I served rent levies to collect a past due judgment. Defendant served me with an ex parte Motion to Quash or Stay of Notice of Levy under writ of execution. He claims that the rental income from these properties are used to pay the mortgage payments.
Per the terms of the deed of trust, the secured mortgage holders are assigned the payments of rent. Without the rental income being applied to the mortgage payment, the properties will go into default and ultimately be lost to foreclosure. This would affect not only the mortgage holders but also the tenants.
Could he get away with this motion?
2 Answers from Attorneys
Thank you for clarifying. As I said yesterday, the question you originally posted wasn't very clear.
If the payments have already been assigned to the mortgage holders, the landlord may indeed be right. The mortgagor would already be entitled to the money, and their claim would take priority over yours. I would need to see his evidence and arguments before I could offer an opinion.
You may want to re-post your question under and/or General Civil Litigation. It isn't really about appeals. More lawyers with the relevant expertise will see it in that category.
I understand your question now. You may want to repost under the real estate category, which I would answer anyway, so I will post a response in part now.
As I understand your question, you have had the sheriff levy on money that the judgment debtor receives from rental income. The judgment debtor has filed a motion to quash or stay the levy, claiming that the rental incomes are used to pay the monthly payments of a promissory note secured by a deed of trust.
First of all, there is no right for the lenders to have the rents unless there is an assignment of rents. Second, this would only be a lien on the rents, which would not arise unless the judgment debtor was in default. That's because the rents are merely security for the debt, albeit an additional form of security. If he is not in default, it does not matter where he obtains the payments for the loan, as long as he is timely in his payments on the loan. If a judgment creditor levies the money, he has to look elsewhere to meet his loan obligations.
The lender would only have a perfected lien, and a right to the rents over and above your right to levy, if the debtor was in default, and the lender took an additional step to collect the rents. That could entail anything from a court appointed receiver to collect the rents and deliver them to the lender, or a notice to the tenants or the debtor that they were in default and that they were to deliver the rents directly to the lender.
You have the motion in your hands, and I have no idea what it says, but it sounds like to me that the motion doesn't have any merit based on what you have posted here.
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