7 LONG TITLE
8 General Description:
9 This bill amends, enacts, and repeals provisions related to non-judicial foreclosure.
10 Highlighted Provisions:
11 This bill:
12 ▸ amends provisions related to the appointment or resignation of a trustee;
13 ▸ enacts provisions related to joinder of a trustee in a legal action against a beneficiary
14 that does not involve the obligations of the trustee under the law or the trust deed;
15 ▸ amends provisions related to notice of default;
16 ▸ provides that a trustee in a trustee's sale may require a successful bidder to make a
18 ▸ provides that a successful bidder in a trustee's sale who fails to pay the bid amount
19 forfeits the bidder's deposit;
20 ▸ provides that a trustee shall provide an unrecorded copy of a signed trustee's deed to
21 a purchaser upon the purchaser's request;
22 ▸ amends a provision limiting the time within which a person may bring a
23 non-judicial foreclosure action;
24 ▸ amends a provision related to notice of a foreclosure proceeding on a reverse
25 mortgage; and
26 ▸ repeals a provision related to notice to a trustor of intent not to defer notice of sale.
27 Money Appropriated in this Bill:
29 Other Special Clauses:
31 Utah Code Sections Affected:
33 57-1-22, as last amended by Laws of Utah 2013, Chapter 395
34 57-1-26, as last amended by Laws of Utah 2002, Chapter 209
35 57-1-27, as last amended by Laws of Utah 2001, Chapter 236
36 57-1-28, as last amended by Laws of Utah 2010, Chapter 381
37 57-1-34, as enacted by Laws of Utah 1961, Chapter 181
38 57-28-304, as enacted by Laws of Utah 2015, Chapter 290
40 57-1-22.1, Utah Code Annotated 1953
42 57-1-24.5, as enacted by Laws of Utah 2011, Chapter 228
44 Be it enacted by the Legislature of the state of Utah:
45 Section 1. Section 57-1-22 is amended to read:
46 57-1-22. Successor trustees -- Appointment by beneficiary -- Effect -- Substitution
47 of trustee -- Recording -- Form.
48 (1) (a) The beneficiary may appoint a successor trustee at any time by filing an
49 appointment of trustee or a substitution of trustee for record in the office of the county recorder
50 of each county in which the trust property or [
52 (b) The [
53 the power, duties, authority, and title [
55 (c) The beneficiary may, by express provision in the appointment of trustee or
56 substitution of trustee, ratify and confirm an action taken on the beneficiary's behalf by the new
57 trustee prior to the recording of the substitution of trustee.
58 (2) [
59 (a) identify the trust deed by stating:
60 (i) the names of the original parties to the trust deed;
61 (ii) the date of recordation; and
62 (iii) (A) the book and page where the trust deed is recorded; or
63 (B) the entry number;
64 (b) include the legal description of the trust property;
65 (c) state the name and address of the new trustee; and
66 (d) be executed and acknowledged by all of the beneficiaries under the trust deed or
67 their successors in interest.
68 (3) (a) If not previously recorded at the time of recording a notice of default, the
69 successor trustee shall file for record, in the office of the county recorder of each county in
70 which the trust property or some part of it is situated, the appointment of trustee or substitution
71 of trustee.
72 (b) A copy of the appointment of trustee or the substitution of trustee shall be sent in
73 the manner provided in Subsection 57-1-26(2) to any:
74 (i) person who requests a copy of any notice of default or notice of sale under
75 Subsection 57-1-26(1)(a); and
76 (ii) person who is a party to the trust deed to whom a copy of a notice of default would
77 be required to be mailed by Subsection 57-1-26(3).
78 (4) [
79 the following form:
84 is hereby appointed [
85 trustor, in which ____ is named beneficiary and ____ as trustee, and filed for record
86 __________(month\day\year), and recorded in Book ____, Page ____, Records of ____
87 County, (Utah or filed for record __________(month\day\year), with recorder's entry No. ____,
88 ____ County), Utah.
92 (5) (a) A trustee of a trust deed may, in accordance with this Subsection (5), resign as
93 trustee by filing for record in the office of the recorder of each county in which the trust
94 property is located, a resignation of trustee.
95 (b) A trustee's resignation under this Subsection (5) takes effect upon the recording of a
96 resignation of trustee.
