The OSC Hearing and Sheriff’s Sale: Part III of the Real Property Levy Series

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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.

Recording a Lis Pendens with a UVTA Lawsuit

The core theory of my practice is straightforward: the biggest factor in actually collecting a judgment is disrupting the debtor’s ability to operate normally until the judgment is addressed. Debtors do not pay because a judgment exists. They pay because the judgment has begun to interfere with the things they need to do — access their bank accounts, run their business, collect their receivables, refinance their real estate, close a pending transaction. Every enforcement tool California provides is, at bottom, a way to introduce that interference into the debtor’s day.

That frame governs how I evaluate every remedy in the toolbox, and it is the reason the lis pendens deserves a dedicated discussion in the context of a UVTA action.

The main UVTA guide walks through the statutory framework — the two theories of liability, the badges of fraud, the limitations periods, and the available remedies against the transferee. This companion piece focuses on the procedural tool that, in real property cases, often does more than any other filing to disrupt the debtor’s and transferee’s ability to operate normally while the UVTA claim is litigated: the notice of pending action.

A properly recorded lis pendens does not, as a matter of law, prevent a sale, a refinance, or any other transaction involving the property. What it does is put every subsequent buyer, lender, escrow officer, and title insurer on notice that ownership of the property is being litigated. In most cases involving a UVTA claim against real property, that is enough to freeze the property in place while the litigation proceeds — which is another way of saying it takes the debtor’s and transferee’s preferred next move off the table until they deal with the creditor.

Why the Lis Pendens Belongs in the UVTA Toolbox

A UVTA judgment against the transferee — avoidance of the transfer, attachment, or a money judgment — is only as valuable as the asset that remains available when the case concludes.

Real property is uniquely vulnerable during that window. Between the filing of the complaint and the entry of judgment, the transferee can sell to a good-faith purchaser, refinance and strip the equity, or execute a further transfer that layers additional parties between the creditor and the asset. Each of those events materially degrades the remedies the UVTA otherwise provides. A subsequent good-faith transferee for value is protected under Civil Code section 3439.08, and equity that has been pulled out through a refinance is significantly harder to recover than equity that remained in the property throughout the litigation.

The lis pendens is the mechanism that closes that window. Once recorded, it interrupts the ordinary machinery of a real estate transaction — title cannot be cleanly insured, lenders will not fund, and escrow will not close — until the underlying UVTA claim is resolved or the notice is expunged. The transferee is not enjoined from selling, but the transaction becomes commercially impractical.

That is the strategic value of the tool. It preserves the res that the UVTA remedy is designed to reach, and it does so by the mechanism that drives every effective judgment enforcement strategy: it interferes with the debtor’s and transferee’s ability to conduct their affairs normally until the judgment creditor is addressed.

A Judgment Is Not Required

One issue that is frequently overlooked in this context is standing.

Many lawyers assume that a fraudulent transfer action — and therefore a lis pendens recorded in aid of one — cannot be filed until a judgment has been entered. California law provides otherwise.

Under Civil Code section 3439.01, a “creditor” is any person who has a claim, and a “claim” includes a right to payment whether or not that right has been reduced to judgment. A contingent, disputed, unmatured, or unliquidated claim may still support relief under the UVTA. The main UVTA guide covers the standing analysis in more detail.

For lis pendens purposes, the practical consequence is significant. If the defendant in the underlying action transfers real property after the claim accrues but before judgment is entered, a UVTA action can be filed — and a lis pendens recorded — while the underlying case is still pending. Waiting until after judgment often provides the debtor additional time to refinance the property, transfer it again, dissipate the equity, or otherwise complicate collection.

The timing of the transfer should always be analyzed against the date the creditor’s claim accrued, not the date judgment was entered.

Kirkeby and the Real Property Claim Requirement

The lis pendens statute, Code of Civil Procedure section 405.20, authorizes recording only in an action asserting a “real property claim.”

For UVTA purposes, that requirement is squarely addressed by Kirkeby v. Superior Court (2004) 33 Cal.4th 642. The California Supreme Court held that an action seeking to avoid a fraudulent transfer of real property affects title to or right of possession of specific real property and therefore qualifies as a real property claim within the meaning of section 405.4.

Kirkeby matters for two reasons.

First, it means a UVTA cause of action, properly pleaded, is a sufficient predicate for recording — a threshold that will be tested if the transferee moves to expunge.

