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3 | 3 | | LCO No. 4033 1 of 11 |
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4 | 4 | | |
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5 | 5 | | General Assembly Raised Bill No. 7129 |
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6 | 6 | | January Session, 2019 |
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7 | 7 | | LCO No. 4033 |
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8 | 8 | | |
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9 | 9 | | |
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10 | 10 | | Referred to Committee on JUDICIARY |
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11 | 11 | | |
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12 | 12 | | |
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13 | 13 | | Introduced by: |
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14 | 14 | | (JUD) |
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15 | 15 | | |
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16 | 16 | | |
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17 | 17 | | |
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18 | 18 | | |
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19 | 19 | | AN ACT CONCERNING TH E FORECLOSURE OF CERTAIN |
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20 | 20 | | COMMERCIAL MORTGAGES BY STATUTORY POWER O F SALE. |
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21 | 21 | | Be it enacted by the Senate and House of Representatives in General |
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22 | 22 | | Assembly convened: |
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23 | 23 | | |
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24 | 24 | | Section 1. (NEW) (Effective January 1, 2020) (a) As used in this section 1 |
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25 | 25 | | and sections 2 to 9, inclusive, of this act, "statutory power of sale" 2 |
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26 | 26 | | means a clause in a mortgage deed or incorporated by reference in a 3 |
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27 | 27 | | mortgage deed granted by a corporation, partnership, including a 4 |
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28 | 28 | | limited partnership or a limited liability partnership, or limited 5 |
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29 | 29 | | liability company, that gives the mortgagee the power to foreclose a 6 |
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30 | 30 | | mortgage by a public sale and auction. If the statutory power of sale is 7 |
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31 | 31 | | incorporated by reference, the deed shall include notice to the 8 |
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32 | 32 | | mortgagor of such statutory power of sale. 9 |
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33 | 33 | | (b) The statutory power of sale shall not be used to foreclose: (1) A 10 |
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34 | 34 | | mortgage granted by a religious corporation organized under the 11 |
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35 | 35 | | provisions of section 33-264a of the general statutes, (2) a consumer 12 |
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36 | 36 | | mortgage, or (3) any mortgage that secures a principal indebtedness of 13 |
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37 | 37 | | less than fifty thousand dollars. If a mortgage deed contains a 14 |
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38 | 38 | | statement, at the time the mortgage deed is given, that the mortgagor 15 Raised Bill No. 7129 |
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39 | 39 | | |
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40 | 40 | | |
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41 | 41 | | |
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42 | 42 | | LCO No. 4033 2 of 11 |
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43 | 43 | | |
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44 | 44 | | is not a religious corporation organized under the provisions of section 16 |
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45 | 45 | | 33-264a of the general statutes, then such statement shall conclusively 17 |
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46 | 46 | | establish the facts contained in such deed. For the purposes of this 18 |
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47 | 47 | | subsection, (A) "consumer mortgage" means a mortgage that secures 19 |
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48 | 48 | | owner-occupied real estate and where the proceeds of the loan secured 20 |
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49 | 49 | | by the mortgage are primarily for personal, family or household 21 |
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50 | 50 | | purposes, and (B) "commercial mortgage" means a mortgage that 22 |
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51 | 51 | | secures real estate that is not owner-occupied and where the proceeds 23 |
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52 | 52 | | of the loan secured by the mortgage are not for personal, family or 24 |
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53 | 53 | | household purposes. A written statement by any party to the 25 |
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54 | 54 | | commercial mortgage indicating that such transaction is commercial 26 |
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55 | 55 | | for the purposes of this section shall be conclusive evidence of such 27 |
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56 | 56 | | status. If a mortgagor, or if the mortgagor is not a natural person, the 28 |
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57 | 57 | | principal of the mortgagor, is occupying the mortgaged property in 29 |
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58 | 58 | | violation of any mortgage covenant, it shall not affect the mortgage's 30 |
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59 | 59 | | status as a commercial mortgage. 31 |
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60 | 60 | | (c) The statutory power of sale in a mortgage deed may provide for 32 |
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61 | 61 | | the power to foreclose a mortgage nonjudicially in accordance with the 33 |
