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First Substitute S.B. 53

Senator Michael G. Waddoups proposes to substitute the following bill:


             1     
TRUST DEED LAW AMENDMENTS

             2     
2001 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Michael G. Waddoups

             5      This act modifies provisions related to trust deeds. The act alters the qualifications and
             6      outlines the duties for trustees of trust deeds. The act modifies provisions relating to
             7      successor trustees. The act alters the trustee's requirements when filing a notice of default.
             8      The act alters provisions relating to the trustee's sale of trust property and the proceeds of
             9      the sale. The act modifies the requirements for the sale of trust property by public auction.
             10      The act amends the requirements for the trustee's course of action once a default under a
             11      trust deed is cured. The act designates the determinative value for trust property. The act
             12      establishes the effect of an erroneously recorded reconveyance of a trust deed. The act also
             13      makes technical corrections.
             14      This act affects sections of Utah Code Annotated 1953 as follows:
             15      AMENDS:
             16          57-1-20, as enacted by Chapter 181, Laws of Utah 1961
             17          57-1-21, as last amended by Chapter 182, Laws of Utah 1996
             18          57-1-22, as last amended by Chapter 75, Laws of Utah 2000
             19          57-1-23, as enacted by Chapter 181, Laws of Utah 1961
             20          57-1-24, as last amended by Chapter 88, Laws of Utah 1989
             21          57-1-25, as last amended by Chapter 75, Laws of Utah 2000
             22          57-1-26, as last amended by Chapter 75, Laws of Utah 2000
             23          57-1-27, as last amended by Chapter 82, Laws of Utah 1988
             24          57-1-28, as last amended by Chapter 68, Laws of Utah 1985
             25          57-1-29, as last amended by Chapter 215, Laws of Utah 1997


             26          57-1-31, as last amended by Chapter 75, Laws of Utah 2000
             27          57-1-32, as last amended by Chapter 68, Laws of Utah 1985
             28          57-1-33.1, as enacted by Chapter 185, Laws of Utah 1995
             29      ENACTS:
             30          57-1-21.5, Utah Code Annotated 1953
             31      Be it enacted by the Legislature of the state of Utah:
             32          Section 1. Section 57-1-20 is amended to read:
             33           57-1-20. Transfers in trust of real property -- Purposes -- Effect.
             34          Transfers in trust of real property may be made to secure the performance of an obligation
             35      of the trustor or any other person named in the trust deed to a beneficiary. All right, title, interest
             36      and claim in and to the trust property acquired by the trustor, or [his] the trustor's successors in
             37      interest, subsequent to the execution of the trust deed, shall inure to the trustee as security for the
             38      obligation or obligations for which the trust property is conveyed [in like manner] as if acquired
             39      before execution of the trust deed.
             40          Section 2. Section 57-1-21 is amended to read:
             41           57-1-21. Trustees of trust deeds -- Qualifications.
             42          (1) (a) The trustee of a trust deed shall be:
             43          (i) any active member of the Utah State Bar residing in Utah;
             44          (ii) any depository institution as defined in Section 7-1-103 , or insurance company
             45      authorized to do business and actually doing business in Utah under the laws of Utah or the United
             46      States;
             47          (iii) any corporation authorized to conduct a trust business and actually conducting a trust
             48      business in Utah under the laws of Utah or the United States;
             49          (iv) any title insurance or abstract company authorized to do business and actually doing
             50      business in Utah under the laws of Utah;
             51          (v) any agency of the United States government; or
             52          (vi) any association or corporation [which] that is licensed, chartered, or regulated by the
             53      Farm Credit Administration or its successor.
             54          (b) Subsection (1) is not applicable to a trustee of a trust deed existing prior to the effective
             55      date of this chapter, nor to any agreement that is supplemental to that trust deed.
             56          (2) The trustee of a trust deed may not be the beneficiary of the trust deed, unless the


