Posting a property bond can get a person out of jail when raising cash is difficult. This type of bond, however, poses some specific risks.
When you don't have cash or a bondsman to bail someone out of jail, pledging property as collateral may be an option. A lot depends on state laws, the amount of equity in the property and the decision of the judge presiding over the case. While posting property can secure the release of someone in jail, the process can be complicated and pose the risk of losing the property under certain circumstances.
Using Property as Collateral
In states where property bonds are allowed, the types of property that can be used for collateral include homes, vacation homes, land and commercial buildings. As a general rule, if the court determines that there is more than enough equity to cover the amount of the bond, it will consider the property for use as collateral.
Additional considerations may include market conditions for selling the property and the types of liens that have been placed against the title. Conditions that could result in the denial of this type of bond by the court would be a property located in an area with depressed prices and low demand. These conditions could make it difficult for the court to sell the property to recover the amount of the bond if the defendant jumps bail.
- Depending on the state or county laws that govern the court, [there may be a requirement that property taxes be paid in full](http://www.ventura.courts.ca.gov/local_forms/vn195.pdf) to be approved for a property bond. In these jurisdictions, if the court finds a lien placed against the pledged property for past due taxes, the property bond will likely be denied.
Starting the Process
The process of posting a property bond usually starts with a court hearing to determine the owners of the property, its value and the equity built up. Documents required for this process typically include the deed, a title history, a list of current lien holders, mortgage statements and a professional appraisal of the property. All property owners listed on the deed are normally required to attend the hearing.
Setting the Property Value
The court will subtract the amount owed on the mortgages from the appraised value to determine the amount of equity in the property. Due to the time required and the complexities of selling a property, courts usually require an equity amount that is 150 to 200 percent of amount of the bond. If the proper documentation is filed and the court determines that the equity in the property is sufficient to secure the bond, paperwork will be drawn to detail the terms of the property bond, which must be signed by all owners listed on the deed.
Property Bond Risk
If a property meets the conditions to be posted for collateral, the court will file a lien on the property for the amount of the bond. This lien will be released if the defendant attends all required court dates and the case is closed. There is, however, significant risk to the property owners if the defendant decides to skip bail, as the contract for property bonds gives the court the right to start foreclosure proceedings at its discretion. At this point, if the property owner cannot come up with cash to cover the bond, the court can foreclose and then sell the property to cover the amount of the bail.
- The guilt or innocence of the defendant is not a factor in getting a lien released. As long as the defendant was present all required hearings, the court will release the lien when the case is closed.