Free Deed of Trust Form | Word, Google Docs

A deed of trust is essential if you want to secure a loan with property as collateral. Using a template helps with complex legal documents, helping to ensure that all necessary sections are included and properly structured. Wordlayouts has developed this Deed of Trust template after extensive research to meet legal standards – covers all essential clauses, signatures, and notarization procedures. It is fully editable so that you can easily adapt to state-specific rules or insert custom provisions.

Read on to learn more about it.

What is a Deed of Trust?

A deed of trust is a financial loan secured by a piece of real estate. It is a document conveying property title from one (or more) borrowers to a third party, such as a bank, escrow, or title company. If the borrower fails to pay (or otherwise defaults on the deed), the lender has the right to sell or foreclose on the property without the need for a court order. The borrower, however, still has equitable rights over the property, such as living, accessing or using the property. When debt is cleared, full title is transferred back to the borrower or property owner.

By signing, parties agree to specific repayment terms, late fee structures, escrow requirements, insurance or maintenance duties, and more. Deeds also cover borrower protections and lender’s remedies – so it’s an important document for everyone. But before there is a deed, there is a promissory note which sets out the loan amount and terms. While not as detailed as a deed, the note is your source of truth. Any mismatch creates disputes, so make sure vital information tallies across the deed, the note, and other loan documents.

Mortgages vs. Trust Deeds

Traditional mortgages are used in all 5 states. But deeds are only used in some. While both create liens, a deed is riskier for borrowers because it supports non-judicial foreclosure. That means the lender has the right to sell the property (if the borrower defaults) without the need for court approval.

Most mortgages, on the other hand, require court involvement, which can be a long and costly process for the lender. In short, deeds are more lender-friendly. That being said, real estate transactions must comply with state law and deed terms.

Key differences

Deeds allow lenders to sell the property without court approval; mortgages (typically) don’t.
A mortgage is signed by 2 parties (lender and borrower); deeds are signed by 3 or more parties: borrower, lender, trustee, and guarantor (optional).

Infographic for Mortgages vs. Trust Deeds

A Step-by-Step Guide to Our Premade Deed of Trust Template

Filling out a property deed on your own can feel daunting at first. But with a bit of guidance from our side and some research on your part, you can learn to draft one correctly, avoid common pitfalls, and record the deed with your county or state the right way. Plus, you’ll know exactly when to ask a lawyer for help.

Below, I go over each fillable section in our template. I also add legal guardrails and useful practical tips so you have all the guidance you need to use, customize, and execute the Deed of Trust document on your own. Before we start:

Some Important Terms to Know

If you are new to the world of real estate, you’ll have a hard time going through this document without Google. Luckily, we compiled a quick glossary of useful terms to prevent confusion and ensure everyone is on the same page about basic concepts, doctrines, and rules.

Property: A piece of real estate securing the loan.
Loan Documents: The note, deed of trust, and related signed loan papers.
Escrow Items: Costs paid from escrow, like taxes and insurance.
Foreclosure: The legal process to sell the property after default.
Principal: The amount borrowed (or still unpaid), not including interest.
Interest: The charge for borrowing money.
Escrow: A held account used to pay specific costs or complete a transaction.
Reconveyance: The recorded release of the deed of trust after payoff.
Encumbrances: Liens or claims that affect title or use of the property.
Cure Period: Time allowed to fix a default after notice.
Early Payoff: Paying the loan in full before the maturity date.
Event of Default: A breach that lets the lender use remedies.
Maturity Date: The deadline to repay the loan in full.

Now, use this document as a starting point. Adapt to the trustee standards, foreclosure rules, notice requirements, timelines, or statutory language applicable in your area or locale. This free template, while equipped with standard clauses, is only a drafting aid, not a substitute for legal review. Fill in the required text (names, dates, deadlines, etc.) and check relevant boxes or add custom stipulations. Once you do, run the final document by a registered attorney familiar with local real estate laws and practice.

Identifying Parties to the Deed

Before diving into T&Cs, let’s accurately identify each signatory or party to the deed.

i) Borrower: Also called the debtor or trustor, the borrower owns the property serving as collateral, holding ‘equitable title’ until the loan is paid. This means they can live in the property, use it, or otherwise benefit from it.

ii) Lender: Lender is the ‘beneficiary’ because he gets a security interest in the property and the right to enforce the lien in the event of default. Anyone who has money to lend can be a lender. In practice, a lender is typically a bank, credit union, mortgage firm, or escrow company.

Borrower and Lender in Deed of Trust Form.

iii) Trustee: A third party who holds the legal title to the property until the loan is paid off. Usually a bank, title company, trust, or real estate firm. As the neutral middle party, the trustee handles transaction logistics and ensures that the title transfer and borrowing process are completed only if both parties fulfil their respective obligations under the deed.

Trustee and Guarantor in Deed of Trust Form.

What do trustees do?

Collect/distribute money (down payment, lender funds, fees)
Ensure documents are signed correctly
Confirm conditions are met before releasing funds (for example, insurance in place, payoff amounts confirmed, etc.)
Coordinate recording of the deed and other closing documents

Infographic about trustees in a deed of trust

iv) Guarantor (Optional): A deed may also identify a guarantor. This can be anyone, usually a friend or relative of the borrower, willing to be financially responsible for the loan if the borrower defaults. While not a legal requirement for a deed to be valid, some lenders may require a guarantor to share equal liability for paying the loan.

