COMMITTEE SUBSTITUTE

FOR

H. B. 4030

(By Delegates Trump, L. White, Faircloth, Rowe,
Staton and

Johnson)
(Originating in the Committee on the Judiciary)


[January 28, 1998]


A BILL to amend and reenact section five, article two, chapter fifty-five of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to limitation of actions and suits enforcing liens reserved by any conveyance of real estate or created by any trust deed or mortgage on real estate; permitting extensions of certain liens by the lienholder; providing that obligations payable on demand express no maturity date; and addressing the retroactive and prospective application of changes made.

Be it enacted by the Legislature of West Virginia:
That section five, article two, chapter fifty-five of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted to read as follows:
ARTICLE 2. LIMITATION OF ACTIONS AND SUITS.

 §55-2-5. Enforcement of liens reserved by conveyance or created by deed of trust or mortgage on real estate.
(a) Any lien reserved by any conveyance of real estate or created by any deed of trust or mortgage on real estate expires after the following periods of time, unless suit to enforce the lien is instituted prior to expiration of the time period or unless the lien is extended as specified in subsections subsection (b) or (e) of this section:
(1) If the final maturity date of the lien obligation is ascertainable from the record lien instrument, the lien expires five years after that date.
(2) If the final maturity date of the lien obligation is not ascertainable from the record lien instrument, the lien expires thirty-five years after the date of the lien instrument. However, if the lienholder rerecords the lien instrument prior to thirty-five years from the date of the lien instrument and includes a copy of the obligation secured by the lien so that the final maturity is ascertainable, the lien expires five years after the date of maturity.
(b) If an affidavit or extension agreement notice executed by the secured party and the grantor or mortgagor to or beneficiary of the lien obligation instrument or an amendment to the lien instrument executed by the grantor or mortgagor and the secured party or beneficiary is recorded prior to expiration of the original period of limitation, as specified in subsection (a) of this section, the time period of limitation is extended as follows:
(1) If the final maturity date of the lien obligation, as extended, secured by the lien instrument is ascertainable from the record of the affidavit, or extension agreement notice or amendment, the lien expires five years after the date of final maturity of the obligation, as extended.
(2) If the final maturity date of the lien obligation, as extended, secured by the lien instrument is not ascertainable from the record of the affidavit, or extension agreement notice or amendment, the lien expires thirty-five years after the date of the lien instrument. However, if the lienholder rerecords the lien instrument prior to thirty-five years from the date of the lien instrument and includes a copy of the obligation secured by the lien so that the final maturity is ascertainable, the lien expires five years after the date of maturity.
(c) Any affidavit, or extension agreement notice or amendment filed pursuant to subsection (b) of this section after the effective date of this section, shall include, but is not limited to, the following:
(1) The unpaid balance of the debt and interest secured by the lien instrument;
(2) The final maturity date of the obligation of the lien, as extended; and
(3) The book and page of recordation of the original lien instrument.
The clerk of the county commission shall record and index any affidavit, or extension agreement notice or amendment in the same manner as the original lien instrument and shall note that filing on the margin of the page where the original lien instrument is recorded.
(d) If the record lien instrument of the lien obligation shows that it secures an obligation payable in installments and the maturity date of the final installment of the obligation is ascertainable from the lien instrument, the time runs from the maturity date of the final installment.
(e) For purposes of this section only, a lien instrument securing an obligation which is payable on demand expresses no maturity date.
(e) (f) Nothing in this section extinguishes any lien obligation which was reserved or created and in effect prior to the effective date of this section: Provided, That if any such lien should be extinguished by this section, then any action to enforce such lien shall be brought or recordation of any extended lien obligation pursuant to subsection (b) of this section shall be made before the first day of July, one thousand nine hundred ninety-eight first day of July, one thousand nine hundred ninety- eight. With respect to any lien reserved or created and in effect prior to the first day of July, one thousand nine hundred ninety-eight, the lien is valid for twenty years after its stated maturity, or if no maturity date is stated in the lien instrument, for thirty-five years after the date of the lien instrument.
(f) (g) The time periods of limitation created by this section shall may be extended only as provided in this section and shall may not be extended by any other method or by operation of law.
(g) Subject to the provisions of subsection (e) of this section, the provisions of this section apply with like effect to every such lien now existing as well as to every such lien hereafter reserved or created.


NOTE: The purpose of this bill is to modify certain of the significant changes made to the statute of limitations on deeds of trusts made during the 1997 Legislative Session. The changes alleviate significant hardships on lienholders, permitting them to extend liens without the need to secure the signature of the mortgagor in certain instances. The bill also removes certain aspects of the retroactive application of the bill passed during the 1997 session. Finally, several technical and clarifying changes have been made.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.