September 19, 2007 CSDA Annual Training Conference Anaheim, CA Working With Title and Escrow Companies Real Property Liens presented by: Fesia A. Davenport Staff Attorney County of Los Angeles Child Support Services Department

September 19, 2007 CSDA Annual Training Conference Anaheim, CA Ownership of Property Right or interest in land or anything attached to the land Estate – the degree, quantity, nature and extent of interest which a person has in real property

September 19, 2007 CSDA Annual Training Conference Anaheim, CA Concurrent Ownership Two or more persons can have a present ownership interest in the same property: Joint Tenancy (Civ. Code § 683) Tenants In Common (Civ. Code § 685) Community Interests (Fam. Code § 760; Civ. Code § 682.1)

September 19, 2007 CSDA Annual Training Conference Anaheim, CA Why Create Real Property Liens? Federal law requires that states have procedures in place to create property liens against real property for amounts of past due support owed by a support obligor. (42 U.S.C. § 666(a)(4).)

September 19, 2007 CSDA Annual Training Conference Anaheim, CA What Is A Lien? Lien is an encumbrance on property. Its purpose is to ensure payment of a debt. It impairs the ability to deliver clear title to property. Can be: Voluntary e.g. deed of trust Involuntary e.g. judgment General e.g. federal/state income taxes, judgment Specific e.g. deed of trust, property taxes In practice does not always prevent an obligor from selling, transferring, or refinancing property without first paying lien created by LCSA.

September 19, 2007 CSDA Annual Training Conference Anaheim, CA How Are Liens Created? A lien based on a judgment for support is created by recording: Abstract of Support Judgment Notice of Support Judgment Interstate Lien Form Certified copy of judgment for support payable in installments –(See Cal. Code Civ. Proc. § , subd. (a); 22 CCR § , subd. (d).)

September 19, 2007 CSDA Annual Training Conference Anaheim, CA Lien Based on “Judgment” for Support When creating a property lien, a judgment is an order for the payment of child, family or spousal support. (Fam. Code § 4506, subd. (d).)

September 19, 2007 CSDA Annual Training Conference Anaheim, CA What Interest Does Lien Affect? Lien attaches to obligor’s interest in real property situated in the county where documents recorded (Civ. Proc. § , subd. (a).) Interest: present, future, vested, contingent, equitable or legal (Civ. Proc. § , subd. (a).) Attaches to obligor’s subsequently acquired interest in real property (Civ. Proc. § , subd. (b).)

September 19, 2007 CSDA Annual Training Conference Anaheim, CA Abstract of Judgment vs. Notice of Support Judgment Formerly, most common way to create lien was to record an Abstract of Support Judgment (form attached) (Fam. Code § 4506, CSS Letter ) Now LCSAs must create liens by recording a Notice of Support Judgment (form attached) (CSS Letter )

September 19, 2007 CSDA Annual Training Conference Anaheim, CA Abstract vs. Notice Notice and Abstract look similar Notice has same force and effect as Abstract Differences are: Notice need not be filed with court Notice need not be certified by court clerk Notice lacks date for issuance of Abstract Forms provided in handout

September 19, 2007 CSDA Annual Training Conference Anaheim, CA When Must LCSA Create Lien? A local child support agency must submit documents necessary to create lien within 45 days of: Date money judgment or order is received by the local child support agency; Date case is opened for enforcement of an existing child support order or judgment; or Date an existing order is registered for enforcement. –(See 22 CCR § , subd. (a).)

September 19, 2007 CSDA Annual Training Conference Anaheim, CA Where Must Lien Be Recorded? Documents must be recorded in the following counties: Where support obligor lives; Where obligor’s parent’s reside; and In other county where obligor is known to have, or could reasonably be expected to acquire, real property –(22 CCR § , subd. (e).)

September 19, 2007 CSDA Annual Training Conference Anaheim, CA What Is The Amount of a Lien? If lien is for a support judgment payable in installments, the amount of the lien is the matured installments, plus any accrued interests and costs, less the sum paid towards the judgment (Cal. Code Civ. Proc. § ) NOTE: “Lien” does not become a lien for any installment until the installment becomes due. (Cal. Code Civ. Proc. § )

September 19, 2007 CSDA Annual Training Conference Anaheim, CA Liens & Changing Balances One need not record a new lien every time arrears balance increases or decreases. (Cal. Code Civ. Proc. § ) State legislature recognizes that balances change over time EXCEPTION: Judgment obtained in different court action Distinguish Supplemental Complaint (Fam. Code § 2330 – ) same parents, additional child

September 19, 2007 CSDA Annual Training Conference Anaheim, CA How Long Is Lien Enforceable? Lien effective during period that the order remains enforceable (Code Civ. Proc. § , subd. (b).) Order for support enforceable until paid in full (Fam. Code § 4502.)

