California provides a distinct and orderly process to sell real property under a writ of execution. Code of Civil Procedure §§701.510, et. seq. This method has a number of important safeguards for the debtor built in. These include:
- Personal service of notice on the debtor;
- An opportunity for the debtor to respond;
- Title report or equivalent is obtained and reviewed;
- Fair Market Value and homestead exemptions are determined;
- Debtor given minimum 120 days from notice to sale; and
- Homestead Property must sell for at least 90% of determined Fair Market Value.
Due to the strictures of this process, there are a number of reasons why a judgment creditor might not obtain satisfaction in the end.
Consider these common issues in relation to Execution Sales:
- The execution method requires cash on sale or within 10 days and these days, buyers with cash are looking for a better deal than 10% under fair market value.
- Buyers are not able to walk through and inspect the property before buying resulting in a lower bid price, especially on questionable properties.
- A mistake is made in the process, here the process must begin again.
- The sale lacks the benefit of common open market sales like listings on the Multiple Listing Service, aggressive marketing by a licensed real estate agent, ability for buyers to obtain financing, inspections and repairs, etc.
- The sheriff or levying officer has numerous responsibilities and cannot devote any significant amount of time toward ensuring completion of the sale or other “special attention”
If you are in a situation where you have gone through an execution sale without success or have a business or collection matter appointment of a receiver may well provide some satisfaction in your case.
About the Author
Attorney Steven Peck has been practicing law since 1981. A former successful business owner, Mr. Peck initially focused his legal career on business law. Within the first three years, after some colleagues and friend’s parents endured nursing home neglect and elder abuse, he continued his education to begin practicing elder law and nursing home abuse law.