A landlord wants to place a lien on a property, but the property isn’t owned by the debtor yet. He will inherit it at some point in the future. What can the landlord do?
Q: I have an interesting scenario that is a unlike any other that I can find described online. I have won a substantial judgment from a court case with our former tenant(s). The judgment has gone unpaid for several years – they have no intention of paying nor the ability to do so.
I keep tabs on them in various ways and I’ve come to learn that the parents of one of the debtors has put their home into a life estate via quit claim deed and the debtor (son) is one of the grantees, along with (presumably) his two siblings.
I want to know the following whether I can place a lien on that property now that it is seemingly in his name. Any advice you can offer is appreciated.
A: You have an interesting situation. When you sue someone, go to court, and finally get a judgment against them, that judgment will live for quite some time until it expires or is paid off.
Let us explain. Judgment are in force for a certain period of time unless you take action to extend the term of the judgment. Frequently, judgment terms are for 7 years or more, depending on the laws of your state.
You can put a lien on any property owned by your debtor. You’ve described a situation where the debtor may come to own property in the future but doesn’t actually own the property now. You can’t place a lien on property the debtor does not own.
You need to be aware that you can’t place liens on properties unless you know for sure that you know you have a right to do so. If you mistakenly place a lien on someone’s property, some jurisdictions can penalize you for taking that action. So, be careful.
Interestingly, Sam recently had a case where a landlord had failed to pay a tenant back his interest on an apartment lease. The tenant sued the landlord and won a judgment. The tenant placed the lien on the landlord’s building and eventually the landlord ended up paying off the lien when he sold the building. This is a situation where it was clear what the landlord owned and what the tenant lien.
With a judgment in hand, you can find out what assets the debtor might own, including what he might earn from his job, and with the help of an attorney, figure out the best way you can get repaid. You’ve indicated that your debtor doesn’t have assets to repay you, so you need to be careful where you spend your own money in trying to collect the debt. No sense throwing good money after bad in this case, unless there is a good chance you can collect.
Otherwise, you’ll have to sit and wait and make sure you keep your judgment alive with the hope that the debtor comes to own property that you can then lien and force the debtor to pay what he owes.
This is a good lesson for anyone who is a tenant, landlord, or owns property. If they get into legal trouble and their creditor gets a judgment against them, that judgment can come back to haunt them years later.