Full question:
I am buying my grandmother's house using a deed of trust security agreement.I had a friends real estate lawyer draw up the papers stating that I make monthly payments to her until her death then the house is mine, payed in full. The lawyer has made him self the trustee but says my grandmother can appoint another trustee if she wants. Is this a normal thing for him to be the trustee and will he have the power to screw me somehow? And can my grandmother appoint another trustee with no problem?
- Category: Real Property
- Subcategory: Deeds
- Date:
- State: Texas
Answer:
It is not unusual for a lawyer to be named as trustee in a deed of trust. Your grandmother can appoint a successor trustee if she wishes. In a deed of trust, the trustee holds the property until the loan is repaid. If the loan defaults, the trustee may sell the property. This power of sale typically does not exist with a standard warranty deed.
The deed of trust outlines the rights and obligations of all parties involved. If you are authorized to sell the property, you may do so without needing an attorney's assistance. In many places, a deed of trust is necessary for a foreclosure by power of sale. The trustee, rather than the mortgage holder, conducts the sale in the event of foreclosure.
Trustees have a fiduciary duty to act in the best interest of the beneficiaries. If this duty is breached, various remedies may be available, including claims for breach of fiduciary duty or fraud. Courts will assess whether a breach occurred based on the specific facts of the case.
To establish a breach of fiduciary duty, it must be shown that: (1) a trust relationship exists, (2) the trustee breached their duties, and (3) the beneficiary suffered damages. Defenses against such claims may include the statute of limitations, lack of a fiduciary relationship, or the beneficiary's consent to the trustee's actions.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.