             57      beneficiary is qualified to be a trustee under Subsection (1) (a)(ii), (iii), (v), or (vi).
             58          (3) The power of sale conferred by Section 57-1-23 may only be exercised by the trustee
             59      of a trust deed if the trustee is qualified under Subsection (1)(a)(i).
             60          (4) A trust deed with an unqualified trustee or without a trustee shall be effective to create
             61      a lien on the trust property, but the power of sale and other trustee powers under the trust deed may
             62      be exercised only if, prior to the exercise of those powers, the beneficiary has appointed a qualified
             63      successor trustee under Section 57-1-22 .
             64          Section 3. Section 57-1-21.5 is enacted to read:
             65          57-1-21.5. Trustees of trust deeds -- Duties.
             66          (1) The following duties of the trustee may not be delegated:
             67          (a) the preparation and execution of:
             68          (i) the notice of default and election to sell;
             69          (ii) the cancellation of notice of default and election to sell;
             70          (iii) the notice of sale;
             71          (iv) the trustee's deed; and
             72          (v) the deed of reconveyance;
             73          (b) the notification of foreclosure through publication, posting, and certified or registered
             74      mail;
             75          (c) the receiving and responding to requests for reinstatement or payoff requirements; and
             76          (d) the handling of reinstatement or payoff funds.
             77          (2) Nothing in this section is intended to prevent the trustee from using clerical or office
             78      staff under the trustee's direct and immediate supervision to assist in the duties described in
             79      Subsection (1) or from using the services of others for publication and posting.
             80          Section 4. Section 57-1-22 is amended to read:
             81           57-1-22. Successor trustees -- Appointment by beneficiary -- Effect -- Substitution
             82      of trustee -- Recording -- Form.
             83          (1) The beneficiary may appoint a successor trustee at any time by filing for record in the
             84      office of the county recorder of each county in which the trust property or some part [thereof] of
             85      the trust property is situated, a substitution of trustee. [From the time the substitution is filed for
             86      record, the] The new trustee shall succeed to all the power, duties, authority, and title of the trustee
             87      named in the deed of trust and of any successor trustee. The beneficiary may, by express provision


             88      in the substitution of trustee, ratify and confirm action taken on the beneficiary's behalf by the new
             89      trustee prior to the recording of the substitution of trustee.
             90          (2) The substitution shall:
             91          (a) identify the trust deed by stating the names of the original parties [thereto] to the trust
             92      deed, the date of recordation, and the book and page where the same is recorded or the entry
             93      number;
             94          (b) include the legal description of the trust property;
             95          (c) state the name of the new trustee; and
             96          (d) be executed and acknowledged by all of the beneficiaries under the trust deed or their
             97      successors in interest.
             98          (3) If not previously recorded, at the time of recording [the] a notice of default, the
             99      successor trustee shall file for record, in the office of the county recorder of each county in which
             100      the trust property or some part of it is situated, the substitution of trustee[, and a]. A copy [thereof]
             101      of the substitution of trustee shall be sent in the manner provided in [Section] Subsection
             102      57-1-26 (2) to all persons to whom a copy of [the] a notice of default would be required to be
             103      mailed by [Section] Subsections 57-1-26 (1)(a) and (3). [In addition thereto, a copy shall be sent
             104      to the prior trustee by regular mail to his last-known address.]
             105          (4) A substitution of trustee shall be sufficient if made in substantially the following form:
             106     
Substitution of Trustee

             107     
(insert name and address of new trustee)

             108              is hereby appointed successor trustee under the trust deed executed by ____ as
             109      trustor, in which ____ is named beneficiary and ____ as trustee, and filed for record
             110      __________(month\day\year), and recorded in Book ____, Page ____, Records of ____ County,
             111      (or filed for record __________(month\day\year), with recorder's entry No. ____, ____ County),
             112      Utah.
             113     
(Insert legal description)

             114     
(Certificate of Acknowledgment)

             115          Section 5. Section 57-1-23 is amended to read:
             116           57-1-23. Sale of trust property -- Power of trustee -- Foreclosure of trust deed.
             117          [A power of sale is hereby conferred upon the] The trustee who is qualified under
             118      Subsection 57-1-21 (1)(a)(i) is given the power of sale by which the trustee may exercise and


