors have rescinded the tax sale of a property in Tiburon, escalating a showdown with the buyer.
County financial managers said selling the parcel — a common area belonging to the Tiburon View Homeowners Association — at a public auction last March was a mistake and should be reversed. The purchaser, AssetRenew, a Wyoming limited liability company formed on March 11, 2024, disagreed.
RELATED: Bay Area property sold at auction for $6,600 by mistake. New owners want $1 million to get it back.
County supervisors voted unanimously to rescind the sale on Nov. 5, but because AssetRenew challenged the decision, the supervisors conducted a second hearing on Tuesday and reaffirmed their earlier decision.
Marin County reverses sale of property that was mistakenly auctioned off for $6,000
“AssetRenew is trying to take advantage of what amounts to a clerical error,” Richard Zuromski, the association’s attorney, said at the hearing. “It’s seeking a windfall from my clients based on that error.”
The common area includes a pool, gardens, a recreation area and laundry machines that are used by seven association members living on lots surrounding the Circle Drive property.
Zuromski has said that AssetRenew “demanded over $1 million for the common area parcel” and threatened to evict the association from the parcel should its demand not be met. AssetRenew paid $6,600 for the parcel.
AssetRenew’s principal, Derek Leffers, could not be reached for comment. In a correspondence with the county prior to Tuesday’s meeting, AssetRenew stated that if the supervisors rescinded the purchase, it would “file an appeal and take this case to the county judge for resolution.”
Sandra Kacharos, the county’s assistant director of finance, said AssetRenew “does not have any legal standing to overturn the board’s decision to rescind a tax sale.”
During the hearing Tuesday, Kacharos recounted how the erroneous sale occurred.
The assessed value of the common area is only $1 because the real value of the area is distributed among the association members. However, because the common area was assigned an assessor parcel number, 034-182-13, to identify it, other taxing agencies authorized by ballot measures and regulations submitted direct charges. Direct charges may be collected by the county tax collector on behalf of a taxing agency at the same time as other county property taxes.
The Belvedere Tiburon Library, the Marin Emergency Radio Authority and the San Francisco Bay Restoration Authority all submitted modest direct charges to the tax collector for the common area to pay. From 2012 to 2018, the area accumulated $1,606 in unpaid taxes, which triggered the tax sale.
According to Zuromski, the tax bill for the common area was sent initially to the association’s manager, Bayside Management and Leasing, which paid it along with the tax bills for the other seven association members.
Bayside Management moved its office from Mill Valley to Sausalito in 2010, and the company submitted a change-of-address notification to the U.S. Postal Service. For reasons unknown to the association, the tax bill for the common area parcel was not forwarded to Bayside’s new address.
Kacharos has said that under state law, a U.S. Postal Service notification does not change an address for tax purposes. The owner of record must submit a change of address to the county assessor.
Kacharos told supervisors on Tuesday that regardless of the details, the state’s revenue and tax code “prohibits a tax lien from attaching solely to a common area.”
“A property tax lien can only attach to each separately owned lot and that lot’s proportionate interest in that common area,” she said. “Therefore the parcel should not have been sold.”
Susan Barilich, an attorney representing AssetRenew, contested Kacharos’ interpretation of the law. She cited the Davis-Stirling Act of 1986, which set out rules for the creation, management and operation of common interest developments, including homeowners associations.
“The Davis-Stirling Act remains important for the decision here in that it does clearly allow taxation of the common area,” Barilich said.
In an email sent to supervisors prior to the meeting, Barilich also wrote that the members of the Tiburon View Homeowners Association “simply have an ‘easement of enjoyment’ which entails no specific ownership interest” over the common area. She said the common area is not “held in common or through ownership of shares of stock or membership in an owners’ association.”
Barilich did not respond to a request for further comment on Thursday.
During the public comment of the supervisors’ meeting, Zuromski responded, “When you buy a condominium or a townhome, you don’t separately purchase the pool and the laundry facilities. You buy the common area with your parcel. The purchase price is what you’re taxed on.”