Legal Question in Real Estate Law in California

Rents and Profits

I have a promissory note secured by a 2nd Deed of Trust in California. I have recorded a Notice of Default for non payment. The property has a main house and two apartments.

The Deed of Trust has Assignment of Rents as additional security. Under Cal Civ Code 2938 am I entitled to collect rents accuring after default, and may I send a Demand For Rent to the two apartment renters under enforcement steps 2938(c). Even though Deed does not state absolute assignment.

The LA County Bar association address this issue at http://www.lacba.org/showpage.cfm?pageid=780, and if I interpret this site correctly, I am able to collect rents.

New Civil Code Section 2938(a) establishes that all assignments will operate as additional security, thus allowing parties to discard the fiction of the absolute assignment.

: One of the most significant conceptual dilemmas raised by the former law was its perpetuation of the distinction between absolute assignments and assignments as additional security. New Civil Code Section 2938(a) could not be more clear in its abolition of the absolute assignment

Thank you,


Asked on 1/02/03, 5:10 pm

1 Answer from Attorneys

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Rents and Profits

According to one authority, courts will probably treat new section 2938 as "authoritative even in cases involving pre-1997 assignments of rents to avoid being mired in the prestatutory chaos."

This is found in a lawyers' practice manual called 'California Mortgage and Deed of Trust Practice' published by Continuing Education of the Bar. See section 6.32. I suggest you find a library that has this reference work and read what it has to say yourself.

Some public libraries may have the CEB books, but more likely you will need to visit a county law library. Each county has at least one, and the staff is usually helpful to non-lawyer users.

Finally, I always caution people trying to handle foreclosures without professional assistance that it's a minefield out there. You run a high risk of a costly screw-up trying to do it yourself.

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Answered on 1/03/03, 1:30 pm


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