§ 38-35-124 — Requirements upon satisfaction of indebtedness

Colorado § 38-35-124

• Jurisdiction: Colorado
• Title 38: Property -
• Art.: Conveyancing and Recording

Text

(1) Except as
provided in articles 22 and 23 of this title or as otherwise provided in this section,
when all indebtedness, whether absolute or contingent, secured by a lien on real
property has been satisfied, unless the debtor requests in writing that the lien not
be released, the creditor or holder of the indebtedness shall, within ninety days
after the satisfaction of the indebtedness and receipt from the debtor of the
reasonable costs of procuring and recording the release documents, record with
the appropriate clerk and recorder the documents necessary to release or satisfy
the lien of record or, in the case of an indebtedness secured by a deed of trust to a
public trustee, file with the public trustee the documents required for a release as
prescribed by section 38-39-102.

(2) If the debtor requests in writing that the lien be released, or fails to
request in writing that the lien not be released, then the debtor's request or the
actual release cancels any obligations on the part of the creditor or holder to make
any further loan or advance that would be secured by the lien. If the person
satisfying the indebtedness requests in writing delivery to him or her of the
canceled instruments of indebtedness at the time of satisfaction, the creditor or
holder is relieved of any further obligation or liability under this section after the
delivery has been completed.

(3) Upon satisfaction of the indebtedness, the creditor or holder shall return
to the person satisfying the indebtedness all papers and personal property of the
debtor that have been held by the creditor or holder in connection with the
indebtedness. A creditor or holder who fails to comply with this section is liable to
the owner of the real property encumbered by such indebtedness and to any other
person liable on such indebtedness for all actual economic loss incurred enforcing
the rights provided under this section, including reasonable attorney fees and
costs.

(4) (a) For indebtedness secured by a lien on real property where the ability
of a debtor to draw upon a line of credit continues notwithstanding that all amounts
outstanding under the line of credit have been paid in full, any lien on real property
securing that line of credit continues, and no lien release under this section is
required, until the line of credit expires and all indebtedness, whether absolute or
contingent, has been satisfied unless, before expiration of the line of credit, all
outstanding indebtedness is satisfied and the debtor relinquishes in writing all right
to make any further draw upon the line of credit.

(b) The debtor relinquishes all right to make a further draw by either
requesting in writing that the line of credit be closed by the creditor or by written
notification by the debtor or debtor's designee that the real property is being
conveyed upon payment of all indebtedness. Upon satisfaction of all indebtedness
in connection with the conveyance of the real property and notice to the creditor or
holder of the conveyance, the creditor or holder shall terminate the line of credit,
record the release of the lien on real property, or in the case of a deed of trust, file
with the public trustee the documents required for release, and return all papers
and personal property as set forth in this section.

Legislative History

Source: L. 87: Entire section added, p. 1338, � 1, effective April 22. L. 91: Entire section amended, p. 1920, � 48, effective June 1. L. 2002: Entire section amended, p. 1331, � 2, effective July 1. L. 2016: Entire section amended, (HB 16-1356), ch. 348, p. 1418, � 1, effective August 10.