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S.B. 53 Enrolled
This act modifies provisions related to trust deeds. The act alters the qualifications and
outlines the duties for trustees of trust deeds. The act modifies provisions relating to
successor trustees. The act alters the trustee's requirements when filing a notice of default.
The act alters provisions relating to the trustee's sale of trust property and the proceeds of
the sale. The act modifies the requirements for the sale of trust property by public auction.
The act amends the requirements for the trustee's course of action once a default under a
trust deed is cured. The act designates the determinative value for trust property. The act
establishes the effect of an erroneously recorded reconveyance of a trust deed. The act also
makes technical corrections.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
57-1-20, as enacted by Chapter 181, Laws of Utah 1961
57-1-21, as last amended by Chapter 182, Laws of Utah 1996
57-1-22, as last amended by Chapter 75, Laws of Utah 2000
57-1-23, as enacted by Chapter 181, Laws of Utah 1961
57-1-24, as last amended by Chapter 88, Laws of Utah 1989
57-1-25, as last amended by Chapter 75, Laws of Utah 2000
57-1-26, as last amended by Chapter 75, Laws of Utah 2000
57-1-27, as last amended by Chapter 82, Laws of Utah 1988
57-1-28, as last amended by Chapter 68, Laws of Utah 1985
57-1-29, as last amended by Chapter 215, Laws of Utah 1997
57-1-31, as last amended by Chapter 75, Laws of Utah 2000
57-1-32, as last amended by Chapter 68, Laws of Utah 1985
57-1-33.1, as enacted by Chapter 185, Laws of Utah 1995
ENACTS:
57-1-21.5, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 57-1-20 is amended to read:
57-1-20. Transfers in trust of real property -- Purposes -- Effect.
Transfers in trust of real property may be made to secure the performance of an obligation
of the trustor or any other person named in the trust deed to a beneficiary. All right, title, interest and
claim in and to the trust property acquired by the trustor, or [
subsequent to the execution of the trust deed, shall inure to the trustee as security for the obligation
or obligations for which the trust property is conveyed [
execution of the trust deed.
Section 2. Section 57-1-21 is amended to read:
57-1-21. Trustees of trust deeds -- Qualifications.
(1) (a) The trustee of a trust deed shall be:
(i) any active member of the Utah State Bar residing in Utah;
(ii) any depository institution as defined in Section 7-1-103 , or insurance company
authorized to do business and actually doing business in Utah under the laws of Utah or the United
States;
(iii) any corporation authorized to conduct a trust business and actually conducting a trust
business in Utah under the laws of Utah or the United States;
(iv) any title insurance or abstract company authorized to do business and actually doing
business in Utah under the laws of Utah;
(v) any agency of the United States government; or
(vi) any association or corporation [
Farm Credit Administration or its successor.
(b) Subsection (1) is not applicable to a trustee of a trust deed existing prior to the effective
date of this chapter, nor to any agreement that is supplemental to that trust deed.
(2) The trustee of a trust deed may not be the beneficiary of the trust deed, unless the
beneficiary is qualified to be a trustee under Subsection (1)(a)(ii), (iii), (v), or (vi).
(3) The power of sale conferred by Section 57-1-23 may only be exercised by the trustee of
a trust deed if the trustee is qualified under Subsection (1)(a)(i) or (iv).
(4) A trust deed with an unqualified trustee or without a trustee shall be effective to create
a lien on the trust property, but the power of sale and other trustee powers under the trust deed may
be exercised only if, prior to the exercise of those powers, the beneficiary has appointed a qualified
successor trustee under Section 57-1-22 .
Section 3. Section 57-1-21.5 is enacted to read:
57-1-21.5. Trustees of trust deeds -- Duties.
(1) The following duties of the trustee may not be delegated:
(a) the preparation and execution of:
(i) the notice of default and election to sell;
(ii) the cancellation of notice of default and election to sell;
(iii) the notice of sale;
(iv) the trustee's deed; and
(v) the deed of reconveyance;
(b) the notification of foreclosure through publication, posting, and certified or registered
mail;
(c) the receiving and responding to requests for reinstatement or payoff requirements; and
(d) the handling of reinstatement or payoff funds.
