Does My Property Have To Be Paid off To Use for Bail?

If the police arrest and detain someone close to you, you likely want to explore every avenue to ensure their release from jail while they await trial. One option is to post bail on your loved one’s behalf. However, the bail amount may be substantial depending on the type and severity of the alleged offense and the defendant’s arrest record.

In these cases, defendants’ friends and family often consider using their homes as bail collateral. You may also be exploring this option if you own a commercial or residential property. But will the court accept a property bond if it still has a mortgage? 

Short Answer – No. BUT, Apex Bail Bonds will! Just call to speak to our large bond expert.

In this guide, the team at Apex Bail Bonds discusses the conditions of using your home as collateral for a bail bond. We also explore some of the other bail options you have available, including a surety bond.

Property Bonds – An Overview

If the police have probable cause, they can arrest a person, charge them with a crime, and detain them. However, the trial can take several months or even years before a final conclusion. This long period can is when lawyers explore plea bargains, discovery, and other matters before the trial concludes with a verdict, dismissal, or acquittal.

The United States Constitution and common sense means detaining a person for this time is neither practical nor fair, as there is a presumption of innocence until proven guilty and jails have limited resources anyway. The defendant may also lose their employment and income. On the other hand, the legal system doesn’t want to release potentially guilty people unconditionally, as they may flee or pose a danger to society.

Bail is the legal system’s solution to this problem. In essence, bail is a sum of money a defendant pays to the court as a form of security or collateral. When the defendant attends all court hearings, the court will pay this amount back to the defendant, regardless of the case’s outcome.

Various types of bail exist:

• Cash bail: This type of bail is the most straightforward and involves a cash payment by the defendant. A friend or family member can also post this type of bail on behalf of a defendant.  
• Surety bond: Under a surety bond, a bail bondsman posts bail on behalf of the defendant in exchange for a fee that is a percentage of the bail surety amount. This option is ideal if the defendant can’t afford to post bail.
• Property bond: Under a property bond, the defendant or someone else posts the value of real property as a guarantee and bail collateral amount for the defendant’s conditional release. In other words, if the defendant fails to appear or comply with the bail restrictions, the surety will lose ownership of the property.

General Requirements for Property Bonds

Each state has unique requirements for property bonds. Generally speaking, posting a property bond is only possible if:

• The surety (property owner) is an identifiable natural individual: For example, corporations or other entities holding a property title cannot post property bonds on behalf of a person.
• The property owner must own the property in full: The surety must have full and irrevocable ownership of the property, with no limitations or restrictions apart from local zoning ordinances.
• The property must have a permanent structure suitable for commercial or residential purposes: The Clerk’s Office has the sole discretion to make decisions about the property’s value and use.
• An attorney must conduct a title search and certify that the surety is the legal owner of the property in fee simple: The attorney must also state that there are no liens on the property. If there are liens on the property, the attorney must certify that these liens do not affect the bond-value ratio requirement.

The surety must execute a Deed of Trust that includes a property description and the bond amount. This document must also include the parties to the property bond.

My Property Has a Mortgage – Can I Use it To Pay Bail?

Generally, a property with a mortgage can qualify for a property bond, provided that your unencumbered equity is sufficient to cover the bail amount. Most states require unencumbered equity that equals at least 150% of the bail amount, but there are exceptions to this rule.

For example, in North Carolina, the proposed property the surety owns must sufficiently exceed the bond amount. As a rule, the property value, less any encumbrances, must be twice the bond amount. However, the court will consider each bond request on a case-by-case basis. The court wants to ensure that the surety’s unencumbered equity in the property is sufficient to cover the bond amount and collection costs.

To calculate the unencumbered equity you have in the property, the court may consider the following sources:

• Tax office records, which give an accurate value of the property
• The register of deeds, which records encumbrances, including mortgages and deeds of trust
• The index of civil judgments, which identifies liens and judgments against the property
• A title opinion by a licensed attorney

In many cases, defendants’ loved ones consider using property bonds, even though they still pay a mortgage on their home. For example, a parent may want to issue a property bond to secure their child’s release from jail. However, this type of bail bond holds various risks.

The Risks of a Property Bond

Upon issuing a property bond, the court will register a lien on your property at the value of the bail amount. If the defendant fails to appear or violates any of the bail restrictions, the court may execute the property lien and initiate foreclosure proceedings on your property. In other words, whether you lose your home depends on the defendant’s compliance with the bail restrictions.