             119      [under which] cause the trust property [may] to be sold in the manner [hereinafter] provided in
             120      Sections 57-1-24 and 57-1-27 , after a breach of an obligation for which the trust property is
             121      conveyed as security; or, at the option of the beneficiary, a trust deed may be foreclosed in the
             122      manner provided by law for the foreclosure of mortgages on real property. The power of sale may
             123      be exercised by the trustee without express provision [therefor] for it in the trust deed.
             124          Section 6. Section 57-1-24 is amended to read:
             125           57-1-24. Sale of trust property by trustee -- Notice of default.
             126          The power of sale conferred upon the trustee who is qualified under Subsection
             127      57-1-21 (1)(a)(i) may not be exercised until:
             128          (1) the trustee first files for record, in the office of the recorder of each county where the
             129      trust property or some part or parcel [thereof] of the trust property is situated, a notice of default,
             130      identifying the trust deed by stating the name of the trustor named [therein] in the trust deed and
             131      giving the book and page, or the recorder's entry number, where the trust deed is recorded and a
             132      legal description of the trust property, and containing a statement that a breach of an obligation for
             133      which the trust property was conveyed as security has occurred, and setting forth the nature of that
             134      breach and of [his] the trustee's election to sell or cause to be sold the property to satisfy the
             135      obligation;
             136          (2) not less than three months has [thereafter] elapsed from the time the trustee filed for
             137      record under Subsection (1); and
             138          (3) after the lapse of at least three months the trustee shall give notice of sale as provided
             139      in [this act] Sections 57-1-25 and 57-1-26 .
             140          Section 7. Section 57-1-25 is amended to read:
             141           57-1-25. Notice of trustee's sale -- Description of property -- Time and place of sale.
             142          (1) The trustee shall give written notice of the time and place of sale particularly describing
             143      the property to be sold:
             144          (a) by publication of the notice, at least three times, once a week for three consecutive
             145      weeks, the last publication to be at least ten days but not more than 30 days prior to the sale, in
             146      [some] a newspaper having a general circulation in each county in which the property to be sold,
             147      or some part [thereof] of the property to be sold, is situated, or in a newspaper of general statewide
             148      daily publication; and
             149          (b) by posting the notice, at least 20 days before the date of sale, in some conspicuous


             150      place on the property to be sold and also [in at least three public places of each city or county in
             151      which the property to be sold, or some part thereof, is situated] at the office of the county recorder
             152      of each county in which the trust property, or some part of it, is located.
             153          (2) (a) The sale shall be held at the time and place designated in the notice of sale [which].
             154          (b) The time of sale shall be between the hours of [9] 8 a.m. and 5 p.m. [and at the
             155      courthouse of the county in which the property to be sold, or some part thereof, is situated.]
             156          (c) The place of sale, as designated in the notice of sale under Subsection (1), shall be one
             157      of the following:
             158          (i) at the property to be sold; or
             159          (ii) at a courthouse serving the county in which the property to be sold, or some part of the
             160      property to be sold, is located.
             161          (3) The notice of sale shall be sufficient if made in substantially the following form:
             162     
Notice of Trustee's Sale

             163          The following described property will be sold at public auction to the highest bidder,
             164      payable in lawful money of the United States at the time of sale, at [the ____ in ____, ____
             165      County, Utah,] (insert location of sale) ________________on __________(month\day\year), at
             166      __.m. of said day, for the purpose of foreclosing a trust deed originally executed by ____ (and
             167      ____, his wife,) as trustors, in favor of ____, covering real property located at ____, and more
             168      particularly described as:
             169     
(Insert legal description)

             170     
[(Certificate of Acknowledgment, if recorded)]

             171          The current beneficiary of the trust deed is ______________________ and the record
             172      owners of the property as of the recording of the notice of default are _________________ and
             173      ____________________.
             174      Dated __________(month\day\year).
_______________

             175     
Trustee

             176          Section 8. Section 57-1-26 is amended to read:
             177           57-1-26. Requests for copies of notice of default and notice of sale -- Mailing by
             178      trustee or beneficiary -- Publication of notice of default.
             179          (1) (a) Any person desiring a copy of any notice of default and of any notice of sale under
             180      any trust deed [may] shall, at any time subsequent to the filing for record of the trust deed and prior


