How to Conduct a Sheriff’s Sale of Real Property to Collect a Judgment in California – Part 5

If the judgment creditor has instructed the sheriff to levy on the judgment debtor’s real property, and if the real property contains a dwelling, the next critical issue is whether the debtor is entitled to a homestead exemption.  CCP § 704.780(a) sets forth the burden of proof regarding the judgment debtor’s entitlement to a homestead exemption.  In short, CCP § 704.780 provides that, if the debtor has recorded a homestead declaration, the burden of proof is on the judgment creditor (i.e., the judgment creditor must prove that the real property is not the debtor’s homestead).  On the other hand, if the debtor has not recorded a homestead declaration, the burden of proof is on the debtor.

CCP § 704.780(b) states as follows, in pertinent part:

“The court shall determine whether the dwelling is exempt.  If the court determines that the dwelling is exempt, the court shall determine the amount of the homestead exemption and the fair market value of the dwelling.  The court shall make an order for sale of the dwelling subject to the homestead exemption, unless the court determines that the sale of the dwelling would not be likely to produce a bid sufficient to satisfy any part of the amount due on the judgment pursuant to Section 704.800.  If the court determines that the dwelling is not exempt, the court shall make an order for sale of the property in the manner provided in Article 6 (commencing with Section 701.510) of Chapter 3.”

In other words, the court first will determine whether the real property is exempt (i.e., whether the real property is the debtor’s “homestead”).  If the court determines that the real property is the debtor’s homestead, the court will then analyze the amount of the homestead exemption and whether the property should be ordered sold in light of the homestead exemption, the liens superior to the creditor’s lien, and the value of the property.  If, on the other hand, the court determines that the property is not the debtor’s homestead, then the court shall make an order for sale of the property in the manner provided in Article 6 (commencing with Section 701.510) of Chapter 3.

In other words, if the real property is not the debtor’s homestead, the value of the real property and the amount owing on senior liens is immaterial. 

CCP § 701.510 states as follows, in pertinent part:

“… the levying officer shall sell all property that has been levied upon except:

(a)         Tangible personal property may not be sold until the levying officer obtains custody of the property.

(b)         Cash may not be sold unless it has a value exceeding its face value.

Real property is neither tangible personal property nor cash.  As a result, the levying officer (i.e., the sheriff) shall sell the real property if it is not the debtor’s homestead.