97 (c) A resignation of trustee shall be in substantially the following form:
98 "Resignation of Trustee
100 hereby resigns as trustee under the trust deed executed by (insert name of trustor) as trustor, in
101 which (insert name of the beneficiary) is named beneficiary and (insert name of trustee) as
102 trustee, and filed for record (insert the month, day, and year the trust deed was recorded), and
103 recorded in Book ___, Page ___, Records of ______________ County, [
104 recorder's entry no.____, ______________ County[
105 (Insert legal description)
106 Signature ________________________
107 (Certificate of acknowledgment)"
108 (d) (i) Within three days after the day on which a trustee resigns under this Subsection
109 (5), the trustee shall [
110 any legal action pending against the trustee that is related to or arises from the trustee's
111 performance of a duty of a trustee.
112 (ii) Except as provided in Subsection (5)(d)(iv), within 10 days after the day on which
113 a party [
114 court to substitute the beneficiary of the trust deed as defendant in the action in the place of the
115 trustee until a successor trustee is appointed. [
117 (iii) Except as provided in Subsection (5)(d)(iv), if, after the expiration of the time
118 described in Subsection (5)(d)(ii), a party does not move the court to substitute the beneficiary
119 or the successor trustee in place of the trustee as defendant, the court shall dismiss with
120 prejudice all claims against the withdrawn trustee.
121 (iv) Subsection (5)(d)(ii) and (5)(d)(iii) do not apply to a cause of action against a
122 trustee that alleges negligent or intentional misconduct by the withdrawn trustee.
123 (e) (i) The withdrawal of a trustee of a trust deed under this section does not affect the
124 validity or the priority of the trust deed.
125 (ii) After a trustee withdraws under this part, only a qualified successor trustee
126 appointed by the beneficiary under Section 57-1-22 may exercise trustee powers, including the
127 power of sale.
128 Section 2. Section 57-1-22.1 is enacted to read:
129 57-1-22.1. Effect on trustee of a legal action involving a trust.
130 (1) A party in a legal action that involves a trust deed is not required to join the trustee
131 as a party in the action unless the legal action pertains to a breach of the trustee's obligations
132 under this chapter or under the trust deed.
133 (2) A trustee of a trust deed is required to act pursuant to a court order against the trust
134 deed beneficiary to the extent the order requires an action that the trustee is authorized to take
135 under this chapter or under the trust deed.
136 (3) If a party in a legal action that involves a trust deed joins the trustee in an action
137 that does not pertain to the trustee's obligations under this chapter or under the trust deed, the
138 court shall dismiss the action against the trustee and award the trustee reasonable attorney fees
139 arising from the trustee being joined in the legal action.
140 Section 3. Section 57-1-26 is amended to read:
141 57-1-26. Requests for copies of notice of default and notice of sale -- Mailing by
142 trustee or beneficiary -- Publication of notice of default -- Notice to parties of trust deed.
143 (1) (a) Any person desiring a copy of any notice of default and of any notice of sale
144 under any trust deed shall file for record a duly acknowledged request for a copy of any notice
145 of default and notice of sale:
146 (i) in the office of the county recorder of any county in which the trust property or any
147 part of the trust property is situated; and
148 (ii) at any time:
149 (A) subsequent to the filing for record of the trust deed; and
150 (B) prior to the filing for record of a notice of default.
151 (b) Except as provided in Subsection (3), the request described in Subsection (1)(a)
152 may not be included in any other recorded instrument.
153 (c) The request described in Subsection (1)(a) shall:
154 (i) set forth the name and address of the one or more persons requesting copies of the
155 notice of default and the notice of sale; and
156 (ii) identify the trust deed by stating:
157 (A) the names of the original parties to the trust deed;
158 (B) the date of filing for record of the trust deed;
159 (C) (I) the book and page where the trust deed is recorded; or
160 (II) the recorder's entry number; and
161 (D) the legal description of the trust property.
162 (d) The request described in Subsection (1)(a) shall be in substantially the following
165 The undersigned requests that a copy of any notice of default and a copy of notice of
166 sale under the trust deed filed for record __________(month\day\year), and recorded in Book
167 ____, Page ____, Records of ____ County, (or filed for record __________(month\day\year),
168 with recorder's entry number ____, _______ County), Utah, executed by ____ and
169 _________________ as trustors, in which ____ is named as beneficiary and ____ as trustee, be
170 mailed to ____ (insert name) ____ at ____ (insert address) __________.