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62 | 62 | | provisions of this section and sections 2 to 9, inclusive, of this act. 34 |
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63 | 63 | | Upon any default in the performance or the observance of the 35 |
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64 | 64 | | conditions on or the requirements of the mortgage deed, promissory 36 |
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65 | 65 | | note or other written agreement made between the mortgagor and 37 |
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66 | 66 | | mortgagee with respect to the mortgage being foreclosed, including, 38 |
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67 | 67 | | but not limited to, any obligations to repay the debt that is secured by 39 |
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68 | 68 | | the mortgage deed, and the expiration of a cure or redemption period, 40 |
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69 | 69 | | if applicable, the mortgagee or the mortgagee's executors, 41 |
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70 | 70 | | administrators, successors or assigns, acting by and through a duly 42 |
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71 | 71 | | authorized attorney in his or her capacity as a commissioner of the 43 |
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72 | 72 | | Superior Court admitted to practice in the state, may sell, by way of a 44 |
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73 | 73 | | public sale, the mortgaged premises, or, in the event of any partial 45 |
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74 | 74 | | release of such mortgage deed, the portion of the mortgaged premises 46 |
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75 | 75 | | that remains subject to the mortgage deed, either as a whole or in 47 |
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76 | 76 | | parcels, together with any improvements to the mortgaged premises. 48 |
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77 | 77 | | Such public sale shall take place in front and within sight of the 49 Raised Bill No. 7129 |
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78 | 78 | | |
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79 | 79 | | |
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80 | 80 | | |
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81 | 81 | | LCO No. 4033 3 of 11 |
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82 | 82 | | |
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83 | 83 | | mortgaged premises. The mortgagee's attorney may convey the 50 |
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84 | 84 | | mortgaged premises by proper deed or deeds to the purchaser or 51 |
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85 | 85 | | purchasers in fee simple, as applicable, pursuant to section 4 of this act. 52 |
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86 | 86 | | (d) Nothing in this section or sections 2 to 9, inclusive, of this act 53 |
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87 | 87 | | shall prevent a mortgagee from foreclosing a mortgage deed by strict 54 |
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88 | 88 | | foreclosure or foreclosure by sale through an action brought in 55 |
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89 | 89 | | Superior Court or as otherwise provided by law. 56 |
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90 | 90 | | (e) Foreclosure by a statutory power of sale of a mortgage junior in 57 |
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91 | 91 | | priority to another mortgage or other encumbrance shall not be a bar 58 |
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92 | 92 | | to foreclosure of any mortgage senior to the foreclosing mortgage by 59 |
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93 | 93 | | statutory power of sale or as otherwise provided by law. 60 |
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94 | 94 | | Sec. 2. (NEW) (Effective January 1, 2020) (a) A notice of intention to 61 |
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95 | 95 | | foreclose pursuant to a statutory power of sale under subsection (c) of 62 |
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96 | 96 | | section 1 of this act shall be: (1) In writing and contain the provisions 63 |
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97 | 97 | | required under subsection (b) of this section; (2) sent by the 64 |
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98 | 98 | | commissioner of the Superior Court conducting the foreclosure and 65 |
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99 | 99 | | mailed by certified mail, return receipt requested, and include a 66 |
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100 | 100 | | certification of service in the same form as required of a commissioner 67 |
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101 | 101 | | of the Superior Court when sending pleadings under the rules of 68 |
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102 | 102 | | practice; and (3) recorded in the land records of the town or towns in 69 |
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103 | 103 | | which the real property subject to foreclosure by a statutory power of 70 |
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104 | 104 | | sale is located. 71 |
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105 | 105 | | (b) A notice of intention to foreclose pursuant to a statutory power 72 |
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106 | 106 | | of sale shall state: (1) The address and legal description of the property 73 |
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107 | 107 | | encumbered by the mortgage deed to be foreclosed by a statutory 74 |
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108 | 108 | | power of sale; (2) the default or defaults that have occurred; (3) the 75 |
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109 | 109 | | action required to cure the default or defaults, or if redemption will 76 |
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110 | 110 | | only be available; (4) a date for the sale of the property, not less than 77 |
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111 | 111 | | ninety days from the date of the notice of intention to foreclose; (5) a 78 |
