By Colin S. Anderson, Lead Attorney, Yolo County DCSS
Hamlet aside, there has been a lot of confusion surrounding real property liens in the last couple of months. The turbulence was noted by the CSDA Legal Practices Committee (LPC) and the issue was discussed at the last few meetings. There has also been ongoing communication with State DCSS. Senate Bill 2 (SB 2), labeled the “Building Homes and Jobs Act,” passed in September 2017. The law has a provision that has a profound impact on one of our major enforcement tools, real property liens. SB 2 adds $75 to the fees already charged to our non-custodial parents (NCPs) when they record a release of a lien that our program filed. Because this presents a potential onerous burden on NCPs, State DCSS issued CSSP letter 17-11 on December 29, 2017. To summarize the state’s position: Local Child Support Agencies (LCSA) must start releasing judgment liens with the County Recorder. NCPs as a policy would no longer be responsible for paying for the lien release costs. State DCSS concluded that LCSAs could only be charged $8.00 for a release of lien. The logic was that the $75 plus other fees could be avoided, and the program would absorb the $8 per lien release. This would have been a big change for most LCSAs.
However, on January 26, 2018, State DCSS through CSSP Letter 18-02 rescinded CSSP 17-11 mentioned above. The letter states, “Effective immediately, local child support agencies (LCSAs) shall operate as they have prior to the release of the December 29th policy guidance.”
The child support issues surrounding the implementation of SB2 have renewed vigorous discussions about California Child Support program’s lien practices. Should there be a threshold amount of arrears that would have to be met before a lien could be placed on the NCP’s property? How would this line of thinking impact whether or not to file real property liens on NCPs who are current with their child support obligations. Furthermore, as it pertains to the fees associated with lien releases, there are arguments that the lien, when issued by the state, is to the benefit of the state, i.e., its use as an enforcement tool. However, when the NCP wants it released, there is no benefit to the state. Therefore, the argument would follow that the cost of the lien release is the NCP’s to bear. Are there unintended consequences by recording real property liens in multiple counties upon establishment of the initial orders in the case? These questions are among many to consider.
So, I bring you back to the title of this article—To Lien or Not to Lien; That is the Question? I suggest that we as a program look to refine our practices and not place liens on NCPs who do not owe child support arrears. If this were our policy, lien release costs would clearly be the responsibility of the NCP as their arrears balance caused the lien to be filed and, therefore, they would have the burden to release it. The costs associated with the recording of the lien release might be included in escrow demands as part of the costs of the sale or transfer of real property. Or, lien release fees might be passed to the NCPs as a cost of accumulating support arrears, analogous to the statutory cost of interest accruing on a money judgment for unpaid support. Concerns related to the costs of the lien releases would be with the California Legislature, not with the child support program.
I commend the state for its continuing efforts to address the issue. Perhaps this represents an opportunity for a comprehensive overhaul of lien practices across the state.