Colorado Amends Provisions Related to Debts Secured by Real Property
Colorado House Bill 16-1356 amends Colorado Revised Statutes 38-35-124 and most notably adds sections 4(a) and (b). These new provisions cover the satisfaction of a debt secured by real property.
- C.R.S. 38-35-124(4)(a)
- This provision covers the satisfaction of a debt secured by real property where the indebtedness has been satisfied by the debtor but the debtor may still draw upon a line of credit. In this situation, the lien on real property securing that line of credit continues and there is no requirement that the lien be released until the line of credit expires and all debts have been satisfied. If the debtor has satisfied all of the indebtedness and the debtor forfeits in writing the right to make any further draws on the line of credit, then the lien shall be released.
- C.R.S. 38-35-124(4)(b)
- The debtor may forfeit the right to make a further draw on the line of credit by submitting a written request that the line of credit be closed by the creditor or by written notification that the property is being conveyed upon payment of the indebtedness. The creditor or holder will then terminate the line of credit, record the release of the lien, or file with the public trustee the documents required for release of a deed of trust.
These provisions are effective on August 10, 2016. The full text of Colorado House Bill 16-1356 can be found here.
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