Using California Trust Deeds To Secure Non-Accelerable Or Contingent Serial Obligations - Pitfalls & Possible Solutions

A recent article in Lexology discusses the pitfalls of using real estate in California to secure non-accelerable or contingent, serial obligations, such as rent payments or indemnification obligations, resulting from the operation of, among other related statutes:

• Section 726 (ie. “one form of action” or "one action" rule, along with with its judicially created corollary rule that a creditor must resort to its “security first”(1)), and



• Section 580d (the anti-deficiency provision)

of the California Code of Civil Procedure in non-judicial foreclosures under California law.

Along with a discussion of the pitfalls, approaches to deal with them are explored.

For those in California (and, I suppose, anywhere else, for that matter) who have any idea what all this might be referring to and may have some interest,(2) see One deed of trust and several obligations: the case for layered foreclosure in California (requires subscription; if no subscription, GO HERE; or TRY HERE - then click appropriate link for the story).

(1) Go here for links to several dozen California cases addressing the state's "one form of action" and "security first" rules.

(2) If not, don't worry about it, it's not important anyway.