What is a Deed of Trust Review?
A deed of trust is a legal document used in real estate. It serves to transfer a property’s legal title to a third party, or trustee. How it works is that the trustee will keep the title as a form of security until the borrower repays their loan to a lender.
If you’ve had a deed of trust drafted, you should review it to ensure all its terms are accurate and clear for both parties to understand. You also want to check that rights and risks are properly defined to protect your interests.
Read the rest of this article to learn what information a deed of trust includes, how to review it, and why you should work with a professional lawyer for a thorough review.
What Key Terms Should You Review in a Deed of Trust?
A deed of trust specifies the following information, which you should review for accuracy.
- Parties. The parties’ (borrower, lender, and trustee) personal information should be included, such as their full legal names.
- Loan amount. This is the full amount a borrower needs to borrow from the lender and what they will have to repay.
- Property description. A full legal description of the property must be included. This should include details such as the lot number and physical address.
- Maturity date. This is the date by which the borrower must repay the loan.
- Defaults. This states what penalties or consequences will be triggered if the borrower doesn’t make payments on time.
What are Tips for Reviewing a Deed of Trust?
When reviewing a deed of trust, there are some important things to consider so that you feel confident to proceed with the transfer and don’t neglect to deal with potential risks.
Consider State Laws
Since state laws vary in terms of their requirements for a deed of trust, such as regarding foreclosures, you want to ensure you know all state rules and follow them closely. Compliance will prevent legal issues.
Provide a Detailed Property Description
Your legal property description shouldn’t be solely a street address. It must identify the property’s location and boundaries, such as with survey and land records. This gives the lender confirmation that the correct property is linked to the loan.
Reference the Promissory Note
A deed of trust must refer to the promissory note to confirm details, such as the original loan amount. It also needs to state that the deed of trust secures the debt owing.
Make Provision for Defaults
If the borrower doesn’t make payments on time, this can result in consequences that must be outlined in the deed of trust. In many states, a consequence can include nonjudicial foreclosure in which the trustee is allowed to start the foreclosure process for the lender instead of the court being involved.
To protect your interests, check the document for an acceleration clause. This states the conditions that can cause the lender to demand immediate full payment if you default.
Scrutinize the Payment Terms
The deed of trust must specify all payment terms, such as the original loan amount and interest rates. The maturity date must also be aligned with what was agreed on between parties.
How Does a Lawyer Help You With a Deed of Trust Review?
A lawyer is valuable to hire when you want to review your deed of trust because the legal document can involve complex provisions. Here is how a lawyer can assist you through the review process.
- Verification of all loan terms. To provide clarity, a lawyer checks all loan terms to confirm that the loan amount, payment schedules, interest rates, and penalties for late payments are clearly specified.
- Clearing up unfavorable clauses. With their expertise, a lawyer will identify any unfair provisions, such as too-broad default triggers.
- Checking the property legal description. By ensuring this is accurate, you can prevent disputes or title issues.
- Monitoring borrower duties. Your lawyer will examine all roles and duties, such as property maintenance, so that they’re reasonable.
- Aligning the deed with all relevant laws. They’ll review the deed of trust so that it’s legally compliant with all laws, such as state-defined ones.
- Identifying negotiation opportunities. Lawyers will help you negotiate any unfair or one-sided terms in the deed with the other party so that you can have a more favorable contract that protects your interests.
- Explaining all your legal and financial risks. They’ll help you include provisions for potential risks to protect you moving forward.
Where to Find a Lawyer to Review Your Deed of Trust
If you need to hire a lawyer to draft your deed of trust, you might be unsure of where to find a professional lawyer who’s reputable and experienced. By using an online legal platform, you can make searching for a lawyer a less stressful experience.
On ContractsCounsel, one of the largest online legal marketplaces, you’ll get access to a curated network of vetted lawyers who can help you review your deed.
To request that a lawyer reviews your deed of trust, simply follow these online steps.
1. Go to the ContractsCounsel marketplace, where you can post your project (or request) for free. Include a few details of what you need so you’re directed to the most appropriate lawyers.
2. Wait for lawyer bids. You’ll receive multiple bids from lawyers directly on the platform.
3. Review the lawyers' profiles. Use data provided by the platform, such as the lawyers’ location, client ratings, years of experience, and field of expertise, to match with the right lawyer.
4. Hire a lawyer you think is best suited to your requirements. They’ll thoroughly review your deed of trust so it’s legal and transparent.
