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<br />Order Number: NCS-121351-B <br />Page Number: 16 <br /> <br />N017CE 1 <br /> <br />Section 12413.1 of the California Insurance Code, effective January I, 1990, requ1res that any title insurance company, undelwrJtten title company, or <br />controlled esaow company handling funds in an est:.rCNi or sub-esaow capacity, walt a specified number of days after depositing funds, before <br />recording any documents In connection with the trBnsaction or dJsbursing funds. This statute allows for funds deposited by wire transfer to be <br />disbursed the same day as deposit. In the case of cashJer's checks or certified checks, funds may be disbursed the next day after deposit. In order to <br />avoid unnecessary delays of three to seven days, or more, please use wire transfer, cashier's checks, or certified checks whenever possible. <br /> <br />If you have any questions about the effect of this new law, please contact your local Rrst American OffIce for more detaUs. <br /> <br />NOTICE rr <br /> <br />As of January 1, 1991, if the transaction which is the subject of this report will be a sale, you as a party to the transaction, may have certain tax <br />reporting and withholding obligations pursuant to the state law referred to below: <br /> <br />In accordance with SectIons 18662 aOO18668 of the Revenue and Taxation Code, a buyer may be required to withhold an amount equal to three and <br />one-thlrd percent of the sales price In the case of the disposition of California real property Interest by either: <br /> <br />1. A seller who Is an individual with a last known street address outside of California or when the disbursement instructions authorize the <br />proceeds be sent to a f1nandal Intermediary of the seller, OR <br />2. A corporate sener which has no permanent place or business in California. <br /> <br />The buyer may become subject to penalty for fanure to withhold an amount equal to the greater of 10 percent of the amount required to be withheld <br />or fIVe hundred dollars ($500). <br /> <br />However, notwithstanding any other provision Induded In the California statutes referenced above, no buyer will be required to withhold any amount or <br />be subject to penalty for failure to withhold if: <br /> <br />1. The sales price of the California real property conveyed does not exceed one hundred thousand dollars ($100,000), OR <br />2. The seller executes a written certificate, under the penalty of perjury, certifying that the seller Is a resident of California, or If a corporation, <br />has a permanent place of busIness In California, OR <br />3. The seller, who Is an indivJdual, executes a written certificate, under the penalty of perjury, that the California real property being conveyed <br />is the seller's principal residence (as defined in Section 1034 of the Internal Revenue Code). <br /> <br />The seller Is subject to penalty for knowingly filing a fraudulent certificate for the purpose of avoiding the withholding requirement. <br /> <br />The California statutes referenced above include provisions which authorize the franchIse Tax Board to grant reduced withholding and waivers from <br />withholding on a case-by-case basis. <br /> <br />The parties to this transaction should seek an attorney's, accountant's, or other tax specialist's opinion concerning the effect of this law on this <br />transaction and should not act on any statements made or omitted by the esaow or dosing officer. <br /> <br />The Seller May Request a Waiver by Contacting: <br />Franchise Tax Board <br />Withhold at Source Unit <br />P.O. Box 651 <br />Sacramento, CA 95812-0651 <br />(916) &15-4900 <br /> <br />First American Title Insurance Company <br />