Deed of Appointment of Substitute Trustee
(Commercial Foreclosure) (DC)

Summary

This template deed of appointment of substitute trustee may be used in the District of Columbia to appoint a substitute trustee prior to the foreclosure of commercial property pursuant to a deed of trust. This template contains practical guidance and drafting notes. Prior to commencement of the foreclosure of commercial property in the District of Columbia, counsel to the lender should contact the trustees named in the deed of trust and ensure they are available to fulfill their duties. Prudent practice dictates the removal of any trustee named in the deed of trust who is employed by the lender or is acting as lender's counsel with a new trustee unaffiliated with the lender or its counsel. This is because the trustee has a fiduciary obligation to the borrower and the lender to comply with the powers and duties of the deed of trust, and where it is shown that a fiduciary has conflicting interests, the burden is on the fiduciary to prove that he or she has been faithful to his or her duties. Sheridan v. Perpetual Building Association, 299 F.2d 463 (D.C. Cir. 1962) and Lewis v. Jordan Investment, Inc., 725 A.2d 495 (D.C. 1999). The deed of trust should expressly empower the lender to substitute trustees in the event that the trustees named in the deed of trust are unable or unavailable to fulfill their duties. Substituting a trustee is done by recording a deed of appointment of substitute trustee with the District of Columbia Recorder of Deeds naming the trustee(s) to be removed and the trustee(s) to be substituted in their place. In the absence of an express substitution provision in the deed of trust, D.C. Code §42-814(b) empowers the lender to substitute any trustee named in the deed of trust with a new trustee by recording a deed of appointment of substitute trustee. For further guidance on foreclosure procedures in the District of Columbia see Commercial Foreclosure (DC) and Commercial Nonjudicial Foreclosure Checklist (DC).