I recently paid off a property, and want to reconvey it to show no lien. The seller/real estate agent/Title company all point the finger at each other as to whom is responsible for providing the reconveyence paperwork. Please tell me who is the responsible party, and what code section it falls under. It appears I'm going to have to bully them.
2 Answers from Attorneys
Is this a commercial lender that is doing this to many borrowers?
A deed of reconveyance is from the trustee to the borrower or borrower's successor, and conveys whatever interest the trustee held under the deed of trust back to the borrower or successor. The reconveyance process is kicked off by a "request for reconveyance" made by the beneficiary (holder of the note) to the trustee. See Civil Code, section 2941, especially subsection (b)(1).
The beneficiary must request reconveyance when the note is paid off, and the request for reconveyance is supposed to be made within 30 days and accompanied by the original note and deed of trust. If either has gone astray, this may result in a delay, and the solution for a lost note can be an affidavit of loss by the beneficiary, and/or a lost instrument bond. See Huckell v. Matranga (1979) 99 Cal.A..3d 471.
The trustee then has 21 days to execute and record the reconveyance.
There are remedies for failure of a trustee to reconvey, or for the failure of the beneficiary to request reconveyance. Willful failure can be a misdemeanor.
Perhaps your practical problem here is in identifying the beneficiary (of the note and deed of trust). If it isn't the party to whom you made the payoff, then it's whomever that party is doing the loan servicing for.
In my experience, most institutional lenders are pretty good at requesting reconveyances, and most professional trustees are very good at executing and recording reconveyances. Maybe here you are dealing with inexperienced (or merged or bankrupt) lenders or servicers.
I suggest that you start by identifying the proper party to initiate the reconveyance; it would not be the seller or real estate agent, and probably not the title company -- it would be the lender (beneficiary); i.e., the party to whom you paid the balance due.
If you continue to have difficulties, you may contact me directly.