Legal Question in Real Estate Law in California

Re: legal advice

Yes. However, suing someone and being successful are two different stories. Given the amount at issue, you can file suit in Small Claims court. You will, however, have to prove your case to the satisfaction of the court.

Re: legal advice

First, business deals with relatives should be documented, just the same as deals with strangers, for the protection of the parties. Written contracts are not just helpful in lawsuits; they also serve as reminders of the parties' agreement, rights and duties even when there is no dispute and no breach.

Second, oral agreements are usually enforceable, and there is no reason you can't sue the borrower. When an agreement must be in writing to be enforced, such as in a real estate deal, the requirement of a written contract is a defense, and if the other party doesn't raise the defense, it doesn't prevent winning. This does not appear to be one of the situations where a written contract would be necessary under the so-called statute of frauds.

Due to the small size of the claim, it is idealy suited for bringing in Small Claims Court. I'd suggest buying a paperback self-help law book on "How to Win Your Case in California Small Claims Court" or the equivalent, and read up on how to prepare, file and serve a complaint, how to get ready for your court hearing, and how to collect your judgment if you win.

In court, you will need to plead and prove that you made the loan, that it is now due, and that you haven't been paid. If you have no written proof at all and the borrower denies any of these three elements, the judge will have to decide which of you is more believable, on balance. You, as plaintiff, will have the "burden of proof," meaning you have to prove you are owed the money, rather than the defendant having to prove that he doesn't owe the money.

You can't put a lien on the borrower's property until you get a judgment. Then follow your book's instructions on how to fill out an abstract of judgment form, have the court stamp it, and finally how to record it in a county where the judgment debtor has real property.

Re: legal advice

Sue? Yes.

Lien? No. Not unless you get a judgment to record as a lien.