September 19, 2007 CSDA Annual Training Conference Anaheim, CA Which Lien Has Priority? Priority of liens determined by section of the CCP Generally, different liens upon the same property have priority according to their time of creation (Civ. Code § 2897.) Priority also affected by type of lien and type of judgment creating the lien

September 19, 2007 CSDA Annual Training Conference Anaheim, CA Exception to Priority Rules Exceptions to first-in-time rule: Real property tax liens (Rev. & Tax. Code § ) Purchase money deed of trust (Civ. Code § 2898, subd. (a).) Installment judgments (Code Civ. Proc. § , subd. (e).) Subordination (Civ. Code § 2934.)

September 19, 2007 CSDA Annual Training Conference Anaheim, CA Clearing Liens A local child support agency must respond in a timely manner to: a title or escrow company’s request for a demand needed to close escrow relating to a support judgment lien and a support obligor who claims an error exists in the amount of alleged arrears. (Code Civ. Proc. § , subd. (e).)

September 19, 2007 CSDA Annual Training Conference Anaheim, CA Clearing Liens Continued Other provisions of the Code require that a judgment creditor respond to a request for demand within certain timeframes State has issued regulations specifying the conditions under which a LCSA will provide a satisfaction of judgment or a release (See 22 CCR §§ et. seq.) (See also CSS letter )

September 19, 2007 CSDA Annual Training Conference Anaheim, CA Acknowledgment of Satisfaction - Full A local child support agency will issue an Acknowledgment of Satisfaction of Judgment when: all arrears are paid in full and all children named in order have reached age of majority or in any other situation where the LCSA determines it appropriate to do so (22 CCR § , subd. (b).) CAVEAT: CP signature required - private cases and post-1996 governmental parentage cases

September 19, 2007 CSDA Annual Training Conference Anaheim, CA Acknowledgment of Satisfaction Matured Installment A local child support agency will prepare an Acknowledgment of Satisfaction of Matured Installments when: when all installments due and owing, as of a specified date, have been paid, plus any interest that has accrued on the installments; and one or more of the child(ren) named in the judgment remains a minor. (Cal. Admin. Code § , subd. (d).)

September 19, 2007 CSDA Annual Training Conference Anaheim, CA Release In Lieu of Satisfaction A LCSA must prepare a Release of Judgment Lien instead of an Acknowledgment of Satisfaction of Judgment when: Recording appears to create lien on real property in which the support obligor is not the property owner – general release Upon receipt of court order requiring a LCSA to deliver recordable document releasing lien – general release LCSA determines all arrears for which the LCSA provided enforcement services, have been paid in full – general release Upon receipt of request from escrow or title company or obligor and support arrears which LCSA enforced have been paid – specific release

September 19, 2007 CSDA Annual Training Conference Anaheim, CA Effect of Release Issuance of release withdraws lien Issuance of release does not: mean that the judgment has been satisfied affect the amount of support owed by the obligor currently or in the future prevent the LCSA from recording another lien

September 19, 2007 CSDA Annual Training Conference Anaheim, CA Transfer Without Satisfaction or Release Generally, if lien un-extinguished or unsatisfied, transferred interest in property remain subject to the lien (Code Civ. Proc. § , subd. (b).) EXCEPTIONS INCLUDE: Right of survivorship (See Dieden vs. Schmidt (2003) 104 Cal.App.4 th 645, ; see also Grothe v. Cortlandt (1992) 11 Cal.App. 4 th 1313.) Tax deed (Rev. & Tax. Code § 3712.)

September 19, 2007 CSDA Annual Training Conference Anaheim, CA LCSA Not Insured LCSA’s do not have a direct claim under a title insurance policy issued to an owner or lender Title insurance is a contract for indemnity The insurer is not exposed until its insured suffers a loss – create loss by forcing sale of property In many cases however LCSA need not levy on the property to have its claim resolved Sample demand letter attached

September 19, 2007 CSDA Annual Training Conference Anaheim, CA Notice Regarding Payment of Support LCSA will prepare a Notice regarding Payment of Support – Substitution of Payee when: CP requests case closure and non-welfare arrears or current support owed to CP Arrears enforced by LCSA paid off but NW CP maintains arrears owing Case transferred to another LCSA Any other situation deemed appropriate by the LCSA (22 CCR , subd. (e).)

September 19, 2007 CSDA Annual Training Conference Anaheim, CA Real Property Liens THE END THANK YOU