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112 | 112 | | copy of a full appraisal of the property by a Connecticut licensed 79 |
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113 | 113 | | appraiser; (6) a list of junior encumbrances to the foreclosing mortgage, 80 |
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114 | 114 | | and their priority as determined by the commissioner of the Superior 81 Raised Bill No. 7129 |
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115 | 115 | | |
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116 | 116 | | |
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117 | 117 | | |
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118 | 118 | | LCO No. 4033 4 of 11 |
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119 | 119 | | |
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120 | 120 | | Court conducting the sale; (7) a list of senior encumbrances to the 82 |
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121 | 121 | | foreclosing mortgage; and (8) a demand for an affidavit of debt from 83 |
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122 | 122 | | the junior encumbrancers, as of the date of the sale, to enable the 84 |
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123 | 123 | | commissioner of the Superior Court to make distributions of surplus, if 85 |
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124 | 124 | | any. 86 |
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125 | 125 | | (c) Notice of the intention to foreclose pursuant to a statutory power 87 |
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126 | 126 | | of sale shall be served on: 88 |
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127 | 127 | | (1) The mortgagor or a representative in interest of the mortgagor as 89 |
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128 | 128 | | designated in writing pursuant to the mortgage deed. Such notice shall 90 |
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129 | 129 | | be sent in accordance with the procedure set forth in section 4 of this 91 |
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130 | 130 | | act. 92 |
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131 | 131 | | (2) Any tenant of the property if the mortgagee knows or should 93 |
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132 | 132 | | know by exercise of due diligence that the property is occupied as a 94 |
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133 | 133 | | rental unit. Upon request from a mortgagee, the mortgagor or the 95 |
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134 | 134 | | mortgagor's representative in interest shall provide the name, address 96 |
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135 | 135 | | and other contact information for any tenant. Notice to a tenant shall 97 |
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136 | 136 | | be served on the tenant by (A) marshal, (B) first class mail sent to the 98 |
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137 | 137 | | tenant's last-known address, or (C) posting it conspicuously at each 99 |
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138 | 138 | | entrance to the mortgaged premises. 100 |
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139 | 139 | | (3) All other parties in interest, including all junior and senior 101 |
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140 | 140 | | encumbrancers. The notice shall be sent by certified mail, return 102 |
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141 | 141 | | receipt requested to the address, if any, listed in the instrument 103 |
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142 | 142 | | evidencing the interest, and, if none is listed, to the registered agent for 104 |
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143 | 143 | | the party in interest or to any other address that may be readily 105 |
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144 | 144 | | available to the mortgagee. 106 |
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145 | 145 | | (4) Failure to notify any party in interest, other than the mortgagor, 107 |
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146 | 146 | | does not invalidate the foreclosure as to other parties in interest to 108 |
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147 | 147 | | whom notice was given. 109 |
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148 | 148 | | Sec. 3. (NEW) (Effective January 1, 2020) At any time up to the time of 110 |
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149 | 149 | | the sale under a foreclosure pursuant to a statutory power of sale, the 111 |
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150 | 150 | | mortgagor may redeem the real property from the mortgage deed 112 Raised Bill No. 7129 |
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151 | 151 | | |
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152 | 152 | | |
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153 | 153 | | |
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154 | 154 | | LCO No. 4033 5 of 11 |
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155 | 155 | | |
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156 | 156 | | being foreclosed pursuant to a statutory power of sale by paying the 113 |
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157 | 157 | | entire indebtedness and any other sums due under the mortgage deed 114 |
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158 | 158 | | and all costs reasonably incurred in connection with the proceeding to 115 |
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159 | 159 | | foreclose, including reasonable attorney's fees of the mortgagee 116 |
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160 | 160 | | pursuant to an itemized affidavit of debt provided by the mortgagee 117 |
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161 | 161 | | upon request. If the mortgagee provides a cure after default, the 118 |
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162 | 162 | | mortgagor may cure any default in the performance of the conditions 119 |
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163 | 163 | | or requirements of a mortgage deed, avoid the operation of any 120 |
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164 | 164 | | acceleration clause in the mortgage deed, prevent the foreclosure 121 |