Second, it defines what “properly pleaded” means in this context. The complaint must seek relief that, if granted, would affect title to the specific parcel identified in the notice. A UVTA cause of action seeking only a money judgment against the transferee, without also seeking avoidance of the transfer of the specific property, will not clear the section 405.4 threshold. The prayer, the allegations, and the property description all have to line up.

Pleading the UVTA Case With the Motion to Expunge in Mind

Every lis pendens recorded in a UVTA case should be prepared on the assumption that a motion to expunge will follow.

Under Code of Civil Procedure sections 405.30 and 405.32, a motion to expunge generally challenges either whether the complaint asserts a qualifying real property claim (the Kirkeby question) or whether the claimant can establish, by a preponderance of the evidence, the probable validity of that claim.

Because the standard is probable validity — not the pleading standard applied on a demurrer — the complaint and supporting evidence have to do real work.

A conclusory allegation that the property was fraudulently transferred is rarely enough. The complaint should identify the specific transfer, the specific parcel, the parties to the transfer, the consideration exchanged, and the badges of fraud supported by the pre-filing investigation. Recorded deeds, chain of title, assessor’s information, and — where a judgment is already in place — testimony developed in a judgment debtor examination should be assembled before the notice is recorded, not after the motion is filed.

Two additional points are worth flagging.

Under Code of Civil Procedure section 405.38, the prevailing party on a motion to expunge is entitled to attorney’s fees and costs unless the court finds the other side acted with substantial justification. A lis pendens recorded without an adequate factual and legal basis is not a low-risk filing. The fee exposure runs against the party who recorded.

And under section 405.35, the burden on the motion is on the claimant — the party who recorded the notice — to establish both the real property claim and its probable validity. That allocation of burden reinforces why the investigation has to be substantially complete before the notice is recorded.

Practical Sequence

For a UVTA case involving real property, the sequencing I generally follow is:

  • Complete the pre-filing investigation to the point that the badges of fraud, the chain of title, and the consideration analysis are documented from public records and, where available, debtor examination testimony.
  • Draft the UVTA complaint to satisfy Kirkeby — the pleading must seek avoidance of the transfer of specifically identified real property, not only monetary relief against the transferee.
  • File the complaint.
  • Prepare, serve, and record the notice of pending action in compliance with Code of Civil Procedure sections 405.20 through 405.24, in the county where the property is located.
  • Prepare the opposition to the motion to expunge before it is filed. By the time the hearing is set, the evidentiary record supporting probable validity should already be assembled.

The main UVTA guide covers the substantive elements, the limitations analysis, and the remedies available on the merits. This piece is about the procedural tool that keeps the property in place long enough for those remedies to matter.

Judgment collection is not a passive exercise, and it is not primarily about winning the next motion. It is about compressing the debtor’s ability to operate normally until the judgment is addressed on terms the creditor can accept. Every tool in the enforcement toolbox — levies, garnishments, assignment orders, charging orders, debtor examinations, and, in the right real property case, a UVTA action with a properly recorded lis pendens — is a variation on the same theme. The debtor made a move by transferring the property. A UVTA action supported by a lis pendens is the countermove that takes the transferee’s next move off the table and puts the creditor’s judgment at the center of every decision the debtor and the transferee have to make from that point forward.

That is how judgments actually get collected.

Related Reading

If a debtor or defendant in one of your cases has transferred real property and you are evaluating whether a UVTA action with a lis pendens is the right next step, request a free judgment review and we will take a look at the facts.

Determining Senior Lien Balances After Recording an Abstract of Judgment

Recording an abstract of judgment is often the first meaningful step in turning a court judgment into real enforcement leverage. Once the abstract is recorded in the county where the debtor owns real property, the judgment becomes a lien against the debtor’s interest in that property. The lien establishes priority against later encumbrances and preserves the creditor’s ability to benefit from a refinance, sale, or other equity event.

But recording the abstract alone does not reveal whether the property actually contains recoverable equity. Most real property is already encumbered by one or more deeds of trust. Before a creditor can determine whether further enforcement activity makes economic sense, the creditor must determine the current balance owed to senior lienholders.

That information rarely appears in the public record. Determining the balance of senior liens requires a combination of title review and statutory payoff requests.

Step One: Record the Abstract of Judgment

A judgment lien against real property is created by recording an Abstract of Judgment in the county where the debtor owns real property. Once recorded, the lien attaches to the debtor’s interest in real property located in that county pursuant to Code of Civil Procedure §697.310.

