S 0517

S‑0517.1 _____________________________________________

SENATE BILL 5706

_____________________________________________

State of Washington 57th Legislature 2001 Regular Session

By Senators Prentice, Deccio, Gardner, Winsley, Honeyford, Fairley and Rasmussen

Read first time 01/31/2001. Referred to Committee on Labor, Commerce & Financial Institutions.

_1 AN ACT Relating to reconveyance of deeds of trust; amending RCW

_2 61.24.005, 61.24.010, and 61.24.110; and adding a new section to

_3 chapter 61.24 RCW.

_4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

_5 Sec. 1. RCW 61.24.005 and 1998 c 295 s 1 are each amended to read

_6 as follows:

_7 The definitions in this section apply throughout this chapter

_8 unless the context clearly requires otherwise.

_9 (1) "Grantor" means a person, or its successors, who executes a

10 deed of trust to encumber the person's interest in property as

11 security for the performance of all or part of the borrower's

12 obligations.

13 (2) "Beneficiary" means the holder of the instrument or

14 document evidencing the obligations secured by the deed of trust,

15 excluding persons holding the same as security for a different

16 obligation.

17 (3) "Affiliate of beneficiary" means any entity which controls,

18 is controlled by, or is under common control with a beneficiary.

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_1 (4) "Trustee" means the person designated as the trustee in the

_2 deed of trust or appointed under RCW 61.24.010(2).

_3 (5) "Borrower" means a person or a general partner in a

_4 partnership, including a joint venture, that is liable for all or

_5 part of the obligations secured by the deed of trust under the

_6 instrument or other document that is the principal evidence of

_7 such obligations, or the person's successors if they are liable

_8 for those obligations under a written agreement with the

_9 beneficiary.

10 (6) "Guarantor" means any person and its successors who is not

11 a borrower and who guarantees any of the obligations secured by a

12 deed of trust in any written agreement other than the deed of

13 trust.

14 (7) "Commercial loan" means a loan that is not made primarily

15 for personal, family, or household purposes.

16 (8) "Trustee's sale" means a nonjudicial sale under a deed of

17 trust undertaken pursuant to this chapter.

18 (9) "Fair value" means the value of the property encumbered by

19 a deed of trust that is sold pursuant to a trustee's sale. This

20 value shall be determined by the court or other appropriate

21 adjudicator by reference to the most probable price, as of the

22 date of the trustee's sale, which would be paid in cash or other

23 immediately available funds, after deduction of prior liens and

24 encumbrances with interest to the date of the trustee's sale, for

25 which the property would sell on such date after reasonable

26 exposure in the market under conditions requisite to a fair sale,

27 with the buyer and seller each acting prudently, knowledgeably,

28 and for self-interest, and assuming that neither is under duress.

29 (10) "Record" and "recorded" includes the appropriate

30 registration proceedings, in the instance of registered land.

31 (11) "Person" means any natural person, or legal or

32 governmental entity.

33 (12) "Person entitled" means the borrower or grantor of the

34 deed of trust or the present vested owner of the property

35 encumbered by the deed of trust, and may include, if the

36 obligation has been satisfied, either (a) an escrow company

37 licensed to do business in this state, (b) a title insurance

38 company authorized to insure title to real property under the laws

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_1 of this state, or (c) an agent of such a title insurance company,

_2 which escrow company, title insurance company, or agent of the

_3 title insurance company has paid the obligation in full based on a

_4 written statement from the beneficiary as to the amounts owed or a

_5 demand therefore. For the purposes of this section only, any such

_6 escrow company, title insurance company, or agent of the title

_7 insurance company that has paid the obligation based on the

_8 written statement or demand from the beneficiary is considered a

_9 lawful agent of the borrower or the grantor of the deed of trust,

10 or present vested owner of the property encumbered by the deed of

11 trust, or the heirs, executors, administrators, successors, or

12 assigns of the borrower, grantor, or owner.