             181      to the filing for record of a notice of default [thereunder] of the trust deed, file for record in the
             182      office of the county recorder of any county in which [any part or parcel of] the trust property, or
             183      any part of the trust property, is situated, a duly acknowledged request for a copy of any notice of
             184      default and notice of sale. [The] Except as provided in Subsection (3), the request may not be
             185      included in any other recorded instrument. The request shall set forth the name and address of the
             186      [person or] persons requesting copies of [such] those notices and shall identify the trust deed by
             187      stating the names of the original parties [thereto] to the trust deed, the date of filing for record
             188      [thereof] of the trust deed, the book and page where [the same] the trust deed is recorded or the
             189      recorder's entry number, and the legal description of the trust property. The request shall be in
             190      substantially the following form:
             191     
REQUEST FOR NOTICE

             192          [Request is hereby made] The undersigned requests that a copy of any notice of default and
             193      a copy of notice of sale under the trust deed filed for record __________(month\day\year), and
             194      recorded in Book ____, Page ____, Records of ____ County, (or filed for record
             195      __________(month\day\year), with recorder's entry number ____, _______ County), Utah,
             196      executed by ____ and _________________ as [trustor] trustors, in which ____ is named as
             197      beneficiary and ____ as trustee, be mailed to ____ (insert name) ____ at ____ (insert address)
             198      __________
             199     
(Insert legal description)

             200     
Signature ____________________

             201     
(Certificate of Acknowledgement)

             202          (b) Upon filing for record of a request for notice, the recorder shall index the request in
             203      the mortgagor's index, mortgagee's index, and abstract record. Except as provided in [this section]
             204      Subsection (3), the trustee under any [such] deed of trust is not required to send notice of default
             205      or notice of sale to any person not filing a request for notice as described [herein] in Subsection
             206      (1)(a).
             207          (2) Not later than ten days after recordation of a notice of default, the trustee or beneficiary
             208      shall mail, by certified or registered mail, with postage prepaid, a copy of [such] the notice of
             209      default with the recording date shown [thereon], addressed to each person whose name and address
             210      are set forth in a request [therefor which] that has been recorded prior to the filing for record of the
             211      notice of default, directed to the address designated in the request. At least 20 days before the date


             212      of sale, the trustee shall mail, by certified or registered mail, return receipt requested with postage
             213      prepaid, a copy of the notice of the time and place of sale, addressed to each person whose name
             214      and address are set forth in a request [therefor which] that has been recorded prior to the filing for
             215      record of the notice of default, directed to the address designated in the request.
             216          (3) Any trust deed may contain a request that a copy of any notice of default and a copy
             217      of any notice of sale [thereunder] under the trust deed be mailed to any person who is a party
             218      [thereto] to the trust deed at the address of the person set forth [therein, and a] in the trust deed.
             219      A copy of any notice of default and of any notice of sale shall be mailed to [each such] any person
             220      requesting the notice who is a party to the trust deed at the same time and in the same manner
             221      required in Subsection (2) as though a separate request [therefor] had been filed by each [of such
             222      persons] person as provided in [this section] Subsection (1)(a).
             223          (4) If no address of the trustor is set forth in the trust deed and if no request for notice by
             224      the trustor has been recorded as provided in this section, a copy of the notice of default shall, no
             225      later than 15 days after the filing for record of the notice of default, either be:
             226          (a) mailed to the address of the property described in the notice of default; or
             227          (b) posted on the property.
             228          [(4) If no address of the trustor is set forth in the trust deed and if no request for notice by
             229      the trustor has been recorded as provided in this section, a copy of the notice of default shall be
             230      published at least three times, once a week for three consecutive weeks, in a newspaper of general
             231      circulation in each county in which the trust property, or some part thereof, is situated, such
             232      publication to commence not later than ten days after the filing for record of the notice of default.
             233      In lieu of this publication, a copy of the notice of default may be delivered personally to the trustor
             234      within the ten days or at any time before publication is completed.]
             235          (5) No request for a copy of any notice filed for record [pursuant to this section] under
             236      Subsections (1) and (3), nor any statement or allegation in any [such request] of those requests, nor
             237      any record [thereof] of those requests, shall affect the title to trust property or be considered notice
             238      to any person that any person requesting copies of notice of default or of notice of sale has or
             239      claims any right, title or interest in, or lien or claim upon, the trust property.
             240          Section 9. Section 57-1-27 is amended to read:
             241           57-1-27. Sale of trust property by public auction -- Postponement of sale.
             242          (1) (a) On the date and at the time and place designated in the notice of sale, the trustee


