Senate Bill No. 440
(By Senators Helmick, Kessler, Ross, Sharpe and Love)
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[Introduced February 9, 1998; referred to the Committee
on the Judiciary.]
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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; providing for extensions of the liens; 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 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 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 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. A lien instrument securing a lien obligation
which is payable on demand expresses no maturity date.
(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 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 is extended as follows:
(1) If the final maturity date of the lien obligation, as extended, secured by the lien is ascertainable from the record of
the affidavit or extension agreement notice or an 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 an 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 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 an
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 an amendment in the same manner as the original lien instrument and note that
filing on the margin of the page where the original lien
instrument is recorded.
(d) If the record 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) 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. With respect to any lien obligation reserved or
created and in effect prior to the first day of July, one
thousand nine hundred ninety-eight, the lien obligation 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) The time 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 and attempt to
reduce customer confusion resulting from the retroactive
application of a relatively short statute of limitations.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.