What steps do you need to take if you don't get the trustee deed within 15 days after the auction?


#1

As you stated somewhere in the forum, according to civil code 2924, I should get the trustee deed in 15 days of the sale to perfect title. What if I haven’t received by the 10th calendar day after the auction and can’t get a hold of the trustee via it’s number (Recontrust – always busy or on hold for 1-2 hrs - as I have stated in another post)? Is there a faster or someother way to get a hold of them?

After you do get a hold of someone, and politely ask for the deed and cite 2924… what if you still don’t receive it by the 15th day? What have you done in these situation? Will it be harder to get title insurance because of this? Is there a law protecting bidders at auction re: this situation since someone can record a bankruptcy or another lien right after the sale? What have you done? Have you ever had to use a lawyer or filed suit because of these situations?

Thank you – I just want to be prepared since I am a newbie. With this much worry, this will probably be the first and last property I buy at auction.


#2

See if you can find a fax number, and fax them a letter citing the correct section in civil code 2924, and letting them know you expect them to take responsibility for any damages that result if they fail to deliver the deed in time.
If you don’t get it, don’t panic. Likely won’t have any impact at all on you. Remember that the trustees deed wipes out debt subsequent to the deed of trust (with some exceptions - see elsewhere in the forums for more on that), so wouldn’t do most parties to file a lien, which would only be wiped out. Bankruptcy is probably the bigger issue, but the chances that a homeowner (or even many attorneys) would be savvy enough to pick up on this and take advantage of it is small.
No law protects you on this, however, I do believe you’d have recourse against the trustee.
What I have done is a)do my best to get the deed before the time is up, b) notify the trustee that I will hold them liable if they fail to deliver and there is a problem, and then c) record the deed as soon as I get it.
No, I’ve never had a problem with a deed recorded after the 15 days.


#3

Sorry for the duplicate post…I meant to reply the first time. Oops! I am having the same problem discussed here (failure to receive a Deed). I have scoured 2924 and have found NOTHING that I can cite to force them to send me my Deed or my money back. I am literally being held financially hostage here. Any help with the specific section of 2924 (or any other section) would be greatly appreciated.


#4

Nothing in 2924 says they have to deliver it to you, only that it is effective 8am the day of sale IF it is recorded within 15 days. See section 2924 h. © here: http://www.foreclosureradar.com/ca-foreclosure-law/ca-foreclosure-law-civil-code-2924 The key is to simply put the trustee on notice that you will hold them liable for anything that arises from their failure to deliver the deed such that it can be recorded within this deadline.


#5

I’m still not clear. According to Title 2924, the title is perfected ONLY if recorded within 15 days after auction. What does it mean when the title is not perfected or past the 15 days time frame please? Does that mean someone can file a lien against the property that will become effective after that 15 day window? What are the risks if you file AFTER the 15 day window please? Thanks.


#6

I think you are misreading the section, it does not say “only”, it says “if”. I’ve never had to deal with a problem on this so I’m not sure the risks. The one risk I’ve heard talked about is that if the homeowner declared bankruptcy it my effectively bar you from recording the trustees deed, as that would be debt collection action. By recording it within the 15 days where it is effective 8am the day of sale it would effectively be recorded their BK filing and therefore the BK filing wouldn’t prevent it. I suppose it could also create some confusion around judgements and liens, perhaps requiring you to provide documentation that the lien was incurred prior to your purchase and thus wiped out. But I’m not sure. One bit of advice I regularly give, I will repeat here. Get to know the chief title officer at your local title co. By them lunch. Always useful to be able to pick up the phone and ask them these kind of questions - with the specifics of your deal.


#7

Several of us own a warehouse as Tenants in Common. One owner filed personal bankruptcy and another existing owner purchased the bankrupt owner’s share of the warehouse. They received a deed from the trustee 8 months ago but have never recorded their deed. Impacts and concerns of this?


#8

HI Jean-Paul, By the trustee I am assuming that you mean the bankruptcy trustee which is very different from a trustees deed following a foreclosure. What you have is a valid unrecorded deed. It would be in your best interest to get this recorded as soon as possible. Your potential exposure is that there have been liens attached to the property from the previous owner but since they filed BK it is unlikely. As Sean stated above you may want to consult with a title officer to look at your specific situation and make sure that there are not any issues. Better to address potential clouds on title earlier than later!


#9

Just to give some background to Sean’s excellent reply:
That section of the code referring to “the recording of the Deed within 15 days is really effective as of the date of the sale - not the date of recording” came about some years ago, because ----
There was some question of what effect a Bankruptcy would have if filed AFTER the time the sale took place, but before recording. Say the fcl. sale concludes at 12:05. If the Bk is filed at 12:02, it no doubt voids the sale. (Even if the sale was published for 12:00. It’s the time the fcl. Trustee says “sold” which is why most make note of the exact time the sale is concluded.) The question arose - what if the Bk. is filed the next day, before the Trustee’s Deed is even prepared, much less recorded - or after the Deed is prepared but before recording? The Code language attempted to state the effective time of the Deed is the time the sale concluded IF the Deed is recorded within 15 days.
Since Federal rules normally over-ride state rules, the general feeling was that the BK. Court could do what they want and this Code section might have no effect. I don’t follow Court cases like I used to - so don’t know if this issue has been decided in the real world in recent years. I don’t know if recording after 15 days really makes any diff.
There is no question that any lien filed against the now former owner after the sale (IRS, Judgment etc.) has no effect no matter when the Deed is recorded.
The practical reason to get the Deed SOON is to begin the process to get possession if the property is occupied. Most professional bidders will not even attempt to contact occupants until they have received the Deed. (This is to stop the former owner from making a last minute attempt to stop the issuance of the Deed by “waking him”. Also, some state Courts want to see that the Deed is recorded at least by the time the eviction action is started if not even earlier - when you first serve a Notice to Quit.


#10

Addition to above reply:
Of course if the former owner is still in the property - a Bk. filing after the sale will require you to get a Relief from Stay from the BK. Ct before proceeding with eviction.


#11

Hello,this is Simon of Advantage title. I don’t know whether it is relevant, but for each receipt you receive, you will have the name of peson in charge. I have helped many many clients tracing for deed and i never had problem getting the deed. DO NOT CALL GENERAL NUMBER. ALL the trustee has their direct lines for person in charge & many of them also have email for contact. Many times, they will ask you to fax in request for deed along with the receipt. Make sure you fax over and attention to the name on the receipt.

For 15 days ruling, as we know, if we record the TDUS within 15 days from the date of TS, then the purchase date rolls back to date of TS> If not recorded within 15 days, the date of purchase will be that recording date which will have some days potentially not covered. So it is always better to make sure push the trustee to send the deed asap. Thank you.

Just for extra information. FOR IRS TAX LIEN, if you record the deed within 15 days, then my title company counts 120 days from the date of TS, if not recorded within 15 days, then we will count 120 days from the date of the recording…
SIMON WU
simonwu01@gmail.com
626 589 8822


#12

If bankruptcy is recorded just right before the trustee’s sale and if it was sold to a third party, will that sale be rescinded and void with return of the bonafide purchaser’s money?


#13

99% of the time the Trustee will not issue the Deed and send back your money. 1% of the time, especially if it not the lst Bk. filing by the debtor, they will issue the Deed, especially if the buyer demands it.