174 (e) If a request for a copy of a notice of default and notice of sale is filed for record
175 under this section, the recorder shall index the request in:
176 (i) the mortgagor's index;
177 (ii) mortgagee's index; and
178 (iii) abstract record.
179 (f) Except as provided in Subsection (3), the trustee under any deed of trust is not
180 required to send notice of default or notice of sale to any person not filing a request for notice
181 as described in this Subsection (1).
182 (2) (a) Not later than 10 days after [
183 is recorded, the trustee or beneficiary shall mail a signed copy of the notice of default:
184 (i) by certified or registered mail, return receipt requested, with postage prepaid;
185 (ii) with the recording date shown;
186 (iii) addressed to each person whose name and address are set forth in a request that
187 has been recorded prior to the filing for record of the notice of default; and
188 (iv) directed to the address designated in the request.
189 (b) At least 20 days before the date of sale, the trustee shall mail a signed copy of the
190 notice of the time and place of sale:
191 (i) by certified or registered mail, return receipt requested, with postage prepaid;
192 (ii) addressed to each person whose name and address are set forth in a request that has
193 been recorded prior to the filing for record of the notice of default; and
194 (iii) directed to the address designated in the request.
195 (3) (a) Any trust deed may contain a request that a copy of any notice of default and a
196 copy of any notice of sale under the trust deed be mailed to any person who is a party to the
197 trust deed at the address of the person set forth in the trust deed.
198 (b) A copy of any notice of default and of any notice of sale shall be mailed to any
199 person requesting the notice who is a party to the trust deed at the same time and in the same
200 manner required in Subsection (2) as though a separate request had been filed by each person
201 as provided in Subsection (1) except that a trustee shall include with a signed copy of a notice
202 of default and the signed copy of a notice of sale the following information current as of the
203 time the notice of default and the notice of sale is provided:
204 (i) the name of the trustee;
205 (ii) the mailing address of the trustee;
206 (iii) if the trustee maintains a bona fide office in the state meeting the requirements of
207 Subsection 57-1-21(1)(b), the address of a bona fide office of the trustee meeting the
208 requirements of Subsection 57-1-21(1)(b);
209 (iv) the hours during which the trustee can be contacted regarding the notice of default
210 and notice of sale, which hours shall include the period during regular business hours in a
211 regular business day; and
212 (v) a telephone number that the person may use to contact the trustee during the hours
213 described in Subsection (3)(b)(iv).
214 (4) If no address of the trustor is set forth in the trust deed and if no request for notice
215 by the trustor has been recorded as provided in this section, no later than 15 days after the filing
216 for record of the notice of default, a copy of the notice of default shall be:
217 (a) mailed to the address of the property described in the notice of default; or
218 (b) posted on the property.
219 (5) The following shall not affect the title to trust property or be considered notice to
220 any person that any person requesting copies of notice of default or of notice of sale has or
221 claims any right, title or interest in, or lien or claim upon, the trust property:
222 (a) a request for a copy of any notice filed for record under Subsection (1) or (3);
223 (b) any statement or allegation in any request described in Subsection (5)(a); or
224 (c) any record of a request described in Subsection (5)(a).
225 Section 4. Section 57-1-27 is amended to read:
226 57-1-27. Sale of trust property by public auction -- Postponement of sale.
227 (1) (a) On the date and at the time and place designated in the notice of sale, the trustee
228 or the attorney for the trustee shall sell the property at public auction to the highest bidder.
229 (b) The trustee, or the attorney for the trustee, [
230 the auctioneer.
231 (c) The trustor, or the trustor's successor in interest, if present at the sale, may direct the
232 order in which the trust property shall be sold, if the property consists of several known lots or
233 parcels which can be sold separately.
234 (d) The trustee or attorney for the trustee shall follow [
235 described in Subsection (1)(c).
236 (e) Any person, including the beneficiary or trustee, may bid at the sale.
237 (f) The trustee may bid for the beneficiary. [
238 (g) A bid is considered an irrevocable offer.
239 (h) The trustee may, in the trustee's discretion, require a successful bidder to make a
240 deposit in an amount set forth in the notice of trustee's sale described in Section 57-1-25.
241 (i) If the highest bidder refuses to pay the amount bid by the highest bidder for the
242 property, the trustee, or the attorney for the trustee, shall either:
243 (i) renotice the sale in the same manner as notice of the original sale is required to be
244 given; or
245 (ii) sell the property to the next highest bidder.
