Judgment Liens Against Real Property in California – Part 2

In California, Abstracts of Judgment are one of judgment creditors’ most effective judgment enforcement tools. This entry discusses certain issues regarding Abstracts of Judgment.

In general, a properly recorded Abstract of Judgment attaches to all real property interests of the judgment debtor in the county where the lien is recorded.  CCP § 697.340(a).  However, the judgment lien usually does not attach to the following interests of the debtor:

1. Lease payments made to the debtor.  However, lease payments owing to the debtor can be reached by seeking an assignment order or levying on such lease payments.  See CCP § 700.170.
2. Lease interests with unexpired terms of less than two years.
3. A beneficiary’s interest under a trust.
4. The debtor’s homestead exemption for a declared homestead.  See CCP § 704.950(a).
5. Assets of the debtor’s probate estate.  See CCP § 686.020.
6. Assets of the debtor’s trust estate after the debtor’s death.  See Prob.C. § 19300.

With respect to homestead exemptions, a judgment lien does not extend to the amount of the debtor’s homestead exemption if the debtor previously recorded a Declaration of Homestead, but the judgment lien does attach to any excess above the amount of the homestead exemption plus all senior liens against the property.  See CCP § 704.950(c).

Regarding community property assets, an Abstract of Judgment attaches to the interests of both spouses in community real property.  See CCP §§ 695.020, 697.310.

Regarding property held in joint tenancy, an Abstract of Judgment reaches only the debtor’s interest in real property held in joint tenancy, and the judgment lien does not automatically sever the joint tenancy. This means that, if the debtor joint tenant dies before the other joint tenant, the surviving joint tenant takes the property free and clear of the judgment lien.  Dang v. Smith (2010) 190 Cal.App.4th 646, 659-660. 

Regarding fraudulently transferred property, a fraudulent transfer of property may be ignored by the judgment creditor and the property may be levied upon directly. See Civ.C. § 3439.07. Often times, a judgment lien reaches the interest of a judgment debtor in property that has been fraudulently transferred, even if the Abstract of Judgment was recorded after the fraudulent transfer. However, this typically does not apply when the property has been transferred to a bona fide purchaser without knowledge of the Abstract of Judgment.