             243      or the attorney for the trustee shall sell the property at public auction to the highest bidder. The
             244      trustee, or the attorney for the trustee, may conduct the sale and act as the auctioneer. The trustor,
             245      or [his] the trustor's successor in interest, if present at the sale, may direct the order in which the
             246      trust property shall be sold, if the property consists of several known lots or parcels which can be
             247      sold [to advantage] separately. The trustee or attorney for the trustee shall follow these directions.
             248      Any person, including the beneficiary or trustee, may bid at the sale. The trustee may bid for the
             249      beneficiary, but not for the trustee. Each bid is considered an irrevocable offer[, and if]. If the
             250      [purchaser] highest bidder refuses to pay the amount bid by [him] the highest bidder for the
             251      property [sold to him at the sale], the trustee, or the attorney for the trustee, [may again sell the
             252      property at any time to the highest bidder. The party] shall either:
             253          (i) renotice the sale in the same manner as notice of the original sale is required to be
             254      given; or
             255          (ii) sell the property to the next highest bidder.
             256          (b) A bidder refusing to pay the bid price is liable for any loss occasioned by the refusal,
             257      including interest, costs, and trustee's and reasonable attorneys' fees. The trustee or the attorney for
             258      the trustee may thereafter reject any other bid of that person for the property.
             259          (2) The person conducting the sale may, for any cause he considers expedient, postpone
             260      the sale [up to a period not to exceed 72 hours]. [If the last hour of the postponement falls on a
             261      Saturday, a Sunday, or a legal holiday, the sale may be postponed until the same hour of the next
             262      day which is not a Saturday, a Sunday, or a legal holiday.] The person conducting the sale shall
             263      give notice of the postponement by public declaration, by written notice or oral postponement, at
             264      the time and place last appointed for the sale. No other notice of the postponed sale is required[,
             265      unless the sale is postponed for longer than 72 hours beyond the date designated in the notice of
             266      sale. In the event of a longer postponement, the sale shall be cancelled and renoticed in the same
             267      manner as the original notice of sale is required to be given].
             268          Section 10. Section 57-1-28 is amended to read:
             269           57-1-28. Sale of trust property by trustee -- Payment of bid -- Trustee's deed
             270      delivered to purchaser -- Recitals -- Effect.
             271          (1) The purchaser at the sale shall pay the price bid as directed by the trustee [and upon].
             272      The beneficiary shall receive a credit on the beneficiary's bid for the amount representing the
             273      unpaid principal owed, accrued interest as of the date of the sale, advances for the payment of


             274      taxes, insurance, and maintenance and protection of the trust property and the beneficiary's lien on
             275      the trust property, and costs of sale, including reasonable trustee's and attorney's fees. Upon receipt
             276      of payment, the trustee shall execute and deliver [his] the trustee's deed to [such] the purchaser.
             277      The trustee's deed may contain recitals of compliance with the requirements of Sections 57-1-19
             278      through 57-1-36 relating to the exercise of the power of sale and sale of the property described
             279      [therein] in the trustee's deed, including recitals concerning any mailing, personal delivery, and
             280      publication of the notice of default, any mailing and the publication and posting of the notice of
             281      sale, and the conduct of sale. These recitals constitute prima facie evidence of [such] compliance
             282      with Sections 57-1-19 through 57-1-36 , and are conclusive evidence in favor of bona fide
             283      purchasers and encumbrancers for value and without notice.
             284          (2) The trustee's deed shall operate to convey to the purchaser, without right of redemption,
             285      the trustee's title and all right, title, interest, and claim of the trustor and [his] the trustor's
             286      successors in interest and of all persons claiming by, through, or under them, in and to the property
             287      sold, including all [such] right, title, interest, and claim in and to [such] the property acquired by
             288      the trustor or [his] the trustor's successors in interest subsequent to the execution of the trust deed,
             289      which conveyance shall be considered effective and relate back to the time of the sale.
             290          Section 11. Section 57-1-29 is amended to read:
             291           57-1-29. Proceeds of trustee's sale -- Disposition.
             292          (1) The trustee shall apply the proceeds of the trustee's sale, first, to the costs and expenses
             293      of exercising the power of sale and of the sale, including the payment of the trustee's and attorney's
             294      fees actually incurred not to exceed the amount which may be provided for in the trust deed,
             295      second, to payment of the obligation secured by the trust deed, and the balance, if any, to the
             296      person or persons legally entitled to the proceeds, or the trustee, in [his] the trustee's discretion,
             297      may deposit the balance of the proceeds with the clerk of the district court of the county in which
             298      the sale took place. If the proceeds are deposited with the clerk of the district court, the trustee
             299      shall file an affidavit with the clerk setting forth the facts of the deposit and a list of all known
             300      claimants, including known addresses. Upon depositing the balance and filing the affidavit, the
             301      trustee shall be discharged from all further responsibility and the clerk shall deposit the proceeds
             302      with the state treasurer subject to the order of the district court.
             303          (2) The clerk shall give notice of the deposited funds to all claimants listed in the trustee's
             304      affidavits within 15 days of receiving the affidavit of deposit from the trustee.