Our template comes with premade sections. Simply insert the following details for each party:

Name: Full legal name, as on official government ID such as a passport or driver’s license. Spell names carefully to avoid confusion later and ensure accurate, traceable records.
Legal Status: Clarify if the party is a person or a registered legal identity, such as a bank, title, or escrow company, etc.
For entities, write in their state of incorporation (or registration) and official post address. This ensures proper identification, documentation, and communication between parties. It also clarifies which laws and regulations govern the entity’s behaviors.

The template includes three entries for each, but this can be edited to match your situation.

Legal Description of the Property

This section of the template aims to describe the property in question, ensuring there is no confusion about what’s being secured or serving as collateral.

Legal Description Section in Deed of Trust Form.

Your postal address is NOT your legal description. There are only three recognized ways of describing properties:

Metes and Bounds: Describes the property by tracing boundaries from a starting point using directions (bearings/angles) and distances, often referencing physical markers (monuments, landmarks, etc).

Lot and Block (Recorded Plat): Points to the property as a specific lot (or block) within a named subdivision. Refers to a recorded plat or map where the boundaries are shown.

Rectangular Survey System (PLSS): Uses the Public Land Survey System format (township, range, section, and portions of sections). Common in many states surveyed under the federal system.

Why is this important?

Address and parcel numbers can change over time. Clearly identifying the property allows the deed to be traced in official public records and satisfy lender, title, and court requirements for a valid transfer.

Terms and Conditions of The Deed of Trust

Every Deed of Trust is shaped by a set of clearly defined terms and conditions. This template brings them together in one place, following careful legal verification to ensure reliability. In the following sections, we discuss each term and condition in detail, with a clear explanation of what it means and when it applies.

Where required, you will also find guidance on the specific information that needs to be filled in to complete the document correctly.

Promise to pay

This is the core clause of a trust deed: the borrower making a clear, legally binding promise to repay the lender any and all outstanding payables, including,

the principal,
The interest, and
Any other fees or costs owed to the lender.

This clause also links the deed to the Promissory Note, which is attached here as Exhibit B.

Here’s what each part does:

Main Loan Amount: States the lump-sum amount the borrower receives from the lender as a loan.
Promissory Note: The initial promissory note signed between the parties specified by date of signing The P. note controls repayment terms like rate, payment schedule, maturity date, late fees, default interest, etc.
Loan Documents: Any related documents tied to the loan (attached in this deed framework as Exhibit C).

Interest

Before commercial or personal loan deals are finalized, parties must agree on how interest is charged. Personalize this section to the rate and terms agreeable to everyone involved in your deed transaction.

A. Interest rate

Check relevant box:

For fixed rates, check the first box and specify the exact % the lender is charging on the Principal Amount.
For variable rates, specify only the rate for the introductory period, and use the line space below to set out exact rate adjustment terms. Explore our free Adjustable Rate Mortgage Calculator for a look at how variable interest rates work!
Unlike a mortgage, deeds allow borrowing to occur without interest. Check the last option if no interest is charged by the lender.

B. Method of calculation

There is more than one way of calculating interest in loan contracts…

Check the 1st box if interest is charged on the Principal Amount (simple interest). With this option, you don’t pay interest on any prior unpaid interest.
Check the second box if interest is being compounded – that is, charged on the Principal Amount plus prior interest. Naturally, compounding leads to a greater accumulation of interest, which can either work in your favor (say, as an investor) or against you (as a borrower, as in this case).

Use this section to set a compounding frequency. This refers to how often interest is charged. The 3 most common options are added as default (Monthly, Quarterly, and Annually). But you can also go for biweekly or bi-monthly frequencies, though these are less common in standard financial practice.

C. Accrual commencement

Enter the exact date when interest starts to accrue – or the Interest Commencement Date. Do not mix this up with the Date of the First Payment, which is simply the due date of your first scheduled installment. Typically, interest begins accruing before the first payment is due, so the first payment often includes interest for the days between these two dates.

D. Application of payments

A legal assurance for each payment to be applied to the unpaid interest first, and then to the Principal.

E. Payment terms

The last section brings the loan to life. Users must manually enter the:

Payment amount (For use outside the USA, replace $ with the relevant currency sign)
Total number of instalments
Date of each month when instalments are due
Maturity date (i.e., by when the loan must be completely paid off)

Payment terms & instructions

Users must specify how payments are made and what happens if there is a change in payment instructions.

Whether payments are processed via check, ETF, or any other online portal. Select one option to avoid confusion and LOWER the risk of double payments.
The notice period required for any change in payment terms or instructions. In most states, this is 10 to 30 days, unless the Promissory note, servicing agreement, or relevant state law points to a different timeframe.

Prepayments

If you’re new to loan finance or home mortgages, you’d be surprised to know how much you can save in time & money by paying more or ahead of time. The lender must carefully decide if prepayments/early payoffs are allowed, as these can significantly lower returns for them.

If prepayments are allowed, check the first box. A standard clause clarifying that the borrower is not subject to any prepayment charge or penalty. Remember, some states and loan types restrict prepayment penalties or require specific disclosures.
If the lender does not agree to prepayments, check the second box. The only way around this restriction is a written agreement with the lender’s signature allowing early payoff.

Feel free to insert additional statements here to define what happens if the borrower attempts to prepay anyway – is the payment returned or accepted with conditions?

