When real estate-owning defendants get sued, there is a chance they will give away, transfer, or sell their property, in an attempt to avoid paying the upcoming final judgment. When the lawsuit involves real estate ownership, one tool to use is a Lis Pendens, a document used to temporarily cloud the title of a defendant’s property.
This article is my opinion, and not legal advice. I am a judgment broker, and am not a lawyer. If you ever need any legal advice or a strategy to use, please contact a lawyer.
When a lawsuit does not involve the ownership of the defendant’s real estate property, a Lis Pendens is not usually appropriate. This is because pre-judgment, the plaintiff will have only an unsecured security interest in the defendant’s property; and is not, and probably will not, be on the title to the defendant’s property.
When a plaintiff sues and their defendant owns property, and no lien has been recorded, they are an unsecured creditor. After getting their judgment, any liens they later record will be junior to any prior liens recorded against the property. However, after the lawsuit starts, the plaintiff or more likely their attorney, can request from the court a prejudgment lien on the defendant’s property, before the judgment is rendered.
In California, this kind of prejudgment lien is called a pre-judgment writ of attachment. The plaintiff is usually required to post a bond in case they do not prevail in their lawsuit. This might be called something different in other states. A plaintiff or their attorney, applies to the court for a pre-judgment writ of attachment. These are not granted automatically, because one must show evidence to the judge to demonstrate that they would likely win their lawsuit. If the judge believes that the evidence looks strong, and especially if the defendant’s previous actions indicate they might try something sneaky, or that the judgment is for fraud; they will usually grant leave to get a pre-judgment writ of attachment on the defendant’s property.
Prejudgment writs of attachments are relatively complicated procedures. However, they can happen relatively quickly to create a security interest in the defendant’s property while the legal action is pending. Of course, the defendant can file for bankruptcy protection at any time, which stops almost all litigations.
As far as I know, there is not any court or Judicial Council forms, for pre-judgment writs of attachment. One needs to properly draft their application, declaration, memorandum of points and authorities, and a proposed order. These are like most other motions which propose to “move” the court to take some action.
In pre-judgment writ of attachment situations, you are asking for a leave of the court, because a judge signs an order granting leave for you to do something. Usually, the cost of applying for this type of motion is low, because the primary fees to start the lawsuit have already been paid. Usually, but not always, a hearing is required, and often pre-judgment writ of attachments can be obtained with an Ex-Parte hearing.
No matter what pre-judgment attachment procedures are called in your state, one can retain a lawyer to seek a preliminary injunction and a temporary restraining order. This will help keep the defendant from conveying (e.g. giving away, selling, transmuting or otherwise alienating) or hypothecating (pledging as collateral for a loan or otherwise giving a security interest in) their real property until such time as the judgment is won and a conventional lien is recorded, or the lawsuit is dismissed or lost.
If you win your judgment, and then secure a property lien, it is usually not easy to sell your judgment debtor’s property, especially their residence. Be sure to check your local homestead laws, and consult a lawyer if you want to attempt this.