War Stories—Overly Aggressive Lien-Holder

By Michael Repka, Esq.

I recently had a listing in Palo Alto, which illustrated the importance of having free legal representation as part of the listing.

The facts of this war story are interesting to say the least. The home was owned by a lovely couple for nearly 50 years. They raised their children in this home, all of whom went onto great success and retained fond memories of their years in Palo Alto. The couple enjoyed many years of happiness until they both recently passed away.

After the second of their parents passed away, the children decided to sell the home. They interviewed several agents and selected us to prepare the property and represent them in the sale. As part of our due diligence, we uncovered a lien dating back to 1986. The children said that they remembered their parents pledging their house as security for a bail bond related to a family friend’s arrest for murder. However, they were certain that this money was not still outstanding.

The title company contacted the bail bonds company, who said that they have no record dating back that far. However, they asserted that the $100,000 must still be outstanding since the family has no record of it being paid, and the lien was never released. Further, they insisted that an additional $300,000 worth of interest had accrued over the last 32 years.

The family felt this claim was outrageous but didn’t know what they could do since they had no records. Given that DeLeon Realty provides free legal representation when things like this arise as part of our listings, we reassured the sellers that we would help them with this matter.

Colette Thomason, an in-house real estate attorney employed by DeLeon Realty, and I, researched the facts and determined that the family friend had been tried and acquitted; the bail bonds company had taken no action over the 32 years to collect any money on this lien; and they had no records to support its legitimacy.

Anticipating that the bail bonds company was lying or willfully sticking their heads in the sand, we prepared a demand letter, along with a nine-page civil complaint (i.e. lawsuit), and we were prepared to file it in Santa Clara Superior Court.

As a courtesy, we sent a copy of the demand letter, complaint, and all of the exhibits to the bail bonds company and notified them that we were filing the complaint the next morning. To their credit, they contacted us within three hours and agreed to complete the release of the lien at no cost to our sellers. This was a result that the title company was unable to obtain without our legal assistance.

In the end, the bail bonds company did do the right thing. However, I can only imagine how many sellers would have been stuck paying money to get a bogus lien like this released, or paying an attorney to fight on their behalf, if they did not have free access to legal counsel.

DeLeon Realty is the only major brokerage in Silicon Valley that provides free legal representation to our sellers as part of every listing. When things like this happen, I am truly proud to be part of such an organization.