Leisure World Mutual 5 files tax appeal

Leisure World Mutual 5 has appealed to the Orange County Board of Supervisors to overturn the non-profit corporation’s share of a $272,948.32 tax penalty.

The appeal was not on the supervisors’ agenda for Aug. 9.

The deadline for making the second installment of Leisure World’s property taxes was Monday, April 11.

The checks for 13 of the 16 non-profit “mutuals” that make up Leisure World arrived late, apparently because the checks were not signed until April 11. They were printed out and ready for signature on Friday, April 8.

The Orange County Tax Collector’s Office imposed a 10 percent penalty on the unpaid portion of the propriety tax bill.

David Noble, one of eight directors of Mutual 5, said the appeal was filed on July 22. As reported in the June 16 issue of the Sun, Noble believed it was up to the individual mutuals to appeal the tax penalty.

Last week, Noble said lawyers representing Mutual 5 had received a letter acknowledging that the Board of Supervisors have received the appeal.

Noble said that if the board does not act on the appeal for six months, then the law deems the appeal to have been denied.

At that point, the taxpayer—in this case, Mutual 5—has another six months to go to court.

Noble said Mutual 5 is basing its appeal on the argument that the principle (the taxpayer) could not foresee that the agent (Golden Rain Foundation) would fail to pay the property tax bill on time.

Noble said a June 10 court of appeals decision could work against Mutual 5.

He said that in First American Commercial Real Estate versus the county of San Diego, the appellate court ruled that the taxpayer was responsible for the payment. Noble said the court determined that because it was within the agent’s power to avoid the delinquency, the failure to pay on time was the responsibility of the principle.

Duane Pickerell, a Sun columnist and Golden Rain Foundation critic, said there had been more than one court case like that. Pickerell predicted that the money spent on legal appeals would be wasted.

In April, Foundation officials tried to persuade the county tax collector to waive the penalty because Leisure World had always paid its property taxes on time in the past.

The Tax Collector’s Office responded with a letter to the Foundation that said payment history was not a basis for waiving the penalty.

According to the Tax Collector’s Office Web site, taxes for secured property are due Nov. 1 of each year.

The deadline for making the first installment payment is Dec. 10.

“A 10 percent penalty is added after the deadline,” the Web site said. The second installment is due Feb. 1.

The deadline for making the second payment is April 10. Because April 10, 2011 fell on a Sunday, this year’s deadline was April 11.

“A 10% penalty plus $23.00 cost is added after the deadline,” the Web site said.

Leisure World is home to roughly one-third the population of Seal Beach. The retirement community covers two of five City Council districts.