Foreclosure by Nonjudicial Sale

V.S.A. tit. 12, ch. 172, subch. 4

in effect

12 V.S.A. § 4961 Power of nonjudicial sale

4961. Power of nonjudicial sale Whether or not a power of sale is contained in a mortgage relating to any property, except for farmland or a dwelling house owned by a natural person, instead of a suit and decree of foreclosure, the mortgagee may, upon breach of mortgage condition, foreclose upon the property without first commencing a foreclosure action or obtaining a foreclosure decree by complying with the terms of this subchapter. No sale under and by virtue of a nonjudicial power of sale shall be valid and effectual to foreclose the mortgage unless the conditions of this subchapter are complied with. Added 2011, No. 102 (Adj. Sess.), § 1.

12 V.S.A. § 4962 Notice of intention to foreclose

4962. Notice of intention to foreclose (a) At least 30 days prior to service of a notice of sale pursuant to subsection 4952(c) of this title, notice of intention to foreclose in a writing complying with this section shall be sent to the mortgagor by registered or certified mail at his or her last known address. (b) The writing required by this section shall state, in a manner calculated to make the mortgagor aware of the situation: (1) the mortgage to be foreclosed; (2) the mortgage condition claimed to have been breached; (3) that the mortgagee has accelerated maturity of the debt secured by the mortgage, if that is the case; (4) the amount to be paid or other action necessary to cure, and the time within which the cure must take place, which shall be not less than 30 days after the date of the notice of intention to foreclose; (5) the intention of the mortgagee to foreclose by exercising the power of sale contained in the mortgage, if the breach of the mortgage condition is not cured within the time and in the manner specified in the notice; and (6) that the mortgagor will be entitled to be sent notice of the foreclosure sale at least 60 days prior to the sale and to redeem the mortgaged property at any time prior to the sale by paying the full amount due under the mortgage, including the costs and expenses of the sale. (c)(1) The following notice of intent to foreclose form may be used and may be altered as circumstances require: PLEASE TAKE NOTICE that you have defaulted under Loan No. ____ by [mortgage condition breached] required by your Promissory Note dated ____ , 20____ . This default also constitutes a breach of the Mortgage, dated ____ , 20____ , recorded in Volume ____ at Page ____ of the Land Records, which secures the Loan. As a result of your default, we have accelerated the maturity of all indebtedness due on the Loan and secured by the Mortgage, totaling $____ as of today’s date. In order to cure this default, you must pay to us on or before ____ [a date not less than thirty (30) days after the date of this Notice] the sum of $____ , plus interest at the rate of $____ per day to the date of payment. If you do not cure this default by making the payments required, it is our intention to foreclose by exercising the power of sale contained in the above Mortgage. You will be sent notice of the foreclosure sale at least sixty (60) days prior to the sale, and you will be entitled to redeem your interest in the mortgaged property at any time prior to the sale by paying the full amount due under the Mortgage, including the costs and expenses of the sale. If you do not cure the default or redeem your interest, your ownership of the mortgaged property will be terminated. (2) This subsection shall not be construed to prevent the use of other forms except that all notices shall comply with the provisions of subsection (b) of this section. Added 2011, No. 102 (Adj. Sess.), § 1.

12 V.S.A. § 4963 Publication of notice of sale

4963. Publication of notice of sale Notice of a sale conducted pursuant to this subchapter shall be published once in each of three successive weeks, in a newspaper of general circulation in the town where the land lies, the first publication to be not less than 21 days before the day of sale. Added 2011, No. 102 (Adj. Sess.), § 1.

12 V.S.A. § 4964 Recording

4964. Recording The mortgagee shall record the notice of sale in the land records of the town or city where the land lies not less than 60 days prior to the sale. The filing of the notice of the sale shall be in lieu of filing a foreclosure complaint under section 4932 of this title and shall be sufficient notice of the pendency of the nonjudicial foreclosure by power of sale to all persons who acquire any interest or lien in the mortgaged property between the dates of recording the notice of sale and recording the foreclosure deed. Without further notice or service, those persons shall be bound by the power of sale and the foreclosure deed and shall be foreclosed from all rights or equity in the mortgaged property. Added 2011, No. 102 (Adj. Sess.), § 1.

