A California homeowner records a declaration of homestead on January 10. On February 15, a creditor records an abstract of judgment against the homeowner. The homeowner's equity in the property is $250,000, and the California homestead exemption is $300,000. Can the creditor force a sale of the property?
Correct Answer
D) No, because the homeowner's equity ($250,000) does not exceed the homestead exemption ($300,000)
Under California CCP §704.800, a forced sale of homesteaded property cannot proceed unless the property's equity exceeds the homestead exemption amount plus any senior liens. Here, the homeowner's equity of $250,000 is less than the $300,000 homestead exemption, so there would not be enough surplus after protecting the exemption amount to pay the creditor. The court will not order a sale when it would not generate enough proceeds to satisfy the exemption and produce a surplus for the creditor.
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