In an earlier post we discussed the process for levying a vehicle. In this post we will discuss the process for the levy of real property.
Threshold Issues
A couple of issues that must be addressed in any levy involves 1) is the property worth it and 2) is my judgment lien perfected? We have discussed the perfection issue in this past post, and for the purposes of this post we will assume that the lien was properly perfected. In a recent post, we also discussed some threshold issues as to determining whether an asset was worth levying and questions which need to be answered to make that determination. Principally, whether the Debtor owned the asset outright or whether the asset subject to certain interests (exemptions or liens). The analysis for real property levies is similar.
Is there a Mortgage? Is the Property Homestead?
I think the single most determinative issue on whether property is worth levying is whether it is subject to a mortgage. Often times debtors who fail to pay one creditor, often fail to pay numerous creditors. If you have a mortgage in default from the purchase money lender, your judgment lien will eventually be extinguished in a subsequent foreclosure. If the mortgage is in place and you levy that property Creditor takes that property subject to that mortgagee’s interest. It is not ideal. I’ve had investor clients do this with the purpose of renting the levied property to make money in the short term, but that strategy is not for everyone.
The easiest way to determine whether there is a mortgage is to order a title search or ownership and encumbrance report. There are many great companies that provide this service for cheap (less than $100) and quickly. In the best-case scenario, Debtor will own the property free and clear (or subject to minor junior liens). Taking subject to a mortgage can also be worth it, if the debtor has a lot of equity in the target property sought to be levied.
It should be noted our firm deals primarily with commercial collection matters, and for the purposes of this example we are assuming that the property sought to be levied is not subject to Florida’s very strong homestead exemption. Article X, Section 4 of the Florida Constitution. Obviously if the property is the Debtor’s homestead, a normal judgment lien would not be effective in levying this type of property.
Look to your Sheriff (again)
As we discussed in our prior post about levying vehicles, the process for levying real property is largely uniform but is subject to certain individual requirements of the local sheriff offices which may be conducting the levy. The Basic process is as follows.
1) Perfect of your judgment lien
2) Delivery of Documents to Sheriff. The documents that every sheriff will need for a levy are an original Writ of Execution from the Clerk of Court; Certified copy of the final Judgment; Certified copy of vesting deed; An an Affidavit of outstanding liens, and Levy Instructions for the Sheriff. Some sheriffs will also require title search (such as Broward County).
4) Publication of Levy by Sheriff.
5) Sale of property by the Sheriff.
Conclusion
Unlike car levies, the costs/deposits tend to be much more uniform in nature from county to county. I prefer real properties when available because the market for these sales tends to be more competitive and more sophisticated. This was probably due to the foreclosure crises from years ago. We have used real property levies to great effect in our practice. If the property is owned outright, it will often cover the cost of the judgment, or force the Debtor into immediate settlement unencumbered real property in Florida is a most valuable asset. If you have questions about real property levies contact Andre Law today.