A deed of trust is a legal document used to secure a lender's interest in real property. It is used in some states in place of a mortgage document. A deed of trust is recorded at the courthouse and is a lien against the property described therein until it is cancelled. State laws provide for the expiration of deeds of trust after the passage of time.
A deed of trust that is recorded in the public registry secures a promissory note signed by a borrower from a mortgage lender. When the note is paid in full, it is not automatically cancelled at the courthouse. Someone, normally the lender, submits the proper documentation under state law so the cancellation is recorded on the public record. The borrower needs to confirm that the deed of trust has been cancelled. Failure to do so can lead to title problems in the future.
Expiration by Maturity Date
Some deeds of trust contain a maturity date; this date marks the day the final payment is due under the underlying promissory note. For example, a 30-year mortgage has a maturity date 30 years in the future. If reading the deed of trust reveals the maturity date, then each state provides for an expiration date. For example, deeds of trust expire 10 years from the maturity date in Nevada, California and Virginia. A state like West Virginia has an earlier time of five years. Check state law for the appropriate expiration date. Also check to see if the time has been changed and if that new change applies to old deeds of trust or only ones filed after the change date.
Expiration by Passage of Time
Many deeds of trust do not have a maturity date spelled out. In those cases, a different expiration date applies. In Nevada and California it is 60 years after recording. Virginia requires only 20 years to expire, while West Virginia law mandates the passage of 35 years from the date of the deed of trust. As with maturity dates, every state has its own law.
Old Deeds of Trust
Old deeds of trust that were never cancelled on the public record present problems for title searchers. The problem arises when a buyer needs a title search for a mortgage loan and purchase. The deed of trust may be in the name of the current seller or someone else further back in the chain of title. In most cases the deed of trust was paid but the paperwork never made it to the courthouse. State laws that provide for expiration solve this problem in many cases.
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