When to record a Trustee's Deed Upon Sale and other timing questions

Although I’ve seen frequent advice describing benefits of recording a Trustee’s Deed Upon Sale (TDUS) within 15 days after the auction, are there any potential benefits to waiting?

I’m not clear what significance the following dates have:

  1. Auction date
  2. Transfer date stated in the TDUS (is this always the same as the auction date?)
  3. Date trustee signs TDUS
  4. When TDUS is deemed recorded (presumably this must be either 8 AM on the auction date, or at least 16 days thereafter)

I assume the auction buyer is responsible for all unpaid property taxes, whether they accrue before or after the sale. However, is (4) always the date a lower reassessed tax rate would be deemed to begin?

When does the auction buyer begin to be liable for HOA fees (if applicable)?

On what date is an auction buyer legally permitted to take possession of a vacant property?

I wonder what is the time line to record Trustee’s Deed upon sale into county recorder’s office?

Hi Donald, Provided the Trustees Deed is recorded within 14 days from the sale date than the effective date of the sale is the actual sale date. Given this gray area of time most investors do not start eviction proceedings or repairs until they have the trustees deed in hand. The property taxes would be the responsibility of the new owner from the date of the sale. The assessor will reassess the property taxes and depending on the time of year that could result in a supplemental tax bill or a credit if the taxes are substantially lowered. If there are past due taxes the new owner would pay the former owners tax rate and the taxes due from the sale date would be reassessed.

Michelle, According to which law is the 14 day rule established?

It’s 15 days. 2924(h)© – For the purposes of this subdivision, the trustee’s sale shall be deemed final upon the acceptance of the last and highest bid, and shall be deemed perfected as of 8 a.m. on the actual date of sale if the trustee’s deed is recorded within 15 calendar days after the sale, or the next business day following the 15th day if the county recorder in which the property is located is closed on the 15th day.

My wife and I just bought a condo at a Trustee’s sale today that we intend to occupy. When do we file the 90 day notice to the existing tenants and how do we file that notice?

Serve personally if you can, and mail. Obviously, try and talk to them first and explain you understand they have the right to stay there 90 days and do have to pay you rent.
Are you sure they are legit tenants? and not squatters? Have them show you the lease.

If the Trustees Deed Upon Auction was recorded,hHow does the auction winner take full ownership of a property if there is a first and second mortgage that has not been satisfied? And, doesn’t the owner prior to the auction need to receive correct notices via certified mail of the the auction? Auction was for unpaid HOA fees for only one of the HOA’s on the property. The 2nd HOA is also unpaid and there is a lien on the property for that as well.

Hi Monique,

What state are we talking about? CA? As miketh notes just above, (excerpt from CA Code 2924(h)©) if you record the Trustee’s Deed Upon Sale within 15 calendar days of the auction, then the sale is perfected (completed) as of 8 a.m. on the actual date of the Trustee Sale. At that point, you ARE the new owner with the very important caveat that you will not have clear title until you payoff any senior (by recording date) liens/loans. You noted that there is a first (1st) and second (2nd) mortgage outstanding. In all but the most rare instances, the HOA lien (which you bought at auction) will be recorded after (junior to) the 1st and the 2nd. Consequently, you will need to payoff those senior loans before you can gain clear title to the property. Hopefully there is still some equity in the property after paying off these debts? Also, in the case of an HOA foreclosure, in many states, the former property owner has the right to redeem the property (reclaim ownership) by paying off his/her back due HOAs. In CA this redemption period extends for 90 days. I am not sure if this HOA redemption period will cause any delay in your receipt of the Trustee’s Deed Upon Sale? Anyone have experience with this? FWIW, here is another thread on this topic http://www.foreclosureradar.com/forum/buyers-and-investors/buying-auction/buying-hoa-liens-and-90-day-right-redemption

Monique, In answer to the second part of your question. The owner is notified of the Trustee Sale by mail (NOD & NTS), by NTS posting (literally on the door or entryway) and by publication (local/regional newspaper and often also online). These notices make it clear the the owner needs to attend the scheduled auction (Trustee Sale) whereupon they might be subsequently notified of any postponements. The auctioneers are very careful to verbally call out any postponements and the dates. The trustee employees who do the door postings will often photograph the NTS posted on the door as an extra layer of proof that the proper notice was made. Try as they might, it is very hard for a “mortgage delinquent” owner to make the case that they were not “properly notified.”