Application of payments

This clause explains how payments are applied under the deed. In normal times, this is done in a predictable order. But after a default, the lender has the right to change the order, apply payments as they choose, or even refuse partial payments.

Check relevant checkboxes in this pre-standardized list:

Costs the lender paid to protect the property or enforce the deed of trust, such as trustee fees, foreclosure/legal costs, property preservation expenses, collection costs, etc.
Late fees, default interest, and penalties: This is extra money triggered by late payments or other breaches.
Accrued interest on the loan balance: This is the interest that has built up but hasn’t been paid yet.
Other (custom): Use blank space to write in any additional category the parties want to.

The clause also stipulates that:

Payments apply to the oldest amounts first. This is standard practice.
If the borrower defaults, the lender reserves the right to apply payment in any order, proportion, or priority they see fit.
The clause does not limit the lender’s right to return payments or accept payment conditionally if the borrower defaults.

Escrow payments

This section explains how escrow items are paid. In mortgage practice, escrow is when lenders collect extra funds each month to hold for property taxes and HO
insurance.

Our default framework gives you three different options to match your individual situation:

Choose what applies:

No escrow account. The borrower pays all Escrow Items directly and promptly.
The lender can pay if the borrower doesn’t. If any Item is late or unpaid, the lender may pay it to protect the property, but the borrower must reimburse the lender.
An escrow account is required. With each installment, the borrower agrees to pay extra money to the lender. The lender will hold this money and use it to pay:
Property taxes & assessments
Other governmental charges
Leasehold payments or ground rent
Hazard insurance
Liability insurance
Mortgage insurance
Any other (to be listed in the space provided)

Payment Obligation

The Deed of Trust template also includes a clause about unconditional payment.

Taxes, assessments, and encumbrances

This clause creates a duty on borrowers to pay all taxes or other government charges levied against the property, as well as unpaid liens or past encumbrances. It assures lenders that no other lien, encumbrance, or legal claim against the property takes priority over the deed.

Let me explain how liens work!

Jack hires Phil for a roof repair, but doesn’t pay him. Phil records a mechanic’s lien. Depending on state rules and timing, that lien can compete with or sometimes gain priority over other liens (such as the one created under this deed). Our built-in clause requires John to either remove the lien (pay and get a release recorded) or dispute the lien in court in good faith.

Use boxes to specify whether you, as a borrower, plan to remove such liens and clear them from public record, OR challenge them in good faith in accordance with local laws.

Lender protection

To protect the lender’s lien, our framework ensures that during legal disputes, any other lien or claim cannot be enforced against the property, and (if the lender asks) the borrower must hand over cash collateral, a bond, or other security acceptable to the lender.

A trust deed grants lenders the right to issue a written notice to a borrower identifying the lien. In the deed template, parties must specify the exact number of days the borrower has to resolve the issue OR if no:

Sign a written repayment/settlement agreement with the lienholder on terms the lender approves.
Or follow another course of action: Add custom options in the blank space.

Property Insurance

Borrowers have a duty to maintain adequate insurance on the property to protect the lender’s lien. It is also common for lenders to buy an insurance policy on the property if the borrower fails to keep the required coverage active. The borrower, however, still pays for it. That being said, force-placed insurance is usually expensive and can become a borrower complaint if not drafted carefully.

Tailor this clause to how you want to handle proceeds from insurance money after a loss or disaster. Use our built-in boxes and spaces to specify:

Whether or not the borrower is required to take out insurance,
What minimum coverage amount is to be paid by the borrower
What must be included in the insurance policy maintained by the borrower (particularly, loss payee and mortgage clause requirements). Write in additional requirements in the blank space.

Handling of insurance claims

Insurance protects the property from loss or damage of various kinds, depending on which HO plan the parties go for. But once the damage is done, how is the money handled? The deed template has the following options.

Option A: Use insurance money first to repair the property, if the lender believes such repair makes financial sense.
Option B: Use the money to pay down the loan balance, even if the loan isn’t due yet (especially if repair isn’t practical).
Option C: Leftover money should be paid to the borrower, unless the law requires a different payout.

The next clause is designed to give lenders control of insurance payout when the borrower is not available or cooperating. This way, the claim doesn’t get delayed, and the lender’s collateral (or repayment) is protected.

In the first blank space, specify the number of days the borrower has to respond to the written notice by the lender. It is common for deeds to specify a number between 10–15 days. 30 days is generally seen as more borrower-friendly.
Lastly, specify what happens to the insurance money. Our default option allows you to use the money for repairs/restoration, or for clearing the debt under this deed. Feel free to add other scenarios e.g. money to be “held in escrow and released in draws as repairs are completed.”

Preservation and maintenance

This clause in the deed template requires the borrower to keep the property in good condition throughout the life of the loan. It confirms that the property must be properly maintained, protected from damage or neglect, and not allowed to lose value due to poor upkeep or abandonment.

Occupancy, maintenance, and repair

While most trust deeds allow the borrower to live in and use the property as their primary place of residence, this permission is not absolute. The borrower cannot totally abandon the property or fail to make necessary repairs.

Occupancy and Repair Section in Deed of Trust Form.

Use relevant checkboxes to determine if the borrower allows or prohibits the property from being vacant or abandoned. Now, determine whether the lender’s (written) consent is required before a property can be abandoned for a prolonged period. Even if you check ‘without consent, the borrower still must not leave the property vacant or abandoned.

