California Government Code 27388.1 imposes a $75 recording surcharge on most real property documents filed with a county recorder, with the money going to the state’s Building Homes and Jobs Trust Fund for affordable housing. It is often mislabeled the “real estate fraud fee,” but that is a different, smaller charge under a different statute. The 27388.1 fee is mandatory statewide, applies per document up to a $225 cap per transaction and parcel, and has five specific exemptions that spare most residential sale recordings.
What You Pay and the $225 Cap
The fee is $75 per title of document, per parcel, added on top of the county’s base recording fees. If one transaction involves several recorded documents affecting the same parcel, the $75 stacks per document but stops at $225. Record a deed of trust, a subordination agreement, and a homestead declaration together on the same parcel, and you pay $225. A fourth document in that same transaction rides free of this particular charge because the ceiling has already been hit.1California Legislative Information. California Government Code 27388.1
The statute took effect January 1, 2018 as part of Senate Bill 2, the Building Homes and Jobs Act. It funds housing production, not fraud enforcement.1California Legislative Information. California Government Code 27388.1
Which Documents Trigger the Fee
The statutory language covers any document relating to real property that is required or permitted by law to be recorded, and it lists examples using “including, but not limited to.” County recorders read that language broadly. Common documents that trigger the fee include:
- Grant deeds, trustee’s deeds, and quitclaim deeds
- Deeds of trust, fictitious deeds of trust, reconveyances, and assignments of deeds of trust
- Abstracts of judgment, mechanic’s liens, and UCC financing statements
- Notices of default, requests for notice of default, and notices of trustee sale
- Declarations of homestead and abandonments of homestead
- Subordination agreements, easements, notices of completion, releases, maps, and covenants, conditions, and restrictions
Because the list is non-exhaustive, a document not named above can still be subject to the fee if it relates to real property and is being recorded.1California Legislative Information. California Government Code 27388.1
The Five Statutory Exemptions
Five categories of documents do not trigger the $75 fee. The first two are why most homebuyers never see this charge:
- Transfers where documentary transfer tax is paid under Revenue and Taxation Code 11911. This covers the bulk of arm’s-length property sales.
- Transfers of a residential dwelling to an owner-occupier, even when documentary transfer tax does not apply.
- Documents executed or recorded by the federal government under the Uniform Federal Lien Registration Act.
- Documents executed or recorded by the state, a county, a municipality, or another political subdivision. AB 110 later clarified that public agencies were never intended to pay the fee.
- Documents recorded to remove a restrictive covenant that violates California’s fair housing laws under Civil Code 12955.
Because sale-related recordings are usually exempt, the fee lands most often on refinances, lien filings, default notices, easements, and other non-sale instruments.1California Legislative Information. California Government Code 27388.1
How to Claim an Exemption
An exemption is never automatic. The person submitting the document has to include a written declaration of exemption, either on the face of the document or on a cover sheet, stating the specific reason the fee does not apply. Without that declaration, the recorder charges the $75 regardless of whether the underlying transaction actually qualifies.2The Bar Association of San Francisco. Building Homes and Jobs Act Requires New Document Recording Fees
There is no easy fix after the fact. A missing or incorrect exemption claim cannot be corrected once the document has been recorded, and no straightforward refund process exists. Title and escrow professionals handling residential sales typically build the right language into their forms. If you are recording something yourself, confirm the declaration appears and cites the correct exemption before you hand the document over the counter.
Not the Real Estate Fraud Fee
Section 27388.1 is often confused with the neighboring section 27388, which is the actual real estate fraud fee. They are separate charges with different purposes, amounts, and rules:
- Section 27388 is up to $10 per recorded real estate document. Section 27388.1 is $75 per document.
- Section 27388 is optional and requires a county board of supervisors resolution to impose. Section 27388.1 is mandatory statewide.
- Section 27388 funds county district attorneys and local law enforcement who prosecute real estate fraud, split 60/40 within the county that collected it. Section 27388.1 funds leave the county and flow to the state’s Building Homes and Jobs Trust Fund.
A recording receipt from a California county may list both charges as separate line items. Exemptions from one do not carry over to the other.3California Legislative Information. California Government Code 27388
Where the Money Goes
County recorders deduct their actual administrative costs, then remit the balance to the State Controller each quarter. A county that misses the quarterly deadline owes interest at the legal rate on the late amount. The Controller deposits the funds into the Building Homes and Jobs Trust Fund, established under Health and Safety Code 50470.1California Legislative Information. California Government Code 27388.1
From 2019 forward, 70 percent of the fund goes to local governments for housing production and preservation, with a requirement to prioritize households at or below 60 percent of area median income. The remaining 30 percent goes to the Department of Housing and Community Development for state incentive programs, the California Housing Finance Agency’s mixed-income housing program, and other affordable housing efforts.4California Legislative Information. California Health and Safety Code 50470
Who Actually Pays This in Practice
If you are buying or selling a home in a standard sale where documentary transfer tax is collected, or you are buying a residence you will live in, the $75 fee typically drops out through the first two exemptions. If you are refinancing, recording a lien, filing a notice of default, adding an easement, or handling almost any real property recording that is not a taxed transfer or an owner-occupier purchase, expect to see the $75 charge for each document, up to the $225 per-transaction ceiling on the same parcel. Check the exemption declaration before recording; check the receipt after. Those two habits are the difference between paying the correct amount and paying more than the statute requires.