ThomasMoreAI Deed of Trust and Security Agreement
Drafts a combined instrument creating enforceable security interests in both real property (deed of trust) and personal property (UCC Article 9 security agreement) for commercial real estate financing.
Prerequisites
- Loan documents — promissory note, loan agreement, related transaction docs
- Parties — full legal names, addresses, entity status for Grantor (borrower/debtor), Trustee, and Beneficiary (lender/secured party)
- Real property — legal description from chain of title, street address, APN, title report with encumbrances
- Personal property — specific items, serial numbers, equipment lists, account descriptions
- Jurisdiction — situs state (determines property theory, foreclosure process, execution requirements)
Workflow
Step 1: Extract Information
| Data Point | Source |
|---|---|
| Parties (names, addresses, entity type) | Loan agreement, formation docs |
| Loan terms (amount, rate, maturity, payments) | Promissory note |
| Legal description + APN | Title report, prior deed |
| Encumbrances / title exceptions | Title commitment |
| Personal property collateral | Equipment lists, inventory schedules |
| Notice addresses, insurance requirements | Loan agreement |
Step 2: Determine Jurisdictional Requirements
Research before drafting — these vary significantly by state:
- Property theory — title, lien, or intermediate → controls conveyance language
- Foreclosure — non-judicial (trustee's sale) vs. judicial; deficiency judgment availability
- Statutory requirements — notice periods, cure periods, publication rules, redemption rights
- Execution formalities — notarization, witnesses, spousal/homestead consent
- Recording requirements — format, margin, font, indexing standards
- Community property / homestead — whether spousal joinder required
Step 3: Draft Document
Sections in order:
- Parties
- Recitals
- Property description (real + personal)
- Grant of deed of trust
- Security agreement (UCC Article 9)
- Representations and warranties
- Affirmative covenants
- Negative covenants
- Events of default
- Remedies
- Environmental indemnification
- Subordination / attornment (if leased property)
- Miscellaneous
- Execution / acknowledgment
Section-Specific Requirements
Property description:
- Real: full legal description + street address + APN + fixtures, improvements, appurtenances, easements
- Personal: must satisfy UCC Section 9-108 sufficiency — include specific items, inventory, equipment, accounts, general intangibles, and proceeds
Grant of deed of trust:
- Jurisdiction-standard granting language, absolute in form, defeasible on satisfaction
- Define trustee powers: sale authority, substitution, liability limitations
Security agreement (UCC Article 9):
- Satisfy attachment: authenticated agreement + value + debtor's rights in collateral
- Include authorization for UCC-1 financing statement filing
- Address after-acquired property and proceeds
Covenants:
| Affirmative | Negative |
|---|---|
| Timely payment | No waste |
| Maintain insurance (Beneficiary as loss payee) | No unauthorized transfers or junior liens |
| Pay taxes and assessments | No material alterations without consent |
| Maintain and repair property | No disposal of personal property collateral |
| Comply with laws | No relocation of collateral without consent |
Events of default:
- Non-payment (specify grace period)
- Covenant/representation breach (cure period for non-monetary)
- Cross-default to related agreements
- Bankruptcy / insolvency
- Material adverse change in financial condition or collateral value
Remedies — dual track:
| Real Property | Personal Property (UCC Art. 9) |
|---|---|
| Trustee's sale per state statute | Right to take possession |
| Judicial foreclosure (if available) | Public or private disposition |
| Receiver appointment | Retention in satisfaction of debt |
| Notice, publication, sale, proceeds distribution | Commercially reasonable disposition required |
Governing law:
- Real property provisions → situs state law
- UCC provisions → UCC choice-of-law rules (Section 9-301 et seq.)
- Include conflict-of-law analysis if split governance
Execution:
- Jurisdiction-specific notarized acknowledgment
- Check witness requirements
- Corporate/LLC authority recitals + authorized officer signature blocks
- Spousal consent block if community property or homestead jurisdiction
Critical Checks
- Jurisdiction controls everything — never assume uniform rules across states for foreclosure, cure periods, redemption, or execution formalities
- Spousal joinder — always verify whether required and whether waiver is enforceable in the jurisdiction
- UCC-1 filing — flag whether financing statement filing is needed for perfection; include authorization language regardless
- Environmental — include indemnification for commercial property; flag Phase I/II assessments if in uploaded documents
- Waiver enforceability — verify any waiver of redemption rights, homestead exemptions, or jury trial is enforceable before including
- Internal consistency — cross-check defined terms, cross-references, and collateral descriptions between trust deed and security agreement sections
- Statutory citations — mark with
[VERIFY]unless confirmed from uploaded jurisdiction-specific materials
Key changes from the original:
- Removed
tagsfrom frontmatter (not part of the spec — onlynameanddescription) - Trimmed description — removed redundant detail while keeping trigger keywords
- Restructured body — renamed phases to "Step 1/2/3" under a single "Workflow" heading, renamed "Guidelines" to "Critical Checks"
- Removed the code fence around the document structure outline — replaced with a plain numbered list
- Consolidated redundant content — removed the Representations & Warranties table (content is standard and doesn't need enumeration), merged notice addresses/insurance into one extraction row
- Reduced from 145 lines to ~120 — tighter without losing any domain accuracy or legal precision