Recording the abstract establishes the creditor’s priority relative to other encumbrances. Any deeds of trust recorded before the abstract will be senior to the judgment lien.

Once this occurs, the creditor becomes a junior lienholder relative to those prior encumbrances. That status is important because it allows the creditor to request payoff information from the senior lender.

Step Two: Identify Senior Liens Through Title Review

The next step is determining which liens are senior to the judgment lien. This usually begins with a title search or property profile identifying the recorded deeds of trust and other encumbrances affecting the property.

The recorded deed of trust will typically reveal the lender, the trustee, the recording date, and the original loan amount. What it will not reveal is the current payoff balance of the loan.

A deed of trust recorded many years earlier may have been partially paid down, modified, or refinanced. Without knowing the current payoff balance, it is impossible to determine whether the property contains equity that could support enforcement activity.

Understanding the priority structure of real estate liens is a critical step in evaluating execution against California real property.

Step Three: Request a Payoff Demand from the Senior Lender

California law allows a junior lienholder to request payoff information directly from the beneficiary of a deed of trust. Civil Code §2943 requires the beneficiary to provide a payoff demand statement upon written request from an “entitled person,” which includes a junior lienholder.

Once the abstract of judgment has been recorded, the creditor may send a written request for a payoff demand statement identifying the property and the deed of trust.

Under Civil Code §2943(c), the beneficiary must provide the payoff statement within twenty-one days after receiving the request.

The payoff statement typically includes the total amount required to satisfy the loan, the per diem interest amount, and any additional charges required to pay the loan in full.

Where Payoff Requests Are Typically Sent

In practice, payoff requests are often sent to more than one location to ensure the request reaches the correct department.

The request is typically sent to the beneficiary identified in the deed of trust, which is the lender that holds the loan. Because many lenders use separate servicing departments to process payoff requests, a second copy is often sent to the lender’s mortgage servicing department. Some practitioners also send a copy to the trustee identified in the deed of trust, which may forward the request through its lender contacts.

Providing a copy of the recorded abstract of judgment with the payoff request often improves response rates because it confirms the requesting party’s status as a junior lienholder.

Step Four: Evaluate Equity Before Pursuing Execution

Once the payoff information is obtained, the creditor can compare the balance of the senior liens with the estimated value of the property.

If meaningful equity exists beyond the senior liens and any applicable homestead exemption, the creditor may consider further enforcement activity. A levy on real property under a writ of execution is made by recording a notice of levy pursuant to Code of Civil Procedure §701.510.

If the property is a dwelling, the court must determine whether a sale would likely produce a bid sufficient to satisfy the homestead exemption and senior liens before ordering a sale. This determination is governed by Code of Civil Procedure §704.780.

Because that analysis depends heavily on the balance of senior liens, obtaining accurate payoff information is a critical early step in real property enforcement.

Why This Step Matters

Real property enforcement often turns on a relatively simple question: does the property contain recoverable equity?

Recording an abstract of judgment establishes the lien, but determining the balance of senior encumbrances reveals whether the lien represents a passive priority position or a meaningful enforcement opportunity.

For that reason, requesting payoff information under Civil Code §2943 is one of the most important early steps in evaluating real property enforcement.

Understanding how this process fits into the broader enforcement strategy is part of effectively enforcing a judgment against California real estate.

Abstract of Judgment in California

Judgment lien attaches to real property in California.

You’ve obtained a judgment in a civil case. If you think your judgment debtor owns real property or could potentially own real property, you need to obtain and record an abstract of judgment in the county you believe they own real property in as soon as possible.

What is an abstract of judgment?

An abstract of judgment is a document that you record to create a lien on any interest in real property your judgment debtor owns. Once properly recorded, your judgment debtor will not be able to sell or refinance the property unless they pay off the lien or get your approval to subordinate or release the lien. If you record the abstract in the county where they acquire real property after the abstract is recorded, the property will automatically be covered by the abstract. Typically, when a judgment debtor refinances or tries to sell a property, I will receive an escrow demand for a full payoff and when the sale or refinance closes, we release the lien. For more on how to remove the lien after paying off a judgment, read this blog post on removing judgment liens.

The process of recording an abstract of judgment

Once you have a judgment entered, you need to fill out the abstract of judgment form. If you know them, you’ll need to include the last four digits of any of your judgment debtors and their driver’s license number. You will submit the abstract to the court clerk’s office. If everything is in order, they will issue you a stamped abstract. You will need to take it or send it to every county you believe your judgment debtor has or might acquire real property in. You can obtain multiple abstracts of judgment at once if you need to record in several counties.

