A lien is the right to retain possession of the property of another person until the person discharges a debt owed. A person who is owed money can put a lien on the debtor’s real property or personal property. Other options include collecting from the debtor’s wages; the debtor’s bank account or safe deposit box. The creditor can also put a lien on the proceeds of a lawsuit that a debtor has against someone else.
What Is a Judgment Lien?
A judgment lien is a type of lien that originates when a creditor wins a judgment for money damages against a debtor. The creditor will then record a lien against the debtor in the county where the debtor or their property is located. The creditor will attach the judgment as proof that they are entitled to the lien.
Lien on Real Property
A lien on real estate can involve a lien on land, a house or other structures on the property, such as an accessory dwelling unit (ADU). A lien on real property does not place a lien on the personal property within the house, such as books or furniture. When a debtor tries to sell or refinance the real property, the creditor can get paid their judgment and accrued interest from the escrow.
Escrow is an arrangement in which a third party holds an asset or funds before a transfer. An escrow bank account is typically managed by an individual’s lender. Getting a lien on real estate is viable when there is enough equity in the property to pay the lien and the cost of foreclosure.
Steps for Real Estate Lien
In California, the process of putting a lien on real estate involves multiple steps. First, the creditor must prepare an abstract of judgment. The creditor will need the debtor’s name and last known address, driver’s license number, Social Security number, and name and address to which the summons or notice of sister-state judgment was personally served or mailed.
In addition, the creditor will need the total amount of the judgment and know whether a stay of execution, or a delay in enforcing the lien, has been ordered by the court. The creditor also will need to know whether the lien is an execution lien, enforced against a property when a judgment has been rendered, or an attachment lien, ordered against a person’s property to prevent them from disposing of it in a lawsuit. The creditor must provide all of the information required on the abstract of judgment form or the lien will be invalid.
Next, the creditor should provide two copies of the abstract of judgment to the court. The clerk of court will certify the abstract. There is a $25 fee for this procedure. An individual who mails the copies should provide a self-addressed stamped envelope so the court will return the certified abstract of judgment to them.
Providing the Judgment to the County Recorder's Office
Then the creditor should provide the county recorder’s office with the certified abstract of judgment and one copy of this document. In Riverside County, the creditor should give these documents to the Riverside County Assessor-County Clerk-Recorder’s Office. There is a $20 fee for this procedure.
The county recorder will notify the debtor that the abstract of judgment has been recorded. The creditor will not get paid automatically or right away. They get paid with interest if the debtor refinances or sells the property. If the debtor owns property in multiple counties, the creditor must repeat the process for each county, but only needs to record one abstract of judgment per county, even if the debtor owns multiple properties in a single county.
Sale at Public Auction
A creditor can request that the sheriff take the debtor’s real property and sell it at public auction. The creditor should start by gathering information from the Riverside County Assessor-County Clerk-Recorder’s Office. They must determine whether there are other owners of the property and any lenders that have an interest in the property.
The creditor should ask the court to issue a writ of execution to the sheriff in Riverside County. A writ of execution is a court order that allows a sheriff’s deputy to take possession of property owned by the judgment debtor. A writ of execution is good only for 180 days.
The creditor should provide the sheriff with written instructions that include to keep the writ open for 180 days. That way the creditor can try to collect the money owed in different ways for the life of the writ. The creditor has to pay a fee for the service, which is usually about $1,000. A sheriff’s deputy will serve a notice of levy on the creditor and the debtor. If the real property is a dwelling, the creditor must ask the court for an order of sale.
Timeframe of an Order of Sale
A creditor can ask for an order of sale within 20 days of receiving notice that the levy has been made. The creditor should ask for this with a request for court order and answer. After 120 days, a sheriff’s deputy will serve a notice of sale on the debtor. The notice will be posted in a public place and on the property.
A sheriff’s deputy will serve a notice of sale on the occupant of the property if there is one. The notice is also published in the local newspaper and mailed to lien holders. The monies received from the sale must be distributed within 30 days after the sale.
Riverside County Notice of Levy
Riverside County has a specific form for notice of levy. The completed form should contain the names of the plaintiff and the defendant, as well as the court case number and the street address of the property. The creditor should attach a separate sheet containing a legal description of the property, including the street address and the assessor’s parcel number. If the property is vacant land or has no common street address, the creditor should attach an assessor’s map with the property boundary highlighted.
Defining a California Mechanics Lien
A mechanics lien is a lien filed by an unpaid contractor, subcontractor, laborer or material supplier. The individual who did work on, or provided supplies for, the house records the lien with the county recorder’s office. If a mechanics lien is left unpaid, it allows a foreclosure action, which forces the sale of the property.
A mechanics lien can be initiated by a bad action on the part of the prime contractor. If the main contractor overseeing the work has not paid the subcontractors, laborers or suppliers, the parties who have not received payment can file a lien. The homeowner is responsible for payment even if they already paid the prime contractor, so a lien can result in double payment for the same job. A recorded lien can affect an owner’s ability to borrow against, refinance or sell the real property.
There are specific rules as to the timing of filing a mechanics lien. In order to file a mechanics lien, a subcontractor or supplier must serve a preliminary 20-day notice upon the owner, general contractor and construction lender. A direct contractor, or entity who contracted directly with the property owner, must file a claim of lien 90 days after completing the work or 60 days after the owner records a notice of completion or cessation. Other claimants must file a claim of lien 90 days after completing the work or 30 days after the owner records a notice of completion or cessation.