Maintenance duty

The first clause makes the borrower fully responsible for keeping the property in livable condition and protecting its value. Borrowers must take reasonable steps to ensure the property is NOT unlivable, run-down, unsafe, or unsanitary.

By default, our template requires the borrowers to comply with:

applicable local ordinances (RESPA, etc.)
insurance requirements
legally imposed property maintenance standard (HOA fees, etc.)

Use blank space to write in extra or specific obligations more suited to your context.

Lender’s right to inspect

Lenders have a vested interest in the condition and value of the property. Ergo, a right to inspect if there’s reasonable evidence that something’s wrong. Parties must carefully limit or qualify that right. For example…

The lender must provide written notice before the inspection visit. Set a time duration aligned to your local laws. Typically, 12 or 24 hours.
The notice must clearly state the date, time, and reason for the visit.
Place a cap on inspection frequency by specifying the number of visits allowed per year.

Emergency rights

To protect the lender’s lien in the property, this section points to real-life scenarios when the lender may have a right to visit without notice or upon reasonable evidence of abandonment. Lenders are required to notify the borrowers as soon as possible after the visit.

Hazardous materials

A deed protects a property from being occupied or used in a way that violates local environmental laws and safety standards. Plus, cleanup can be costly, and most lenders don’t want any risk attached to the property serving as collateral.

This section prohibits the manufacture, presence, use, storage, or release of any hazardous substances on or around the Property. It doesn’t matter if a borrower was directly responsible or a tenant, contractor, invitee, or any other person. Remember, laws vary by state so do your homework before challenging a borrowing party in court.

Hazardous Substances in Deed of Trust Form.

Clarify what you recognize as hazardous:

Any substance so defined under federal, state, or local laws
Pollutants

Contaminants

Flammable materials (gasoline, diesel fuel, kerosene, and other petroleum-based substances)

Toxic pesticides & herbicides
Volatile solvents
Any substances containing asbestos, formaldehyde, or radioactive components

Looking for something specific? Write in specific substances or chemicals more relevant to your deed in light of factors such as property type, property use context, locale, or geography, etc.

Prohibited activities

Mark against standard options prohibiting the borrower from certain activities. By default, borrowers shall not engage in any activity that results in:

A violation of applicable environmental law
A risk to human health or safety
Loss in the value, condition, or marketability of the property

In addition, you can identify specific activities better suited to your property context. This “Other” line is most useful when a property has specific risk factors (for example, a workshop, farm land, mixed-use space, or older buildings).

Actions required by borrower(s)

As soon as the borrower is made aware of the presence of hazardous material, they are legally obliged to share this information with the Lender or the Trustee. Use the checklist to determine the borrower’s duties in this regard:
☐ Notify the lender in writing as soon as practical
☐ Take all remedial actions required by law, regulation, or governmental order
☐ If other, please specify in the blank space.

Release and reconveyance

If all goes to plan, the full legal title of the property is transferred back to the borrower when the loan is paid off. In legal terms, this is called reconveyance.

Here’s how this works out practically:

Borrower pays all his monetary dues to the lender, including principal, interest, escrow, other fees, etc.
Lender sends a written request to the Trustee for reconveyance (along the Promissory Note & official deed)
Trustee signs a release of the property, without any warranty, delivering it to the person legally entitled to the property

The clause further specifies that any fees to prepare, sign, or record the reconveyance are paid by the party receiving the reconveyance (typically, the borrower). Lenders or trustees have a right to charge a reasonable fee as permitted by law.

What happens if…

If a property is sold before the loan is paid off: Trustee uses the proceeds from the sale to pay the lender(s) their outstanding due. Borrowers are paid from the remaining proceeds.
If the loan is paid off timely: Trustee dissolves the Trust and transfers the title back to the borrower.

Free Legal Tips for Each Party

Borrowers: Do NOT assume “paid off” means “released.” A payoff only clears debt; you still need a recorded reconveyance document to clear title.
Lenders: Overbroad “processing” fees are a common friction point. So when it comes to reconveyance fees, charge carefully and transparently. Try to limit it to actual third-party costs and disclose it upfront in payoff quotes. Learn more about ways to strategize early payoff and save on interest with our premade loan calculators!
Trustees: Ensure the lender’s request is properly executed, matches the correct loan and property description, and is supported by relevant original docs. Be careful since wrong reconveyance can result in defective titles or unnecessary legal disputes down the road.

Borrower’s representations and warranties

What assurance do lenders have that the borrower actually owns what they claim? What if they are hiding defects in the title or other owners, say, a spouse or business partner? Or misleading about existing liens, unpaid taxes, boundary disputes, or ongoing claims that could reduce the property’s value or interfere with the lender’s ability to enforce its lien?

Thankfully, with this clause in the deed document, the lender can rely on a set of formal promises by the borrower. Remember, courts treat these statements as serious “deal terms.” If one turns out to be false, it can trigger a default or give the lender legal remedies. Before executing the deed, make sure the title promise matches the title report reality (i.e. existing liens, easements, HOA covenants).

Here’s a standard set of warranties included in trust deeds. Use the “Other” option to disclose any other additional warranty or representation not listed here.

