To secure a bail bond, most bail companies require some form of collateral as proof that you can pay if the terms of the bail are violated. Depending on the amount of the bail, the bail company might require you to use your house as collateral. Even if you have other assets that could pay off the bail, many bail companies prefer the security of having real estate as collateral. However, proceed with caution when putting up a house for bail. If the defendant misses a trial date, the bail bond company can foreclose on the house without warning.
Putting a house up as collateral for a bail bond involves entering into an agreement with a bail bond company and filing a deed of trust with the county recorder.
Understand How Bail Bonds Work
Understand bail bonds. When someone is charged with a crime, the court often issues a bail amount. This bail is the amount of money that must be paid before the defendant can be released from jail while awaiting his trial date. Bail is designed to ensure that the defendant will show up for his court dates.
In reality, the full amount of the bail is not required as payment. Instead, a percentage of the full bail, plus a promise to pay the full amount if the defendant doesn’t show up in court, serves as the bond. State law determines what percentage of the full bail is required to bond someone out of jail.
Bail Bond Companies Expect Collateral
Bonds are issued by bail bond companies that have been contracted either by or on behalf of the defendant. The company expects to be paid the percentage of the bail required by the court, plus a fee for its service, upfront by the person who is hiring it. It also expects collateral, because in issuing the bond to the court, the bond company is on the hook for the whole bail amount should the defendant skip a court date. The collateral is proof that the company could then collect that amount from you.
If you want to put your house up as collateral, you will need to make a deal with the bail bond company. It will tell you how much you have to pay upfront, the amount of the fees and interest it will charge (the bond premium), and what documentation it will require on the collateral, such as proof of ownership and property valuation. The amount of the bond premium bail bond companies can charge varies from state-to-state. Some states require a flat 10% premium, while other states list a maximum percentage or dollar amount. Several states' laws don't list a maximum.
Filing With the County Property Records Office Secures the Bail Bond Company's Interest in the Property
Next, the bail bond company will require you to formally document their interest in the home. You may need to visit your county’s property records office, which usually is at the county courthouse, to file a deed of trust making the bail company the beneficiary. Some states now allow title companies, realtors, law firms and certain other businesses to file deeds electronically, so your attorney may be able to handle this filing for you.
Once filed, the deed means the bail company has a lien on your property and can take possession of it if you default on your agreement. The bail bond company might require proof that you have made this filing before it posts the bond with the courthouse.
After the Legal Matter Has Been Resolved, Take Action to Release the Property Lien
For the duration of the case, the lien against the property remains in place while the wheels of justice spin. Once the case is completed, whatever the result, the court must officially exonerate the bond before you can remove the lien. The defendant’s attorney should request the exoneration of the bond from the court. Request a certified copy of the bond exoneration order.
Present a certified copy of the exonerated bond, the balance of any interest that has accrued over the course of the case, plus a written request that the lien be released to the bail bond company.
The final step is to collect a reconveyance — proof that the lien has been released — from the bail bond company. Typically, the company has 30 days to provide you with this documentation. If it does not release the lien, you might be able to sue it for damages.