[WSBARP] Seller Financing - Non-Judicial Foreclosure Timing Issue

[David R. Ambrose]

Mark,

I believe the explanation is dependent upon the nature of the collateral encumbered by the trust deed.

In addition to what you cite,  RCW 61.24.030 (8)(g) also provides as follows: "*** or no less than 150 days in the future if the borrower received a letter under RCW 61.24.031."  This deals with residential real property of up to four units.  If that is the nature of the collateral encumbered by the trust deed, essentially an extra 30 days is given to the grantor/borrower before the sale can be held.  RCW 61.24 (8)(k) only applies to residential real property of up to four units.  Note how it starts out:  "(k) In the event the property secured by the deed of trust is residential real property of up to four units, ****."  And see RCW 61.24.030 (9), which provides:  "(9) That, for residential real property of up to four units, before the notice of the trustee's sale is recorded, transmitted, or served, the beneficiary has complied with RCW 61.24.031 and, if applicable, RCW 61.24.163;".

And RCW 61.24.040 confirms this distinction:  "(1) At least 90 days before the sale, or if a letter under RCW 61.24.031 is required, at least 120 days before the sale, the trustee shall:"

Finally, see the definition of "Residential real property", provided in RCW 61.24.005:  "(13) "Residential real property" means property consisting solely of a single-family residence, a residential condominium unit, or a residential cooperative unit. For the purposes of the application of RCW 61.24.163, residential real property includes residential real property of up to four units."  Of importance is the fact that it does not require that the real property be owner-occupied, so the extra 30 days can apply to non-owner-occupied investment residential properties, up to four units.

There are multiple additional obligations imposed in connection with the foreclosure of residential real property of up to four units.

Regards,

David Ambrose
drambrose at ambroselaw.com

From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Mark Anderson
Sent: Wednesday, May 15, 2024 4:52 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: [WSBARP] Seller Financing - Non-Judicial Foreclosure Timing Issue

Dear All:

Scenario: Nonjudicial foreclosure of a deed of trust used in a residential seller-financed transaction.

RCW 61.24.030(8)(g) says that the Notice of Default shall contain a statement "... that the property described in (a) of this subsection may be sold at public auction at a date no less than 120 days in the future...." When I first read that, I interpreted that as meaning the property could be sold at a trustee sale after 120 days had passed following the time the Notice of Default was given.

RCW 61.24.030(8)(k) then goes on to require a prominent statement that includes the following language: "The notice of sale will provide a minimum of 120 days' notice of the date of the actual foreclosure sale."  This would indicate that the 120-day waiting period starts on the date of the Notice of Trustee Sale.

But then I read RCW 61.24.040.  RCW 61.24.040(1) says that the following actions (amongst others) must be taken at least 90 days before the sale:
Record the Notice of Trustee Sale;
Send a copy of the Notice of Trustee Sale to the borrower and grantor as well as any other persons holding a lien against the property; and
Post the Notice of Trustee Sale on the property.
RCW 61.24.040 appears to permit a Trustee Sale after 90 days have passed after giving the Notice of Trustee Sale (and not 120).

How does this apparent disconnect get reconciled?

Thanks in advance for any insights here.

Mark B. Anderson
ANDERSON LAW FIRM PLLC
821 Dock St  Ste 209  PMB 4-12
Tacoma, Washington 98402
+1 253-327-1750
+1 253-327-1751 (fax)
marka at mbaesq.com<mailto:marka at mbaesq.com>
www.mbaesq.com<http://www.mbaesq.com/>
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