If you own property in Virginia, you might have a mortgage, a lien of credit, or a loan against your property. Lenders formalize that arrangement by filing a document known as a “deed of trust” with the clerk’s office at the courthouse. So what is a deed of trust, and what are your protections if things go bad?

What is a Deed of Trust?

A deed of trust is a document that is recorded in a land record’s office that notifies prospective buyers or creditors that you agreed to pay someone money and that they now have an interest in your property. This notice is important, because it allows other lenders or prospective buyers to understand what the property may be worth. If the property gets sold, the person who has a deed of trust will also be paid from the sale of the property.

A deed of trust is typically removed after the sale of a home so long as the lender is reimbursed from the sale. This is done through a process known as “closing.” A buyer will typically get a new mortgage or find the money from some other lending institution to pay off the old deed of trust.

How long is a Deed of Trust good for?

Under Virginia law, a deed of trust is not necessarily always going to be valid. A lender only has so long to pursue the deed of trust before it becomes void. The amount of time a lender has to pursue a deed of trust depends on several factors including a) when the deed of trust was recorded, b) when the “maturity date” is on the deed of trust (or when it becomes due) and c) whether or not the lender was a proper lending agency.

A maturity date is the date when your loan becomes due. For example, if you have a thirty year mortgage that you sign in 2020, the maturity date would be in 2050. Generally speaking, a lender has ten (10) years from the maturity date. If the deed of trust does not have a maturity date, the amount of time the lender has is generally twenty (20) years from the date the loan is signed. Some lines of credit can be pursued forty (40) years after the date it is signed. It really depends on the type of deed you are dealing with.

There are some other exceptions that impact the amount of time a lender has to pursue the deed of trust, so if you have any questions it is generally a good idea to hire a lawyer.

Why you need a real estate lawyer.

If the lender has run out of time to go after your deed of trust because it is a very old deed, then you may be able to file a lawsuit to remove the deed of trust from your title search. This has the benefit of being able to keep more of the money from closing and increasing the value of your property.

If you have an old deed of trust and you are interested in selling your home, it is usually a good idea to have a real estate lawyer involved in the transactions. Our job is to explore any avenues that can help protect you during the sale process and maximize your return. Make sure to consult with a real estate lawyer if you are considering selling your property.