HB4433 S JUD AM #1
The Committee on the Judiciary moved to amend the bill by striking out everything after the enacting clause and inserting in lieu thereof the following:
ARTICLE 1. VENDOR’S AND TRUST DEED LIENS.
§38-1-2a. How deeds of trust construed; duties and rights of parties.
(a) Every deed of trust to secure debts or indemnify sureties is a contract and shall be construed according to its terms to the extent its terms are not in conflict with applicable state and federal laws.
(b) Unless the deed of trust or applicable law provides otherwise, a deed of trust to secure debts or indemnify sureties executed on or after the effective date of the enactment of this section shall be construed to impose and confer upon the parties and beneficiaries the following duties, rights, and obligations as if the same were expressly provided for by the deed of trust:
(1) The deed shall be construed to secure the performance of each of the covenants entered into by the grantor as well as the payment of the primary obligation;
(2) The grantor is considered to covenant that he or she will pay all taxes, levies, and other governmental assessments and charges upon the property, as long as any obligation upon the grantor under the deed of trust remains undischarged;
(3) The grantor is considered to covenant that in the event of his or her failure to meet any obligations imposed upon him or her, then the trustee or any beneficiary may, at his or her option, satisfy the obligations to the extent reasonable or appropriate to protect the beneficiary’s interest in the property and rights under a security instrument. The money advanced, with interest as provided in the deed of trust, shall be a part of the debt secured by the deed of trust, in the event of sale to be paid next after the expenses of executing the trust, and is otherwise recoverable from the grantor as a debt. This section is not intended to create personal liability for a grantor that did not execute the note or debt instrument secured by the deed of trust;
(4) A covenant to pay interest is considered a covenant to pay interest on the principal balance as the rate may vary or be modified from time to time by the parties under the original instruments or agreements or a written agreement of modification, whether or not recorded, and all the interest on the principal secured by the deed of trust is on an equal priority with the principal debt secured by the deed of trust, in the event of sale to be paid next after the expenses of executing the trust; and
(5) Any covenant, otherwise authorized by law, that the lender is entitled to share in the gross income or the net income, or the gross rent or revenues, or net rents or revenues of the property, or in any portion of the proceeds or appreciation upon sale or appraisal or similar event, is on an equal priority with the principal debt secured by the deed of trust, in the event of sale to be paid next after the expenses of executing the trust, and shall be specified in the recorded deed of trust or other recorded document in order to be notice of record as against subsequent parties. This subdivision does not apply to consumer loans as defined in the West Virginia Consumer Credit and Protection Act §46A-1-101 et seq. of this code or residential deeds of trust, unless expressly provided for in the applicable deed of trust or by applicable law.