How to Record a Trustee's Deed After Bankruptcy in California
A trustee's deed, also known as a trustee's deed upon sale in California, is a legal instrument that indicates the ownership of real property after a foreclosure. After a foreclosure sale, the trustee -- a third-party entity that conducts the foreclosure -- issues a trustee's deed to the new owner of the property. California law requires that the deed then be recorded in the county where the real property is located. Recording a trustee's deed after the real property owner files for bankruptcy can be a complicated scenario that requires caution.
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Instructions
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Seek relief from the bankruptcy automatic stay. This necessitates the filing of a motion in federal bankruptcy court in the bankruptcy case of the owner of the real property that is pending in California. The motion must allege that the property has no equity, colloquially known as being "underwater."
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Schedule and conduct the foreclosure sale of the real property after successfully obtaining relief from the bankruptcy automatic stay. In California, foreclosure is a nonjudicial process, allowing for a much quicker process. Issue the trustee's deed with the purchaser's name as the legal owner of the property.
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Take several copies of the trustee's deed to the recorder's office in the California county where the real property is located. For example, if the property is in San Francisco, take the copies to the San Francisco Assessor-Recorder. The clerk will record the copies of the trustee's deed for a small fee and return the stamped and signed deeds by mail.
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Tips & Warnings
The purpose of recording multiple copies of the trustee's deed is to provide a back-up in case of the loss of one copy.
The original trustee's deed should remain in the hands of the owner and need not be taken for recording; a copy is sufficient.
This article does not constitute legal advice. See an attorney.
