Legal Question in Real Estate Law in California

You will file a complaint and a document called a lis pendens to let potential purchasers that there is litigation regarding property.

This answer does not create an attorney client relationship. If you need forther assistance, please email or call.

I'm assuming by "property" you mean real property (real estate), as opposed to personal property.

Step one would be for a lawyer to examine the agreement to determine whether it is a note and deed of trust, a valid mortgage, a pseudo-mortgage, or simply a contractual promise (or maybe nothing at all). This will determine whether it is enforceable, and how.

Most people who take real estate as collateral for a loan will insist upon a promissory note secured by a deed of trust. This permits foreclosure without going to court. Sometimes, however, the instrument lacks the language necessary to allow an out-of-court sale. Then it becomes necessary to take the borrower to court to obtain a judgment and other orders to enforce the lien.

I agree with the previous answer that the next steps after determining your rights under your agreement would be to (1) prepare, file and serve a lawsuit, probably asking for judicial foreclosure of the property; and (2) promptly thereafter to prepare, record, file and serve a so-called "notice of pendency of action" which is the California statutory term for what almost everyone else calls by its legal Latin name, "lis pendens."

The purpose of the lis pendens is to give notice to all that you have a claim in litigation that affects title to the property, and preserves your place in the pecking order, should the debtor try to sell the property before trial and judgment. A lis pendens cannot be filed without a judge's approval if you are a self-represented plaintiff, but your attorney can do it.

I'm writing just to help clarify and focus you in on the key points of the previous answers with which I agree. The key point is that if you want to take the property, and it is real estate (what we lawyers call "real property") then the agreement must satisfy the requirements to create an enforceable lien on the property. Unless it is a standard form, or attorney prepared deed of trust or mortgage, it is very unlikely that it satisfies all the requirements to be an enforceable lien. In that case the only hope you would have of directly obtaining the property by court action would be to sue for specific performance of the obligation to grant you the property in the event the person did not pay. Otherwise, the best you can do is sue for the debt, and then record a judgment lien against the property and foreclose on it. Bottom line: you really need to review your documentation with a lawyer in person before you do anything else.