12 V.S.A. § 4965 Service; form

4965. Service; form (a)(1) In all cases, unless service is waived under subsection 4966(g) of this title, a copy of the notice of sale shall be served on the mortgagor or his or her representative in interest by: (A) sending the notice by registered or certified mail addressed to the mortgagor or such representative at his or her last known address, or to such person and address as may be agreed upon in said mortgage, at least 60 days before said sale; or (B) serving the notice in any manner authorized by the Vermont Rules of Civil Procedure. (2) As used in this section, “mortgagor” shall mean the mortgagor or the then record owner of the mortgaged property. (b)(1) A copy of the notice of sale shall be sent to any tenant lawfully occupying the mortgaged property and to any person having a recorded interest in the mortgaged property of record which will be foreclosed by the sale, provided that the interest is recorded in the applicable land records prior to the recording of the notice of sale. The notice required by this subsection shall be sent not less than 60 days before the sale. Notice to a tenant shall be sufficient if mailed to the tenant by first class mail at the address specified in the lease, if recorded, or to the occupant at the address of the mortgaged property, if the lease is not recorded. (2) Compliance with this subsection shall be sufficient with respect to persons entitled to receive notice under subdivision (1) of this subsection, and the failure to give additional notice shall not be grounds to invalidate the sale. Any mortgagor or junior lienholder who refuses to accept or claim mailed or served notice or who frustrates attempts by the mortgagee to give notice of the sale by failing to give or leave a forwarding address or by other acts or omissions shall be deemed to be notified of the sale, provided that such mortgagee shall have made a good faith effort to provide such notice. (c)(1) The following notice of sale form may be used and may be altered as circumstances require: By virtue and in execution of the Power of Sale contained in a certain mortgage given by ____ dated ____ and recorded in Volume ____ Page ____ of the land records of the town of ______ , of which mortgage the undersigned is the present holder (if by assignment, or in any fiduciary capacity, give reference) for breach of the conditions of said mortgage and for the purpose of foreclosing the same will be sold at Public Auction at ____ o’clock, ____ M. on the ____ day of ____ 20____ , (place) ____ at the mortgaged property. To wit: (Legal description of the mortgaged property and in case of partial releases, state exceptions.) Terms of sale: (State here the amount, if any, to be paid in cash by the purchaser at the time of the sale, and the schedule for payment of the balance.) The mortgagor and all junior lienholders are entitled to redeem the mortgaged property at any time prior to the sale by paying the full amount due under the mortgage, including the costs and expenses of the sale. Other terms to be announced at the sale or inquire at ______ (Signed) ________ Mortgagee (may be signed by mortgagee’s attorney) ______ 20____ (2) This subsection shall not be construed to prevent the use of other forms. A notice of sale shall be sufficient if it fully sets forth the date, time, and place of sale; the town, county, street, or highway and street number, if any, of the mortgaged premises; the date of the mortgage; the volume and page of the recording of the mortgage; the terms of the sale; the statement language required by subdivision (d)(1) of this section; and notice of the right to redeem. (d)(1) The notice of the sale shall include the following statement: “The mortgagor and all junior lienholders are hereby notified that at any time before the foreclosure sale, the mortgagor and all junior lienholders have a right to petition the Civil Division of the Superior Court for the county in which the mortgaged property is situated, with service upon the mortgagee, and upon such bond as the court may require, to enjoin the scheduled foreclosure sale. Failure to institute such petition and complete service upon the foreclosing party, or the party’s agent, conducting the sale prior to sale shall thereafter bar any action or right of action of the mortgagor or any junior lienholder based on the validity of the foreclosure, the right of the mortgagee to conduct the foreclosure sale, or compliance by the mortgagee with the notice requirements and other conditions of this section. An action to recover damages resulting from the sale of the mortgaged property on the date of the sale may be commenced at any time within one year following the date of the sale, but not thereafter.” (2) The mortgagor and all junior lienholders shall have the rights contained in the notice provided for in this subsection. Added 2011, No. 102 (Adj. Sess.), § 1.

