• Datta Khalsa

Escape From Santa Cruz?

Here’s a little story that happened recently in Santa Cruz County. The names have been changed to keep the privacy of the parties involved.

Our protagonists, let’s call them Jack and Jill, bought some land in the hills in 1977 with a couple of old barns and corrals and over time they turned the property into a small vineyard.

Jack and Jill didn’t have enough money to build a new house, so they took the larger barn and made a house out of it, where they lived happily for the next 10 years, permit-free. In 1987 they decided to build a real house, so they had the County come out to evaluate where a septic tank could be put and in the process the old barn got red-tagged. That was the first and last time they had the County come up to the property until 18 years later, in 2001 when they decided to do a second remodel, this time with the help of an architect and a builder, adding a kitchen and a bedroom, and finally got the red tag removed.

After the inspector left, they expanded on their home within the original footprint, adding an upstairs with a second bedroom and bath plus a yoga room. They connected the existing decks, and also added a detached 400-500 SF art studio with a deck, which never quite got finished out. These kinds of things happen up in the mountains. Pleased with their improved living space, Jack and Jill also expanded on the second barn, turning it into a wine processing room and tasting room with an office, adding a couple sinks along the way. As with the other building, they stayed within the footprint, but raised the roof and added an upstairs, along with a deck in the back.

Time passed and they eventually decided to sell their happy home and let the proceeds fund their retirement. Their idea went largely according to plan, with the home drawing multiple offers, and selling last July for well over a Million Dollars. This left them free to drive off into the sunset in their RV to explore the country as nomads and settle down somewhere less expensive, unfettered by the cares of real estate ownership in Santa Cruz County—like high property taxes for instance. Jack and Jill had successfully escaped the cost of living amidst increasingly expensive economic conditions here and had moved on to the next phase of their life…or so they thought.

Then in September, they started receiving notices from the County Tax collector that they owed something called “Escape Taxes” for unpermitted improvements that they had added to the property. Apparently at some point while the home was on the market, or during the course of the Buyer’s due diligence process, the Assessor became aware of Jack and Jill’s industrious add-ons to the property and concluded that they had added value above and beyond what they were paying taxes for. What’s more, according to statute, the Assessor was billing them retroactively for their past 4 years of untaxed improvements. (To Be Continued…)

Due to space constraints, we are unable to print the full article in this week’s issue of Good Times. To view the conclusion of this story, you can email Datta, visit his FaceBook page or wait until his next column is published.

4 views

© 2019 by Main Street Realtors