Tahoe Timber Trails Association incorporated in 1970 as a Mutual Benefit Corporation granted non-profit status as a 501(c)(7) social club. About 2018, Nevada County changed how it applies property tax assessments for individual members and the common areas of the Association.
For mutual benefit corporations where members have exclusive occupancy, Civil Code § 783.1 is the relevant statute. It clarifies that even though you only own a share in a corporation, your “separate interest” and your “correlative interest” in that corporation are legally considered interests in real property.
The County Assessor has the right to assess members separately in a stock cooperative or mutual benefit corporation. The legal framework that applies property taxes to the real property interests described in Civil Code § 783.1 is primarily found in the California Revenue and Taxation Code (RTC) § 2188.7
Revenue and Taxation Code (RTC) § 2188.7 is the specific property tax code that applies to mutual benefit corporations. It allows for the separate assessment of individual interests in a stock cooperative where the association/corporation owns the entire real property, and members/shareholders only have rights of exclusive occupancy (limited access to a specific unit/area) without direct fee-simple ownership of the property itself.
This section provides the mechanism for separate assessment of individual shareholders’/members’ interests for property tax purposes, even though legal title to the land and buildings remains with the cooperative corporation/association.
The interest that is to be separately assessed is the value of the right of exclusive occupancy which is transferable only concurrently with the transfer of the share or shares of stock in the corporation held by the person having such right of occupancy, together with an interest in appurtenant common areas
Under Revenue and Taxation Code § 65.1, the Assessor must reappraise only the specific unit (membership and exclusive campsite) that changes ownership. Revenue and Taxation Code § 65.1 is a critical “anti-proration” law that ensures property tax increases are targeted only at the person who recently bought into the Association, rather than being spread among all members. In a mutual benefit corporation or stock cooperative (where the association owns the entire parcel), this code creates a legal “shield” for existing members.
When a single unit in your association is sold, § 65.1(a) requires the County Assessor to reappraise only the portion that changed ownership. Even though the Association technically owns the whole campground, the law treats the sale of your membership share as a “change in ownership” of that specific unit (membership and exclusive campsite).
Under RTC § 2188.7(d), the tax on each separately assessed interest in a cooperative is entered on the secured roll, but if it goes unpaid the tax collector can treat it like unsecured-roll debt for collection. If it stays delinquent, the tax, penalties, and costs get transferred to the unsecured roll.
The association is not legally responsible for paying the taxes if the member/shareholder with the exclusive occupancy interest doesn’t pay. The lien is solely on that individual interest. The lien attaches only to the member’s specific interest — the value of their occupancy right tied to their shares — not the entire building or the corporation’s assets.
The corporation itself isn’t on the hook for an individual member’s unpaid bill. The member’s shares and occupancy rights are at risk, but the association doesn’t have to cover it out of general funds. That’s the key protection built into the statute — it keeps one person’s tax problem from dragging down the whole co-op.
The county ultimately goes after the member’s interest, not the association. The tax bill is issued against the separately assessed interest — that member’s right of exclusive occupancy tied to their shares. The statute explicitly says for co-ops the tax gets treated like unsecured property tax if it goes unpaid: it moves to the unsecured roll, and the county can pursue collection that way.
In practice, TTT Bylaws allow the Association to step in, foreclose on the non-paying member, sell their shares, and use the proceeds to cover the taxes. When the association forecloses on those shares and resells them to a new buyer, the unpaid taxes from the old owner don’t automatically transfer to the new one or the association.
The county can still chase the original owner personally (via unsecured roll collection), but they can’t go after the corporation or the new shareholder for back taxes that accrued before the resale. The new owner only becomes responsible for taxes going forward on their newly assessed interest. In short, foreclosure and resale don’t make the association or the buyer liable for the old debt — that stays with the person who didn’t pay.
For more information or to check the status of your membership tax amounts click the link below
