The Seller's Repair Deposit & Escape Tax
Understanding what gets deducted from your proceeds and when you will receive your final check.
In Leisure World, escrow requires a specific amount of money to be held back from your total sale proceeds to ensure all Mutual requirements are met. The RD varies from Mutual to Mutual. This deposit guarantees that any mandatory property repairs are fully paid for before the new buyer takes over.
What gets deducted from your funds?
1. Unfinished Pre-Listing Inspection (PLI) Repairs
If the required work has not been completed by the seller, the inspector writes work orders to have the work completed prior to the close of escrow. Once the deadline passes, the seller can no longer do any repairs. The cost will be deducted from the seller's Repair Deposit (RD).
2. Mutual Contractor Invoices
Seller's costs for required repairs are compiled and sent to the GRF Finance Department to be paid from the seller's RD. The Mutual's physical properties department will use this money to cover the labor and materials for anything you did not fix yourself.
3. The Escape Tax (For Trust & Estate Sales)
When a Leisure World qualified member passes away, it can trigger a reassessment by the county tax assessor, resulting in an "escape assessment" (a catch-up tax bill). To ensure these taxes are paid, Escrow will hold back an Escape Tax from the sale proceeds. This guarantees that any pending property taxes are fully squared away before the final funds are released to the estate or heirs.
It takes time for the Mutual and the county to compile all the final invoices and clear the tax records. Because of this, you will not receive this portion of your money on the actual day your home closes.
The remaining balance is refunded to the seller (or the estate) generally within 45 to 60 days after the close of escrow.