             305          (3) Any claimant may file a petition for adjudication of priority to the funds. The
             306      petitioner requesting the funds shall give notice of the petition to all claimants listed in the trustee's
             307      affidavit and to any other claimants known to the petitioner. The petitioner's notice must specify
             308      that all claimants have 20 days to contest the petition by affidavit or counter-petition. If no
             309      affidavit or counter-petition is filed within 20 days, the court shall enter an order directing the clerk
             310      of the court or the county treasurer to disburse the funds to the petitioner according to the petition.
             311          (4) If a petition for adjudication is contested by affidavit or counter-petition, the district
             312      court shall conduct a hearing to establish the priorities of the parties to the deposited funds and
             313      give notice to all known claimants of the date and time of the hearing. At the hearing, the court
             314      will establish the priorities of the parties to the deposited funds and enter an order directing the
             315      clerk of the court or county treasurer to disburse the funds according to the court's determination.
             316          (5) All persons having or claiming to have an interest in the disposition of funds deposited
             317      with the court under Subsection (1) who fail to appear and assert their claims are barred from any
             318      claim to the funds after the entry of the court's order under Subsection (4).
             319          Section 12. Section 57-1-31 is amended to read:
             320           57-1-31. Trust deeds -- Default in performance of obligations secured --
             321      Reinstatement -- Cancellation of recorded notice of default.
             322          (1) Whenever all or a portion of the principal sum of any obligation secured by a trust deed
             323      has, prior to the maturity date fixed in the obligation, become due or been declared due by reason
             324      of a breach or default in the performance of any obligation secured by the trust deed, including a
             325      default in the payment of interest or of any installment of principal, or by reason of failure of the
             326      trustor to pay, in accordance with the terms of the trust deed, taxes, assessments, premiums for
             327      insurance, or advances made by the beneficiary in accordance with terms of the obligation or of
             328      the trust deed, the trustor or [his] the trustor's successor in interest in the trust property or any part
             329      [thereof] of the trust property or any other person having a subordinate lien or encumbrance of
             330      record [thereon] on the trust property or any beneficiary under a subordinate trust deed, at any time
             331      within three months of the filing for record of notice of default under the trust deed, if the power
             332      of sale is to be exercised, may pay to the beneficiary or [his] the beneficiary's successor in interest
             333      the entire amount then due under the terms of the trust deed (including costs and expenses actually
             334      incurred in enforcing the terms of the obligation, or trust deed, and the trustee's and attorney's fees
             335      actually incurred) other than that portion of the principal as would not then be due had no default


             336      occurred, and thereby cure the existing default [theretofore existing and, thereupon, all proceedings
             337      theretofore had or instituted shall be dismissed or discontinued and]. After the beneficiary or
             338      beneficiary's successor in interest has been paid and the default cured, the obligation and trust deed
             339      shall be reinstated [and shall be and remain in force and effect the same] as if no [such]
             340      acceleration had occurred.
             341          (2) If the default is cured and the trust deed reinstated in the manner provided in
             342      Subsection (1), [the beneficiary, or his assignee, shall, on demand of any person having an interest
             343      in the trust property, execute and deliver to him a request to the] and a reasonable fee is paid for
             344      cancellation, including the cost of recording the cancellation of notice of default, the trustee [to]
             345      shall execute, acknowledge, and deliver a cancellation of the recorded notice of default under the
             346      trust deed; and any [beneficiary under a trust deed, or his assignee,] trustee who[, for a period of
             347      30 days after such demand,] refuses to [request the trustee to] execute and [deliver] record this
             348      cancellation within 30 days is liable to the person [entitled to such request] curing the default for
             349      all actual damages resulting from this refusal. A [release and] reconveyance given by the trustee
             350      [or beneficiary, or both,] or the execution of a trustee's deed constitutes a cancellation of a notice
             351      of default. Otherwise, a cancellation of a recorded notice of default under a trust deed is, when
             352      acknowledged, entitled to be recorded and is sufficient if made and executed by the trustee in
             353      substantially the following form:
             354     
Cancellation of Notice of Default

