[WSBARP] DOT and Non-monetary Defaults

[Rick Hoss]

The non-judicial trustee may drag her or his feet before proceeding with
foreclosure for non-monetary default, but rcw 61.24.090(3) addresses cure
necessary for a default occasioned by other than a failure to make payments
so this was contemplated when adopting rcw 61.24. The trustee should make it
very clear about what constitutes cure and come up with an objective
performance standard. With so much recent focus on trustee behaviors the
trustee should be more flexible in extending cure times than with payment
defaults.

 

A more cautious approach  is often for a judicial foreclosure with or
without a request for appointment of a receiver. But thinking backward, how
will the foreclosed party exercise his redemption rights unless the cost of
the nonmonetary default is specified in the fof, col and/or judgment? What
if there is a judgment for the cost to cure but the work isn't done?

 

It takes me just about the same amount of time to draft a judicial
foreclosure and summary judgment pleadings as the non-judicial foreclosure
notices, and there are not nearly as many recent decisions critical of
judicial foreclosure processes. But there is a redemption right that needs
to be planned for with the judicial foreclosure.

 

 

From: wsbarp-bounces at lists.wsbarppt.com
[mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Paul Neumiller
Sent: Wednesday, February 03, 2016 1:53 PM
To: wsbarp at lists.wsbarppt.com
Subject: [WSBARP] DOT and Non-monetary Defaults

 

Listmates: I have been pondering this problem for a long time.  Client is a
seller-carryback holder of a deed of trust and note.  Debtor is not in
default of note installments but is allowing the real property secured by
the lien of the DOT to deteriorate.  Waaaay too much deferred maintenance
(i.e. leaking roof in residence, dilapidated barns, etc.).  The note doesn't
mature for another 20 years.  Parties used the standard WA residential DOT
requiring that debtor "keep the property in good condition and repair"  and
an acceleration of debt if the debtor fails to perform a duty agreed to in
the DOT.  

 

So how does this work?  Has anyone just tried a non-judicial foreclosure and
"damn the torpedoes"?  Maybe, have the creditor go in and fix everything
(not sure the creditor has the right to cure non-monetary defaults) and then
bring a non-judicial foreclosure based on the repair costs, OR bring a
judicial foreclosure and have lots of pictures and evidence of deferred
maintenance?  That sure seems like a can of worms and litigator's dream.
Any ideas?

 

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