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165 | 165 | | pursuant to a statutory power of sale or other disposition of the 122 |
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166 | 166 | | mortgaged premises and reinstate the mortgage deed by tendering the 123 |
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167 | 167 | | payment or performance due under the mortgage deed by: (1) Paying 124 |
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168 | 168 | | all sums that would have been due at the time of payment in the 125 |
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169 | 169 | | absence of any acceleration clause; (2) performing any other obligation 126 |
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170 | 170 | | the mortgagor would have been bound to perform in the absence of 127 |
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171 | 171 | | any acceleration clause; and (3) paying the costs of the proceeding to 128 |
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172 | 172 | | foreclose that are reasonably incurred by the mortgagee, including, but 129 |
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173 | 173 | | not limited to, reasonable attorney's fees of the mortgagee. 130 |
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174 | 174 | | Sec. 4. (NEW) (Effective January 1, 2020) (a) The mortgagee, after the 131 |
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175 | 175 | | mortgagor's default and upon compliance with the provisions of 132 |
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176 | 176 | | sections 1 to 9, inclusive, of this act, may sell all or any part of the 133 |
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177 | 177 | | mortgaged premises that is subject to the mortgage deed. A sale under 134 |
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178 | 178 | | a foreclosure pursuant to a statutory power of sale shall convey title to 135 |
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179 | 179 | | the property subject to all other parties in interest who have superior 136 |
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180 | 180 | | priority to the foreclosing mortgagee. The sale may be by public 137 |
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181 | 181 | | auction, as a whole or in parcels, at any time after ninety days from the 138 |
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182 | 182 | | date of sending notice of intention to foreclose, including, but not 139 |
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183 | 183 | | limited to, sale on credit. The sale shall be conducted by a 140 |
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184 | 184 | | commissioner of the Superior Court admitted to practice in the state of 141 |
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185 | 185 | | Connecticut who is in good standing with the state-wide grievance 142 |
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186 | 186 | | committee, and who maintains and operates an interest earned on 143 |
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187 | 187 | | lawyers' clients fund account under section 51-81c of the general 144 |
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188 | 188 | | statutes. The commissioner of the Superior Court shall be selected by 145 |
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189 | 189 | | the mortgagee. Every aspect of the sale, including the method, 146 Raised Bill No. 7129 |
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190 | 190 | | |
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191 | 191 | | |
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192 | 192 | | |
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193 | 193 | | LCO No. 4033 6 of 11 |
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194 | 194 | | |
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195 | 195 | | advertising, time, place, deposit and terms of sale, such as buyer's 147 |
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196 | 196 | | mortgage contingency, shall be commercially reasonable, provided 148 |
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197 | 197 | | there shall be a rebuttable presumption that a sale that complies with 149 |
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198 | 198 | | the requirements of subsection (c) of this section is commercially 150 |
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199 | 199 | | reasonable. 151 |
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200 | 200 | | (b) At the time of acceptance of a bid at a public sale under this 152 |
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201 | 201 | | section, the successful bidder, other than the foreclosing mortgagee, 153 |
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202 | 202 | | shall pay the required deposit to the commissioner of the Superior 154 |
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203 | 203 | | Court conducting the sale and execute and deliver to such 155 |
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204 | 204 | | commissioner a contract to purchase the real property, which may be a 156 |
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205 | 205 | | bond for deed. If the highest bidder fails to perform on the purchase 157 |
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206 | 206 | | and sale agreement, the commissioner of the Superior Court 158 |
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207 | 207 | | conducting the sale may execute a purchase and sale agreement with 159 |
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208 | 208 | | the next highest bidder not later than thirty days after the sale and the 160 |
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209 | 209 | | deposit of the highest bidder may be retained or recovered as 161 |
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210 | 210 | | liquidated damages. If the foreclosing mortgagee is the highest bidder 162 |
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211 | 211 | | or becomes the highest bidder by failure of another bidder to perform 163 |
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212 | 212 | | a purchase and sale agreement, a purchase and sale agreement need 164 |
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213 | 213 | | not be executed for the foreclosing mortgagee. Any sums retained or 165 |
