The Mills Act protects properties that have historic value. What happens when a receiver takes control of a property that is protected by the Mills Act?
This issue is complicated for court-appointed receivers, regardless of what kind of receivership is in motion. You can’t just rehabilitate or renovate a Mills Act property. Instead, receivers must work closely with a historic preservation specialist to ensure that all changes and improvements are done in compliance with the Mills Act.
Understanding the Mills Act
The Mills Act is a California law that gives local governments the authority to enter into a contract with the owner of a historic property to provide tax relief in exchange for the continued rehabilitation and protection of the property.
Each city in the state can determine how it will implement the Mills Act.
Property owners who enter into a Mills Act contract experience property tax savings every year for the duration of the contract, which is typically a ten-year term. When the city values a property that qualifies for the Mills Act, it utilizes an income approach to the value, rather than the market approach.
The goal of the Mills Act is to give municipalities the authority to develop preservation programs that improve the community through rehabilitation, increased safety standards (including seismic safety), affordable housing, heritage tourism, and increased pride in property ownership.
Not all California counties participate in the Mills Act, but all counties have the option to do so if they choose to.
How Does a Property Qualify for the Mills Act?
A qualified historical property meets the following criteria:
- It must be privately owned
- It cannot be exempt from property taxation
- It is listed in the National Register of Historic Places or is located in a registered historic district
- It is listed on the official register of historical or agriculturally significant sites, places, or landmarks in any state, city, or county
Receivership Remedies for Mills Act Properties
Receivers may be appointed by courts to manage, rehabilitate, and sell properties that are the subject of ownership disputes, health and safety concerns, judgment debts, and other legal disputes. Dilapidated properties can still have historic value and deserve to be preserved.
When a receiver takes control of a property that is of historical value and recognized by the Mills Act, the receiver must bring in the expertise of a historic preservation consultant. This consultant can guide each step of the process, from developing the rehabilitation plan to implementing any renovations and improvements.
At Griswold Law, We’ve Worked with Historic Consultants to Ensure Compliant Remediation
We hired GPA Consulting to guide us through our receivership process that involved a Mills Act property.
Griswold Law recently navigated the renovation process of a historic theater, and we needed to make sure that the historic value of the theater was preserved each step of the way.
Consultants like the ones at GPA help us determine things like:
- How to bring the property up to code without violating its historic integrity
- Limitations and expectations for renovating and updating
- How to protect the historic value of the property from being damaged by repairs or improvements
Receivers also need to have a strong understanding of the impact of income-based assessments and their effect on property tax values.
Concerned about a Mills Act Property?
Book a consultation today to discuss the unique case you’re working on and learn how we can help.