             355          The undersigned hereby cancels the notice of default filed for record
             356      __________(month\day\year), and recorded in Book ____, Page ____, Records of ____ County,
             357      (or filed of record __________(month\day\year), with recorder's entry No. ____, ____ County),
             358      Utah, which notice of default refers to the trust deed executed by ____ and ___________ as
             359      [trustor] trustors, in which ____ is named as beneficiary and ____ as trustee, and filed for record
             360      __________(month\day\year), and recorded in Book ____, Page ____, Records of ____ County,
             361      (or filed of record __________(month\day\year), with recorder's entry No. ____, ____ County),
             362      Utah.
             363     
(legal description)

             364     
Signature of Trustee ______________________________________________________

             365          Section 13. Section 57-1-32 is amended to read:
             366           57-1-32. Sale of trust property by trustee -- Action to recover balance due upon


             367      obligation for which trust deed was given as security -- Collection of costs and attorney's
             368      fees.
             369          At any time within three months after any sale of property under a trust deed[,] as
             370      [hereinabove] provided in Sections 57-1-23 , 57-1-24 , and 57-1-27 , an action may be commenced
             371      to recover the balance due upon the obligation for which the trust deed was given as security[, and
             372      in such action the complaint shall set forth the entire amount of the indebtedness which was
             373      secured by such trust deed, the amount for which such property was sold, and the fair market value
             374      thereof at the date of sale]. Before rendering judgment, the court shall find the [fair market] value
             375      of the property at the date of sale [of the property sold]. Absent evidence to the contrary, the
             376      amount for which the property was sold shall be determinative of the value. If other evidence is
             377      considered in determining the value, the court shall take into account the marketing period, holding
             378      costs, and anticipated costs of sale for the plaintiff. The court may not render judgment for more
             379      than the amount by which the amount of the indebtedness with interest, costs, and expenses of sale,
             380      including trustee's and attorney's fees, exceeds the [fair market] value of the property as of the date
             381      of the sale. In any action brought under this section, the prevailing party shall be entitled to collect
             382      its costs and reasonable attorney fees incurred [in bringing an action under this section].
             383          Section 14. Section 57-1-33.1 is amended to read:
             384           57-1-33.1. Reconveyance of a trust deed -- Erroneous reconveyance.
             385          (1) (a) When an obligation secured by a trust deed has been satisfied, the trustee shall,
             386      upon written request by the beneficiary, reconvey the trust property.
             387          (b) At the time the beneficiary requests a reconveyance under Subsection (1)(a), the
             388      beneficiary shall deliver to the trustee or the trustee's successor in interest the trust deed and the
             389      note or other evidence that the obligation securing the trust deed has been satisfied.
             390          (2) The reconveyance under Subsection (1) may designate the grantee as "the person or
             391      persons entitled thereto."
             392          (3) If a reconveyance is erroneously recorded by a beneficiary, the effect of the
             393      reconveyance may be nullified and the trust deed reinstated by the recording of a corrective
             394      affidavit or similar instrument describing the trust deed and setting forth the fact of the erroneous
             395      reconveyance. Upon the recording of a corrective affidavit or similar instrument, the trust deed
             396      has the same priority as it did prior to the erroneous reconveyance. However, any lien or interest
             397      that was recorded or attached to the trust deed property between the time of the recording of the


             398      erroneous reconveyance and the recording of the corrective affidavit or similar instrument has
             399      priority over the reinstated trust deed, unless the lien or interest was recorded or attached with
             400      actual knowledge that the trust deed had been reconveyed erroneously.


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