(2) Nothing in this section is intended to prevent the trustee from using clerical or office staff
employed by the trustee and under the trustee's direct and immediate supervision to assist in the
duties described in Subsection (1) or from using the services of others for publication, posting,
marketing, or advertising the sale.
Section 4. Section 57-1-22 is amended to read:
57-1-22. Successor trustees -- Appointment by beneficiary -- Effect -- Substitution of
trustee -- Recording -- Form.
(1) The beneficiary may appoint a successor trustee at any time by filing for record in the
office of the county recorder of each county in which the trust property or some part [
trust property is situated, a substitution of trustee. [
in the deed of trust and of any successor trustee. The beneficiary may, by express provision in the
substitution of trustee, ratify and confirm action taken on the beneficiary's behalf by the new trustee
prior to the recording of the substitution of trustee.
(2) The substitution shall:
(a) identify the trust deed by stating the names of the original parties [
deed, the date of recordation, and the book and page where the same is recorded or the entry number;
(b) include the legal description of the trust property;
(c) state the name of the new trustee; and
(d) be executed and acknowledged by all of the beneficiaries under the trust deed or their
successors in interest.
(3) If not previously recorded, at the time of recording [
trustee shall file for record, in the office of the county recorder of each county in which the trust
property or some part of it is situated, the substitution of trustee[
substitution of trustee shall be sent in the manner provided in [
persons to whom a copy of [
Subsections 57-1-26 (1)(a) and (3). [
(4) A substitution of trustee shall be [
is hereby appointed successor trustee under the trust deed executed by ____ as trustor,
in which ____ is named beneficiary and ____ as trustee, and filed for record
__________(month\day\year), and recorded in Book ____, Page ____, Records of ____ County, (or
filed for record __________(month\day\year), with recorder's entry No. ____, ____ County), Utah.
Signature _____________________________
Section 5. Section 57-1-23 is amended to read:
57-1-23. Sale of trust property -- Power of trustee -- Foreclosure of trust deed.
[
57-1-21 (1)(a)(i) or (iv) is given the power of sale by which the trustee may exercise and [
57-1-24 and 57-1-27 , after a breach of an obligation for which the trust property is conveyed as
security; or, at the option of the beneficiary, a trust deed may be foreclosed in the manner provided
by law for the foreclosure of mortgages on real property. The power of sale may be exercised by the
trustee without express provision [
Section 6. Section 57-1-24 is amended to read:
57-1-24. Sale of trust property by trustee -- Notice of default.
The power of sale conferred upon the trustee who is qualified under Subsection
57-1-21 (1)(a)(i) or (iv) may not be exercised until:
(1) the trustee first files for record, in the office of the recorder of each county where the
trust property or some part or parcel [
identifying the trust deed by stating the name of the trustor named [
giving the book and page, or the recorder's entry number, where the trust deed is recorded and a
legal description of the trust property, and containing a statement that a breach of an obligation for
which the trust property was conveyed as security has occurred, and setting forth the nature of that
breach and of [
obligation;
(2) not less than three months has [
record under Subsection (1); and
(3) after the lapse of at least three months the trustee shall give notice of sale as provided
in [
Section 7. Section 57-1-25 is amended to read:
57-1-25. Notice of trustee's sale -- Description of property -- Time and place of sale.
(1) The trustee shall give written notice of the time and place of sale particularly describing
the property to be sold:
(a) by publication of the notice, at least three times, once a week for three consecutive
weeks, the last publication to be at least ten days but not more than 30 days prior to the sale, in
[
some part [
(b) by posting the notice, at least 20 days before the date of sale, in some conspicuous place
on the property to be sold and also [
county in which the trust property, or some part of it, is located.
(2) (a) The sale shall be held at the time and place designated in the notice of sale [
(b) The time of sale shall be between the hours of [
(c) The place of sale shall be clearly identified in the notice of sale under Subsection (1) and
shall be one of the following:
(i) at a courthouse serving the county in which the property to be sold, or some part of the
property to be sold, is located; or
(ii) at the property to be sold, provided that:
(A) if the described property comprises more than one acre, the location on the property
where the sale will be conducted is specifically described; and
(B) the property is accessible to the public at the time of the sale.
