Legal Question in Real Estate Law in California

Deeds of Trust with Assignment of Rents

We are a church, obtaining a loan from a private party to pay off another party. We want to secure the loan with real property we own. The only form I could find at our very small office supply store in this small town that seemed to apply, was Deed of Trust with Assignment of Rents. It has a promissory note and reconveyance too. Question: There are not ''rents'' - the property to secure the loan is a lot with a house which has been converted to classrooms for our school/sunday school. Is this the wrong form? Who is the Beneficiary and who is the trustee? Does the Deed get recorded immediately or only in case of default? What about the reconveyance? Does it get recorded after the loan is paid off? Thank you. We are a very small church and I have limited legal knowledge.


Asked on 3/17/01, 10:25 pm

1 Answer from Attorneys

Roy Hoffman Law Offices of Roy A. Hoffman

Re: Deeds of Trust with Assignment of Rents

A deed of trust "with assignment of rents" is simply one form of deed of trust which would allow the lender to "step in" and collect any rents due the borrower. If there are no rents, then that providion of the deed has no effect. While it would be better to use a deed of trust without this provision, it is not necessarily the "wrong" form.

The beneficiary of a deed of trust is the person lending the money; the trustor is the borrower; and the trustee is a disinterested third party (usually a title company).

In order for the deed of trust to properly "secure" the indebtedness, the lender will want to record it with the county recorder immediately after it has been signed. The reconveyance or request for full reconveyance must be completed, signed and recorded after the loan has been repaid. The reconveyance is the instrument that "removes" the deed of trust as an encumbrance on the real property.

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Answered on 5/25/01, 1:10 pm


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