Legal Question in Real Estate Law in California

How to file a lein against a business? The business "S" is in breach of contract for not paying timely on the mobile home they are buying from me. The contract is pretty iron clad. If they fo not pay they are responsible for all court costs and attorney fees. I want to file a lein to protect myself.

Karen F.


Asked on 6/16/12, 12:50 am

2 Answers from Attorneys

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

The answer is that "filing a lien" is not the right course of action for breach of a contract.

First, liens may be divided into two distinct kinds: those created by the debtor voluntarily, such as a note and deed of trust given to borrow on real estate or a financing agreement on a personal-property purchase; and those which are more or less involuntary, imposed or authorized by statute, such as a lien for unpaid taxes, a mechanic's lien, an abstract of judgment, and several others.

You might already have a lien, in which case you would only need to enforce it. The only way to be sure is to review the iron clad contract, probably with the assistance of a lawyer, to see whether you have rights to repossess and (re)sell the mobile home.

You or your lawyer should bear in mind that mobile homes are sometimes treated as vehicles under the Vehicle Code and sometimes as real estate. If the latter, you must comply with Code of Civil Procedure section 1062.10 which requires filing a change-of-ownership statement under Revenue & Taxation Code section 480 before you can sue.

Next, the contract may well fall within the provisions of the Automobile Sales Finance Act if the mobile home was a vehicle rather than real property (which is likely) and the contract is a "conditiional sales contract" as defined in the Act at Civil Code section 2981(a)(1). The Act, sometimes known as the Rees-Levering Act, is several pages of fine print and covers the legal requirements for sale and repossession of motor vehicles (including mobile homes treated as vehicles rather than real estate) in some detail.

In any event, unless a different procedure is required or permitted under the ASFA or laws for foreclosure on real estate, your first step in obtaining a lien is to sue for breach of the contract and win a judgment. You can then record an abstract of the judgment, which creates a lien. However, you may have a shorter route as a consequence of the terms of your contract or the provisions of the ASFA.

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Answered on 6/16/12, 10:34 am
Terry A. Nelson Nelson & Lawless

You don't.

Your written security interest and sale documents define whether and how you can have, perfect and record a 'lien' against the sold property, if you haven't already done so at the time of sale. Have them reviewed by counsel if you don't understand them.

Unless you are a labor or materials supplier to the defendant [which does not seem the case], and follow those supplier lien rules timely and properly, you'll only get a 'lien' against the buyer/company itself when you obtain a court judgment against them in a breach of contract lawsuit. Consult with counsel to discuss that suit.

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Answered on 6/16/12, 1:23 pm


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