Borrower is the rightful owner of the property and title except for items already on record or disclosed and accepted by the lender (say, an existing lien on the property).
The borrower has the legal authority to sign the deed without any other person or entity’s permission.
Borrower agrees that the deed does not violate any laws, court orders, or other legal contracts, including loan agreements.
Borrower confirms that there are no pending lawsuits, probate issues, or boundary disputes that can cloud the title and harm the lender’s lien.
Borrower acknowledges that all information submitted on their behalf is accurate to the best of their knowledge (and doesn’t leave out key facts that can affect the lender’s decision to issue the loan or on what terms).

Default & remedies

Failing to pay monthly dues is not the only way a borrower defaults. In the U.S mortgage world, there are several grounds or criteria for defaulting. Check relevant boxes to define what these are for you. For any situations not listed, use the blank space to write in the original criteria.

What Counts As Defaulting?!

Missing payments: When a borrower is unable to pay principal, interest, escrow, or other required payments on time.
Violating the Deed: When they don’t follow a requirement stipulated in the Deed of Trust (for example: keeping insurance, paying property taxes, maintaining the home etc.).
Providing false information: If they hand in false or misleading information related to the loan.
Signs of legal trouble around the property: A civil/criminal/administrative action starts, which, in the lender’s view, could lead to seizure, forfeiture, or major harm to the property or the lender’s lien.
Abandonment or failure to maintain: The borrower has abandoned the property or is unable to maintain it as required or does not treat the property as their primary residence, if so required in a loan agreement.
Government actions: The government takes all or part of the property through condemnation or similar action (See Condemnation Award below).

Remedies upon default

This subsection provides a clear legal roadmap of what happens after a borrower defaults. Any lender with reason to believe a borrower is defaulting has several legal avenues to explore.

Tick the boxes for remedies that are most suitable for you, or write in original remedies.

Demand that the borrower pay the entire outstanding balance right away, not just the missed payment.
Notify the trustee and start non-judicial foreclosure, i.e., sell the property without court process, but still in line with local statutory guidelines.
File for a court foreclosure directly, if required by law or if the lender chooses.
Take control of the property and do reasonable things to maintain or protect it (repairs, securing it, etc.).

Opportunity to cure

A written notice by the lender is not ‘game-over’ for a defaulting borrower as long as they fix or ‘cure’ the violation on time. Cure includes paying all past-due amounts plus late fees, interest, and other reasonable costs.

Use this quick checklist to:

Specify the duration of the cure period (exact number of days from the date of the written notice)
Whether a cure (automatically & categorically) stops the lender or trustee from taking any further action against the borrower
If the cure period can be extended through a written agreement signed by the lender

Default and Remedies in Deed of Trust Form.

Payment acceleration

If a party fails to pay their due or generally defaults under the deed terms, what can lenders do? For one, a lender may accelerate the loan, which means they can demand the entire remaining loan balance right away, instead of letting the borrower continue making monthly payments. That said, the lender must wait for any applicable notice or cure period to pass before making the demand.

Additionally, the lender must relay the demand in writing. In our template, you can decide the kind of information you want to include in this notice by choosing the checkboxes which are relevant:

What happened: Identify the nature of the default. Did the borrower miss a monthly installment? Is there reason to believe the property is abandoned or environmentally unsafe?
How to fix it: Identify actions the borrower can take to ‘cure’ or address the violation of the deed terms, say, getting a license, applying for insurance, or allowing the property to be inspected, etc.
Deadline: Indicate how much time (days) the borrower has to set things right before legal proceedings can be initiated against them
Consequences of non-action: The lender may demand payment acceleration or start non-judicial foreclosure.

A blank space is added for any extra details you want to add for instance, where to send payments, required documents, late fee amount, or the acceptable method of delivery.

What Happens If…

The borrower fails to fix the issue at hand by the deadline: The lender may direct the Trustee(s) to exercise the power of sale or initiate foreclosure proceedings.
The borrower cures the violation in time: The deed terms go back to normal as if the default never happened.

Power of sale

This is a critical section in any trust deed. It clearly states that if the borrower defaults and fails to fix the problem within the required period, the lender may declare the full loan balance and instruct the trustee to sell the property or invoke any other remedy.

When this happens, you will need to set ground rules. Here’s a simpler version of what potential steps you can take if a sale or transfer occurs:

The lender gives the trustee written instructions to sell the property as required by law.
The borrower (or anyone else entitled to notice) receives all required notices, such as a notice of default and notice of sale.
The property may be sold “as-is,” without warranties, unless the law requires otherwise.
The trustee (or a permitted substitute) runs the sale at the time and place allowed by law.
The lender (or the lender’s representative) may bid at the sale and buy the property.
Sale proceeds are applied in the order required by law, or if not specified, in the order set by the user.
If other, please specify in the blank space.

Keep in mind that individual states have different rules when it comes to how and when the power of sale can be invoked or exercised.

Condemnation

Sometimes, private property is ‘taken over’ by the government. Whether the government plans to build a new road or lay down utility lines, a ‘Taking’ can end up reducing the value of the lender’s collateral. To minimize the lender’s risk, this part clarifies what happens to the loan and any money paid because of that taking.

It is the borrower’s (legal) duty to inform the lender of the Taking or imminent condemnation in writing. Because the lender has a vested financial interest in the property, it is their right to know if their financial interest in the property is threatened.

