What if your judgment debtor lives in the house of their deceased parent that seemed to own the house your debtor lives in? What if you cannot find any probate records, and the house is still in their parent’s name?
One of many judgment articles: I am a judgment broker, not a lawyer, and this article is my opinion based on my experience, please consult with a lawyer if you need legal advice.
Of course, you believe that the parent left your judgment debtor the house, however that is only a hunch. How can you find out for sure who owns the house now, or will in the future?
One way to determine property ownership is to pull the deed at the recorder’s office, then get the debtor in court with a debtor examination, to admit they are living there. Perhaps there is a living trust. As long as your debtor pays the taxes, nobody will be the wiser, unless somebody blows things up in your debtor’s face.
One way of discovering whose name the house lies in, is to use a professional data service. You supply the APN (assessor’s parcel number), and certain data services or any title company, will show the most recent title conveyance.
Some other things you can do to figure out who owns the house, and increase the chances that you will be paid:
1) Is there a properly filled out abstract of judgment or property lien (with the last 4 digits of the debtor’s SSN or driver’s license) recorded in the county where the parent’s house is? It is important to record an abstract, even if the debtor does not own any property, because it will attach to future interests of the debtor when title is transferred to them. If there already is an abstract recorded, that may be why the debtor has not changed title yet.
2) At the county recorder, pull a copy of the property deed and look to see who is the owner. Is the title in the name of a living trust, or just the parent’s name, or in more than one person’s name?
3) Did the deceased parent live in that house as their primary residence, or did they just own the house?
4) Double check, is there a probate file open in the county where the house is located? Even if the house is deeded to a living trust, sometimes there is a probate file for things that were not put into the trust. Did the parent own property somewhere else in another county too? There could be a probate file in that county for their primary residence.
5) Living trusts are not usually recorded anywhere, so you will have to get a copy, to see who the successor trustee(s) are. That person is responsible for administering the trust, and disbursing the property as called for in the trust. That person could potentially be held accountable for their actions or non-actions.
6) A legal action may be necessary to get a court ruling on whether your debtor owns the house. Perhaps you could then have the sheriff levy on the house (in California, under CCP 700.015), however you must be fully prepared before this is done. If you do this, it is best to contact a lawyer, get an appraisal, and a preliminary title report prior to serving the levy; so as not to delay getting your court order for the Sheriff’s auction sale.
At the court hearing, all liens on the property must be listed, along with all other relevant information. This will help the court decide to order the sale, if the parent is deceased and there is documentation showing the debtor has an interest in the property.
If the house was not transferred to a revocable living trust (if it had been, it would become irrevocable upon the death of the settlor, e.g., the parent). If the judgment amount is large; consider hiring an attorney for a limited scope of representation, to file a petition on your behalf, perhaps to have you or them administer the estate of the parent.
In California, probate code section 8461, subdivision (r), gives a judgment creditor a potential right to administer the estate of the parent, especially if they have been deceased for some time (at least a year, and a death certificate would certainly help) and no other eligible person named in section 8461 has stepped forward to take charge of marshaling the assets of the estate, which presumably would include the house.
Of course, if a judgment creditor or their attorney steps in to administer the estate, someone (most likely a family member) will squawk and one of them will step forward and administer the estate, which is all you want them to do anyway.
If nobody else does it, the debtor’s family must hire an attorney, get a bond (e.g., a $300K surety probate bond costs about $1K per year) and then do what you want – marshal the assets, sell the house (with or without the consent of the current occupant) and disburse the proceeds. Hopefully, your judgment debtor’s share of the parent’s estate will cover the amount they owe you for the judgment. The surety probate bond protects you from mischief.
It is not good when (in court) you hear, “What else have you got, Mr. creditor, do you have any proof of your allegation?”. At court, you should only bring document exhibits that the parties signed under penalty of perjury. This is because the court can take judicial notice of the existence of a document, but not necessarily the truthfulness of the document. Otherwise, the court might decide your documents are hearsay.
Becoming the administrator of an estate is not trivial, and most people should retain an attorney. If you end up being the administrator of the debtor’s parent’s estate (and presumably there was not a revocable living trust that became irrevocable upon the parent’s death), you should get unlimited authority to sell the assets of the estate, including the sale of the house (because of the Independent Administration of Estates Act), so you can use the proceeds of the sale to satisfy your judgment.