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Chapter 7. Borrowing, Refinancing, And Encumbering Property of California Probate Code >> Division 7. >> Part 5. >> Chapter 7.
(a) Subject to subdivision (c), after authorization by order
of court obtained under this chapter upon a showing that it would be
to the advantage of the estate, the personal representative may
borrow money on a note, either unsecured or to be secured by a
security interest or other lien on the personal property of the
estate, or any part thereof, or to be secured by a mortgage or deed
of trust on the real property of the estate, or any part thereof, and
may give a security interest or other lien on the personal property
of the estate, or any part thereof, or a mortgage or deed of trust on
the real property of the estate, or any part thereof, in order to do
any one or more of the following:
(1) Pay the debts of the decedent or the estate, devises, expenses of administration, and charges against the estate.
(2) Pay, reduce, extend, or renew a security interest or lien or mortgage or deed of trust already existing on property of the estate.
(3) Improve, use, operate, or preserve property in the estate.
(b) The personal representative shall apply the money to the purpose specified in the order.
(c) Where the surviving spouse has elected to have his or her share of the community real property administered in the decedent's estate, the personal representative is authorized to borrow money to be secured by a mortgage or deed of trust on the community real property of the estate, or any part thereof, only with the written consent of the surviving spouse.
(1) Pay the debts of the decedent or the estate, devises, expenses of administration, and charges against the estate.
(2) Pay, reduce, extend, or renew a security interest or lien or mortgage or deed of trust already existing on property of the estate.
(3) Improve, use, operate, or preserve property in the estate.
(b) The personal representative shall apply the money to the purpose specified in the order.
(c) Where the surviving spouse has elected to have his or her share of the community real property administered in the decedent's estate, the personal representative is authorized to borrow money to be secured by a mortgage or deed of trust on the community real property of the estate, or any part thereof, only with the written consent of the surviving spouse.
If property of the estate consists of an undivided interest
in real or personal property, or any other interest therein less than
the entire ownership, upon a showing that it would be to the
advantage of the estate to borrow money to improve, use, operate, or
preserve the property jointly with the owners of the other interests
therein, or to pay, reduce, extend, or renew a security interest,
lien, mortgage, or deed of trust already existing on all of the
property, the personal representative, after authorization by order
of the court obtained under this chapter, may join with the owners of
the other interests in borrowing money and the execution of a joint
and several note and such security interest, lien, mortgage, or deed
of trust as may be required to secure the payment of the note. The
note may be for such sum as is required for the purpose.
(a) The personal representative or any interested person may
file a petition for an order under this chapter.
(b) The petition shall state the purpose for which the order is sought and the necessity for or the advantage to accrue from the order. If applicable, the petition shall also show the amount of money proposed to be borrowed, the rate of interest to be paid, the length of time the note is to run, and a general description of the property proposed to be mortgaged or subjected to the deed of trust, security interest, or other lien.
(b) The petition shall state the purpose for which the order is sought and the necessity for or the advantage to accrue from the order. If applicable, the petition shall also show the amount of money proposed to be borrowed, the rate of interest to be paid, the length of time the note is to run, and a general description of the property proposed to be mortgaged or subjected to the deed of trust, security interest, or other lien.
Notice of the hearing on the petition shall be given as
provided in Section 1220.
(a) Subject to subdivision (c), if the court is satisfied
that it will be to the advantage of the estate, the court shall make
an order that authorizes or requires that the personal representative
do any one or more of the following:
(1) Borrow money and execute a note.
(2) Execute a mortgage or deed of trust or give other security by security interest or other lien.
(3) Pay, reduce, extend, or renew a security interest or lien or mortgage or deed of trust already existing upon property of the estate.
(b) The court in its order may do any one or more of the following:
(1) Order that the amount specified in the petition, or a lesser amount, be borrowed.
(2) Prescribe the maximum rate of interest and the period of the loan.
(3) Require that the interest and the whole or any part of the principal be paid from time to time out of the whole estate or any part thereof.
(4) Require that the personal property used as security, or any buildings on real property to be mortgaged or subjected to the deed of trust, be insured for the further security of the lender and that the premiums be paid out of the estate.
(5) Specify the purpose for which the money to be borrowed is to be applied.
(6) Specify the terms and conditions of any extension or renewal agreement.
(7) Prescribe such other terms and conditions concerning the transaction as the court determines to be to the advantage of the estate.
(c) Where the surviving spouse has elected to have his or her share of the community real property administered in the decedent's estate, an order authorizing or requiring the personal representative to borrow money to be secured by a mortgage or deed of trust upon the community real property of the estate, or any part thereof, may be made only if the written consent of the surviving spouse has been filed with the court.
(1) Borrow money and execute a note.
(2) Execute a mortgage or deed of trust or give other security by security interest or other lien.
(3) Pay, reduce, extend, or renew a security interest or lien or mortgage or deed of trust already existing upon property of the estate.
(b) The court in its order may do any one or more of the following:
(1) Order that the amount specified in the petition, or a lesser amount, be borrowed.
(2) Prescribe the maximum rate of interest and the period of the loan.
