We often prepare Deeds of Trust for our Los Angeles customers. A Deed of Trust is a loan secured by a real estate. But what happens if a debtor is willing to put a lien on a business instead?
One of our customers has a mediation agreement in his favor but the other party is not complying.
In general, to be able to file a lien, you need to obtain a judgment, unless you have a debt that is secured. A deed of trust secures a debt (evidenced usually by a promissory note) with a piece of real property. You can file that with the recorder, but to actually obtain the property, you have to foreclose on the debt.
With business assets, the only way for the creditor to enforce his mediation agreement is to file a collection action, obtain a judgment, and then file the appropriate form: (http://www.sos.ca.gov/business/ucc/ra_9_jl1_barcode.pdf).
We hope that this post has helped you better understand the process of putting a lien on a business to secure a loan or debt in Los Angeles or throughout Southern California.
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The information contained in this blog – including information of a legal nature – is provided for informational purposes only, and should not be construed as legal advice on any subject matter.