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214 | 214 | | recovered by the foreclosing mortgagee under this subsection shall be 166 |
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215 | 215 | | applied to the payment of the debt secured by the mortgage deed in 167 |
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216 | 216 | | the same manner as the proceeds of a completed sale. 168 |
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217 | 217 | | (c) There shall be a rebuttable presumption that a sale under this 169 |
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218 | 218 | | section is commercially reasonable if: (1) The commissioner of the 170 |
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219 | 219 | | Superior Court chosen to conduct the sale complies with all applicable 171 |
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220 | 220 | | requirements for notice and sale as provided in sections 1 to 7, 172 |
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221 | 221 | | inclusive, of this act; (2) notice of the sale, including the address of the 173 |
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222 | 222 | | real property to be sold, the date, place and time of the sale, the 174 |
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223 | 223 | | amount of the deposit required at the sale and the name and telephone 175 |
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224 | 224 | | number of the commissioner of the Superior Court conducting the sale, 176 |
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225 | 225 | | is posted at the location of the real property not less than sixty days 177 |
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226 | 226 | | before the date of the sale; and (3) the sale is advertised in a newspaper 178 |
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227 | 227 | | of general circulation in the town or towns where the real property is 179 |
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228 | 228 | | located, at least once each week for three successive weeks before the 180 Raised Bill No. 7129 |
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229 | 229 | | |
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230 | 230 | | |
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231 | 231 | | |
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232 | 232 | | LCO No. 4033 7 of 11 |
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233 | 233 | | |
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234 | 234 | | sale, in substantially the form customarily used for notices of judicial 181 |
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235 | 235 | | sale of real property, and includes the address of the real property to 182 |
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236 | 236 | | be sold, the date, place and time of the sale, the amount of the deposit 183 |
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237 | 237 | | required at the sale and the name and telephone number of the 184 |
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238 | 238 | | commissioner of the Superior Court conducting the sale. The 185 |
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239 | 239 | | commissioner of the Superior Court, after serving a notice of intention 186 |
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240 | 240 | | to foreclose by a statutory power of sale under section 2 of this act, is 187 |
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241 | 241 | | authorized to enter upon the real property for the purpose of posting 188 |
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242 | 242 | | the notice of sale required under this subsection. 189 |
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243 | 243 | | (d) The commissioner of the Superior Court shall convey title by a 190 |
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244 | 244 | | Mortgagee Statutory Power of Sale Deed, or other applicable method 191 |
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245 | 245 | | as provided in the applicable contract for sale and as provided in 192 |
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246 | 246 | | section 7 of this act. 193 |
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247 | 247 | | (e) Before the recording of the deed conveyed pursuant to 194 |
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248 | 248 | | subsection (d) of this section, the commissioner of the Superior Court 195 |
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249 | 249 | | appointed to sell the real property in accordance with this section shall 196 |
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250 | 250 | | cause to be recorded on the land records of the town in which the real 197 |
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251 | 251 | | property subject to foreclosure by a statutory power of sale is located a 198 |
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252 | 252 | | certificate of foreclosure of mortgage pursuant to a statutory power of 199 |
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253 | 253 | | sale containing: (1) The name of the foreclosing mortgagee by whom 200 |
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254 | 254 | | such commissioner was appointed, the names of the original 201 |
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255 | 255 | | mortgagor and mortgagee as stated in the mortgage deed being 202 |
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256 | 256 | | foreclosed pursuant to the statutory power of sale, the volume and 203 |
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257 | 257 | | page of the land records where such mortgage deed is recorded and, if 204 |
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258 | 258 | | applicable, the parties and recording information of any modification 205 |
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259 | 259 | | or assignment of such mortgage deed to the foreclosing mortgagee; 206 |
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260 | 260 | | and (2) a statement that such commissioner has complied with all 207 |
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261 | 261 | | applicable requirements for the sale of the real property. 208 |
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262 | 262 | | Sec. 5. (NEW) (Effective January 1, 2020) (a) A mortgagor, or any 209 |
