Code Section Group

Probate Code - PROB

DIVISION 7. ADMINISTRATION OF ESTATES OF DECEDENTS [7000 - 12591]

  ( Division 7 enacted by Stats. 1990, Ch. 79. )

PART 5. ESTATE MANAGEMENT [9600 - 10382]

  ( Part 5 enacted by Stats. 1990, Ch. 79. )

CHAPTER 18. Sales [10000 - 10382]

  ( Chapter 18 enacted by Stats. 1990, Ch. 79. )

ARTICLE 8. Application of Sale Proceeds of Encumbered Property; Sale to Lienholder [10360 - 10363]
  ( Article 8 enacted by Stats. 1990, Ch. 79. )

10360.
  

As used in this article:

(a) “Amount secured by the lien” includes interest and any costs and charges secured by the lien.

(b) “Encumbered property” means real or personal property that is subject to a lien for a secured debt which is a valid claim against the estate and which has been allowed or approved.

(c) “Lien” means a mortgage, deed of trust, or other lien.

(Enacted by Stats. 1990, Ch. 79.)

10361.
  

(a) If encumbered property is sold, the purchase money shall be applied in the following order:

(1) Expenses of administration which are reasonably related to the administration of the property sold as provided in paragraph (1) of subdivision (a) of Section 11420.

(2) The payment of the expenses of the sale.

(3) The payment and satisfaction of the amount secured by the lien on the property sold if payment and satisfaction of the lien is required under the terms of the sale.

(4) Application in the course of administration.

(b) The application of the purchase money, after the payment of those expenses set forth in paragraphs (1) and (2) of subdivision (a), to the payment and satisfaction of the amount secured by the lien on the property sold shall be made without delay; and, subject to Section 10362, the property sold remains subject to the lien until the purchase money has been actually so applied.

(Amended by Stats. 1996, Ch. 862, Sec. 26. Effective January 1, 1997.)

10361.5.
  

The personal representative or any interested party may, at any time before payment is made to satisfy all liens on the encumbered property sold, petition for an order determining the amount of expenses of administration that are reasonably related to the administration of that encumbered property as provided in paragraph (1) of subdivision (a) of Section 11420. The petition may be heard as part of a petition for confirmation of sale of personal or real property as provided in Section 10260 or 10308, respectively or may be heard separately. If the petition is presented as part of a petition for confirmation of sale of real or personal property, the notice of hearing otherwise required by this code for a petition for confirmation of sale shall be given in addition to the notice requirements under Section 10361.6.

(Added by Stats. 1996, Ch. 862, Sec. 27. Effective January 1, 1997.)

10361.6.
  

(a) At least 30 days prior to the day of the hearing, the petitioner shall cause notice of the hearing and a copy of the petition to be served in the manner provided in Chapter 4 (commencing with Section 413.10) of Title 5 of Part 3 of the Code of Civil Procedure on all of the following persons:

(1) The personal representative, if the personal representative is not the petitioner.

(2) The holder of any mortgage or other lien secured by the property that is sold.

(3) All agents or brokers entitled to compensation from the proceeds of the property that is sold.

(b) Except for those persons given notice pursuant to subdivision (a), notice of the hearing, together with a copy of the petition, shall be given as provided in Section 1220 to all of the following persons:

(1) Each person listed in Section 1220.

(2) Each known heir whose interest in the estate would be affected by the petition.

(3) Each known devisee whose interest in the estate would be affected by the petition.

(4) The Attorney General, at the office of the Attorney General in Sacramento, if any portion of the estate is to escheat to the state and its interest in the estate would be affected by the petition.

(c) The court may not shorten the time for giving the notice of hearing under this section.

(Added by Stats. 1996, Ch. 862, Sec. 28. Effective January 1, 1997.)

10362.
  

(a) If encumbered property is sold, the purchase money, or so much of the purchase money as is sufficient to pay the amount secured by the lien on the property sold and the expenses of the sale, may be paid to the clerk of the court. Upon the payment being so made, the lien on the property sold ceases.

(b) The clerk of court without delay shall use the money paid to the clerk under this section to pay the expenses of the sale and to pay and satisfy the amount secured by the lien on the property sold. The clerk shall at once return the surplus, if any, to the personal representative unless the court, for good cause shown and after notice to the personal representative, otherwise orders.

(Enacted by Stats. 1990, Ch. 79.)

10363.
  

(a) At a sale of real or personal property subject to a lien, the lienholder may become the purchaser of the property, even though no claim for the amount secured by the lien on the property sold has been, or could have been, filed, allowed, or approved.

(b) Unless the property is sold subject to the lien:

(1) If the lienholder becomes the purchaser of the property and the amount secured by the lien on the property is a valid claim against the estate and has been allowed or approved, the receipt of the lienholder for the amount due the lienholder from the proceeds of the sale is a payment pro tanto.

(2) If the lienholder becomes the purchaser of the property and no claim for the amount secured by the lien on the property has been filed, allowed, or approved, the court may at the hearing on the petition for confirmation of the sale examine into the validity and enforceability of the lien and the amount secured by the lien, and the court may authorize the personal representative to accept the receipt of the lienholder for the amount secured by the lien as payment pro tanto.

(3) If the lienholder becomes the purchaser of the property and the amount for which the property is purchased is insufficient to pay the expenses of the sale and to discharge the lienholder’s lien, whether or not a claim has been filed, allowed, or approved, the lienholder shall pay to the clerk of the court an amount sufficient to cover the expenses of the sale.

(c) Nothing permitted under this section shall be deemed to be an allowance or approval of a claim based upon the lien or the amount secured by the lien.

(Enacted by Stats. 1990, Ch. 79.)

PROBProbate Code - PROB8.