If the debtor owns property in California, in addition to recording an Abstract of Judgment in the county in which the real property is located, consider instructing the sheriff’s office to levy on and sell the real property. If you are successful in doing so, the sheriff will ultimately sell the property at auction to the highest bidder, and the judgment creditor can “credit bid” the amount owing on the judgment.
In order to successfully navigate the sheriff’s sale process for real property, it is important to first understand the definitions of the words “dwelling” and “homestead.” This is because the real property’s designation as a “dwelling” and/or “homestead” impacts the steps necessary to complete the sheriff’s sale.
The Code of Civil Procedure defines the words “dwelling” and “homestead.” CCP § 704.710(a) states as follows:
““Dwelling” means a place where a person resides …”
If any person lives at the real property, the property is a “dwelling” for purposes of the sheriff’s sale process. This is true regardless of whether the debtor lives at the property.
CCP § 704.710(c) states as follows, in pertinent part:
““Homestead” means the principal dwelling (1) in which the judgment debtor or the judgment debtor’s spouse resided on the date the judgment creditor’s lien attached to the dwelling, and (2) in which the judgment debtor or the judgment debtor’s spouse resided continuously thereafter until the date of the court determination that the dwelling is a homestead….”
Real property can qualify as the debtor’s “homestead” if either the debtor or the debtor’s spouse lives at the property. Importantly, the debtor cannot convert a property into his homestead merely by moving in after the sheriff has levied on the property. Rather, the debtor must reside at the property continuously from the date the judgment creditor’s lien attached to the property until the court determines whether the real property is the debtor’s homestead.
The significance of the “dwelling” and “homestead” designations will be explained in future posts.