Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 220 Second Substitute (2016GS)

Sponsor

Sen. Harper, W.

Final action

Governor Signed 3/25/2016

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• amends provisions related to the appointment or resignation of a trustee;
• enacts provisions related to joinder of a trustee in a legal action against a beneficiary that does not involve the obligations of the trustee under the law or the trust deed;
• amends provisions related to notice of default;
• provides that a trustee in a trustee's sale may require a successful bidder to make a deposit;
• provides that a successful bidder in a trustee's sale who fails to pay the bid amount forfeits the bidder's deposit;
• provides that a trustee shall provide an unrecorded copy of a signed trustee's deed to a purchaser upon the purchaser's request;
• amends a provision limiting the time within which a person may bring a non-judicial foreclosure action;
• amends a provision related to notice of a foreclosure proceeding on a reverse mortgage; and
• repeals a provision related to notice to a trustor of intent not to defer notice of sale.

Every vote on this bill

Bill text

NON-JUDICIAL FORECLOSURE AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Wayne A. Harper
House Sponsor: 
R. Curt Webb
LONG TITLE
General Description:
This bill amends, enacts, and repeals provisions related to non-judicial foreclosure.
Highlighted Provisions:
This bill:
▸ amends provisions related to the appointment or resignation of a trustee;
▸ enacts provisions related to joinder of a trustee in a legal action against a beneficiary
that does not involve the obligations of the trustee under the law or the trust deed;
▸ amends provisions related to notice of default;
▸ provides that a trustee in a trustee's sale may require a successful bidder to make a
deposit;
▸ provides that a successful bidder in a trustee's sale who fails to pay the bid amount
forfeits the bidder's deposit;
▸ provides that a trustee shall provide an unrecorded copy of a signed trustee's deed to
a purchaser upon the purchaser's request;
▸ amends a provision limiting the time within which a person may bring a
non-judicial foreclosure action;
▸ amends a provision related to notice of a foreclosure proceeding on a reverse
mortgage; and
▸ repeals a provision related to notice to a trustor of intent not to defer notice of sale.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
57-1-22
, as last amended by Laws of Utah 2013, Chapter 395
57-1-26
, as last amended by Laws of Utah 2002, Chapter 209
57-1-27
, as last amended by Laws of Utah 2001, Chapter 236
57-1-28
, as last amended by Laws of Utah 2010, Chapter 381
57-1-34
, as enacted by Laws of Utah 1961, Chapter 181
57-28-304
, as enacted by Laws of Utah 2015, Chapter 290
ENACTS:
57-1-22.1
, Utah Code Annotated 1953
REPEALS:
57-1-24.5
, as enacted by Laws of Utah 2011, Chapter 228
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
57-1-22
 is amended to read:
57-1-22.
Successor trustees -- Appointment by beneficiary -- Effect -- Substitution
of trustee -- Recording -- Form.
(1) (a) The beneficiary may appoint a successor trustee at any time by filing 
an
appointment of trustee or a substitution of trustee
 for record in the office of the county recorder
of each county in which the trust property or [
some
] 
a
 part of the trust property is [
situated, a
substitution of trustee
] 
located
.
(b) The [
new
] trustee [
shall succeed to all the
] 
appointed under Subsection (1)(a) has
the
 power, duties, authority, and title [
of the trustee named
] 
described
 in the deed of trust [
and
of any successor trustee
].
(c) The beneficiary may, by express provision in the 
appointment of trustee or
substitution of trustee, ratify and confirm 
an
 action taken on the beneficiary's behalf by the new
trustee prior to the recording of the substitution of trustee.
(2) [
A
] 
An appointment of trustee or a
 substitution of trustee shall:
(a) identify the trust deed by stating:
(i) the names of the original parties to the trust deed;
(ii) the date of recordation; and
(iii) (A) the book and page where the trust deed is recorded; or
(B) the entry number;
(b) include the legal description of the trust property;
(c) state the name and address 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) (a) If not previously recorded at the time of recording a notice of default, the
successor 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 
appointment of trustee or
 substitution
of trustee.
(b) A copy of the 
appointment of trustee or the
 substitution of trustee shall be sent in
the manner provided in Subsection 
57-1-26
(2) to any:
(i) person who requests a copy of any notice of default or notice of sale under
Subsection 
57-1-26
(1)(a); and
(ii) person who is a party to the trust deed to whom a copy of a notice of default would
be required to be mailed by Subsection 
57-1-26
(3).
(4) [
A
] 
An appointment of trustee or a
 substitution of trustee shall be in substantially
the following form:
[
Substitution of Trustee
]
[
(insert name and address of new trustee)
]
"Appointment or Substitution of Trustee
_________________________(name and address of appointed or substituted trustee)
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, (
Utah
 or filed for record __________(month\day\year), with recorder's entry No. ____,
____ County), Utah.
(Insert legal description)
Signature_____________________________
(Certificate of Acknowledgment)
"
(5) (a) A trustee of a trust deed may, in accordance with this Subsection (5), resign as
trustee by filing for record in the office of the recorder of each county in which the trust
property is located, a resignation of trustee.
(b) A trustee's resignation under this Subsection (5) takes effect upon the recording of a
resignation of trustee.
(c) A resignation of trustee shall be in substantially the following form:
"Resignation of Trustee
_________________________
([
Insert
] 
insert
 name and address of 
resigned
 trustee)
hereby resigns as trustee under the trust deed executed by (insert name of trustor) as trustor, in
which (insert name of the beneficiary) is named beneficiary and (insert name of trustee) as
trustee, and filed for record (insert the month, day, and year the trust deed was recorded), and
recorded in Book ___, Page ___, Records of ______________ County, [
(
]
Utah
 or with
recorder's entry no.____, ______________ County[
)
], Utah.
(Insert legal description)
Signature ________________________
(Certificate of acknowledgment)"
(d) (i) Within three days after the day on which a trustee resigns under this Subsection
(5), the trustee shall [
deliver
] 
provide
 written notice of the trustee's resignation to each party in
any legal action pending against the trustee that is related to or arises from the trustee's
performance of a duty of a trustee.
(ii) Except as provided in Subsection (5)(d)(iv), within 10 days after the day on which
a party [
receives
] 
is provided
 a notice described in Subsection (5)(d)(i), the party may move the
court to substitute the beneficiary of the trust deed as defendant in the action in the place of the
trustee until a successor trustee is appointed. [
When a successor trustee is appointed, the
successor trustee shall be substituted as defendant in place of the beneficiary.
]
(iii) Except as provided in Subsection (5)(d)(iv), if, after the expiration of the time
described in Subsection (5)(d)(ii), a party does not move the court to substitute the beneficiary
or the successor trustee in place of the trustee as defendant, the court shall dismiss with
prejudice all claims against the withdrawn trustee.
(iv) Subsection (5)(d)(ii) and (5)(d)(iii) do not apply to a cause of action against a
trustee that alleges negligent or intentional misconduct by the withdrawn trustee.
(e) (i) The withdrawal of a trustee of a trust deed under this section does not affect the
validity or the priority of the trust deed.
(ii) After a trustee withdraws under this part, only a qualified successor trustee
appointed by the beneficiary under Section 
57-1-22
 may exercise trustee powers, including the
power of sale.
Section 2. Section 
57-1-22.1
 is enacted to read:
 57-1-22.1.
Effect on trustee of a legal action involving a trust.
(1) A party in a legal action that involves a trust deed is not required to join the trustee
as a party in the action unless the legal action pertains to a breach of the trustee's obligations
under this chapter or under the trust deed.
(2) A trustee of a trust deed is required to act pursuant to a court order against the trust
deed beneficiary to the extent the order requires an action that the trustee is authorized to take
under this chapter or under the trust deed.
(3) If a party in a legal action that involves a trust deed joins the trustee in an action
that does not pertain to the trustee's obligations under this chapter or under the trust deed, the
court shall dismiss the action against the trustee and award the trustee reasonable attorney fees
arising from the trustee being joined in the legal action.
Section 3. 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 -- Notice to parties of trust deed.
(1) (a) Any person desiring a copy of any notice of default and of any notice of sale
under any trust deed shall file for record a duly acknowledged request for a copy of any notice
of default and notice of sale:
(i) in the office of the county recorder of any county in which the trust property or any
part of the trust property is situated; and
(ii) at any time:
(A) subsequent to the filing for record of the trust deed; and
(B) prior to the filing for record of a notice of default.
(b) Except as provided in Subsection (3), the request described in Subsection (1)(a)
may not be included in any other recorded instrument.
(c) The request described in Subsection (1)(a) shall:
(i) set forth the name and address of the one or more persons requesting copies of the
notice of default and the notice of sale; and
(ii) identify the trust deed by stating:
(A) the names of the original parties to the trust deed;
(B) the date of filing for record of the trust deed;
(C) (I) the book and page where the trust deed is recorded; or
(II) the recorder's entry number; and
(D) the legal description of the trust property.
(d) The request described in Subsection (1)(a) shall be in substantially the following
form:
"
REQUEST FOR NOTICE
The undersigned requests that a copy of any notice of default and 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 trustors, in which ____ is named as beneficiary and ____ as trustee, be
mailed to ____ (insert name) ____ at ____ (insert address) __________.
(Insert legal description)
Signature ____________________
(Certificate of Acknowledgement)
"
(e) If a request for a copy of a notice of default and notice of sale is filed for record
under this section, the recorder shall index the request in:
(i) the mortgagor's index;
(ii) mortgagee's index; and
(iii) abstract record.
(f) Except as provided in Subsection (3), the trustee under any deed of trust is not
required to send notice of default or notice of sale to any person not filing a request for notice
as described in this Subsection (1).
(2) (a) Not later than 10 days after [
recordation of
] 
the day on which
 a notice of default
is recorded
, the trustee or beneficiary shall mail a signed copy of the notice of default:
(i) by certified or registered mail
, return receipt requested
, with postage prepaid;
(ii) with the recording date shown;
(iii) addressed to each person whose name and address are set forth in a request that
has been recorded prior to the filing for record of the notice of default; and
(iv) directed to the address designated in the request.
(b) At least 20 days before the date of sale, the trustee shall mail a signed copy of the
notice of the time and place of sale:
(i) by certified or registered mail, return receipt requested, with postage prepaid;
(ii) addressed to each person whose name and address are set forth in a request that has
been recorded prior to the filing for record of the notice of default; and
(iii) directed to the address designated in the request.
(3) (a) Any trust deed may contain a request that a copy of any notice of default and a
copy of any notice of sale under the trust deed be mailed to any person who is a party to the
trust deed at the address of the person set forth in the trust deed.
(b) A copy of any notice of default and of any notice of sale shall be mailed to any
person requesting 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 had been filed by each person
as provided in Subsection (1) except that a trustee shall include with a signed copy of a notice
of default and the signed copy of a notice of sale the following information current as of the
time the notice of default and the notice of sale is provided:
(i) the name of the trustee;
(ii) the mailing address of the trustee;
(iii) if the trustee maintains a bona fide office in the state meeting the requirements of
Subsection 
57-1-21
(1)(b), the address of a bona fide office of the trustee meeting the
requirements of Subsection 
57-1-21
(1)(b);
(iv) the hours during which the trustee can be contacted regarding the notice of default
and notice of sale, which hours shall include the period during regular business hours in a
regular business day; and
(v) a telephone number that the person may use to contact the trustee during the hours
described in Subsection (3)(b)(iv).
(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, no later than 15 days after the filing
for record of the notice of default, a copy of the notice of default shall be:
(a) mailed to the address of the property described in the notice of default; or
(b) posted on the property.
(5) The following shall not affect the title to trust property or be considered notice 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:
(a) a request for a copy of any notice filed for record under Subsection (1) or (3);
(b) any statement or allegation in any request described in Subsection (5)(a); or
(c) any record of a request described in Subsection (5)(a).
Section 4. 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.
(b)
 The trustee, or the attorney for the trustee, [
may
] 
shall
 conduct the sale and act as
the auctioneer.
(c)
 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 separately.
(d)
 The trustee or attorney for the trustee shall follow [
these
] 
the trustor's
 directions
described in Subsection (1)(c)
.
(e)
 Any person, including the beneficiary or trustee, may bid at the sale.
(f)
 The trustee may bid for the beneficiary. [
Each
]
(g) A
 bid is considered an irrevocable offer.
(h) The trustee may, in the trustee's discretion, require a successful bidder to make a
deposit in an amount set forth in the notice of trustee's sale described in Section 
57-1-25
.
(i)
 If the highest bidder refuses to pay the amount bid by the highest bidder for the
property, the trustee, or the attorney for the trustee, shall either:
(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
] 