(3) Require that the interest and the whole or any part of the principal be paid from time to time out of the whole estate or any part thereof.
(4) Require that the personal property used as security, or any buildings on real property to be mortgaged or subjected to the deed of trust, be insured for the further security of the lender and that the premiums be paid out of the estate.
(5) Specify the purpose for which the money to be borrowed is to be applied.
(6) Specify the terms and conditions of any extension or renewal agreement.
(7) Prescribe such other terms and conditions concerning the transaction as the court determines to be to the advantage of the estate.
(c) Where the surviving spouse has elected to have his or her share of the community real property administered in the decedent's estate, an order authorizing or requiring the personal representative to borrow money to be secured by a mortgage or deed of trust upon the community real property of the estate, or any part thereof, may be made only if the written consent of the surviving spouse has been filed with the court.
(a) The personal representative shall execute and deliver the
mortgage or deed of trust, or execute and deliver the instrument
creating the security interest, setting forth therein that it is made
by authority of the order, giving the date of the order.
(b) The note and the mortgage or deed of trust or other instrument creating the security interest, if any, shall be signed by the personal representative and shall be acknowledged by the personal representative if the instrument creates a lien on real property.
(b) The note and the mortgage or deed of trust or other instrument creating the security interest, if any, shall be signed by the personal representative and shall be acknowledged by the personal representative if the instrument creates a lien on real property.
(a) Every mortgage, deed of trust, or security interest made
pursuant to a court order obtained under this chapter is effectual to
mortgage, or to subject to the deed of trust or security interest,
all of the following:
(1) All right, title, and interest which the decedent had to the property described therein at the time of the decedent's death.
(2) Any right, title, or interest in the property acquired by the estate of the decedent, by operation of law or otherwise, since the time of the decedent's death.
(3) Any right, title, or interest in the community real property belonging to the decedent's surviving spouse whose written consent has been filed with the court and which is referred to in the court order obtained under this chapter.
(b) Jurisdiction of the court to administer the estate of the decedent vests the court with jurisdiction to make the order for the note and for the security interest, lien, mortgage, or deed of trust. This jurisdiction shall conclusively inure to the benefit of the owner of the security interest or lien, mortgagee named in the mortgage, or the trustee and beneficiary named in the deed of trust, and their heirs and assigns.
(c) No omission, error, or irregularity in the proceedings under this chapter shall impair or invalidate the proceedings or the note, security interest, lien, mortgage, or deed of trust given pursuant to an order under this chapter. Subject to Section 9807, the owner of the security interest or lien, the mortgagee named in the mortgage, or the trustee and beneficiary named in the deed of trust, and their heirs and assigns, have and possess the same rights and remedies on the note and the security interest or lien or mortgage or deed of trust as if it had been made by the decedent prior to his or her death.
(1) All right, title, and interest which the decedent had to the property described therein at the time of the decedent's death.
(2) Any right, title, or interest in the property acquired by the estate of the decedent, by operation of law or otherwise, since the time of the decedent's death.
(3) Any right, title, or interest in the community real property belonging to the decedent's surviving spouse whose written consent has been filed with the court and which is referred to in the court order obtained under this chapter.
(b) Jurisdiction of the court to administer the estate of the decedent vests the court with jurisdiction to make the order for the note and for the security interest, lien, mortgage, or deed of trust. This jurisdiction shall conclusively inure to the benefit of the owner of the security interest or lien, mortgagee named in the mortgage, or the trustee and beneficiary named in the deed of trust, and their heirs and assigns.
(c) No omission, error, or irregularity in the proceedings under this chapter shall impair or invalidate the proceedings or the note, security interest, lien, mortgage, or deed of trust given pursuant to an order under this chapter. Subject to Section 9807, the owner of the security interest or lien, the mortgagee named in the mortgage, or the trustee and beneficiary named in the deed of trust, and their heirs and assigns, have and possess the same rights and remedies on the note and the security interest or lien or mortgage or deed of trust as if it had been made by the decedent prior to his or her death.
(a) Except as provided in subdivision (b), no judgment or
claim for any deficiency shall be had or allowed against the personal
representative or the estate if (1) there is a foreclosure or sale
under a security interest, lien, mortgage, or deed of trust and (2)
the proceeds of sale of the encumbered property are insufficient to
pay the note, the security interest, lien, mortgage, or deed of
trust, and the costs or expenses of sale.
(b) If the note, security interest, mortgage, or deed of trust was given to pay, reduce, extend, or renew a lien, security interest, mortgage, or deed of trust existing on property of the estate at the time of death of the decedent and the indebtedness secured thereby was a claim established under Part 4 (commencing with Section 9000), the part of the indebtedness remaining unsatisfied shall be classed with other established claims.
(b) If the note, security interest, mortgage, or deed of trust was given to pay, reduce, extend, or renew a lien, security interest, mortgage, or deed of trust existing on property of the estate at the time of death of the decedent and the indebtedness secured thereby was a claim established under Part 4 (commencing with Section 9000), the part of the indebtedness remaining unsatisfied shall be classed with other established claims.
