CO Code § 38-38-501 (2021)
2021 Colorado Code|Title 38 - Property - Real and Personal|Article 38 - Foreclosure Sales|Part 5 - Issuance of Public Trustee's Deed, Sheriff's Deed, and the Nature of Title|§ 38-38-501. Title Vests Upon Expiration of Redemption Periods - Confirmation Deed

  Upon the expiration of all redemption periods allowed to all lienors entitled to redeem under part 3 of this article or, if there are no redemption periods, upon the close of the officer's business day eight business days after the sale, title to the property sold shall vest in the holder of the certificate of purchase or in the holder of the last certificate of redemption in the case of redemption. Subject to the right to cure and the right to redeem provisions of section 38-38-506 and subject to the provisions of section 38-41-212 (2), such title shall be free and clear of all liens and encumbrances junior to the lien foreclosed. No earlier than ten business days nor later than fifteen business days after both the title vests and the officer has received all statutory fees and costs, the officer shall execute and record a confirmation deed pursuant to section 38-38-502 or 38-38-503 to the holder of the certificate of purchase or, in the case of redemption, to the holder of the last certificate of redemption confirming the transfer of title to the property; except that the officer shall execute and record a confirmation deed prior to the tenth business day after title vests, if the officer has received all statutory fees and costs and notice from the appropriate holder that the certificate will not be assigned. But under no circumstances shall the officer be required to issue a confirmation deed unless the officer has received an order authorizing the sale that meets the requirements of section 38-38-105 (2)(a). Failure of the officer to execute and record such deed or to record the deed within the time specified shall not affect the validity of the deed or the vesting of title.    Notwithstanding any provision of law to the contrary, an officer may not include an assignee as a grantee in a confirmation deed, unless:   The officer has received a copy of the assignment executed in accordance with section 38-38-403 within ten business days after title vests; and    The assignment was dated, signed, and notarized or recorded prior to the time title vests.        History. Source: L. 90: Entire article R&RE, p. 1669, § 2, effective October 1. L. 2006: Entire section amended, p. 1474, § 28, effective January 1, 2008. L. 2007: Entire section amended, p. 1844, § 21, effective January 1, 2008. L. 2009: Entire section amended,(HB 09-1207), ch. 164, p. 720, § 17, effective January 1, 2010. L. 2012: Entire section amended,(SB 12-030), ch. 96, p. 324, § 12, effective September 1.    Editor's note:    This section is similar to former § 38-39-110, as it existed prior to 1990.    The effective date for amendments made to this section by chapter 305, Session Laws of Colorado 2006, was changed from July 1, 2007, to January 1, 2008, by section 27 of chapter 404, Session Laws of Colorado 2007. (SeeL. 2007, p. 1849.)     ANNOTATION   Law reviews. For article, “Foreclosure by Sale by Public Trustee of Deeds of Trust in Colorado”, see 14 Dicta 5 (1936). For article, “Curative Statutes of Colorado Respecting Titles to Real Estate”, see 16 Dicta 71 (1940). For article, “Curative Statutes of Colorado Respecting Titles to Real Estate”, see 26 Dicta 321 (1949). For article, “Foreclosure by Sale by Public Trustee of Deeds of Trust in Colorado”, see 28 Dicta 437 (1951). For article, “Enforcement of Security Interests in Colorado”, see 25 Rocky Mt. L. Rev. 1 (1952). For article, “Statutory Redemption in Colorado”, see 30 Dicta 79 (1953). For article, “Public Trustee's Deeds and Redemption Under Section 362 of the Bankruptcy Code”, see 12 Colo. Law. 229 (1983). For article, “Deeds in Lieu of Foreclosure”, see 15 Colo. Law. 394 (1986). For article, “Recent Statutory Amendments to the Public Trustee and Sheriff Foreclosure Process”, see 15 Colo. Law. 794 (1986). For article, “1987 Statutory Amendments Concerning Foreclosures of Deeds of Trust and Mortgages”, see 16 Colo. Law. 1386 (1987). For article, “Strategic Options for Overly Encumbered Real Property (Friendly Foreclosures)”, see 46 Colo. Law. 31 (July 2017).   Annotator's note. Since § 38-38-501 is similar to § 38-39-110 as it existed prior to the 1990 repeal and reenactment of this article and article 39, relevant cases construing that provision have been included in the annotations to this section.   The purpose of this section is to render titles to real property absolute and free of technical defects so that a subsequent purchaser of a public trustee's deed may rely on the record title, but a purchaser is bound to investigate when the record indicates the existence of an outside interest by which the title may be affected and is charged with knowledge of the facts to which the investigation would have led. Ragsdale Bros. Roofing v. United Bank, 744 P.2d 750 (Colo. App. 1987).   