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263 | 263 | | other person entitled to notice of intention to foreclose pursuant to a 210 |
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264 | 264 | | statutory power of sale under subsection (c) of section 2 of this act, 211 |
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265 | 265 | | may apply to the Superior Court for a protective order seeking to stay, 212 |
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266 | 266 | | enjoin or condition the terms of the sale. Such applicant shall pay to 213 Raised Bill No. 7129 |
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267 | 267 | | |
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268 | 268 | | |
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269 | 269 | | |
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270 | 270 | | LCO No. 4033 8 of 11 |
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271 | 271 | | |
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272 | 272 | | the clerk of the Superior Court a fee for the entry of a civil action as set 214 |
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273 | 273 | | forth in section 52-259 of the general statutes. An application made 215 |
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274 | 274 | | under this subsection shall be scheduled for a hearing by the Superior 216 |
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275 | 275 | | Court. The Superior Court shall order reasonable notice of the date and 217 |
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276 | 276 | | time of the hearing to be given to all interested persons not less than 218 |
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277 | 277 | | twelve days before the date of the hearing. Service of process specific 219 |
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278 | 278 | | to an application pursuant to this section shall be by certified mail, 220 |
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279 | 279 | | return receipt requested, accompanied by a certification of service by 221 |
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280 | 280 | | the attorney or pro se party effectuating such service, in such form as is 222 |
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281 | 281 | | required by the rules of practice. After such hearing, the Superior 223 |
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282 | 282 | | Court may order that a sale of real property under a foreclosure 224 |
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283 | 283 | | pursuant to a statutory power of sale, or the disposition of the 225 |
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284 | 284 | | proceeds from such sale, shall continue as planned, with or without a 226 |
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285 | 285 | | revised sale date, or be restrained or carried out in accordance with 227 |
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286 | 286 | | such terms and conditions as the Superior Court may determine if it is 228 |
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287 | 287 | | established that: (1) The underlying obligation that is secured by the 229 |
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288 | 288 | | mortgage deed to be foreclosed pursuant to a statutory power of sale is 230 |
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289 | 289 | | invalid; (2) the mortgagor is not in default or has cured the default; (3) 231 |
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290 | 290 | | the order of priorities of junior encumbrances requires adjustment; (4) 232 |
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291 | 291 | | the fair market value of the mortgaged property as established by the 233 |
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292 | 292 | | mortgagee's appraisal is incorrect, invalid or in need of adjustment; or 234 |
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293 | 293 | | (5) the mortgagee or other person exercising a statutory power of sale 235 |
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294 | 294 | | under section 4 of this act has not complied with the provisions of 236 |
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295 | 295 | | sections 1 to 7, inclusive, of this act, or that there exists in law any other 237 |
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296 | 296 | | claim or defense that can be made in a foreclosure action. 238 |
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297 | 297 | | (b) A mortgagee may apply to the Superior Court for an order in aid 239 |
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298 | 298 | | of the mortgagee's rights under sections 1 to 9, inclusive, of this act, or 240 |
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299 | 299 | | its mortgage, promissory note or other contract with the mortgagor, 241 |
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300 | 300 | | including, but not limited to, an order allowing the mortgagee and 242 |
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301 | 301 | | other interested persons reasonable access to the real property subject 243 |
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302 | 302 | | to foreclosure pursuant to a statutory power of sale for purposes of 244 |
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303 | 303 | | rehabilitation, preparation for sale, repair, maintenance, inspection, 245 |
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304 | 304 | | posting of notice or conducting the sale. 246 |
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305 | 305 | | (c) An application before the Superior Court shall be made not later 247 Raised Bill No. 7129 |
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306 | 306 | | |
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307 | 307 | | |
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308 | 308 | | |
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309 | 309 | | LCO No. 4033 9 of 11 |
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310 | 310 | | |
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311 | 311 | | than thirty days prior to the sale date, and in the event the court does 248 |
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312 | 312 | | not resolve the case within twenty-one days prior to the sale date, the 249 |
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313 | 313 | | sale date shall be reset by the court to a date not later than thirty days 250 |
