Mello-Roos and Special Assessment Notice
Reviewed by Jimi (James) Allyn · Founder, Verity NHD · 37-year real estate professional
When a property sits in a Mello-Roos Community Facilities District or a 1915 Act assessment district, the seller must deliver a notice of that special tax or assessment.
What it is
Mello-Roos is a financing mechanism, and the disclosure exists because it produces a property tax bill that looks nothing like what a buyer expects from Proposition 13 math.
Under the Mello-Roos Community Facilities Act, a local agency can form a Community Facilities District and levy a special tax on properties within it to fund infrastructure — streets, schools, parks, water systems — typically in newer subdivisions. The special tax is separate from the ad valorem property tax, it is not limited by the 1% Prop 13 rate, and it can escalate annually under the formula in the district's documents. A parallel scheme, the Improvement Bond Act of 1915, funds improvements through assessments secured by liens on the benefited parcels.
Civil Code section 1102.6b requires the seller of residential property with one to four units to make a good-faith effort to obtain a notice of special tax from the levying agency and deliver it to the prospective buyer. The notice identifies the district, the current tax or assessment amount, and the terms — including the fact that the amount may increase and how long it runs.
The disclosure obligation is about obtaining the official notice, not estimating the number yourself. The seller may satisfy section 1102.6b with the notice issued by the levying agency under Government Code section 53340.2 or section 53754, or with a substantially equivalent notice from a private source so long as it contains the statutory elements — section 1102.6b(c)–(d).
This page is general information, not legal advice — confirm current C.A.R. form revisions.
Who signs it
The seller obtains and delivers the notice; the buyer acknowledges receipt. Agents typically coordinate the request, but the statute frames it as the seller's good-faith obligation to obtain the notice from the district or agency that levies the tax.
Note that the levying agency is the authoritative source. A tax bill line item tells you a special tax exists; the notice tells the buyer what it is, how it escalates, and when it ends. Those last two facts are what buyers actually need.
When it's due
Before transfer of title, delivered with the seller's disclosure package. Because the notice has to come from the levying agency, request it early — agency turnaround varies and this is a frequent cause of late disclosure.
On cancellation rights, read the two schemes separately. Section 1102.6b itself contains no cancellation clause. The three-day (in person) / five-day (mail) termination right lives in Government Code section 53341.5(c), and it applies to sales by the subdivider. On a resale, the notice is simply a disclosure required by Article 1.5, so where it is delivered after the offer the general Civil Code section 1102.3 window governs — three days in person, five days by mail, five days by electronic record. A willful violation of section 53341.5 carries the buyer's actual damages plus a fine of up to $500 under section 53341.5(e).
If it's missed
The buyer's exposure is financial and ongoing: a special tax that adds meaningfully to the annual bill, escalates on a schedule, and continues for decades. When a buyer discovers that after closing, the claim is easy to quantify — which makes it easy to bring.
It is also a common source of loan and appraisal friction. A buyer qualified on a payment that omitted a special tax may find the total obligation outside their approved range, and unwinding that mid-escrow is unpleasant for everyone.
Missing notice does not undo the transfer; it leaves the seller and agents facing the difference.
Common mistakes
Assuming "new subdivision" means "no special taxes." It usually means the opposite. New construction is the classic CFD setting.
Quoting the current amount and stopping there. Buyers need the escalation formula and the term. That is the part that changes their affordability.
Confusing this with supplemental property taxes. Different statutes, different mechanisms, both surprising to buyers.
Relying only on the tax bill. Get the agency notice.
Requesting the notice at week three of a 30-day escrow. Request it at listing.
Statute
- Cal. Civ. Code § 1102.6b (notice of special tax / assessment)
- Mello-Roos Community Facilities Act, Gov. Code § 53311 et seq.
- Improvement Bond Act of 1915, Sts. & Hy. Code § 8500 et seq.
This page is general information, not legal advice. Confirm current forms with C.A.R. and the DRE.
How Verity handles it
Our tax section reports the property tax picture for the parcel, including special tax and assessment line items where they appear in the county data, so you know at listing whether a district notice needs to be requested. The official notice must still be obtained from the levying agency.