(1)  In this section, “good faith” means honesty in fact and the observance of reasonable commercial standards of fair dealing.

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Terms Used In Utah Code 57-26-114

  • Assignee: means a person entitled to enforce an assignment of rents. See Utah Code 57-26-102
  • Assignor: means a person that makes an assignment of rents or the successor owner of the real property from which the rents arise. See Utah Code 57-26-102
  • Cash proceeds: means proceeds that are money, checks, deposit accounts, or the like. See Utah Code 57-26-102
  • Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
  • Notification: means a document containing information that this chapter requires a person to provide to another, signed by the person required to provide the information. See Utah Code 57-26-102
  • Proceeds: means personal property that is received or collected on account of a tenant's obligation to pay rents. See Utah Code 57-26-102
  • Rents: means :
(a) sums payable for the right to possess or occupy, or for the actual possession or occupation of, real property of another person;
(b) sums payable to an assignor under a policy of rental interruption insurance covering real property;
(c) claims arising out of a default in the payment of sums payable for the right to possess or occupy real property of another person;
(d) sums payable to terminate an agreement to possess or occupy real property of another person;
(e) sums payable to an assignor for payment or reimbursement of expenses incurred in owning, operating and maintaining, or constructing or installing improvements on, real property; or
(f) any other sums payable under an agreement relating to the real property of another person that constitute rents under law of this state other than this chapter. See Utah Code 57-26-102
  • Security interest: means an interest in property that arises by agreement and secures performance of an obligation. See Utah Code 57-26-102
  • State: means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. See Utah Code 57-26-102
    • (2)  If an assignor collects rents that the assignee is entitled to collect under this chapter:

    (a)  the assignor shall turn over the proceeds to the assignee, less any amount representing payment of expenses authorized by the assignee; and

    (b)  the assignee continues to have a security interest in the proceeds so long as they are identifiable.

    (3)  For purposes of this chapter, cash proceeds are identifiable if they are maintained in a segregated account or, if commingled with other funds, to the extent the assignee can identify them by a method of tracing, including application of equitable principles, that is permitted under law of this state other than this chapter with respect to commingled funds.

    (4)  In addition to any other remedy available to the assignee under law of this state other than this chapter, if an assignor fails to turn over proceeds to the assignee as required by Subsection (2), the assignee may recover from the assignor in a civil action:

    (a)  the proceeds, or an amount equal to the proceeds, that the assignor was obligated to turn over under Subsection (2); and

    (b)  reasonable attorney fees and costs incurred by the assignee to the extent provided for by agreement and not prohibited by law of this state other than this chapter.

    (5)  The assignee may maintain an action under Subsection (4) without bringing an action to foreclose any security interest that it may have in the real property. Any sums recovered in the action must be applied in the manner specified in Section 57-26-112.

    (6)  Unless otherwise agreed, if an assignee entitled to priority under Subsection 57-26-105(3) enforces its interest in rents after another creditor holding a subordinate security interest in rents has enforced its interest under Section 57-26-108 or 57-26-109, the creditor holding the subordinate security interest in rents is not obligated to turn over any proceeds that it collects in good faith before the creditor receives notification that the senior assignee has enforced its interest in rents. The creditor shall turn over to the senior assignee any proceeds that it collects after it receives the notification.

    Enacted by Chapter 139, 2009 General Session

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