Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 203 (2017GS)

Sponsor

Sen. Davis, G.

Final action

Governor Signed 3/28/2017

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• provides that an entity in good standing that provides licensed professional legal services, employs an active member of the Utah State Bar, and maintains an office in the state may act as a real estate trustee under certain circumstances;
• provides that a claimant may file a petition for adjudication of priority to trustee sale funds if the claimant pays the court clerk a filing fee; and
• modifies the number of days in which a person may contest a petition for adjudication of priority to trustee sale funds.

Every vote on this bill

Bill text

REAL ESTATE TRUSTEE AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Gene Davis
House Sponsor: 
Brian S. King
LONG TITLE
General Description:
This bill amends provisions related to real estate trustees.
Highlighted Provisions:
This bill:
▸ provides that an entity in good standing that provides licensed professional legal
services, employs an active member of the Utah State Bar, and maintains an office in
the state may act as a real estate trustee under certain circumstances;
▸ provides that a claimant may file a petition for adjudication of priority to trustee sale
funds if the claimant pays the court clerk a filing fee; and
▸ modifies the number of days in which a person may contest a petition for
adjudication of priority to trustee sale funds.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
57-1-21
, as last amended by Laws of Utah 2008, Chapter 250
57-1-29
, as last amended by Laws of Utah 2008, Chapter 230
Be it enacted by the Legislature of the state of Utah:
Section 1. 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 
individual who is an active member of the Utah State Bar, or any entity in good
standing that is organized to provide licensed professional legal services and employs an
 active
member of the Utah State Bar [
who maintains a place within
]
, if the individual or entity is able
to do business in the state and maintains an office in
 the state where the trustor or other
interested parties may meet with the trustee to:
(A) request information about what is required to reinstate or payoff the obligation
secured by the trust deed;
(B) deliver written communications to the lender as required by both the trust deed and
by law;
(C) deliver funds to reinstate or payoff the loan secured by the trust deed; or
(D) deliver funds by a bidder at a foreclosure sale to pay for the purchase of the
property secured by the trust deed;
(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 company or agency that:
(A) holds a certificate of authority or license under Title 31A, Insurance Code, to
conduct insurance business in the state;
(B) is actually doing business in the state; and
(C) maintains a bona fide office in the state;
(v) any agency of the United States government; or
(vi) any association or corporation that is licensed, chartered, or regulated by the Farm
Credit Administration or its successor.
(b) For purposes of this Subsection (1), a person maintains a bona fide office within the
state if that person maintains a physical office in the state:
(i) that is open to the public;
(ii) that is staffed during regular business hours on regular business days; and
(iii) at which a trustor of a trust deed may in person:
(A) request information regarding a trust deed; or
(B) deliver funds, including reinstatement or payoff funds.
(c) This Subsection (1) is not applicable to a trustee of a trust deed existing prior to
May 14, 1963, nor to any agreement that is supplemental to that trust deed.
(d) The amendments in Laws of Utah 2002, Chapter 209, to this Subsection (1) apply
only to a trustee that is appointed on or after May 6, 2002.
(e) For an entity that acts as a trustee under Subsection (1)(a)(i), only a member
attorney of the entity who is currently licensed to practice law in the state may sign documents
on behalf of the entity in the entity's capacity as trustee.
(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 the beneficiary has appointed a qualified successor trustee
under Section 
57-1-22
.
Section 2. Section 
57-1-29
 is amended to read:
57-1-29.
Proceeds of trustee's sale -- Disposition.
(1) (a) The trustee shall apply the proceeds of a trustee's sale in the following order:
(i) 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 fees actually incurred not to exceed any
amount provided for in the trust deed;
(ii) second, to payment of the obligation secured by the trust deed; and
(iii) (A) the balance, if any, to the person or persons legally entitled to the proceeds; or
(B) the trustee, in the trustee's discretion, may deposit the balance of the proceeds with
the clerk of the district court of the county in which the sale took place.
(b) 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.
(c) Upon depositing the balance and filing the affidavit, the trustee is 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 affidavit within 15 days of receiving the affidavit of deposit from the trustee.
(3) (a) [
Any
] 
A
 claimant may file a petition for adjudication of priority to the funds 
if
the claimant pays to the court clerk a filing fee in the amount of $50
.
(b) A petitioner requesting funds under Subsection (3)(a) shall give notice of the
petition to all claimants listed in the trustee's affidavit and to any other claimants known to the
petitioner.
(c) The petitioner's notice under Subsection (3)(b) shall specify that all claimants have
[
] 
 days to contest the petition by affidavit or counter-petition.
(d) If no affidavit or counter-petition is filed within [
] 
 days of the notice required
by Subsection (3)(c), 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) (a) 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.
(b) At a hearing under Subsection (4)(a), the court shall 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) A person having or claiming to have an interest in the disposition of funds deposited
with the court under Subsection (1) who fails to appear and assert the person's claim is barred
from any claim to the funds after the entry of the court's order under Subsection (4).