Utah Amends Multiple Statutes and Enacts Uniform Power of Attorney
Utah has made amendments to its statutes that govern the Foreclosure of Residential Rental Property and Trustees and Non-Judicial Foreclosures as well as its Residential Mortgage Practices and Licensing Act. It also enacted a Uniform Power of Attorney Statute. Each of these changes takes effect on May 9, 2016.
Foreclosure of Residential Rental Property
Utah amended its code’s treatment of foreclosed residential rental property. This legislation applies to tenants with a bona fide residential rental agreement. A bona fide residential rental agreement is defined as a rental agreement for a property secured by a trust deed that was the result of an arm’s length transaction and instituted before the trustee records a notice of default or files an action to foreclose. The agreement must also provide the tenant exclusive use and occupancy of the property at will or for a specified period of time of 12 months or less.
A bona fide tenant is an individual who has the right to occupy the property under the rental agreement. He or she cannot be the trustor or the trustor’s child, spouse or parent.
The new owner is defined as the “immediate successor in interest of a foreclosed rental property following a foreclosure or trustee’s sale of the property.” The new owner must take ownership of the property subject to tenant’s right to occupy it, as outlined in the rental agreement until its termination. If the new owner wishes to terminate the tenancy because they would like to occupy the property as their primary residence, they may terminate the rental agreement and the tenant’s occupancy. However, the new owner must serve the tenant with a notice to vacate, as specified by the statute.
Prior to foreclosure, the tenant is required to receive notice within 20 days of filing an action to foreclose on the rental property. The Plaintiff must post and mail the notice, as required by the statue. If the Plaintiff does not provide notice to the tenant in the manner specified, the foreclosure can be challenged and the sale may be invalidated.
Trustees and Non-Judicial Foreclosures
Utah has made several changes that effect trustees with regard to non-judicial foreclosures.
The first change is that Utah revised the manner in which a beneficiary may appoint a successor trustee. The beneficiary must file an appointment or substitution of trustee which must be recorded in each county where any portion of the trust property is located. The appointment must specifically identify the property and follow the form outlined by the statute. Also, a copy of the appointment must be sent to anyone who requests a copy of a notice of default or notice of sale under section 57-1-26 or any party to the trust deed whom would have received a notice of default under 57-1-26(3). If a party would like to receive a copy of the notice of default, they must file a request with the county recorder before the notice of default is recorded.
A trustee may also resign by filing a resignation of trustee in each county where the trust property is located. Similar to the appointment, the resignation must closely follow the form outlined by the statute.
The trustee must sell the trust property on the advertised date and time to the highest bidder. The trustee may serve as the auctioneer. If the trust property is made up of multiple lots, each one can be sold separately. The trustee must adhere to any instructions from the trustor regarding items such as the deposit and bids. Also, the sale may be postponed by the person conducting it for any expedient reason but notice must be given by public declaration at the sale. No further notice is needed unless the postponement is longer than 45 days.
Once the property is sold, the beneficiary will be credited for any unpaid principal, accrued interest through the date of the sale, advances, taxes, insurance, maintenance, property preservation, liens, sale costs, and trustee and attorney’s fees. The trustee has 5 business days to send the deed to the county recorder for recording.
Uniform Power of Attorney
Utah’s power of attorney statute presumes that a power of attorney is durable, unless it expressly states that the power is terminated when the principal becomes incapacitated. To create an effective power of attorney, the document must be signed by the principal or in his or her conscious presence, in front of a notary public. It should be noted that if the principal is a resident of or about to become a resident of a hospital, assisted living or skilled nursing facility the principal may not name the owner, operator, health care provider(s), or employees of the facility as their agent, unless they are the principal’s spouse, legal guardian, next of kin or if the power of attorney has the limited purpose of establishing Medicaid eligibility. The document is effective upon execution, unless there is a stated future date or it is contingent up on a future event.
The power of attorney terminates upon the principal’s death, incapacity or revocation. It can also terminate upon a date stated within the document, when its purpose is completed or if the agent dies, becomes incapacitated or resigns.
The agent accepts their powers by exercising them. While acting on the principal’s behalf, the agent is required to act in the principal’s best interest, in good faith, within the scope of their powers, loyally for the benefit of the principal, avoid conflicts of interest, maintain records, comply with the power of attorney, act with the care, competence and diligence ordinarily exercised by agents in similar situations, cooperate with health care decision makers and preserve the principal’s estate plan. Failure to do so may result in liability for the agent.
If an agent decides to resign, they must provide notice the principal or to the principal’s guardian, caregiver or government agency or individual with an interest in the principal’s’ welfare. The principal can use the power of attorney to name a successor agent.
A power of attorney can perform a variety of actions on behalf of the principal but some actions require the document to expressly provide the agent power to complete them such as making a gift or changing a beneficiary designation. The power of attorney must provide specific authority for each of these actions.
If the power of attorney contains grants general authority for real property, the agent can participate in a variety of transactions on behalf of the principal such as purchases, leases and easements. The same general grant of authority applies to tangible personal property, stocks and bonds, commodities and options, banks and financial institutions, operation of an entity or business, insurance and annuities, estates trusts and beneficial interests, claims and litigation, personal and family maintenance, benefits from government programs, and taxes.
The statute includes a form that can be used to drafter a power of attorney document.
Residential Mortgage Practices and Licensing Act
Utah has also made changes to its Residential Mortgage Practices and Licensing Act.
The changes to this statute include updates to licensing requirements for mortgage professionals. Also, it alters its provision related to what a mortgage loan professional may accept in exchange for a referral.
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