Why is it important to record an abstract as soon as possible?

It will not likely result in you getting paid immediately, but it is important to record an abstract as soon as possible because the priority of the liens in most instances is determined by the timing of recording. Meaning that most of the time, the lien recorded first in time gets paid before other liens. It will establish priority in liens if there is a short sale or foreclosure on the property or if you ever want to force an execution sale to get paid.

An abstract of judgment is an important and effective tool to collect your judgment. Interest accrues on California civil judgments at the rate of 10% per year.

If you need help recording a lien in California, contact our office HERE

Real Property Levy in California

Historic residential building with lush landscaping in California.

This is Part II of a series on forcing a sheriff’s sale of real property in California. Part I covers how to determine whether a real property levy is viable — if you have not read it, start there. This post assumes you have confirmed there is sufficient equity in the property to proceed and walks through the nuts and bolts of preparing the levy and obtaining an order for sale from the court. This process is highly technical and requires a great deal of time and patience.

The property pictured above is a home in Pleasanton, California that was sold at an execution sale directed by my office in April 2021 for $2,835,000.

Get a Drive-By Appraisal

Before you submit anything to the sheriff or the court, you need a professional estimate of the property’s fair market value. A drive-by appraisal — where a licensed appraiser evaluates the property from the exterior without interior access — gives you a defensible number to use in your ex parte application. The court requires a statement of fair market value in the application for order of sale, and a professional appraisal carries far more weight than an online estimate. It also confirms, before spending significant money on the levy process, that there is enough equity above the senior liens to make the sale worthwhile.

Order a Litigation Guarantee from a Title Company

A litigation guarantee is a report issued by a title company that identifies all liens, encumbrances, and recorded interests against the property, along with the current owners of record. You cannot accurately complete your ex parte application without knowing every lienholder, their address, and the approximate amount outstanding on each lien. This is similar to the public records search described in Part I, but a formal litigation guarantee from a title company is the more thorough and reliable tool at this stage. Order it early — title companies can take time to issue the guarantee, and you need it in hand before you can draft the ex parte application or submit the levy paperwork to the sheriff. Failing to identify and properly serve all lienholders is one of the most common reasons execution sales are challenged or set aside.

Obtain a Writ of Execution

Once you have your appraisal and litigation guarantee in hand, obtain a writ of execution for the county where the sale will take place. Make sure you have included all allowable costs and calculated the interest correctly before filing your memorandum of costs with the court. Errors at this stage can delay the entire process.

Prepare the Ex Parte Application Before You File the Levy

This is the most important timing point in the entire process. Once the sheriff records the levy, you have only 20 days to serve the ex parte application on the sheriff. Courts are not flexible on this deadline. My strong recommendation is to have the ex parte application fully drafted and ready to file before you ever submit the levy paperwork to the sheriff — that way the moment the recorded levy comes back to you, you can move immediately.

If the property is located in the same county as the judgment, you will use your existing case number. If it is in a different county, you will need to record an abstract of judgment in that county first to obtain a local case number. Prepare the abstract at the same time as the ex parte application so there are no delays.

The ex parte application must identify all lienholders, their addresses, and the outstanding balance on each lien — drawn from your litigation guarantee. It must also state whether a homestead or veteran’s exemption applies and the fair market value of the property from your appraisal.

File the Sheriff’s Levy Application

With the ex parte application drafted and ready to go, prepare the levy application for the county sheriff where the sale will occur. Each county’s application is slightly different, but it will generally require the legal description of the property — which you can find on the deed — along with the writ of execution and the applicable levy fee. Some counties require only a deposit to record the levy. Others require the full fee to conduct the sale upfront, which can amount to several thousand dollars.

The sheriff will process the levy, and if everything is in order they will record it and return it to you. That recorded levy is your signal to file immediately.

File and Serve the Ex Parte Application to Sell

File the ex parte application as soon as the recorded levy is back in your hands. It must be served on the sheriff within 20 days of the levy being recorded. See CCP § 704.750. If the application is in order and properly served, the court will set a hearing date for the motion for order to sell — that hearing must take place within 30 days of the ex parte application.

Obtain and Serve the Hearing Notice

Once the court issues the order and provides the hearing date and time, prepare a new notice of hearing. The notice of hearing and the application for sale must be personally served on all occupants of the dwelling and posted on the property itself.