Condemnation Award

When governments take over land, owners are given ‘condemnation money’ to compensate for the loss. Use this clause to clarify the following:

A) Is the award to be treated as collateral for the loan? Specify whether the money from the award will serve as security for the loan. If that’s a yes, the lender can claim it the same way as they did the property.

B) Is the award payable to someone? Use this part to name the person or entity receiving the money. This may be the Lender, Borrower or sometimes a joint payee arrangement. Alternatively, you can expressly exclude a particular person/entity from receiving the award. This removes ambiguity about who gets the money while ensuring that the payment lines up with the lender’s security interest.

Partial taking

Even partial takings can reduce the value of the property. So If the government takes only part of the property, and the loan is not paid off, the parties must decide what happens next:

Scenario A: The loan stays in place, and the Deed of Trust still applies to whatever part of the property is left.
Scenario B: The old rules stop, and the parties follow a different arrangement, which you must write in the blank.

In practice, most deeds keep the first option as it keeps the loan enforceable and the lender’s security in place.

Protection of Lender’s Interest

This provision is a legal guarantee that the lender’s rights and financial interests will be protected under the deed. Lenders invoke this section if a borrower:

Fails to pay on time
Abandons the property
Violates a specific term of the deed

Condemnation and Lender's Interest Details in Deed of Trust Form.

In the template, space is provided to list down measures or actions the lender can take to protect their rights under the deed if a borrower defaults, breaches loan terms, or abandons the property.

We were careful not to create a mandatory legal duty on the lender to take action, but only give them the discretionary right to do so. This ensures the lender can step in to prevent further loss or damage without being blamed later for not acting sooner, and without creating an ongoing duty to manage the property for the borrower’s benefit.

Transfer of Loan Interest

Lenders have the right to transfer the loan interest to a new Loan Servicer (bank, title company, etc,), Borrowers have a right to know when this change occurs, so they know who to pay. This clause makes sure of both.

The template provides structured checkboxes and a dedicated space to indicate notice requirements, servicing responsibilities, and borrower notification details in case the loan is transferred.

Transfer of Loan Interest in Deed of Trust Form.

What’s a Loan Transfer? When lenders transfer, assign, or convey a Promissory Note, or any partial interest they have in the property, along with the Deed of Trust, to a new loan servicer. Loan transfers are normal in the U.S. mortgage world. Your interest rate and core terms generally don’t change just because the loan is sold, but who you pay can.

Who’s a loan servicer?

A loan servicer collects payments and handles admin work like statements, escrow, and customer service. Use check-boxes (and blank space) to set out exact duties.

Decide if the lender has the right to transfer the loan interest without prior knowledge of the borrower or not.
The borrower must expressly decide if a change in loan servicing can occur (independently of any sale or transfer of the P. Note).
Lastly, the borrower must be notified of any transfer of loan interest in advance and in writing.

Learn more about official requirements under RESPA Section 6 and Regulation X about what to include in a servicing-transfer notice!

The Guarantee Clause

Unlike a regular property deed, a Deed of Trust also includes a guarantor. This could be anyone willing to say “Hey! If the borrower doesn’t pay or follow the loan terms, I will.” While the guarantor(s) are already named in the beginning, this section creates a legal duty on them to be bound by the terms of the deed until the loan is paid off.

Guarantee Section in Deed of Trust Form.

Check relevant boxes to determine the exact legal relationship you want to establish between the guarantor and the deed:

Unconditional Obligation: If the borrower fails to pay on time, the guarantor is responsible for full payment of any outstanding principal, interest and applicable fees. No ifs, ands, or buts.
Continuing Liability: Until the loan is paid off and released, the guarantors are bound by the deed terms. Even if the borrower files bankruptcy, or part of the Deed is found invalid.
Assumption of Rights: If the guarantor pays the borrower’s debt, the guarantor has the right to recover that money, to the extent allowed by law, say, by seeking reimbursement from the borrower directly or by asserting subrogation rights to the Lender’s claims, remedies, and security interests until repaid.
Indemnification: If the lender suffers financial losses because the borrower or guarantor failed to perform, the guarantor covers those losses, including legal fees or damages resulting from nonperformance.
Acknowledgement of terms: What if the guarantor later claims, ‘I didn’t know what I was signing!’. This clause shields lenders from such a situation, confirming the guarantor knew what they were signing up for.
Notice to Guarantor: Any formal notices to the guarantor shall be delivered using the same rules used for the borrower (method, address, timing) and in line with the terms of the deed (See Notice clause below)
Separate and Independent Obligation: In simple words, this means the guarantee stands on its own. Even if the lender is unable to enforce an obligation against the borrower, the lender may still be able to enforce the guarantee against the guarantor (subject to law and case facts).

During the negotiation, decide if you want “unlimited” or “limited” guarantee. If you want to include additional terms of the guarantee, use the blank space in section(h). For example, it is common to set a maximum cap on guarantor liability or require the lender to pursue the borrower/collateral first.

Guarantor’s execution

As with every deed involving a guarantee, the guarantor must consent to the terms by adding their signature (preferably, dated).

By signing, the guarantor confirms they understand the guarantee and voluntarily accept the responsibilities outlined in the deed. The guarantor is also free, even encouraged, to seek independent legal advice to better understand their rights & obligations under the deed.

Our template supports two guarantors, but you can add more using an editable version of the file.

Joint signatures

Deeds of trust allow multiple individuals or legal entities to be listed as borrowers. Each borrower is liable for all obligations. This is unlike most property transfer deeds, where each party can only transfer, sell, or liquidate their share of the property.

