Legal Question in Real Estate Law in California

How to Create Lien on RE to Avoid Suit

I offered to sell valuable jewelry (75K) for a close relative- while in transit to a potential buyer I lost the items. They were not insured and she is threatening me with a suit. She mentioned that if I agree to create a lien on her behalf on my home that she will not pursue an action-she will recoup when the home is sold. Is this even possible? There's a 30k mortgage and a 5K judgement lien currently on the home.

Thank You


Asked on 1/12/03, 1:31 am

3 Answers from Attorneys

Lyle Johnson Bedi and Johnson Attorneys at Law

Re: How to Create Lien on RE to Avoid Suit

You should contact an attorney regarding your circumstances. Depending on the circumstances you may not owe the potential buyer anything. Also if you have home owner's insurance the insurer may provide a defense, even if it does not have to cover the loss.

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Answered on 1/15/03, 2:16 am
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: How to Create Lien on RE to Avoid Suit

Yes, it is certainly possible. The lien thus created would be junior to the existing liens, but your friend would be paid ahead of any proceeds of sale going to you.

I recommend exercising some caution with respect to the $75,000 alleged value. The quick-sale or wholesale value of jewelry is often a fraction of appraised value. Some jewelry has lost value in recent years. I don't know where the $75,000 figure comes from, but if I were representing you I would recommend settling for a lesser value unless the friend has some proof of the current market value.

Also, since the circumstances of loss (not given in your question) could involve criminal activity, I would suggest you make a police report giving as much identifying information as possible, and provide in the note and deed of trust that if the jewelry is recovered the note will be canceled and your home reconveyed.

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Answered on 1/13/03, 2:43 pm
Larry Rothman Larry Rothman & Associates

Re: How to Create Lien on RE to Avoid Suit

a note and deed of trust can be prepared and we can assist you.

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Answered on 1/12/03, 12:39 pm


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