In my limited experience, HOA foreclosure of a friends condo, the HOA trustee did not issue the deed to the buyer at the auction, but rather elected to wait the 90 days. My friend redeemed on day 89. It was really just a pissing match over stupid HOA stuff.

Hi Barco, That is one of the risks of buying a HOA foreclosure.

I’m actually dealing with a similar scenario. I bought an HOA lien at Trustee sale after verifying with my title company that there were only two loans on the property. I called the trustee and was surprised that I wasn’t getting a Trustee’s Deed Upon Sale. The trustee said that I would get a copy of a “Certificate of Foreclosure Sale Subject to Redemption.” The original was sent to a title company and they would record it with the county. If the owner does not redeem the lien within 90 days, then I will receive the TDUS. I’d like some help from y’all out there on how to track down who currently holds the 1st loan on the property. The senior loan purchase money VA loan from 1983 and the second, which I’m not really worried about now, was a much smaller loan from 1985. I’m having trouble tracking down the loan because the last lender to record an Assignment in January 2001 claims that they sold the loan back to the same lender in December 2001. When I contacted the new lender they couldn’t find the loan for me. Any advice out there on how to track down the old loan or to clear title if I can’t find it? (I’m planning to hold the property as a rental so there’s no urgency).

Hi Andy, Your title company should be able to help you. You will likely need the TDUS to be recorded before they will release the payoff information to you. It is important that you monitor the property to make sure that the senior liens and loans do not go into foreclosure while you are waiting for the redemption period to expire. I have heard of one other case where the loan was “lost”. Depending on the situation and your interpersonal skills you may want to reach out to the homeowner. I have heard of investors that are in similar situations getting to know the owner and finding out what is happening on the loan. This will not only tell you if they intend to redeem the property but if you are working to payoff the loans on the property they may be willing to at least give you basic loan information. The risk is that this is a hostile situation and could be very dangerous for you. I have always found that if you treat people with respect they usually are responsive. If you do not have good people skills maybe you know someone that could contact them on your behalf. Sometimes a good real estate agent can be worth their weight in gold in cases like this.

Andy M, Great info and makes perfect sense that the trustee, on an HOA foreclosure, would have to send to what amounts to a “placeholder” (Cert of Foreclosure Sale Subject to Redemption) until they are free to send you the TDUS some 90 days later. Also means the sale can’t be “perfected” as of the date of the auction (by recording TDUS w/in 15 calendar days of sale). One more reason to triple check before buying an HOA foreclosure.

Thanks for the replies. Turns out that the lady I talked to at the Trustee Company was wrong about the “Certificate of Foreclosure Sale Subject to Redemption” being sent to and recorded by a title company. I received this by FedEx today and it looks almost the same as a TDUS. The title is, of course, different and some of the verbiage is different but it’s very similar. I’m taking it to the Recorder’s office tomorrow to record it. This deal has been an interesting deal to unravel and I’ll feel positive about the whole experience as long as it’s ultimately profitable. Following an internet search, I believe that the owner passed away a few years ago. The condo is renter occupied and the renter has not been able to get in contact with his landlord for the past month. It makes sense to me that someone inherited the condo, never properly transfered title, stopped paying HOA dues and taxes, and just collected rent checks for as long as possible. If I can’t get any additional info from my own research at the Recorder’s office, I will contact my title rep to get help to find the loan or get it reconveyed. Good luck, all!