Legal Question in Real Estate Law in California
bank excepted "short sale offer," when title was pulled a judgment was located. Seller stated she did not know. she co-signed on a rental property and the tenant failed to fulfill lease agreement. Does the judgment follow the seller or stay on the house. Second, if the house goes to auction is it automatic that the junior lien is eliminated.
1 Answer from Attorneys
The answer to the first question is that a judgment lien attaches to the debtor's nonexempt interest in title and stays on the house when it is sold,and the new owner's title will be subject to the lien. See Code of Civil Procedure sections 697.390 and 695.070. If the house had been under a declared homestead, a calculation might be necessary to determine if there were then, or afterward, any nonexempt equity to which the judgment lien has attached. This can get a bit technical and the safe posture is to assume the judgment lien will come with the property until shown otherwise, and by all means get title insurance that covers this.
If the house is sold at a trustee's sale, the winning bidder will receive a trustee's deed that delivers title free and clear of all liens that were junior to the interest of the foreclosing creditor. I cannot think of any exceptions when the sale is regular in all respects and the IRS has received the prior notice it requires.