(j) If a bidder refuses to
 to pay the bid price
:
(i) the bidder
 is liable for any loss occasioned by the refusal, including interest, costs,
and trustee's and reasonable [
attorneys' fees. The
] 
attorney fees;
(ii) the
 trustee or the attorney for the trustee may [
thereafter
]
, after the bidder's refusal,
reject any other bid of that person for the property[
.
]
;
(iii) the bidder forfeits the bidder's deposit; and
(iv) the bidder's deposit is treated as additional sale proceeds applied in accordance
with Section 
57-1-29
.
(2) 
(a)
 The person conducting the sale may, for any cause [
he
] 
that the person
 considers
expedient, postpone the sale.
(b)
 The person conducting the sale shall give notice of each postponement by public
declaration[
, by written notice or oral postponement,
] at the time and place last appointed for
the sale.
(c)
 No [
other
] notice of the postponed sale 
in addition to the notice described in
Subsection (2)(b)
 is required, unless the postponement [
exceeds 45 days. In that event,
] 
is for
longer than 45 days after the date designated in the original notice of sale.
(d) If the person conducting the sale postpones a sale for longer than the time period
described in Subsection (2)(c), the person conducting
 the sale shall [
be renoticed
] 
renotice the
sale
 in the same manner [
as
] 
required for
 the original notice of sale [
is required to be given
].
Section 5. 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) (a) The purchaser at the sale shall pay the price bid as directed by the trustee.
(b) The beneficiary shall receive a credit on the beneficiary's bid in an amount not to
exceed the amount representing:
(i) the unpaid principal owed;
(ii) accrued interest as of the date of the sale;
(iii) advances for the payment of:
(A) taxes;
(B) insurance; and
(C) maintenance and protection of the trust property;
(iv) the beneficiary's lien on the trust property; and
(v) costs of sale, including reasonable trustee's and attorney's fees.
(2) (a) (i) Within [
three
] 
five
 business days of the day the trustee receives payment of
the price bid, the trustee shall [
make the trustee's deed available to the purchaser.
]
:
(A) execute and submit the trustee's deed to the county recorder for recording; and
(B) upon the purchaser's request, provide an unrecorded copy of the signed trustee's
deed to the purchaser.
(ii) If the trustee does not comply with this Subsection (2)(a), the trustee is liable for
any loss incurred by the purchaser because of the trustee's failure to comply with this
Subsection (2)(a).
(b) 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 in the trustee's deed, including recitals concerning:
(i) any mailing, personal delivery, and publication of the notice of default;
(ii) any mailing and the publication and posting of the notice of sale; and
(iii) the conduct of sale.
(c) The recitals described in Subsection (2)(b):
(i) constitute prima facie evidence of compliance with Sections 
57-1-19
 through
57-1-36
; and
(ii) are conclusive evidence in favor of bona fide purchasers and encumbrancers for
value and without notice.
(3) 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 the
trustor's successors in interest and of all persons claiming by, through, or under them, in and to
the property sold, including all right, title, interest, and claim in and to the property acquired by
the trustor or the trustor's successors in interest subsequent to the execution of the trust deed,
which trustee's deed shall be considered effective and relate back to the time of the sale.
(4) In accordance with Section 
57-3-106
, an interest of a purchaser in a trustee's deed
that is recorded with the county recorder may not be divested if a person records an affidavit or
other document purporting to rescind or cancel the trustee's deed.
Section 6. Section 
57-1-34
 is amended to read:
57-1-34.
Sale of trust property by trustee -- Foreclosure of trust deed --
Limitation of actions.
[
The trustee's sale of property under a trust deed shall be made, or an action to foreclose
a trust deed as provided by law for the foreclosure of mortgages on real property shall be
commenced,
] 
A person shall,
 within the period prescribed by law for the commencement of an
action on [
the
] 
an
 obligation secured by [
the
] 
a
 trust deed[
.
]
:
(1) commence an action to foreclose the trust deed; or
(2) file for record a notice of default under Section 
57-1-24
.
Section 7. Section 
57-28-304
 is amended to read:
57-28-304.
Foreclosure.
Before a person initiates foreclosure proceedings on a reverse mortgage, the person
shall:
(1) [
give
] 
send
 the borrower
, by certified mail, return receipt requested,
 written notice
that states the grounds for default and foreclosure; and
(2) provide the borrower at least 30 days after the day on which the [
borrower receives
]
person sends
 the notice described in Subsection (1) to cure the borrower's default.
Section 8. 
Repealer.
This bill repeals:
Section 
57-1-24.5
,
Notice to trustor of intent not to defer notice of sale.