Let’s say Ali and Khan buy a home together. Both sign the Deed of Trust as Borrowers, taking out $200,000 in loan. Even if Ali and Sara each “own” 50% of the property, the lender does not treat the loan as 50/50. Under joint and several liability, the lender can legally demand the full $200,000 from either Ali or Sara!

In short, a property deed is about ownership shares, but a Deed of Trust is about repayment responsibility, which is treated as one whole.

Use our default checklist to clarify the following:

If the lender can enforce the obligations against one or more borrowers without having to pursue all of them?
If a notice, demand, waiver, or release involving one Borrower counts for all Borrowers?
Any other condition or possibility agreed upon by both parties.

Substitute trustee

There are many reasons why lenders may need to appoint a new trustee. For example, the original trustee is incompetent or unavailable, or they require someone more experienced in foreclosure cases. To accommodate these practical scenarios, this clause grants lenders sole authority to replace the original Trustee with a new one.

Use boxes to specify how such an appointment takes place:

Through a formal signed document
After being recorded in the land registry/office where the property is located
Use the Other option to write in additional requirements or procedures that must be followed for the appointment to be valid. For example, you can add a requirement for notices to be notarized (see Notarization section below).

What’s included?

The appointment notice is a legally enforceable document, so it must come with specific details. Use checkboxes to specify what information must be included in the notice:

Names of the borrower, lender, and trustee
Recording reference of the Deed of Trust
Name and address of the new or Substitute Trustee
Any other information deemed relevant & useful by the parties may be included in the blank space, such as the effective date of substitution.

Lastly, this clause defines what happens once the substitution is recorded. The new trustee may automatically take over the original trustee’s authority (depending on whether you check “with” or “without” any further act). If you check the first, additional steps may be required. Generally speaking, most trust deeds select the second option, allowing the substitute trustee to immediately step into the role.

Successors and assigns

What happens if one of the parties under the deed dies, or the lender sells a loan to another lender? Do terms & covenant under this deed remain intact?

Thankfully, yes. This section ensures the Deed of Trust doesn’t just apply to the people who sign it today. But also anyone who succeeds them (such as a legal heir) or anyone they voluntarily allow to act on their behalf.

Here’s what checking each box means:

If the document says “Borrower,” “Lender,” or “Trustee,” it also means whoever legally replaces them later.
Even if the Borrower transfers the property (or assigns their interest), they are still on the hook for their obligations under this deed (unless the Lender signs a written release).
When the Lender sells or assigns the Deed of Trust, the new holder gets the same rights and remedies (like enforcing payments, default rights, foreclosure rights), unless the assignment document says something different.

Use the ‘Other’ space to add any other custom rule about transfers or assignments, such as special consent requirements or restrictions unique to the deal.

We close with a safety line stating this provision does not override any other clause that limits or restricts transfers (like a due-on-sale clause or a “no transfer without consent” clause). Those restrictions still hold.

The whole idea of a deed of ‘trust’ is based on the assumption that trustees won’t sell or benefit from the property for the duration they hold legal title. This section reinforces this idea by clearly prohibiting any sale or transfer of the property occurring without knowledge of the parties (borrower/lender).

Keep in mind that provisions apply to all types of property transfer, whether happening via private sale, public auction, gift, devise, assignment, or other means. It also doesn’t matter whether a financial consideration was provided when the title was transferred.

If you want to limit the scope, specify what is allowed without getting prior written consent from the borrower and the lender. Lawyers often use this space to refer to ‘any transfer expressly approved in writing by the Lender.’

No Sale Without Consent in Deed of Trust Form.

Governing law

Most deeds will tell you what happens in case of a conflict between the parties. To avoid confusion or legal ambiguity later on, it’s best to decide beforehand which individual state laws apply to you. In the template, blank space is provided where you’d fill that in, like ‘New York’ or ‘Texas’. In most real estate secured transactions, this should be the state where the property is located.

In the second blank space, you have an opportunity to widen “applicable law” beyond just statutes and court decisions, including other enforceable legal authorities that can affect enforcement. For example, you can refer to:

Option 1: other rules, directives, and orders of governmental authorities
Option 2: administrative rules, agency orders, and other governmental directives
Option 3: common law principles and other legally binding authorities

Typically, the first option is your safest bet as it covers most situations without getting overly technical.

Dispute resolution

But what happens if there is a legal tussle between the parties over one or more of the terms? If either party wants to sue, they must submit a written notice to the other party. Any such notice must comply with deed requirements. In the blank space, the user must refer (by number and title) to the section of your Deed that explains how notices must be delivered or what cure/default notice procedures to follow.

What if state law requires a specific “waiting period” before someone can file a lawsuit or start foreclosure? This clause stipulates that such a waiting period be automatically treated as a fair chance to fix the problem. Essentially, the parties agree to whatever the relevant local law considers reasonable.

The Severability Clause

Commonly featured in professional commercial contracts, a severability clause makes sure that even if one part of the deed is deemed invalid by a court of law, the rest of the deed remains valid. Of course, for courts & judges dealing with real estate cases, the decision ultimately boils down to figuring out what the parties originally intended at the time of signing.

The goal is to ensure that the agreement remains fair and law-compliant. This helps safeguard the interests of the borrower, lender, trustee, and other parties involved.

