12-1566. Execution upon judgments for debts secured by real property; fair market value; hearing; redemption rights; guarantees; applicability

A. This section applies to execution upon real property under a judgment obtained pursuant to section 33-725 or obtained pursuant to section 33-814 or obtained against a guarantor or any other person directly, indirectly or contingently liable on a debt for which a judgment under section 33-725 or 33-814 may be obtained.

B. Any sale of real property under this section shall be a credit on the amount of the judgment in the amount of either the fair market value of the real property determined under subsection C of this section or the sales price of the real property at a sheriff's sale, whichever is greater.

C. Any judgment debtor against whom a judgment has been entered pursuant to section 33-725 or 33-814 may, not later than thirty days after sale of the real property, file a written application with the court for determination of the fair market value of the real property which has been sold. Notice of filing the application and of the hearing shall be given to all parties to the action. The fair market value shall be determined by the court at a priority hearing which shall be held upon such evidence as the court may allow. The court shall issue an order crediting the amount due on the judgment with the greater of the sales price or the fair market value of the real property. Fair market value shall mean the most probable price, as of the date of the execution sale, in cash, or in terms equivalent to cash, or in other precisely revealed terms, after deduction of prior liens and encumbrances with interest to the date of sale, for which the real property or interest therein would sell after reasonable exposure in the market under conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably and for self-interest, and assuming that neither is under duress. If an application has been filed, there shall be no right to redemption as to the real property sold as provided in sections 12-1281, 12-1282 and 12-1283, except creditors having a junior lien to the lien foreclosed may redeem by five day successive periods as provided in section 12-1282, subsection C, commencing sixty days after the sale of the real property. The redemption price shall be calculated on the sales price of the real property.

D. Except when the primary residence has been given as security pursuant to a mortgage or deed of trust, no primary residence occupied by a judgment debtor covered by subsection A of this section may be sold under execution until all other sales under execution of real property of the judgment debtor in this state have been held and, if timely requested, the hearing pursuant to subsection C of this section has been held. The judgment debtor, within thirty days after entry of judgment, may file with the court a certified list and legal description of the debtor's real property within thirty days after entry of the judgment. This subsection shall not apply to any real property which the judgment holder does not have actual knowledge of at the time of entry of judgment or real property not listed on a certified list filed by the judgment debtor. This subsection shall not require the judgment holder to sell real property which the judgment holder has released from the judgment lien.

E. The obligation of a guarantor may be enforced without regard to this section in accordance with the terms and conditions of the contract between the lender and the guarantor in an action independent of any other action or judgment. A guarantor of the debt or any other person directly, indirectly or contingently liable for the debt who is not a judgment debtor in an action for foreclosure of a mortgage or deed of trust or an action for deficiency judgment shall receive the same credit as the judgment debtor receives pursuant to this section or section 33-814.

F. This section shall not abate, suspend or bar the right of the holder of a debt secured by real property to abandon and release the lien on the real property which secures the debt and proceed against any borrower or guarantor. Abandonment and release shall be evidenced by a recorded release of the lien.

G. This section shall not abate, suspend or bar any action of the holder of the judgment to realize upon or satisfy the judgment from personal property of a judgment debtor or guarantor or any other person directly, indirectly or contingently liable for the debt.

H. The sheriff's deed given pursuant to a sale held under execution or a trustee's deed upon sale under power of sale shall constitute conclusive evidence of the meeting of such requirements in favor of purchasers or encumbrancers for value and without actual notice that any requirements of this section have not been met.

I. For the purposes of subsection D of this section:

1. "Primary residence" means a real property of two and one-half acres or less which is limited to and utilized for either a single one-family or a single two-family dwelling.

2. "Real property of the judgment debtor" means only real property or an interest therein of the judgment debtor at the time of entry of judgment.