(3) The notice of sale shall be [
The following described property will be sold at public auction to the highest bidder, payable
in lawful money of the United States at the time of sale, at [
(insert location of sale) ________________on __________(month\day\year), at __.m. of said day,
for the purpose of foreclosing a trust deed originally executed by ____ (and ____, his wife,) as
trustors, in favor of ____, covering real property located at ____, and more particularly described
as:
The current beneficiary of the trust deed is ______________________ and the record owners
of the property as of the recording of the notice of default are _________________ and
____________________.
Dated __________(month\day\year).
_______________
Trustee
Section 8. Section 57-1-26 is amended to read:
57-1-26. Requests for copies of notice of default and notice of sale -- Mailing by trustee
or beneficiary -- Publication of notice of default.
(1) (a) Any person desiring a copy of any notice of default and of any notice of sale under
any trust deed [
to the filing for record of a notice of default [
of the county recorder of any county in which [
of the trust property, is situated, a duly acknowledged request for a copy of any notice of default and
notice of sale. [
other recorded instrument. The request shall set forth the name and address of the [
persons requesting copies of [
names of the original parties [
trust deed, the book and page where [
number, and the legal description of the trust property. The request shall be in substantially the
following form:
[
a copy of notice of sale under the trust deed filed for record __________(month\day\year), and
recorded in Book ____, Page ____, Records of ____ County, (or filed for record
__________(month\day\year), with recorder's entry number ____, _______ County), Utah, executed
by ____ and _________________ as [
____ as trustee, be mailed to ____ (insert name) ____ at ____ (insert address) __________.
Signature ____________________
(b) Upon filing for record of a request for notice, the recorder shall index the request in the
mortgagor's index, mortgagee's index, and abstract record. Except as provided in [
Subsection (3), the trustee under any [
notice of sale to any person not filing a request for notice as described [
(2) Not later than ten days after recordation of a notice of default, the trustee or beneficiary
shall mail, by certified or registered mail, with postage prepaid, a copy of [
with the recording date shown [
forth in a request [
of default, directed to the address designated in the request. At least 20 days before the date of sale,
the trustee shall mail, by certified or registered mail, return receipt requested with postage prepaid,
a copy of the notice of the time and place of sale, addressed to each person whose name and address
are set forth in a request [
notice of default, directed to the address designated in the request.
(3) Any trust deed may contain a request that a copy of any notice of default and a copy of
any notice of sale [
to the trust deed at the address of the person set forth [
any notice of default and of any notice of sale shall be mailed to [
the notice who is a party to the trust deed at the same time and in the same manner required in
Subsection (2) as though a separate request [
person as provided in [
(4) If no address of the trustor is set forth in the trust deed and if no request for notice by the
trustor has been recorded as provided in this section, a copy of the notice of default shall, no later
than 15 days after the filing for record of the notice of default, either be:
(a) mailed to the address of the property described in the notice of default; or
(b) posted on the property.
[
(5) No request for a copy of any notice filed for record [
Subsections (1) and (3), nor any statement or allegation in any [
any record [
to any person that any person requesting copies of notice of default or of notice of sale has or claims
any right, title or interest in, or lien or claim upon, the trust property.
Section 9. Section 57-1-27 is amended to read:
57-1-27. Sale of trust property by public auction -- Postponement of sale.
(1) (a) On the date and at the time and place designated in the notice of sale, the trustee or
the attorney for the trustee shall sell the property at public auction to the highest bidder. The trustee,
or the attorney for the trustee, may conduct the sale and act as the auctioneer. The trustor, or [
the trustor's successor in interest, if present at the sale, may direct the order in which the trust
property shall be sold, if the property consists of several known lots or parcels which can be sold [
person, including the beneficiary or trustee, may bid at the sale. The trustee may bid for the
beneficiary. Each bid is considered an irrevocable offer[
refuses to pay the amount bid by [
the trustee, or the attorney for the trustee, [
(i) renotice the sale in the same manner as notice of the original sale is required to be given;
or
(ii) sell the property to the next highest bidder.
