Legal Question in Real Estate Law in California

Re: Assignment of Leases

This document would usually be referred to by a shorter name, "deed of trust." A deed of trust is the principal means by which real property is used to collateralize a loan (usually in the form of a promissory note, which would be cross-referenced to the related deed of trust. The deed of trust, when properly executed, notarized and recorded, perfects a security interest in the real property described therein. The deed of trust will give a trustee a so-called "pwer of sale," meaning the note and deed of trust can be foreclosed without court action in a private sale upon the borrower's default and failure to redeem within the statutory period.

Deeds of trust are used by all kinds of lenders, including private individuals, not just banks. Neither the lender/beneficiary or the trustee receives any possessory interest, i.e., there is no leasehold.

Under Revenue and Taxation Code section 61(c), a transfer of possessory interest by means of a lease of 35 or more years would trigger a reassessment, but since a deed of trust is not a lease, that provision doesn't apply.