Statute of Limitation on Notes secured by Trust Deeds - California

[Abdenour Achab]

In California, the statute of limitation on unsecured promissory notes is 4 years from the date of the first default (with several exceptions). More generally, the statute of limitation on written contracts is 4 years.

What's the statute of limitation on promissory notes secured by trust deeds ? I recently received a lead of a note available for sale, secured by a trust deed dated in 1996. I have seen the trust deed, but haven't seen the note yet. No payment has ever been made on the note.

I was going to wait until I gather information from various parties before asking the questions here, but then decided to ask here first, so that I know more about what questions to ask. I will ask more specific questions later once I have gathered more information.

Assuming that the note called for payments starting in 1996, which means it has been delinquent for over 16 years, how does the Statute of Limitation affect the note ? How does it affect the Trust Deed ? Will I have the right to foreclose (trustee sale) if I buy the note and Trust Deed ?

Thank you,

Abdenour

[Rick H.]

Lost this thread since reading it back in 2012 (ok, 12/30/2012).

Got the definitive answer: properly recorded trust deed can be foreclosed on judicially or non-judicially for 10 years following the due date, if identified on the recorded security instrument (i.e., trust deed), or 60 years, I not so identified.

I must have been eating magic mushrooms to not immediately recall this, guys. Around 2003 I was involved with a very high profile probate attorney's whereby the decedent had fouled up title to the primary estate asset in a defunct corporation and clouded with some 23 judgment liens junior to a private party 1st.

The clean solution was to track down the little old lady who owned the ancient 1st TD which had not been paid on since about 1988. The bene had even lost the original note so I had her give me a lost instrument indemnification agreement along with the assignment of note/TD. I subbed in my corp as trustee, added 15 + years of back payments and completed a "friendly" foreclosure with the blessing and cooperation of the heirs.

This had the effect if wiping off the liens as no 3rd party bidders resulted in title reverting to me as assignee. Now that I had title, I negotiated a sale back to the estate, financed paying off the attorney's fees and my fee, as well as the foreclosure costs. Damn, this one was fun!