(b) A bidder refusing to pay the bid price is liable for any loss occasioned by the refusal,
including interest, costs, and trustee's and reasonable attorneys' fees. The trustee or the attorney for
the trustee may thereafter reject any other bid of that person for the property.
(2) The person conducting the sale may, for any cause he considers expedient, postpone the
sale [
notice of [
the time and place last appointed for the sale. No other notice of the postponed sale is required,
unless the [
postponement exceeds 45 days. In that event, the sale shall be renoticed in the same manner as the
original notice of sale is required to be given.
Section 10. Section 57-1-28 is amended to read:
57-1-28. Sale of trust property by trustee -- Payment of bid -- Trustee's deed delivered
to purchaser -- Recitals -- Effect.
(1) The purchaser at the sale shall pay the price bid as directed by the trustee [
beneficiary shall receive a credit on the beneficiary's bid in an amount not to exceed the amount
representing the unpaid principal owed, accrued interest as of the date of the sale, advances for the
payment of taxes, insurance, and maintenance and protection of the trust property and the
beneficiary's lien on the trust property, and costs of sale, including reasonable trustee's and attorney's
fees. Upon receipt of payment, the trustee shall execute and deliver [
the purchaser. The trustee's deed may contain recitals of compliance with the requirements of
Sections 57-1-19 through 57-1-36 relating to the exercise of the power of sale and sale of the
property described [
delivery, and publication of the notice of default, any mailing and the publication and posting of the
notice of sale, and the conduct of sale. These recitals constitute prima facie evidence of [
compliance with Sections 57-1-19 through 57-1-36 , and are conclusive evidence in favor of bona
fide purchasers and encumbrancers for value and without notice.
(2) The trustee's deed shall operate to convey to the purchaser, without right of redemption,
the trustee's title and all right, title, interest, and claim of the trustor and [
in interest and of all persons claiming by, through, or under them, in and to the property sold,
including all [
trustor or [
trustee's deed shall be considered effective and relate back to the time of the sale.
Section 11. Section 57-1-29 is amended to read:
57-1-29. Proceeds of trustee's sale -- Disposition.
(1) The trustee shall apply the proceeds of the trustee's sale, first, to the costs and expenses
of exercising the power of sale and of the sale, including the payment of the trustee's and attorney's
fees actually incurred not to exceed the amount which may be provided for in the trust deed, second,
to payment of the obligation secured by the trust deed, and the balance, if any, to the person or
persons legally entitled to the proceeds, or the trustee, in [
the balance of the proceeds with the clerk of the district court of the county in which the sale took
place. If the proceeds are deposited with the clerk of the district court, the trustee shall file an
affidavit with the clerk setting forth the facts of the deposit and a list of all known claimants,
including known addresses. Upon depositing the balance and filing the affidavit, the trustee shall
be discharged from all further responsibility and the clerk shall deposit the proceeds with the state
treasurer subject to the order of the district court.
(2) The clerk shall give notice of the deposited funds to all claimants listed in the trustee's
affidavits within 15 days of receiving the affidavit of deposit from the trustee.
(3) Any claimant may file a petition for adjudication of priority to the funds. The petitioner
requesting the funds shall give notice of the petition to all claimants listed in the trustee's affidavit
and to any other claimants known to the petitioner. The petitioner's notice must specify that all
claimants have 20 days to contest the petition by affidavit or counter-petition. If no affidavit or
counter-petition is filed within 20 days, the court shall, without a hearing, enter an order directing
the clerk of the court or the county treasurer to disburse the funds to the petitioner according to the
petition.
(4) If a petition for adjudication is contested by affidavit or counter-petition, the district court
shall, within 20 days, conduct a hearing to establish the priorities of the parties to the deposited funds
and give notice to all known claimants of the date and time of the hearing. At the hearing, the court
will establish the priorities of the parties to the deposited funds and enter an order directing the clerk
of the court or county treasurer to disburse the funds according to the court's determination.
(5) All persons having or claiming to have an interest in the disposition of funds deposited
with the court under Subsection (1) who fail to appear and assert their claims are barred from any
claim to the funds after the entry of the court's order under Subsection (4).
