Legal Question in Real Estate Law in California

Re: How to apply a lien on a house

Well, this is close to the right approach, but maybe not quite close enough.

The most common way to lend money secured by real property in California is to use two instruments, a note and a deed of trust. The deed of trust is recorded, and it will make some reference to the note, but rarely if ever to my knowledge is the note itself recorded.

Here, there is (apparently) only one instrument, a promissory note granting the holder a security interest in the real property. So, you don't have a deed of trust situation at all, there is no trustee and no power of sale.

If the note is sufficient to meet the criteria to be a mortgage, and the county recorder of the county where the property is situated finds that the note is recordable, then you can record it, and if it has an adequate legal description of the property and is recorded and indexed properly, you will have probably perfected the security interest you wanted to have, i.e., you'll have an enforceable lien.

However, the problem is that the note may not be in proper form to constitute a valid mortgage or the be recordable, or the legal description of the property may be inaccurate or deficient.

A further problem is that the promissory note may contain terms and other information that neither you nor the borrower want to insert into a permanent public record, for all to read into eternity.

If you and the borrower are still on good terms, I would recommend having a lawyer or title company assist you in replacing the note with a more conventional note and deed of trust. One huge advantage of using a deed of trust is that you can foreclose by trustee's sale rather than having to file a lawsuit for judicial foreclosure.