Rights acquired by certificate holder. The holder of a certificate of purchase on an execution sale acquires only the alternative rights to receive the redemption money, in case of a redemption, or a deed for the land after the time for redemption has expired. Davis Mfg. & Supply Co. v. Coonskin Props., Inc., 646 P.2d 940 (Colo. App. 1982).   Accordingly, plaintiff who holds certificate of purchase cannot challenge validity of lien after plaintiff accepts redemption funds. Kellum v. RE Serv., LLC, 30 P.3d 875 (Colo. App. 2001).   Plaintiff held no redemption right upon expiration of the redemption period because title vested at that time and the judgment was then satisfied. Craft v. Storey, 942 P.2d 1211 (Colo. App. 1996).   Effect of federal statute. Title remains in the mortgagors unless and until the holder of the certificate of purchase takes the affirmative act of applying for a deed, and the public trustee issues a deed. These affirmative acts are what 11 U.S.C. § 362 stays. In re Murphy, 22 B.R. 663 (Bankr. D. Colo. 1982 ).   11 U.S.C. § 362(a)(4) stays the public trustee from issuing a public trustee's deed under this section. In re Murphy, 22 B.R. 663 (Bankr. D. Colo. 1982 ).   Mechanics' liens which are filed after a deed of trust, but superior to the deed of trust, cause the title acquired pursuant to this section to be subject to the superior lien. Ragsdale Bros. Roofing v. United Bank, 744 P.2d 750 (Colo. App. 1987).   The language “liens or encumbrances recorded or filed subsequent” means liens or encumbrances junior in fact to the lien on which the sale is based. Ragsdale Bros. Roofing v. United Bank, 744 P.2d 750 (Colo. App. 1987).   An implied lease based on the terms of an earlier pre-foreclosure lease was created since the property owner/landlord accepted monthly payments from the tenant and did not renounce the prior agreement. Tanktech, Inc. v. First Interstate Bank, 851 P.2d 174 (Colo. App. 1992).   “Free and clear” voids prior agreements respecting use of property. Where former owner had executed a parking agreement with the city, agreement did not survive the foreclosure and was not binding on new owner despite new owner's actual knowledge of the agreement. Town of Grand Lake v. Lanzi, 937 P.2d 785 (Colo. App. 1996).   The language “free and clear” means free of any subordinate leases as well as of other types of liens or encumbrances. First Interstate Bank v. Tanktech, Inc., 864 P.2d 116 (Colo. 1993).   Court of appeals' opinion, which was unclear as to whether the court regarded a subordinate, pre-foreclosure lease as having been extinguished under this section, reversed to the extent the opinion held the lease was extended. First Interstate Bank v. Tanktech, Inc., 864 P.2d 116 (Colo. 1993).   When a deed of trust is foreclosed, the issuance of a certificate of purchase voids all junior liens, unless a redemption occurs, and the title received is free and clear of all unredeemed junior encumbrances. Ferguson Enters. v. Keybuild Solutions, 275 P.3d 741 (Colo. App. 2011).   Holdover doctrine does not bind a foreclosure-sale purchaser to the terms of a pre-foreclosure lease to which it was not a party, although nothing would preclude the purchaser from entering into a new lease with the tenant on identical terms. First Interstate Bank v. Tanktech, Inc., 864 P.2d 116 (Colo. 1993).   Subordination agreements enforceable. This section does not govern or affect the priority of liens established by subordination agreements. Such agreements are enforceable. Peoples Bank & Trust Co. v. Rocky Mt. Dist. Council, 620 P.2d 58 (Colo. App. 1980).   Effect of bankruptcy of debtor. Where a debtor commences a bankruptcy action before a deed is executed to the holder of a certificate of purchase, the debtor retains title to the property and the bankruptcy court has jurisdiction over it. Benford-Whiting Co. v. Robertson, 4 B.R. 213 (D. Colo. 1980 ).   With the exception of defective notice to municipality, under version of section in effect at the time of subject foreclosure, foreclosure was proper. Therefore, title vested in partnership as grantee of the public trustee's deed, free and clear of the other plaintiffs' judgment liens. Based on this conclusion, trial court's order attaching other plaintiffs' original judgment liens to the ranch must be reversed except as to the municipality. Bd. of Cty. Comm'rs v. Sportsmen's Ranch, 271 P.3d 562 (Colo. App. 2011) (decided under law in effect prior to 2006 amendment).   Because municipality did not receive notice of foreclosure, partnership took title to ranch subject to municipality's judgment lien. That conclusion is supported by former version of this section. Bd. of Cty. Comm'rs v. Sportsmen's Ranch, 271 P.3d 562 (Colo. App. 2011) (decided under law in effect prior to 2006 amendment).   Applied in Fish v. East, 114 F.2d 177 (10th Cir. 1940); Mt. Carbon Metro. Dist. v. Lake George Co., 847 P.2d 254 (Colo. App. 1993); Nationsbank of Ga. v. Conifer Asset Mgmt. Ltd., 928 P.2d 760 (Colo. App. 1996).