Beware Attorney Charging Liens On California Real Property
Law360, New York ( March 23, 2015, 8:28 PM EDT) -- California fee contracts between an attorney and client often include provisions that provide the attorney with a "charging lien", i. e. , a lien upon property owned by the client to insure the payment of fees. Charging liens are valid provisions of a fee contract in California, and such "secret" liens take effect and are perfected upon execution of the contract creating the lien. See Carroll v. Interstate Brands Corp. , 99 Cal. App. 4th 1168, 1175 (2002). Although charging liens are "perfected" under state law upon execution of the contract, after filing a notice of charging lien — and especially if the attorney asserts the lien against the client's real property — attorneys should file and record the notice in the county in which the property is located, although such recordation is not required to perfect the lien. In the context of a bankruptcy case, which this article will examine, a Chapter 7 trustee plays a prominent role in the ultimate treatment of the lien with respect to property of the bankruptcy estate. Indeed, a Chapter 7 trustee can sell free and clear of secret liens on real property under 11 USC § 544. . . .
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