247 (i) the bidder is liable for any loss occasioned by the refusal, including interest, costs,
248 and trustee's and reasonable [
249 (ii) the trustee or the attorney for the trustee may [
250 reject any other bid of that person for the property[
251 (iii) the bidder forfeits the bidder's deposit; and
252 (iv) the bidder's deposit is treated as additional sale proceeds applied in accordance
253 with Section 57-1-29.
254 (2) (a) The person conducting the sale may, for any cause [
255 expedient, postpone the sale.
256 (b) The person conducting the sale shall give notice of each postponement by public
258 the sale.
259 (c) No [
260 Subsection (2)(b) is required, unless the postponement [
261 longer than 45 days after the date designated in the original notice of sale.
262 (d) If the person conducting the sale postpones a sale for longer than the time period
263 described in Subsection (2)(c), the person conducting the sale shall [
264 sale in the same manner [
265 Section 5. Section 57-1-28 is amended to read:
266 57-1-28. Sale of trust property by trustee -- Payment of bid -- Trustee's deed
267 delivered to purchaser -- Recitals -- Effect.
268 (1) (a) The purchaser at the sale shall pay the price bid as directed by the trustee.
269 (b) The beneficiary shall receive a credit on the beneficiary's bid in an amount not to
270 exceed the amount representing:
271 (i) the unpaid principal owed;
272 (ii) accrued interest as of the date of the sale;
273 (iii) advances for the payment of:
274 (A) taxes;
275 (B) insurance; and
276 (C) maintenance and protection of the trust property;
277 (iv) the beneficiary's lien on the trust property; and
278 (v) costs of sale, including reasonable trustee's and attorney's fees.
279 (2) (a) (i) Within [
280 the price bid, the trustee shall [
281 (A) execute and submit the trustee's deed to the county recorder for recording; and
282 (B) upon the purchaser's request, provide an unrecorded copy of the signed trustee's
283 deed to the purchaser.
284 (ii) If the trustee does not comply with this Subsection (2)(a), the trustee is liable for
285 any loss incurred by the purchaser because of the trustee's failure to comply with this
286 Subsection (2)(a).
287 (b) The trustee's deed may contain recitals of compliance with the requirements of
288 Sections 57-1-19 through 57-1-36 relating to the exercise of the power of sale and sale of the
289 property described in the trustee's deed, including recitals concerning:
290 (i) any mailing, personal delivery, and publication of the notice of default;
291 (ii) any mailing and the publication and posting of the notice of sale; and
292 (iii) the conduct of sale.
293 (c) The recitals described in Subsection (2)(b):
294 (i) constitute prima facie evidence of compliance with Sections 57-1-19 through
295 57-1-36; and
296 (ii) are conclusive evidence in favor of bona fide purchasers and encumbrancers for
297 value and without notice.
298 (3) The trustee's deed shall operate to convey to the purchaser, without right of
299 redemption, the trustee's title and all right, title, interest, and claim of the trustor and the
300 trustor's successors in interest and of all persons claiming by, through, or under them, in and to
301 the property sold, including all right, title, interest, and claim in and to the property acquired by
302 the trustor or the trustor's successors in interest subsequent to the execution of the trust deed,
303 which trustee's deed shall be considered effective and relate back to the time of the sale.
304 (4) In accordance with Section 57-3-106, an interest of a purchaser in a trustee's deed
305 that is recorded with the county recorder may not be divested if a person records an affidavit or
306 other document purporting to rescind or cancel the trustee's deed.
307 Section 6. Section 57-1-34 is amended to read:
308 57-1-34. Sale of trust property by trustee -- Foreclosure of trust deed --
309 Limitation of actions.
313 action on [
314 (1) commence an action to foreclose the trust deed; or
315 (2) file for record a notice of default under Section 57-1-24.
316 Section 7. Section 57-28-304 is amended to read:
317 57-28-304. Foreclosure.
318 Before a person initiates foreclosure proceedings on a reverse mortgage, the person
320 (1) [
321 that states the grounds for default and foreclosure; and
322 (2) provide the borrower at least 30 days after the day on which the [
323 person sends the notice described in Subsection (1) to cure the borrower's default.
324 Section 8. Repealer.
325 This bill repeals:
326 Section 57-1-24.5, Notice to trustor of intent not to defer notice of sale.