Also known as: deed of trust · trust deed · trust deeds
Written by attorneys — see sources below.
A security device by which real property is pledged to secure payment of a debt or performance of an obligation. Title is conveyed to a trustee to hold for the benefit of the lender until the debt is paid. The borrower retains possession and the right to redeem. Upon default the lender may foreclose to satisfy the obligation.
Brighton Development LLC executed a deed of trust on vacant land reciting a two million dollar loan and optional future advances from Oakridge Capital. Oakridge never funded the loan or made any advances. Metro Bank later recorded a valid deed of trust on the same parcel. When Oakridge attempted foreclosure, its instrument proved unenforceable because no underlying obligation had ever arisen.
Field Kitchen LLC defaulted on a senior obligation secured by a deed of trust containing power-of-sale language. Prime Restaurant directed the trustee to conduct a nonjudicial sale. The sale generated surplus proceeds after satisfying the senior debt. Plains Food, holding a junior lien terminated by the sale, claimed the surplus in order of priority.
Lake Wind executed a deed of trust containing a future-advance clause securing all credit extended by Dusk Wind. After recording, Dusk Wind made an additional acquisition loan. When Lake Wind defaulted, the later advance remained secured by the original instrument because the dragnet language encompassed it.
Ernest Sullivan transferred real estate into an inter vivos deed of trust naming himself trustee. After his death his widow elected her statutory share of his estate. The court included the trust assets in the estate calculation because the deed of trust functioned as a security device retaining the settlor's beneficial interest.
Mary A. Sullivan, the widow of Ernest G. Sullivan, exercised her right under G. L. c. 191, § 15, to take a share of her husband’s estate. She filed an action in the Probate Court for Suffolk County seeking a determination that assets held in an inter vivas trust created by her husband during the marriage should be considered part of his estate. A judge of the Probate Court rejected the widow’s claim and entered judgment dismissing the complaint. In September 1973, Ernest G. Sullivan executed a deed of trust transferring real estate to himself as sole trustee. The net income of the trust was payable to him during his life, and the trustee was instructed to pay to him all or such part of the principal as he might request in writing from time to time. He retained the right to revoke the trust at any time. On his death, the successor trustee was directed to pay the principal and any undistributed income equally to George F. Cronin, Sr., and Harold J. Cronin, who survived him. Ernest G. Sullivan died on April 27, 1981, while still trustee of the inter vivas trust. He left a will stating that he intentionally neglected to make any provision for his wife Mary A. Sullivan and his grandson Mark Sullivan, and directing that the residue of his estate be paid over to the trustee of the inter vivas trust. The defendants George F. Cronin, Sr., and Harold J. Cronin were named coexecutors of the will, and the defendant Burkin is successor trustee of the inter vivas trust. On October 21, 1981, Mary A. Sullivan filed a claim pursuant to G. L. c. 191, § 15, for a portion of the estate. The parties state that Ernest G. Sullivan and Mary A. Sullivan had been separated for many years, and in 1962 the wife obtained a court order providing for her temporary support. At his death the husband owned personal property worth approximately $15,000, and the only asset in the trust was a house in Boston sold after his death for approximately $85,000. The widow appealed, and on July 12, 1983, a panel of the Appeals Court reported the case to the Supreme Judicial Court.
View caseA joint tenant executed a deed of trust on her interest in the property. Upon her death the surviving joint tenant claimed the entire parcel free of the lien. The deed of trust interest terminated with the debtor's death because the right of survivorship ended the encumbered cotenancy share.
Mr. and Mrs. Riddle purchased a parcel of real estate, taking title as joint tenants. Several months before her death, Mrs. Riddle retained an attorney to plan her estate. After reviewing pertinent documents, he advised her that the property was held in joint tenancy and that, upon her death, the property would pass to her husband. Distressed upon learning this, she requested that the joint tenancy be terminated so that she could dispose of her interest by will. As a result, the attorney prepared a grant deed whereby Mrs. Riddle granted to herself an undivided one-half interest in the subject property. The document also provided that “The purpose of this Grant Deed is to terminate those joint tenancies formerly existing between the Grantor, Frances P. Riddle, and Jack C. Riddle, her husband. ...” He also prepared a will disposing of Mrs. Riddle’s interest in the property. Both the grant deed and will were executed on December 8, 1975. Mrs. Riddle died 20 days later. The trial court refused to sanction her plan to sever the joint tenancy and quieted title to the property in her husband. The executrix of the will of Frances Riddle appeals from that judgment.
View caseOne joint tenant leased property subject to a deed of trust and later died. The surviving joint tenant sought to terminate the lease. The lease ended upon the lessor's death because the deed of trust lien attached only to the deceased tenant's interest that terminated by survivorship.
Raymond Johnson and plaintiff Hazel Tenhet owned a parcel of property as joint tenants. The deed was executed by Jettie N. Johnson to them as joint tenants. The property consisted of a dwelling house and lot. Its value did not exceed three thousand five hundred dollars at the time of Johnson's death in 1971. Assertedly without plaintiff's knowledge or consent, Johnson leased the property to defendant Boswell. The lease was for a period of ten years at a rental of one hundred fifty dollars per year. It included a provision granting the lessee an option to purchase. Johnson died some three months after execution of the lease. Plaintiff sought to establish her sole right to possession of the property as the surviving joint tenant. After an unsuccessful demand upon defendant to vacate the premises, plaintiff brought this action to have the lease declared invalid. The third amended complaint contained five causes of action. The trial court granted a motion to strike the fourth and fifth causes of action. It sustained demurrers to the second and third causes without leave to amend. But the court made no express ruling on the first cause of action seeking declaratory relief and damages. The trial court sustained demurrers to the complaint and entered a judgment of dismissal. Plaintiff appealed from the ensuing judgment of dismissal to the Supreme Court of California.
View caseA deed of trust is a security device that cannot exist without an underlying obligation such as a note or other enforceable promise to pay. If no debt or duty is ever created, the instrument is ineffective and cannot be foreclosed.
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A future-advance or dragnet clause allows later loans by the same lender to be secured by the original deed of trust. Priority of those advances depends on state statute, the mortgage terms, and whether the lender had notice of intervening liens before making the advance.
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A deed of trust may authorize nonjudicial foreclosure through a power-of-sale clause or require judicial foreclosure through court action. The chosen method governs notice requirements, the sale process, and the timing of redemption rights.
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