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Commercial Deed Of Trust for the United States

Commercial Deed Of Trust Template for United States

A Commercial Deed of Trust is a legal instrument used in the United States to create a security interest in real property to secure a loan or other obligation. It involves three parties: the trustor (borrower), the trustee, and the beneficiary (lender). Unlike a mortgage, which involves only two parties, the deed of trust places the legal title to the property with a neutral trustee who holds it as security for the loan until repayment is complete.

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Commercial Deed Of Trust

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What is a Commercial Deed Of Trust?

The Commercial Deed of Trust is widely used in U.S. commercial real estate transactions as a security instrument for loans. It provides lenders with a relatively streamlined method of foreclosure compared to traditional mortgages. This document outlines the terms of the security arrangement, including property description, loan terms, obligations of all parties, default provisions, and remedies. The Commercial Deed of Trust is particularly common in states like California, Texas, and other western states, where it serves as the primary security instrument for commercial real estate financing.

What sections should be included in a Commercial Deed Of Trust?

1. Parties: Identifies the Trustor (borrower), Trustee, and Beneficiary (lender)

2. Recitals: Background information including property description and loan details

3. Definitions: Key terms used throughout the document

4. Granting Clause: Formal conveyance of the property to the trustee

5. Security Agreement: Terms of the security interest being created

6. Borrower's Obligations: Detailed responsibilities of the borrower including payments and maintenance

7. Default Provisions: What constitutes default and consequences

8. Remedies: Actions available to the beneficiary upon default

9. Governing Law: Jurisdiction and applicable law

What sections are optional to include in a Commercial Deed Of Trust?

1. Environmental Provisions: Environmental requirements and indemnities for properties with potential environmental risks

2. Assignment and Subletting: Terms for transferring interests when transfer rights need to be restricted

3. Construction Provisions: Requirements for property improvements when development is planned

4. Operating Covenants: Specific operational requirements for special use properties

What schedules should be included in a Commercial Deed Of Trust?

1. Schedule A - Property Description: Legal description of the secured property

2. Schedule B - Permitted Encumbrances: List of allowed liens and encumbrances

3. Schedule C - Note Terms: Details of the underlying promissory note

4. Schedule D - Insurance Requirements: Specific insurance coverage requirements

5. Schedule E - Personal Property: List of included personal property or fixtures

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Document Type

Trust Deed

Cost

Free to use
Clauses






























Industries

Truth in Lending Act (TILA): Federal law that requires lenders to provide standardized disclosures about loan terms and costs, protecting borrowers in commercial lending transactions.

Real Estate Settlement Procedures Act (RESPA): Federal law governing real estate settlement processes, requiring specific disclosures related to mortgage loans and prohibiting certain practices in real estate settlements.

Uniform Commercial Code (UCC): Comprehensive set of laws governing commercial transactions, particularly relevant for security interests and commercial lending aspects of the deed of trust.

Federal Tax Lien Act: Legislation governing the priority and enforcement of federal tax liens in relation to other security interests in property.

State Property Laws: State-specific regulations governing real property rights, transfers, and encumbrances within the particular state's jurisdiction.

State Recording Requirements: State-specific rules for properly recording real estate documents, including format, content, and filing procedures.

State Foreclosure Laws: State-specific regulations governing the process and requirements for foreclosure proceedings and borrower rights.

State Security Interest Laws: State-specific regulations governing how security interests are created, perfected, and enforced within the state.

County Recording Requirements: Local county-specific requirements for document recording, including formatting, notarization, and filing procedures.

Local Real Estate Regulations: Municipality-specific rules governing real estate transactions and property use within local jurisdictions.

Zoning Laws: Local regulations governing property use, development, and restrictions within specific zones or areas.

Property Description Requirements: Legal requirements for accurately and sufficiently describing the property being used as security in the deed of trust.

Trustee Powers and Duties: Legal framework defining the scope of trustee authority and responsibilities in managing the deed of trust.

Default and Remedies Provisions: Legal requirements and limitations regarding default scenarios and available remedies for the lender.

Due-on-Sale Clauses: Legal provisions governing the acceleration of the loan upon transfer or sale of the property.

Assignment Rights: Legal framework governing the transfer or assignment of rights under the deed of trust.

Insurance Requirements: Legal obligations regarding property insurance and other required coverage under the deed of trust.

Property Maintenance Obligations: Legal requirements regarding the borrower's duties to maintain and preserve the property securing the deed of trust.

Teams

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