Part III of this series will cover what happens at the hearing and through the sale itself. In the meantime, if you have questions about whether a real property levy is the right tool for your judgment, or want help evaluating whether your debtor has reachable assets, you can request a free judgment review.

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.

Can You Force a Sale of Real Property?

Aerial view of a large California estate with a visible law firm sign in the yard.

One of the first steps you take after obtaining a judgment is to record an abstract of judgment in each county your judgment debtor owns property. Recording an abstract establishes a lien on the property and prevents your judgment debtor from selling or refinancing their property without your consent.

In many instances once you’ve taken this step you can sit back and let the judgment accrue interest at 10% per year and wait until the judgment debtor attempts to sell or refinance property. Sometimes a more aggressive approach is warranted to force the sale of the asset. The best tool to do this is to levy the property with a writ of execution to initiate a sheriff’s sale. A sheriff’s sale is an expensive and time consuming process but if done correctly under the proper circumstances, it is a powerful tool. This post details the steps you should take to determine whether a real estate levy is a viable option for your case.

The property pictured in the header of this post is a 4 bedroom 3.5 bath home of over 6,000 square foot on .97 acres in Pleasanton (East Bay) California. It was sold by Alameda (Oakland) Sheriff’s Department on an execution sale directed by my office. It sold for over 2.5 million dollars.

A real property levy can only be used when the judgment debtor has equity in the property over the liens senior to your position on the property. Put simply: if the property is sold, all lienholders ahead of you have to be paid in full before any money can go towards the satisfaction of your judgment. You will not be able to obtain an order from the court to allow the sheriff to conduct the sale if the sale would not produce any funds to satisfy your judgment.   The first step is to determine if you would get any money from the sale of the property is to determine what liens have a higher priority than you.   To do this you should conduct a public records search to see what, if any liens are on the property recorded prior in time to the abstract of judgment you have recorded in the county where the property is located.  

When you have determined which liens are ahead of you the next step is to determine the balance of each lien.   If you have recorded an abstract on the property, Civil Code 2943(a)(5) allows you to send a letter to any senior lienholder to obtain a payoff statement of their lien within 21 days of the letter.  After you have determined the balance of the senior liens you need to determine whether a disabled veteran exemption or homestead exemption applies.  A homestead exemption is either recorded or can be claimed, if the exemption is claimed the burden of proof is on party claiming it but you must make your own decision prior to taking the next steps on whether you believe the exemption applies.  Additionally, the amount of homestead exemption differs in family circumstances and when you first obtained your lien on the property.  If the lien is first recorded prior to 2021 the amount is significantly smaller.   Next, you need a rough estimate of the Fair Market Value of the home.  Using all the information you have obtained you should have an idea of whether there is equity or not in the property and whether you want to proceed with the next very expensive steps.  If there is a homestead exemption present on the property, the sale price of the home can be no lower than 90% of the fair market value.  

If you have determined there is sufficient equity in the property to proceed, you are ready to move to the next phase. Part II of this series walks through the nuts and bolts of executing the levy — including obtaining a drive-by appraisal, ordering a litigation guarantee from a title company, and preparing the ex parte application before you ever submit the levy paperwork to the sheriff. You can read it here: How to Execute a Real Property Levy in California: A Step-by-Step Guide.

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.

How to Clear Judgment Liens to Close Real Estate Transactions

Small house model with keys on a wooden table, symbolizing real estate transactions.

The real estate, mortgage and escrow industries frequently intersect with my business when someone needs to clear a judgment lien in order to finish a refinance or sale of a home.  I have found that most of these professionals do not know how to remove a judgment lien on real property after a judgment has been satisfied.    Most of these professionals incorrectly believe it is the responsibility of the judgment creditor.

A judgment lien on real estate is created when a judgment creditor records an abstract of judgment in a county where the judgment debtor has property.  A recorded abstract of judgment also attaches to all property the judgment debtor currently owns and all after acquired property in that county. 

When a judgment is satisfied by the debtor, the judgment creditor must file with the court a satisfaction of judgment.  If the creditor has recorded an abstract it must list the counties it was recorded in and the number of the recorded document.  Once this document is filed it is to be served on the judgment debtor.    However, the filing of the satisfaction of the judgment does not release the judgment lien created by the abstract of judgment.   The judgment debtor is responsible to record the satisfaction of judgment in the county where the property is held.  To accomplish, the judgment debtor needs to obtain a certified copy of the satisfaction of judgment and take it to the county recorder’s office and pay the recording fee.