Governing Law, Resolution, and Severability Sections in Deed of Trust Form.

The No Waiver Clause

A waiver refers to permission to ignore a rule or requirement. This clause ensures that the rights of the lender, borrower, or trustee cannot be legally waived even if they:

Don’t enforce a right right away.
Reinforce a right they have already claimed once, or partly.

No Waiver Section in Deed of Trust Form.

Next up, decide when waivers are legally valid? For any waiver to be valid, it must be in writing and signed by the waiving party.

Keep in mind waivers only apply to a specific situation, not automatically to future situations – unless the writing clearly says so. For example, if the lender accepts a late payment one month, that doesn’t mean late payments are okay going forward, and it doesn’t stop the lender from enforcing default rights later.

Notice

When it comes to formal notices, it’s not just about what’s being delivered, but also how. Handing it over to the party directly or taping it to their front door may seem simple & straightforward, but not all methods are legally valid.

This section specifies the method of notice of delivery:

Must be submitted in writing (a quick voicemail won’t do!)
Sent via certified or registered mail. This is one of the surest ways to prove a notice was delivered, as it requires the recipient to sign upon receipt, providing a concrete record for the sender that the notice was successfully sent, delivered, and received. Learn more about delivering legal notices in the US in our detailed blog post here!

The clause goes on to include any other legally acceptable method. Remember, depending on your local laws or state statutes, you may need to follow a specific method of delivery (or even multiple ones) such as personal or direct delivery, post & mail, etc.

Lastly, it also establishes that notices must only be sent to the person specified in the document. Spaces have been provided in the deed template to add their names and contact details.

Termination of Restrictions

This section basically says that restrictions under the Deed will automatically end and no longer apply if specific “end-of-the-road” events happen. It goes on to specify what these events may be.

Check ones relevant to you or add any additional situations you want.:,

The property is sold at a foreclosure sale under this Deed of Trust.
The borrower hands the property to the lender (or trustee) instead of going through foreclosure
The lender assigns the deed or Promissory Note to a government entity

If one of these occurs, the deed’s restrictions stop governing the property going forward.

Additional terms

Use this space in the trust deed to carefully add any terms not included in our premade template. Avoid the use of ambiguous statements and use professional language to define any extra terms & conditions you chose to write in.

Have the final version vetted by a registered attorney to ensure legal, contractual, and ethical standards are met.

Termination and Additional Terms in Deed of Trust Form.

Addenda

Deeds are not etched in tone. You can always use an addendum to modify the original. An addendum is any document signed by the parties modifying one or more terms of the deed. For example, a change in loan repayment terms, another guarantor, or a new mode of payment.

Use blank space to enlist any additional terms, provisions or changes not included in the text of the deed. Write N/A or Not Applicable if there are no additional terms or provisions agreed upon by the parties.

Executing the Deed: Sign, Notarize, and Record

Until a deed is fully executed, it does not carry legal value for courts. Follow this step-by-step guide to make your property deeds legally effective & secure:

Have the borrower sign the document. This is usually done after payment has been made, so the loan and title transfer occur simultaneously.
Check if your local laws require the deed to be signed in front of witnesses. Some states (like Florida, Georgia, and South Carolina) require one or two witnesses when signing property deeds. Others, like California or New York, do not.
The guarantor must sign the deed in front of a Notary Public, who adds their seal and signature after verifying the guarantor’s identity, willingness, and soundness of mind.
The trustee signs only to acknowledge acceptance of their role as holder of legal title for the lender and does not assume any financial obligation

Notarize the deed (if required in your state). The Notary Public then makes a note of the notarization in an official journal. This record can help either party prove the deed’s existence if the original is ever lost or destroyed. A printable Notarization Form is attached to our template with legally required sections for the Notary Public name signature, stamp, and commission expiration date.

Notary Acknowledgment in Deed of Trust Form.

Pro Tips for Deed Execution

Always check local laws about notarization rules & witness requirements before signing the deed
When visiting the local land registry or county office for recordation, each party should bring valid ID so the notary can confirm the identity of each party
Have witnesses sign at the same time as the borrower, lender, and trustee

How to Record a Deed of Trust

Once the deed document is signed, you must submit it for recording. The “For Recorder’s Use Only” section must be filled out by the recorder—usually by someone at the county clerk’s office or the local land registry.

Recording a Deed Details in Deed of Trust Form.

Requested By: This is usually a title company or escrow officer (most common in financed closings) or a real estate or law firm. It is rare for borrowers to request the recording themselves.
Prepared By: Enter the drafter’s name and mailing address. This can be an attorney, title company, agent, or party. The recorder uses it to address any errors or mistakes before filing.
Return To: Enter the name of the person or entity who gets the original deed document after recording. This is often the lender, the trustee, the title/escrow company, or the borrower’s designated contact, depending on who is responsible for storing the recorded original and distributing copies to the parties.

For each of the above persons or entities, add their full legal name and complete postal address, including ZIP code. This information allows the recorder to ask parties for clarification in case of any confusion about the contents of the deed, and ensure that the original document and copies of the deed are delivered to the right addresses.

What Is a Parcel Number?

The Assessor Parcel Number (or APN) is a unique ID assigned by the county assessor to track property tax and ownership records. Copy carefully from a recent tax bill. If unknown, confirm with the assessor or recorder. Enter the full number without typos, as individual digits often encode subdivision, block, and lot.