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314 | 314 | | from the date of the order. The sale shall be considered final and all 251 |
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315 | 315 | | disputes shall be resolved prior to the sale. The Superior Court shall 252 |
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316 | 316 | | order the applicant to pay the reasonable costs and attorney's fees of 253 |
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317 | 317 | | the other parties to the claim in the event the applicant's claims are 254 |
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318 | 318 | | ruled against or are otherwise unsuccessful. 255 |
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319 | 319 | | (d) The judges of the Supreme Court, Appellate Court and Superior 256 |
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320 | 320 | | Court shall adopt and may, from time to time, modify or repeal rules 257 |
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321 | 321 | | and forms regulating pleading, practice and procedure in judicial 258 |
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322 | 322 | | proceedings administered by the courts for the purpose of simplifying 259 |
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323 | 323 | | proceedings applied for in the Superior Court pursuant to this section, 260 |
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324 | 324 | | and promoting the speedy and efficient determination of such 261 |
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325 | 325 | | proceedings. Such rules shall: (1) Provide for an accelerated 262 |
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326 | 326 | | adjudication process; (2) address hearing procedures, discovery and 263 |
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327 | 327 | | motions; and (3) require that a decision on a dispositive motion or 264 |
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328 | 328 | | hearing be rendered not later than ten days after the date on which 265 |
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329 | 329 | | such motion was heard or hearing held. Such rules shall not abridge, 266 |
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330 | 330 | | enlarge or modify the jurisdiction of any court. Such rules shall 267 |
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331 | 331 | | become effective on such date as the judges specify, but not in any 268 |
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332 | 332 | | event until sixty days after the promulgation of such rules. 269 |
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333 | 333 | | Sec. 6. (NEW) (Effective January 1, 2020) (a) The proceeds from a sale 270 |
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334 | 334 | | of real property under a foreclosure pursuant to a statutory power of 271 |
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335 | 335 | | sale under sections 1 to 9, inclusive, of this act, shall be held by the 272 |
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336 | 336 | | commissioner of the Superior Court conducting the sale as a trustee for 273 |
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337 | 337 | | the benefit of the foreclosing mortgagee and all persons who may 274 |
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338 | 338 | | claim an interest in such proceeds. Such proceeds shall be distributed 275 |
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339 | 339 | | by such commissioner in the following order: 276 |
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340 | 340 | | (1) The reasonable expenses of sale; 277 |
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341 | 341 | | (2) The reasonable expenses of securing possession before sale and 278 |
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342 | 342 | | holding, maintaining and preparing the real property for sale, 279 Raised Bill No. 7129 |
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343 | 343 | | |
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344 | 344 | | |
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345 | 345 | | |
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346 | 346 | | LCO No. 4033 10 of 11 |
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347 | 347 | | |
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348 | 348 | | including, but not limited to, premiums on hazard and liability 280 |
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349 | 349 | | insurance, and, to the extent provided for in the mortgage deed and 281 |
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350 | 350 | | not prohibited by law, reasonable attorney's fees and other legal 282 |
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351 | 351 | | expenses incurred by the mortgagee; 283 |
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352 | 352 | | (3) Satisfaction of the indebtedness secured by the mortgage deed 284 |
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353 | 353 | | being foreclosed pursuant to a statutory power of sale; 285 |
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354 | 354 | | (4) Satisfaction in the order of priority of any subordinate interest of 286 |
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355 | 355 | | record entitled to notice under subdivision (3) of subsection (c) of 287 |
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356 | 356 | | section 2 of this act; and 288 |
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357 | 357 | | (5) Remittance of any excess to the mortgagor. 289 |
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358 | 358 | | Sec. 7. (NEW) (Effective January 1, 2020) The commissioner of the 290 |
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359 | 359 | | Superior Court conducting a sale of real property under sections 1 to 9, 291 |
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360 | 360 | | inclusive, of this act shall execute a deed to the purchaser of such real 292 |
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361 | 361 | | property that is sufficient to convey title and that: (1) Identifies the 293 |
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362 | 362 | | mortgage deed foreclosed by the statutory power of sale and the 294 |
