Mello-Roos and Special Tax Disclosures

If your house sits inside a community facilities district, California Civil Code 1102.6b requires you, as the seller, to make a good-faith effort to get a Notice of Special Tax from each agency that levies a Mello-Roos special tax on the property, and to deliver it to the buyer. The same rule covers 1915 Act assessment bonds and contractual assessments such as PACE financing. The special tax does not end at the sale: it stays with the land, the buyer carries it forward on the property tax bill, and any unpaid installments are paid through escrow from your proceeds.

This article is part of the seller costs, net and California rules section. It describes the rule; whether a particular sale is exempt is a question for your attorney.

What is Mello-Roos?

Mello-Roos is the common name for a special tax levied by a community facilities district, formed under the Mello-Roos Community Facilities Act of 1982 (Government Code 53311 and following). Cities, counties, school districts and other agencies form these districts to pay for streets, parks, schools and ongoing services in a defined area, usually new development. The tax for each parcel is set every year under the district's Rate and Method of Apportionment, the formula adopted when the district was formed.

In Rancho Cucamonga, the city administers its own community facilities districts. Its special districts page says the special taxes are typically billed through the County of San Bernardino and appear as separate line items on the property tax bill, and it offers an address search that lists every special district on a parcel. That same page lists the city's street lighting districts, landscape maintenance districts and an assessment district, which are different charges from a Mello-Roos special tax. The district name on the bill is what tells them apart.

What does a seller have to disclose?

Civil Code 1102.6b applies when three things are true: the sale is covered by the state's residential disclosure article, the property carries a continuing Mello-Roos lien, a 1915 Act assessment or a contractual assessment, and the developer's own new-subdivision notice (Government Code 53341.5) is not the one required. Then the seller must:

1. Make a good-faith effort to obtain a Notice of Special Tax (or the assessment notice) from each levying agency.
2. Deliver that notice, or those notices, to the prospective buyer, as long as the agency makes them available.

Government Code 53340.2 tells each agency to designate an office that keeps the current roll of special taxes by parcel, estimates future levies, and furnishes the Notice of Special Tax to an owner who asks. The code lets the agency charge a small capped fee for it.

The notice can also come from a private source, and many sales handle it that way: the private report ordered for the natural hazard disclosure can include a special tax section. Under 1102.6b, that private notice has to state:

• The name of the Mello-Roos entity levying the tax
• The annual tax due for the current tax year
• The maximum tax that may be levied against the property in any year
• The percentage by which that maximum may increase each year
• The date until which the tax may be levied
• A contact phone number for the district, if one is available

For 1915 Act bonds and contractual assessments, the statute also accepts a substantially equivalent notice, including a copy of the most recent property tax bill.

When does the disclosure rule not apply?

Section 1102.6b only reaches sales covered by the disclosure article, and Civil Code 1102.2 lists the transfers that article does not cover. Among them are sales by court order, including probate court sales; foreclosure sales; transfers between co-owners; transfers to a spouse or a direct relative; and most sales by a trustee, administrator, guardian or conservator in the course of administering a trust or estate. That last exemption does not apply when the trustee of a revocable trust is a natural person who was a former owner of the house or lived in it within the past year.

An exemption from the disclosure statute does not make the tax disappear. The special tax still shows on the bill, the title report and the buyer's lender file. If you are selling as a trustee or through probate, ask the estate's attorney which disclosures to give; this page does not answer that for your file. For how court confirmation changes a probate sale, see what probate court confirmation and overbid do to a cash offer.

Does Mello-Roos go away when you sell?

No. The lien is continuing, so the levy runs with the parcel until the end date stated in the notice. The buyer pays it from the date of closing on. What changes hands at closing is:

ItemHow escrow usually handles itAmount

Current-year special tax

Prorated with the rest of the property tax bill to the closing date

-

Delinquent installments

Paid from the seller's proceeds before the buyer takes title

-

Penalties on delinquent installments

Paid with the arrears

-

Future levies

Not paid at closing; disclosed to the buyer

-

Some owners in Rancho Cucamonga's newer tracts are behind on both the mortgage and the special-tax line. When that is the situation, the arrears belong on the net sheet as their own line, and the timing questions belong with the lender and, if a notice of default has been recorded, a HUD-approved housing counselor. See selling with tax liens or unpaid property taxes.

