The OSC Hearing and the Sheriff’s Sale: Part III of the Real Property Levy Series
This is Part III of my series on forcing a sheriff’s sale of real property in California. Part I covers whether a real property levy is even viable, and Part II walks through obtaining the drive-by appraisal, the litigation guarantee, and preparing and filing the ex parte application. Part II ended with the notice of hearing and application served on all occupants and posted on the property itself. This post picks up from there — the hearing itself, and what it takes to actually get the property sold. For context on where a real property levy fits among the other judgment enforcement tools available to a California creditor, see that overview.
What Happens at the OSC Hearing
When you file your application, the court doesn’t just grant it — it sets a hearing and issues an order to show cause directing the judgment debtor to explain why an order for sale shouldn’t be made. That hearing has to take place within 45 days of when you filed the application, and you have to serve the OSC, the application, and the notice of hearing on the debtor at least 30 days before the hearing date (CCP § 704.770).
If nothing is contested — no exemption claim, no valuation fight — the hearing is short. The judge confirms service was proper, reviews the application, and signs the order for sale. If the debtor contests the homestead exemption or disputes the fair market value number, the hearing becomes a mini-trial, with declarations and sometimes live testimony on residency and value.
The Homestead Exemption Standard
Who has the burden of proof at the hearing comes down to one thing that should have been addressed in your ex parte application: what the county tax assessor’s records show. If the assessor’s records reflect a current homeowner’s or disabled veteran’s exemption on the property, the burden shifts to the judgment creditor to prove the dwelling is not a homestead. If there is no such exemption on file with the assessor, the burden falls on the person claiming the homestead exemption to prove the property qualifies as a homestead under California law. Merely owning the property is not enough; the claimant must establish that the property was their principal dwelling. (CCP § 704.780.) If your application already identifies the applicable homestead exemption amount, the burden shifts again, and the party disputing that amount must prove it is incorrect.
Pull the assessor’s exemption records before filing your application. That record determines who carries the burden of proof, and your application should reflect it. Once the court resolves the homestead issue, it also determines the property’s fair market value and, if appropriate, enters an order directing the sale subject to the applicable homestead exemption. If the numbers show the sale will not produce sufficient proceeds after paying senior liens, the homestead exemption, and satisfying the 90-percent fair market value requirement discussed in Part I, the court will deny the application for an order of sale..
If the Debtor Doesn’t Show Up
A no-show at the hearing does not close the issue. CCP § 704.790 still requires proper service of the actual order — not just the earlier notice — on the debtor and their spouse (personally or by mail) and on an occupant (personally, or by posting on the property if no one is there). Proof of that service must be filed with both the court and the sheriff before the sale can proceed. Without it, the sheriff will not sell.
The statute also gives the debtor a second window: within 10 days after being served with notice of the order, the debtor or their spouse can file a declaration with the levying officer stating their absence from the hearing was due to mistake, inadvertence, surprise, or excusable neglect, and that they wish to assert the homestead exemption. That reopens the exemption question at a new hearing, which the court must set within 20 days. Service is the only part of this stage within your control — get it right, because it is the only thing that can undo a default order.
What You Need to Get to the Sheriff After the Order
The court clerk is required to transmit a certified copy of the order to the levying officer, and to the clerk of the court where the judgment was entered if that’s a different county (CCP § 704.780(c)). This is also the point where the priority you established when you first recorded the abstract of judgment actually pays off — the sale proceeds get distributed according to that lien position. Do not wait on the clerk’s timeline. Send the certified order to the sheriff’s civil unit directly, with the notice-of-sale package attached: the legal description, the fair market value and minimum bid figure from your appraisal and litigation guarantee, the mailing list of lienholders entitled to notice, and any remaining sale fee the county requires before it will calendar the date. Sheriff’s civil units are backlogged as a rule and will not act on an incomplete package.
As a matter of practice, I always follow up with a phone call to confirm the sheriff’s office has everything it needs. Most counties designate a specific deputy or clerk to handle real property levies, and a five-minute call can prevent weeks of unnecessary delay.
Recoverable Costs of Marketing the Sale
The statutory notice of sale is bare minimum — one posting on the property, one small legal notice in a newspaper. That is rarely enough to draw real bidding interest. CCP § 701.550 permits the judgment creditor to advertise the sale beyond the statutory minimum — in the classified or other advertising section of a newspaper or other publication — and recover the reasonable cost of doing so. That means photos, a broader publication buy, or other targeted marketing aimed at maximizing the number of bidders on auction day. More bidders means a stronger sale price, which increases the recovery on the judgment.
Using Your Judgment to Credit Bid at the Auction
On sale day, the judgment creditor does not need a cashier’s check for the full amount to bid. CCP § 701.590(b) allows a bid by written receipt crediting all or part of what’s owed on the judgment — the only cash required is for the sheriff’s outstanding costs and any preferred claims, which must be paid in cash or certified funds. That allows a credit bid up to the judgment balance plus accrued interest and costs, with no cash outlay beyond those fees. If the winning bid on the real property exceeds $5,000, the high bidder can also elect to treat it as a credit transaction: deposit at least $5,000 or 10%, whichever is greater, then pay the balance within 10 days.
What’s Next
That covers the ground between the order for sale and the auction itself. Each of these six pieces — the OSC hearing, contesting or defending a homestead claim, a debtor no-show, what the sheriff requires, marketing the sale, and credit bidding — warrants its own standalone guide. Those will follow in this series.
Technical Enforcement Guide Series
This article is part of a series of Technical Enforcement Guides discussing practical tools used in California judgment enforcement.
Bryan M. Grundon has focused on judgment collection and post-judgment enforcement for more than 20 years, representing creditors in enforcement matters throughout California.
