§ 704.850.Order of Distribution of Proceeds of Sale
Title 9. Enforcement of Judgments · Division 2 · Chapter 4. Exemptions · Article 4. Homestead Exemption · Enacted 1982 · no amendments on record · Last verified July 28, 2026
In one sentenceSection 704.850 sets the order for distributing homestead sale proceeds -- first to lienholders, then to the debtor for the exempt amount, then to the levying officer's unreimbursed costs, then to the creditor for post-writ costs and interest and the judgment amount, and any remainder back to the debtor.
(a)The levying officer shall distribute the proceeds of sale of a homestead in the following order:
(1)To the discharge of all liens and encumbrances, if any, on the property.
(2)To the judgment debtor in the amount of any applicable exemption of proceeds pursuant to Section 704.720.
(3)To the levying officer for the reimbursement of the levying officer's costs for which an advance has not been made.
(4)To the judgment creditor to satisfy the following:
(A)First, costs and interest accruing after issuance of the writ pursuant to which the sale is conducted.
(B)Second, the amount due on the judgment with costs and interest, as entered on the writ.
(5)To the judgment debtor in the amount remaining.
(b)Sections 701.820 and 701.830 apply to distribution of proceeds under this section.
Plain-English Summary
Once a homestead sells under a court order, this section tells the levying officer exactly how to divide the money, in a fixed sequence. Liens and encumbrances on the property get paid first. After that, the judgment debtor receives the amount of any applicable proceeds exemption under § 704.720 — the equity the law is designed to protect comes out before the creditor sees a dollar.
Next in line is the levying officer, for any costs not already covered by an advance. Only after all of that does the judgment creditor get paid, and even then in a set order: first costs and interest that accrued after the writ issued, then the underlying judgment amount with its own costs and interest as stated on the writ. Whatever is left after all five categories are satisfied goes back to the judgment debtor.
Subdivision (b) folds in the general distribution-dispute procedures of §§ 701.820 and 701.830, so conflicting claims to the proceeds get resolved the same way they would in any other execution sale.
Frequently Asked Questions
Who gets paid first when a homestead is sold under court order?
Existing liens and encumbrances on the property are paid first, followed by the debtor's exempt proceeds amount under § 704.720, before the creditor receives anything.
Does the debtor get any of the exempt amount before the creditor is paid?
Yes. The debtor's applicable proceeds exemption is distributed second in line, ahead of the judgment creditor.
What if there's a dispute over how the proceeds should be distributed?
Section 704.850(b) applies the general distribution procedures in §§ 701.820 and 701.830, the same rules used for conflicting claims in other execution sales.
What happens to money left over after everyone is paid?
Any remaining amount goes to the judgment debtor.
Amendment History
Added by Stats. 1982, Ch. 1364, Sec. 2. Operative July 1, 1983, by Sec. 3 of Ch. 1364.
Source & verification. Section text is reproduced verbatim from
the Deering's California Codes Annotated / vLex. Enacted by the California Legislature.
Last verified July 28, 2026.
· Official source
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