Does Mello-Roos lower the price a buyer will pay?

Buyers price the annual cost in. Two houses of the same size in Rancho Cucamonga can carry very different yearly costs if one sits inside a community facilities district and the other does not, and a county average blends them together. That is why the comps for a house in Victoria, Terra Vista or the newer Etiwanda tracts come from houses in the same district, carrying the same tax, and not from older Cucamonga tracts or Alta Loma foothill lots without it.

The same logic holds next door. Much of Ontario Ranch is inside community facilities districts, and so are parts of College Park and The Preserve in Chino and parts of Chino Hills. The Rancho Cucamonga, Ontario, Chino and Chino Hills city pages each describe where those districts sit.

The two numbers on a special-tax house

Each house gets two numbers in writing: an as-is cash offer and an open-market read, each with the comps, the deductions and the net. On a house in a community facilities district, both columns carry the special tax the same way: the comps already reflect it, the arrears line is the same on both, and the disclosure goes to either buyer.

Listing tends to net more when the house is in good shape, there are no arrears, and the comps inside the district are recent and close; then an open-market buyer is pricing the same tax that every neighbor's buyer priced, and you keep the condition premium. The cash path tends to fit when arrears, repairs, a deadline or a tenant would eat that difference. When the open-market column wins, the written recommendation says so and you are introduced to a designated local expert, an independently licensed California agent who works your neighborhood. Mr. Cali Offers never lists a house. The open-market read is a preliminary estimate, not an appraisal; a certified appraisal, if a lender or court needs one, is referred to Mr. Cali Appraisals.

A seller's checklist for special taxes

1. Find the special-tax lines on your current property tax bill and note each district name.
2. Run your address through the city's special districts search, if your city has one, to see every district on the parcel.
3. Request the Notice of Special Tax from each designated office, or confirm that the hazard disclosure report will carry an equivalent notice.
4. Check for unpaid installments, and tell escrow early so the payoff demand includes them.
5. Deliver the notice to the buyer and keep a signed copy in the file.

For how the special-tax line sits next to the transfer tax, escrow and title on a full net sheet, see the pillar, what selling a house costs in Southern California, and what you net, and the companion article on escrow and title fees.

What this looks like in practice

These are the kinds of files that come in, described without names or figures.

• An Etiwanda owner holding a mailed offer that never mentioned the special tax. The second sheet added the arrears line and the comps from inside the district.
• A Victoria family moving out of state who wanted to know whether the special tax would hurt a listing. The comps from the same district answered it, and the recommendation was to list.
• A trustee of a Terra Vista house who asked whether the special-tax notice was required, and was referred to the trust's attorney on the exemption.

Next step

Read the cash offer vs. listing comparison, then send the address or call (909) 498-3977. There is no cost and no obligation to get the two numbers and the written report.

Sources

• California Civil Code 1102.6b (special tax and assessment disclosure): leginfo.legislature.ca.gov, accessed October 31, 2026
• California Civil Code 1102.2 (transfers the disclosure article does not cover): leginfo.legislature.ca.gov, accessed October 31, 2026
• California Civil Code 1102 (disclosure article applicability): leginfo.legislature.ca.gov, accessed October 31, 2026
• California Government Code 53340.2 (Notice of Special Tax from the levying agency): leginfo.legislature.ca.gov, accessed October 31, 2026
• California Government Code 53341.5 (subdivider's notice of special tax): leginfo.legislature.ca.gov, accessed October 31, 2026
• City of Rancho Cucamonga, Special Districts (community facilities districts and address search): cityofrc.us, accessed October 31, 2026
• San Bernardino County Assessor-Recorder-County Clerk, Document Recording: arc.sbcounty.gov, accessed October 31, 2026
• City of Chino, The Preserve: cityofchino.org, accessed September 26, 2026

Cash offers come from independent buyers and investors who buy for their own account and may resell for profit; a cash offer is generally below what the open market would bring. Any value shown is a preliminary estimate, not an appraisal. Nothing here is legal, tax or financial advice.