13 Sec. 2. RCW 61.24.010 and 1998 c 295 s 2 are each amended to read

14 as follows:

15 (1) The trustee of a deed of trust under this chapter shall be:

16 (a) Any domestic corporation incorporated under Title 23B, 30,

17 31, 32, or 33 RCW of which at least one officer is a Washington

18 resident; or

19 (b) Any title insurance company authorized to insure title to

20 real property under the laws of this state, or its agents; or

21 (c) Any attorney who is an active member of the Washington

22 state bar association at the time the attorney is named trustee;

23 or

24 (d) Any professional corporation incorporated under chapter

25 18.100 RCW, any professional limited liability company formed

26 under chapter 25.15 RCW, any general partnership, including

27 limited liability partnerships, formed under chapter 25.04 RCW,

28 all of whose shareholders, members, or partners, respectively, are

29 either licensed attorneys or entities, provided all of the owners

30 of those entities are licensed attorneys, or any domestic

31 corporation wholly owned by any of the entities under this

32 subsection (1)(d); or

33 (e) Any agency or instrumentality of the United States

34 government; or

35 (f) Any national bank, savings bank, or savings and loan

36 association chartered under the laws of the United States.

37 (2) The trustee may resign at its own election or be replaced

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_1 by the beneficiary. The trustee shall give prompt written notice of

_2 its resignation to the beneficiary. The resignation of the trustee

_3 shall become effective upon the recording of the notice of

_4 resignation in each county in which the deed of trust is

_5 recorded. If a trustee is not appointed in the deed of trust, or

_6 upon the resignation, incapacity, disability, absence, or death of

_7 the trustee, or the election of the beneficiary to replace the

_8 trustee, the beneficiary shall appoint a trustee or a successor

_9 trustee. In addition, a person entitled may, if the obligation has

10 been paid in full based upon a written statement or demand from

11 the beneficiary, and if the beneficiary has not requested the

12 reconveyance as provided for in this chapter, appoint a successor

13 trustee. Upon recording the appointment of a successor trustee in

14 each county in which the deed of trust is recorded, the successor

15 trustee shall be vested with all powers of an original trustee.

16 Sec. 3. RCW 61.24.110 and 1998 c 295 s 13 are each amended to read

17 as follows:

18 Upon satisfaction in full of the obligation secured by the deed

19 of trust, the beneficiary shall forward a request for reconveyance

20 of the deed of trust, together with proof of satisfaction or

21 written verification to the trustee within thirty calendar days of

22 satisfaction. If the obligation has been paid in full and the

23 beneficiary has not requested the reconveyance as required by this

24 chapter, a person entitled may forward a request for reconveyance,

25 including a statement as to the reason, to the trustee. The

26 trustee shall, within thirty calendar days of receipt of the

27 written request for reconveyance made by either the beneficiary or

28 other person entitled, reconvey all or any part of the property

29 encumbered by the deed of trust to the ((~~person entitled thereto~~

30 ~~on written request of the beneficiary, or upon satisfaction of the~~

31 ~~obligation secured and written request for reconveyance made by~~

32 ~~the beneficiary or the person entitled thereto~~)) grantor under the

33 deed of trust or the present owner of the property encumbered by

34 the deed of trust. The sole remedy of a party against a trustee who

35 fails to reconvey within the thirty-day period is limited to the

36 authority to appoint a successor trustee as authorized by this

37 chapter.

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_2 NEW SECTION. Sec. 4. A new section is added to chapter 61.24

_3 RCW to read as follows:

_4 If the beneficiary fails to request a reconveyance within the

_5 thirty-day period required by this chapter, the beneficiary

_6 forfeits the right to request the reconveyance in favor of a

_7 person entitled to reconveyance. Upon the forfeiture, the

_8 beneficiary becomes liable to the trustee for all reasonable fees

_9 and costs for the reconveyance. Nothing in this chapter, however,

10 invalidates a request for reconveyance made by the beneficiary

11 after the expiration of the thirty-day period; subject however to

12 the liability of the beneficiary resulting from the forfeiture of

13 the right to make the request for reconveyance.

‑‑‑ END ‑‑‑

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