12 V.S.A. § 4966 Conduct and location of sale

4966. Conduct and location of sale (a) The sale shall be held at the mortgaged property except that it may be held elsewhere if agreed to in writing by the mortgagor and the mortgagee not less than 60 days nor more than 90 days before the sale. At the sale, the mortgaged property shall be sold to the highest bidder in conformance with the terms of sale set forth in the foreclosure notice. (b) The mortgagor shall be entitled to redeem the mortgaged property at any time prior to the sale by paying to the mortgagee the full amount due under the mortgage, including the costs and expenses of the sale. (c) The public sale may be adjourned one or more times for a total time not exceeding 60 days by announcement of the new sale date to those present at each adjournment or by posting notice of the adjournment in a conspicuous place at the location of the sale. Written notice of the new sale date shall also be given by first class mail, postage prepaid, to any person who received notice of the sale pursuant to section 4965 of this title. (d) Any person may bid at the sale. All bidders, except for the mortgagee plaintiff or designee, shall meet the requirements set forth in the notice of sale in order to bid at the sale. (e) In the event that the proceeds of sale, after first deducting the reasonable expenses incurred in making the sale, exceed the amounts due to the mortgagee at the time of sale, the surplus shall be paid to other lien holders of record in the order of the priority of their liens. In the event that the proceeds of sale exceed the amount due to the mortgagee and the amounts due to the other lien holders, the excess shall be paid to the mortgagor. The mortgagee or person conducting the sale may interplead any sale proceeds in excess of the indebtedness and expenses secured by the mortgage in the event there are any liens of record against the real estate. (f) This section shall not preclude the mortgagee from maintaining a subsequent action against the mortgagor for any deficiency. (g) Any party entitled to be sent notice under this section may, either before or after the foreclosure sale, waive the party’s right to receive notice, in which case no foreclosure sale shall be invalid or ineffectual to foreclose that party’s rights under the mortgage. A waiver of notice authorized or validated under this section shall be recorded in the land records in the town or city where the property is located. Added 2011, No. 102 (Adj. Sess.), § 1.

12 V.S.A. § 4967 Recording following sale

4967. Recording following sale (a) Within 90 days after the sale, the mortgagee selling pursuant to the power shall cause the foreclosure deed and an accompanying affidavit to be recorded in the land records of the town where the property is situated. The affidavit setting forth fully and particularly the mortgagee’s acts with respect to the sale of the mortgaged property, including the dates that notices of the sale were published, shall set forth facts showing that no person in interest is in the military service as defined in the Service Members Civil Relief Act of 2003. The affidavit or a duly certified copy thereof shall be admissible in evidence on the issue of whether the power of sale was duly executed. (b) If the recording required by this section is prevented by an order or stay of any court, the time for such recording shall be extended until 10 days after the expiration or removal of such order or stay. (c) If the recording required by this section is made more than 60 days after the sale, the affidavit shall state why the recording was not made earlier. (d) Failure to record the deed and affidavit within the statutory period required by this subsection shall render the sale void and of no effect only as to liens or other encumbrances of record intervening between the day of the sale and the time of recording of the deed and affidavit. (e) Correction of error. In case of an alleged error or omission in the affidavit, the court, on petition and after notice to interested parties, may validate the affidavit or authorize the recording of an affidavit amending, correcting, or in substitution for an affidavit so recorded, and the affidavit so authorized to be recorded or a certified copy of the record thereof shall have the same effect and shall be admitted in evidence as if it had been recorded within the 90-day period required by this section. Added 2011, No. 102 (Adj. Sess.), § 1.

12 V.S.A. § 4968 Transfer of title

4968. Transfer of title Title to the foreclosed mortgaged property under this section shall not pass to the purchaser until the time of the recording of the deed and affidavit. Upon such recording, title to the mortgaged property shall pass to the purchaser free and clear of all interests and encumbrances which do not have priority over such mortgage. Added 2011, No. 102 (Adj. Sess.), § 1.

12 V.S.A. § 4969 Failure of sale; resale

4969. Failure of sale; resale If the purchaser does not pay the balance of the purchase price according to the terms of the sale, and at the option of the mortgagee, the down payment, if any, shall be forfeited and the foreclosure sale shall be void. Added 2011, No. 102 (Adj. Sess.), § 1.

12 V.S.A. § 4970 Form and effect of foreclosure deed

4970. Form and effect of foreclosure deed (a) The foreclosure deed shall be in substantially the following form: ______ of ______ County, ______ State of ______ , holder of a mortgage from ____ to ____ dated ____ , recorded in ____ Book____ at Page ____ of the Town of ____ Land Records, by the power conferred by said mortgage and every other power, for ____ dollars paid, grant to ______ , (complete mailing address) ______ , of ______ Street, Town (City) of ____ , ______ County, State of ______ , the premises conveyed by said mortgage. (Here add acknowledgment) (b) A deed substantially in the form set forth in subsection (a) of this section shall, when duly executed and delivered, have the force and effect of a deed in fee simple to the grantee, heirs, successors, and assigns, to their own use, with covenants on the part of the mortgagee, for himself or herself, that, at the time of the delivery of such deed, the mortgagee was duly authorized to make sale of the mortgaged property; that in all of the mortgagee’s proceedings in the sale thereof, the mortgagee has complied with the requirements of this subchapter; and that the mortgagee will warrant and defend the same to the grantee, heirs, successors, and assigns against the lawful claims of all persons claiming by, from, or under him or her. Added 2011, No. 102 (Adj. Sess.), § 1.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/12/172Fetched: 10/21/2026