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363 | 363 | | parties to the mortgage deed; (2) indicates the volume and page of the 295 |
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364 | 364 | | land records where such mortgage deed is recorded; and (3) recites 296 |
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365 | 365 | | that the deed is executed by the commissioner of the Superior Court 297 |
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366 | 366 | | conducting the sale after a default and sale under sections 1 to 9, 298 |
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367 | 367 | | inclusive, of this act and pursuant to the commissioner's authority to 299 |
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368 | 368 | | conduct the sale. In the event the mortgagee is the successful bidder 300 |
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369 | 369 | | for the property at the sale, title to the property shall automatically 301 |
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370 | 370 | | vest in the mortgagee as of the date of such sale, and the evidence of 302 |
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371 | 371 | | title shall only be by certificate of foreclosure filed by the commissioner 303 |
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372 | 372 | | of the Superior Court conducting the sale. The signature and title or 304 |
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373 | 373 | | authority of such commissioner signing the deed as grantor, together 305 |
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374 | 374 | | with the certificate required by subsection (e) of section 4 of this act, 306 |
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375 | 375 | | are sufficient proof of the facts recited in the deed and of the signer's 307 |
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376 | 376 | | authority to sign the deed. 308 |
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377 | 377 | | Sec. 8. (NEW) (Effective January 1, 2020) In the event the value of the 309 |
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378 | 378 | | property, as determined by the appraisal, if title to the property vests 310 |
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379 | 379 | | in the mortgagee, or if the proceeds of the sale are not enough to pay 311 Raised Bill No. 7129 |
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380 | 380 | | |
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381 | 381 | | |
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382 | 382 | | |
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383 | 383 | | LCO No. 4033 11 of 11 |
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384 | 384 | | |
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385 | 385 | | off the debt of the mortgage, then the mortgagee may apply to the 312 |
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386 | 386 | | Superior Court for a deficiency judgment. The mortgagee may use the 313 |
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387 | 387 | | original appraisal in its application if the application date occurred not 314 |
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388 | 388 | | later than one hundred twenty days after the date of issuance of the 315 |
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389 | 389 | | appraisal. If the application occurs more than one hundred twenty 316 |
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390 | 390 | | days after the date of issuance of the appraisal, then the mortgagee 317 |
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391 | 391 | | shall obtain a new appraisal. The costs of the second appraisal may be 318 |
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392 | 392 | | added to the debt and deficiency judgment. 319 |
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393 | 393 | | Sec. 9. (NEW) (Effective January 1, 2020) Immediate possession of 320 |
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394 | 394 | | property obtained by a sale under a foreclosure pursuant to a statutory 321 |
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395 | 395 | | power of sale under sections 1 to 8, inclusive, of this act shall be 322 |
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396 | 396 | | enforceable by ejectment pursuant to section 49-22 of the general 323 |
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397 | 397 | | statutes. 324 |
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398 | 398 | | This act shall take effect as follows and shall amend the following |
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399 | 399 | | sections: |
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400 | 400 | | |
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401 | 401 | | Section 1 January 1, 2020 New section |
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402 | 402 | | Sec. 2 January 1, 2020 New section |
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403 | 403 | | Sec. 3 January 1, 2020 New section |
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404 | 404 | | Sec. 4 January 1, 2020 New section |
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405 | 405 | | Sec. 5 January 1, 2020 New section |
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406 | 406 | | Sec. 6 January 1, 2020 New section |
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407 | 407 | | Sec. 7 January 1, 2020 New section |
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408 | 408 | | Sec. 8 January 1, 2020 New section |
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409 | 409 | | Sec. 9 January 1, 2020 New section |
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410 | 410 | | |
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411 | 411 | | Statement of Purpose: |
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412 | 412 | | To authorize the foreclosure of certain commercial mortgages by |
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413 | 413 | | statutory power of sale. |
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414 | 414 | | [Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, |
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415 | 415 | | except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is |
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416 | 416 | | not underlined.] |
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417 | 417 | | |
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