Liens and Judgments Do Not Have to Trap You — We Buy Properties with Title Issues

## Selling a Property with Liens or Judgments in California Liens and judgments attached to your property can make a traditional sale feel impossible. Most buyers — and many real estate agents — will walk away from a property with title complications. But you are not stuck. Understanding what liens are, how they work under California law, and how to resolve them is the first step toward selling your home and moving forward. ### What Is a Lien? A lien is a legal claim against your property that gives a creditor the right to be paid from the proceeds when the property is sold. Liens "attach" to the property itself, not just to you personally. This means even if you sell the property, the lien follows it — making it the buyer's problem unless it is resolved at closing. ### Types of Liens Common on California Properties **Property Tax Liens.** When property taxes are unpaid, the county automatically places a lien on the property. Under California Revenue and Taxation Code §2187, property tax liens are "super liens" that take priority over virtually all other liens, including mortgages. **Mechanic's Liens.** Under California Civil Code §8400-8494, contractors, subcontractors, and material suppliers who perform work on your property can file a mechanic's lien if they are not paid. These liens must be filed within specific timeframes — generally 90 days after completion of work for direct contractors, or 90 days after a notice of completion is recorded. Mechanic's liens can relate back to the date work commenced, potentially taking priority over later-recorded liens. **IRS Tax Liens.** When you owe federal taxes, the IRS can file a Notice of Federal Tax Lien against all your property, including real estate. Under 26 U.S.C. §6321, this lien attaches to all property and rights to property. IRS liens can be complex to resolve, but the IRS has programs for lien discharge (removing the lien from specific property) under 26 U.S.C. §6325(b), which allows a property to be sold. **State Tax Liens.** The California Franchise Tax Board (FTB) and Employment Development Department (EDD) can also file liens for unpaid state income taxes or payroll taxes under California Government Code §7170-7174. These liens attach to real property in any county where they are recorded. **HOA Liens.** Homeowners association liens for unpaid dues and assessments are governed by California Civil Code §5700-5740 (the Davis-Stirling Act). HOA liens can be particularly aggressive — the association can foreclose on the lien through a non-judicial process, similar to a mortgage foreclosure, even if the homeowner is current on their mortgage. **Judgment Liens.** When a creditor wins a lawsuit and obtains a money judgment against you, they can record an Abstract of Judgment with the county recorder under California Code of Civil Procedure §697.310. This creates a lien on all real property you own in that county, lasting 10 years and renewable for another 10. **Child Support Liens.** Under California Family Code §17523, the Department of Child Support Services can place liens on real property for unpaid child support. These liens can be recorded in any county and must be satisfied before the property can transfer clear title. ### How Liens Affect Your Ability to Sell When you sell a property, the title company runs a **title search** to identify all liens and encumbrances. Every lien must be addressed before the buyer receives "clear title." In a traditional sale, this creates several problems: 1. **Buyers get scared.** Most buyers and their agents do not want to deal with properties that have title complications. They move on to easier purchases. 2. **Lenders will not fund.** If the buyer is using a mortgage, their lender requires clear title. A property with unresolved liens cannot close with conventional financing. 3. **Negotiations stall.** Even if a buyer is willing, negotiating with multiple lienholders can take months, and any single lienholder can derail the entire transaction. 4. **The math may not work.** If total liens exceed the property value, a traditional sale is impossible without lienholder cooperation to accept less than what is owed. ### How SHH Holdings Resolves Lien Issues We have extensive experience purchasing properties with complex title issues across Los Angeles, San Bernardino, Riverside, and Orange counties. Here is how we approach it: **Title analysis.** We work with our title company to identify every lien, judgment, and encumbrance on the property. We then categorize them by priority, amount, and the likelihood of negotiation. **Lienholder negotiation.** Many lienholders — particularly the IRS, FTB, judgment creditors, and HOAs — will accept less than the full amount owed in order to get paid now rather than wait. We have established relationships and negotiation experience with these entities: - **IRS lien discharge:** We apply for discharge of the federal tax lien under 26 U.S.C. §6325(b)(2)(A), demonstrating that the IRS interest in the property has no value after senior liens and our purchase price is fair. - **Judgment lien negotiation:** Many judgment creditors will accept a reduced payoff rather than risk the judgment expiring or the debtor filing bankruptcy. - **HOA lien resolution:** We negotiate directly with HOA management companies to settle outstanding dues and fees. - **Mechanic's lien resolution:** We review the validity of mechanic's liens (many have procedural defects that make them unenforceable) and negotiate settlements. **Structured closing.** We structure the closing so that all agreed-upon lien payoffs happen simultaneously through escrow. Lienholders receive their negotiated amounts, the title clears, and you receive your equity — all in one transaction. ### What If Liens Exceed the Property Value? If the total amount of liens and judgments exceeds your property's value, you may still have options: - **Lien negotiation:** Many lienholders will accept cents on the dollar rather than receive nothing. We have successfully negotiated significant reductions on IRS liens, judgment liens, and HOA obligations. - **Priority analysis:** Not all liens are equal. Understanding which liens have priority and which are junior can determine whether some liens can be wiped out through the sale. - **Bankruptcy consideration:** In some cases, filing bankruptcy before selling can discharge certain debts and remove associated liens. We recommend consulting with a bankruptcy attorney if this applies to your situation. ### California-Specific Lien Protections **Homestead Exemption.** Under California Code of Civil Procedure §704.730, your primary residence is protected from forced sale by judgment creditors up to certain amounts ($300,000 to $600,000 depending on your county's median home price, as updated by AB 1885). This exemption does not remove the lien, but it prevents creditors from forcing a sale if your equity is below the exemption amount. **Statute of Limitations.** Many liens have expiration dates. Judgment liens last 10 years (renewable). Mechanic's liens must be enforced within 90 days of recording. IRS liens generally expire 10 years from assessment. Understanding these timelines can affect negotiation strategy. Do not let liens and judgments keep you trapped in a property you need to sell. Call SHH Holdings at **(626) 414-4859** for a free, confidential assessment of your situation. We will tell you exactly what is on your title, what it will cost to clear, and what you will walk away with.