This post was guest authored by Stoel Rives partner Martin Banks.
A record number of bills were introduced during the 45-day Utah Legislative Session for 2016. While many of the bills dealt with education and legalizing medical marijuana, a few dealt with the foreclosure and the mortgage lending industry. The bills listed below were all signed by Governor Herbert:
- H.B. 17 3rd Sub. ASSESSMENT AREA FORECLOSURE AMENDMENTS
HB 17 3rd Sub. amends foreclosure provisions in the Assessment Area Act (Utah Code Ann. §§ 11-42-202; 11-42-207; and 11-42-502) and enacts § 11-42-502.1. Specifically, this bill modifies the methods by which a local entity may enforce an assessment lien and makes technical and conforming changes. If a governing body intends to enforce an assessment lien on the property, it must appoint a trustee that satisfies the requirements of Section 57-1-21, gives the trustee the power of sale and explains that if an assessment or an installment of an assessment is not paid when due, the local entity may sell the property owner’s property to satisfy the amount due plus interest, penalties, and costs, in the manner described in Title 57, Chapter 1, Conveyances. Furthermore, the bill separates out “Pre-May 2016 procedure” and “Post-May 2016 procedure” on enforcement of an assessment lien.
- S.B. 22 1st Sub. FORECLOSURE OF RESIDENTIAL RENTAL PROPERTY
SB 22 1st Sub. Enacts and amends provisions related to foreclosure of residential rental property. Specifically, this bill, under certain circumstances, allows a pre-existing tenant to continue to occupy, for a limited amount of time, a residential rental property after a forced sale at public auction; repeals a sunset provision; eliminates a sunset repeal date; and provides a repeal date for certain sections (Utah Code Ann. §§ 57-1-25; 631-1-257; 631-1-278; and 78B-6-802). Publication of the Notice of Trustee’s Sale shall be for: (1) at “least” once a week for three consecutive weeks; and (2) in at least “three” conspicuous places on the property to be sold. If the property is sold, tenants may continue to occupy the rental unit until the rental agreement expires, or 45 days after the date they are served with a notice to vacate. Before, it was 90 days.
- S.B. 220 2nd Sub. NON-JUDICIAL FORECLOSURE AMENDMENTS
S.B. 220 2nd Sub. Amends, enacts, and repeals provisions related to non-judicial foreclosure. The 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 (Utah Code Ann. §§ 57-1-22; 57-126; 57-1-27; and 57-1-28).
- H.B. 177 1st Sub. MORTGAGE LENDING AMENDMENTS
H.B. 177 1st Sub. Modifies provisions that address mortgage lending. It defines terms and addresses the application of Mortgage Lending and Servicing Act to mortgage lenders and makes technical changes (Utah Code Ann. §§ 70D-2-102 and 70D-2-201).