The short answer is “yes.” Not only can you record a judgment against real property, but you will often want to. Obtaining a judgment lien against real property can be a good way to ensure payment of a judgment debt. A lien on the property makes it more difficult for a judgment debtor to transfer an interest in the property and gives the judgment creditor (the person who won the judgment) the ability to take further steps, including foreclosure on the property.
Speaking generally, once you obtain a judgment from the court, it becomes a judgment lien by properly recording it with the appropriate county recorder, along with an Affidavit of Judgment, and payment of a fee. If the judgment is from a small claims court, you will also need to obtain an “Abstract of Judgment” before you can attach a lien to the property.
Putting a lien on all of the Defendant’s Property, can it be done?
In some situations, the real property a defendant/judgment debtor owns in a county might not be related to the underlying suit that led to the judgment. However, you can still lien that property. Creating a judgment lien against property allows a successful plaintiff/judgment creditor to collect on the judgment by laying a claim against real property that the defendant/judgment debtor owns.
Property is not always subject to a judgment lien, especially when the defendant/judgment debtor lives on the property or has declared it as a “Homestead.” In Nevada, a property owner can record a “Homestead Declaration” which can exempt the property from a judgment lien. NRS 115.010; NRS 21.090(l)(m); NRS 21.095. A judgment creditor should be able to see from county records if the property is a homestead. However, recording may still be a good idea depending on the value of the home, as the exemption only covers equity up to $550,000.00 in equity.
Collection against Property owned by a business entity
Sometimes a legal entity, rather than an individual person or persons, owns property. If a legal entity is a judgment debtor, the judgment creditor should have no difficulty recording a judgment lien against the property. However, it is crucial to get the name(s) of the judgment debtor and property owners correct. Depending on the circumstances, some post-judgment proceedings may have to take place in order to properly create a judgment lien.
Recording the Documents
To properly record and obtain a judgment lien against Property, two documents will need to be recorded. First, the judgment creditor will need to obtain a certified copy of the judgment from the court (or an abstract of judgment, if the judgment was a result of a small claims action). The certified judgment must be accompanied by an Affidavit of Judgment. The Affidavit of Judgment should be made by the judgment creditor and has specific requirements to identify the judgment creditor and the relevant property. NRS § 17.150(4).
Along with identification of the debtor, the other crucial portion of the Affidavit of Judgment is the identification of property. Nevada requires the Affidavit set forth the following information:
- The assessor’s parcel number (APN) for the property;
- The address for the property; and
- A statement that the judgment creditor has confirmed that the judgment debtor is the legal owner.
Id. Additionally, this information must be made on personal knowledge, and not merely “on information and belief.”
Gathering Information about the Property
What if a judgment creditor suspects property is owned by the judgment debtor, but is not sure? Several options are available to search for a debtor’s property assets. A good place to start is reviewing county records. County Assessors and County Recorders maintain publicly available information about property ownership that will allow the creditor to find out where a debtor owns real property, including the APN and address.
Another option is a Judgment Debtor Exam. This is a legal proceeding in which the debtor must answer questions about assets, including real property. The Exam requires the creditor to obtain a court order for the debtor to appear, and the proceedings require the debtor to provide documents and answer questions under oath.
A judgment creditor may want to record a judgment against a creditor without going through the time and expense of finding the individual property information, or may wish to make some recorded claim quickly, and then make more specific claims once information is available. This may be done by recording a certified judgment without reference to an APN; in other words, a judgment can be recorded without reference to a specific property.
This method of recording should be done with extreme caution and may not obtain a judgment lien on a specific property. For example, a title search might not reveal the claim, and thus could be ineffective in the judgment creditor’s efforts to collect. Additionally, a judgment lien might not be created due to lack of following the judgment lien requirements. In sum, recording generally should be a last resort.
Beware of Slander of Title
An improperly recorded judgment may provoke a lawsuit for Slander of Title. This action would allow a property holder to remove the improperly recorded judgment to clear up the cloud on title. It would also allow the owner to seek damages resulting from the cloud on title, including the costs of suit and attorney’s fees. Because of the potential liability, it is important to make sure that the judgment lien is filed against the correct owner and property.
Recording a judgment against real property has specific requirements, but it can be done (and often should be done). Remember, recording the judgment, and therefore obtaining a judgment lien against real property, is one step in the process of judgment, although it is an important one. As always, if you think you need an attorney’s guidance in the judgment recording process, you should consult one.
And finally, as we always say, “If you think you might need an attorney, you probably do.” Contact us before anything is set in stone. We love answering questions!
Kyle Hoyt is an attorney at MLC and was formerly the Managing Editor of the Clearfield High School Newspaper, The Talon.