Conditional Waiver and Release
A release of a lien can be conditional or unconditional. A conditional waiver and release is only effective when the claimant is actually paid. A person owed money, or a lien claimant, can give evidence of payment by their endorsement on a single check or joint check paid by the bank or written acknowledgement of the payment. A release can be provided upon a progress payment or a final payment.
Riverside County Claim of Lien
Riverside County has a specific form for a mechanics lien. The form requires a brief description of the property and a general description of the work performed or materials furnished. The contractor must also provide the name and address of the owner or reputed owner of the property.
Getting a Property Lien Release
A lien release is a release of the debt by the contractor who performed work on the property or a lender. A claimant provides a lien release when the debtor has fully repaid the debt. If the debtor got a loan from the claimant, the total debt usually includes any interest incurred.
A claimant usually provides a written release to the debtor after the payment clears. If a debtor does not receive a lien release, they should submit a request to the claimant for proof that the loan has been satisfied. In California, a lien release is not binding unless the claimant signs and delivers a waiver and release. A form signed by the claimant or their authorized agent is effective to release the owner of the real property, the construction lender and the surety, or guarantor, in case of a payment bond.
Riverside County Lien or Encumbrance Release
Riverside County has a specific form for release of a mechanics lien. The form should contain a description of the real property that was encumbered. A notary public completes the certificate and notarizes it. The notary only verifies the identity of the person who signed the document, not the validity of the document.
A Lien on Another Lawsuit
Getting a lien on proceeds from a lawsuit that a debtor has against someone else is only possible if the debtor recovers from the lawsuit. The first step for a creditor who wants to access such proceeds is to ask the court to issue an abstract of judgment. The creditor must then prepare a notice of lien.
The creditor should file these two documents with the court where the debtor’s lawsuit is pending. (The lawsuit may not be in the same county as the real property.) The creditor should then personally serve or mail copies of the documents to all of the parties in the debtor’s lawsuit.
Getting Legal Advice
A creditor should request legal advice and counsel from an attorney with experience in real property law. The court cannot assist a creditor in preparing a lien because such action constitutes legal advice.
Removal of a lien usually starts with the party that recorded the lien. This party must fill out the release of lien form. A property owner who believes a lien was wrongly placed on their property should contact a creditor to request that the lien be removed. If the creditor will not remove the lien, the property owner should hire an attorney.
Liens on Personal Property
A creditor can request that the sheriff take the debtor’s personal property and sell it at public auction to pay the debt. Personal property can include items in the home and on the land, such as computers or books. An item on real property is deemed to be a fixture, or part of the property if the item is attached to the land by roots, like trees; or imbedded in it, like walls; or permanently resting on it, like buildings; or permanently attached to what is permanent, with means like cement, plaster or nails.
Often the cost of seizure and sale of personal property is worth more than the property itself. The creditor should estimate the value of the personal property before proceeding with a request to seize it. The process for placing a lien on personal property includes asking the court to issue a writ of execution, giving the sheriff’s deputy written instructions, and having a notice of levy served on the debtor. The sheriff’s deputy makes a demand for the property when serving the notice of levy.
The sheriff’s deputy tells the debtor that the debtor may be liable for attorney fees and costs. The sheriff’s deputy will not forcibly take personal property. If the debtor does not deliver the property, the sheriff’s deputy takes no further action. They pursue further legal action by seizing or forcing a sale of the property.
- California Courts: Collect From the Debtor's Property
- Assessor, County Clerk, Recorder, of Riverside County: Mechanics' Lien
- Assessor, County Clerk, Recorder, of Riverside County: Release of Mechanics' Lien
- California Civil Code: Sections 3046 to 3066, Other Liens
- Department of Consumer Affairs, Contractors State License Board: Understanding Mechanics Liens
- Department of Consumer Affairs, Contractors State License Board: Conditional and Unconditional Waiver and Release Forms
- California Courts: Abstract of Judgment
- Department of Consumer Affairs, Contractors State License Board: What Is a Mechanics Lien?
- County of Riverside: Assessor-County Clerk-Recorder
- Assessor, County Clerk, Recorder, of Riverside County: Master FAQs
- California Civil Code: Sections 654 to 663, Nature of Property
- Riverside County Sheriff's Department: Writ of Execution (Real Property)
- Riverside County Sheriff's Department: Levy Upon the Debtor’s Real Property, Instructions to the Sheriff of Riverside County
- Department of Consumer Affairs, Contractors State License Board: What if a Mechanics Lien Is Filed on Your Property?
- California Courts: Collecting the Judgment
- A lien cannot be filed unless you have won a previous claim against the debtor.
- If the lien is satisfied by the debtor you must file a Acknowledgement of Satisfaction Judgment, form EJ-100 with the court. You must mail or take a certified copy of it to the county recorder's office where the lien is filed nad have the lien removed.
- A lien is a lengthy process in which you may not see the money for years. It should be a last resort.
- If the lien is not satisfied pursue further legal action by seizing or forcing sale of property.
Jessica Zimmer is a journalist and attorney based in northern California. She has practiced in a wide variety of fields, including criminal defense, property law, immigration, employment law, and family law.