Section 12. Section 57-1-31 is amended to read:
57-1-31. Trust deeds -- Default in performance of obligations secured -- Reinstatement
-- Cancellation of recorded notice of default.
(1) Whenever all or a portion of the principal sum of any obligation secured by a trust deed
has, prior to the maturity date fixed in the obligation, become due or been declared due by reason
of a breach or default in the performance of any obligation secured by the trust deed, including a
default in the payment of interest or of any installment of principal, or by reason of failure of the
trustor to pay, in accordance with the terms of the trust deed, taxes, assessments, premiums for
insurance, or advances made by the beneficiary in accordance with terms of the obligation or of the
trust deed, the trustor or [
[
[
three months of the filing for record of notice of default under the trust deed, if the power of sale is
to be exercised, may pay to the beneficiary or [
amount then due under the terms of the trust deed (including costs and expenses actually incurred
in enforcing the terms of the obligation, or trust deed, and the trustee's and attorney's fees actually
incurred) other than that portion of the principal as would not then be due had no default occurred,
and thereby cure the existing default [
successor in interest has been paid and the default cured, the obligation and trust deed shall be
reinstated [
occurred.
(2) If the default is cured and the trust deed reinstated in the manner provided in Subsection
(1), [
including the cost of recording the cancellation of notice of default, the trustee [
acknowledge, and deliver a cancellation of the recorded notice of default under the trust deed; and
any [
days is liable to the person [
resulting from this refusal. A [
a cancellation of a recorded notice of default under a trust deed is, when acknowledged, entitled to
be recorded and is sufficient if made and executed by the trustee in substantially the following form:
The undersigned hereby cancels the notice of default filed for record
__________(month\day\year), and recorded in Book ____, Page ____, Records of ____ County, (or
filed of record __________(month\day\year), with recorder's entry No. ____, ____ County), Utah,
which notice of default refers to the trust deed executed by ____ and ___________ as [
trustors, in which ____ is named as beneficiary and ____ as trustee, and filed for record
__________(month\day\year), and recorded in Book ____, Page ____, Records of ____ County, (or
filed of record __________(month\day\year), with recorder's entry No. ____, ____ County), Utah.
Signature of Trustee ______________________________________________________
Section 13. Section 57-1-32 is amended to read:
57-1-32. Sale of trust property by trustee -- Action to recover balance due upon
obligation for which trust deed was given as security -- Collection of costs and attorney's fees.
At any time within three months after any sale of property under a trust deed[
[
to recover the balance due upon the obligation for which the trust deed was given as security, and
in [
was secured by [
market value [
shall find the fair market value of the property at the date of sale [
may not render judgment for more than the amount by which the amount of the indebtedness with
interest, costs, and expenses of sale, including trustee's and attorney's fees, exceeds the fair market
value of the property as of the date of the sale. In any action brought under this section, the
prevailing party shall be entitled to collect its costs and reasonable attorney fees incurred [
Section 14. Section 57-1-33.1 is amended to read:
57-1-33.1. Reconveyance of a trust deed -- Erroneous reconveyance.
(1) (a) When an obligation secured by a trust deed has been satisfied, the trustee shall, upon
written request by the beneficiary, reconvey the trust property.
(b) At the time the beneficiary requests a reconveyance under Subsection (1)(a), the
beneficiary shall deliver to the trustee or the trustee's successor in interest the trust deed and the note
or other evidence that the obligation securing the trust deed has been satisfied.
(2) The reconveyance under Subsection (1) may designate the grantee as "the person or
persons entitled thereto."
(3) If a reconveyance is erroneously recorded by a beneficiary, the effect of the reconveyance
may be nullified and the trust deed reinstated by the recording of a corrective affidavit executed by
the then current beneficiary describing the trust deed and setting forth the fact of the erroneous
reconveyance. Upon the recording of a corrective affidavit or similar instrument, the trust deed has
the same priority as it did prior to the erroneous reconveyance. However, any lien or interest that
was recorded or attached to the trust deed property between the time of the recording of the
erroneous reconveyance and the recording of the corrective affidavit or similar instrument has
priority over the reinstated trust deed, unless the lien or interest was recorded or attached with actual
knowledge that the trust deed had been reconveyed erroneously.
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