2005 Nevada Revised Statutes - Chapter 106 — Real Mortgages

CHAPTER 106 - REAL MORTGAGES

ADOPTION OF COVENANTS

NRS 106.020 Adoptionby reference before March 1, 1967.

NRS 106.025 Adoptionby reference on and after March 1, 1967.

NRS 106.030 Mortgagesecures performance of covenants adopted by reference.

NRS 106.040 Adoptionby reference in instrument.

NRS 106.050 Partiesmay enter into different or additional covenants.

IMPOUND TRUST ACCOUNTS

NRS 106.105 Contributions;payment of obligations; notice regarding and disposition of excess money; civilpenalty.

MORTGAGES OF ESTATES FOR YEARS; POSSESSORY CLAIMS TO PUBLICLANDS OR MINING CLAIMS

NRS 106.195 Mortgageof estate for years.

NRS 106.200 Effectof recorded mortgage upon possessory claims to public lands or mining claims.

ASSIGNMENTS; SUBORDINATION AND WAIVERS AS TO PRIORITY;DISCHARGE AND EXTINGUISHMENT

NRS 106.210 Recordingof assignments of mortgages or beneficial interests in deeds of trust;constructive notice.

NRS 106.220 Filingand recording of instruments subordinating or waiving priority of mortgages ordeeds of trust; constructive notice.

NRS 106.240 Extinguishmentof lien created by mortgage or deed of trust upon real property.

NRS 106.260 Dischargeand assignment: Marginal entries; discharge or release must be recorded whenmortgage or lien recorded by microfilm.

NRS 106.270 Dischargeof mortgages on filing of certificates specifying satisfaction or payment.

NRS 106.280 Certificatesof discharge: Recording.

NRS 106.290 Recordingof discharge of mortgage by mortgagee; liability for failure to recorddischarge; requirements for release of mortgage when discharge not recorded;liability for improperly recording release; criminal penalty.

ENCUMBRANCE TO SECURE FUTURE ADVANCES

NRS 106.300 Definitions.

NRS 106.310 Borrowerdefined.

NRS 106.320 Futureadvance defined.

NRS 106.330 Instrumentdefined.

NRS 106.340 Lenderdefined.

NRS 106.345 Principaldefined.

NRS 106.350 Applicability.

NRS 106.360 Execution,contents and amendment of instrument.

NRS 106.370 Priorityof lien.

NRS 106.380 Noticeof election to terminate operation of instrument; recording of statement bylender.

NRS 106.390 Effectof notice of termination.

NRS 106.400 Advancesmade after notice of termination.

_________

ADOPTION OF COVENANTS

NRS 106.020 Adoptionby reference before March 1, 1967. In any mortgageof real or personal, or real and personal property, made prior to March 1,1967, the parties may adopt by reference all or any of the following covenants,agreements, obligations, rights and remedies:

1. Covenant No.1. That the mortgagor will perform each and all of the promises and obligationsof the mortgage and all covenants thereof, adopted by reference as providedherein, and will pay the indebtedness therein described with interest astherein provided.

2. Covenant No.2. That the mortgagor will pay a reasonable attorney fee in case suit isstarted for the collection of the mortgage debt or any part thereof, and willpay all costs and expenses of the suit, whether the suit be prosecuted to judgmentor not, and will also pay all costs of any sale made thereunder without courtproceedings, including in case of such sale an attorney fee equal to ........percent of the amount due at the date of the sale upon the principal and interestof the mortgage debt.

3. Covenant No.3. That the mortgagor will pay, in lawful money of the United States, all sumsexpended or advanced by the mortgagee for taxes or assessments levied orassessed against the mortgaged property, fire insurance upon the same, oradvanced for any other purpose provided for by the terms of the mortgage or thecovenants thereof adopted by reference, together with interest upon any suchsums from the date of the payment by the mortgagee until repaid, at the rate of........ percent per annum.

4. Covenant No.4. That this mortgage will be security for the payment in lawful money of theUnited States of any and all moneys that may hereafter become due or payablefrom the mortgagor to the mortgagee, from any cause whatsoever.

5. Covenant No.5. That this mortgage shall be security for any and all renewals of themortgage debt or of the promissory note or notes evidencing the same, which maybe executed and delivered by the mortgagor to the mortgagee, and any and alladditional or future advances or loans which may be made by the mortgagee tothe mortgagor.

6. Covenant No.6. That the mortgagor agrees to pay and discharge at maturity all taxes andassessments and all other charges and encumbrances which are, or shallhereafter be, or appear to be, a lien upon the mortgaged property, or any partthereof, and he will pay all interest or installments due on any priorencumbrance. And in default thereof, the mortgagee may, without demand ornotice, pay the same and the mortgagee shall be the sole judge of the legalityor validity of such taxes, assessments, charges or encumbrances and the amountnecessary to be paid in the satisfaction or discharge thereof.

7. Covenant No.7. That the mortgagor will at all times keep the buildings and improvements,which are now or which shall hereafter be erected upon the mortgaged premises,insured against loss or damage by fire to the amount of at least $........ insome reliable insurance company or companies, approved by the mortgagee, andwill deliver the policies therefor to the mortgagee to be held by the mortgageeas further security. In default of the mortgagor to obtain such insurance, themortgagee may procure the same, not exceeding the amount aforesaid, and may payand expend for premiums for such insurance such sums of money as the mortgageeshall deem necessary.

8. Covenant No.8. That if there be more than one mortgagor in a mortgage, all covenants,terms, promises and obligations set forth in the mortgage or adopted byreference are agreed to be joint and several covenants, terms, conditions,promises and obligations of each of the mortgagors thereto.

9. Covenant No.9. That this mortgage is made upon the express condition that if all sumssecured hereby shall be paid at the time, place and manner mentioned in themortgage, or in any of the covenants provided by this section which shall beadopted by reference, the mortgage and the estate therein mentioned anddescribed shall cease, determine and be void, and the mortgagor, for himself,his heirs, executors, administrators, successors and assigns, covenants and agreesto pay in lawful money of the United States to the mortgagee all sums securedby the mortgage, or by the terms of the covenants adopted by reference at thetime and in the manner therein provided, and if default be made in the paymentof the principal or interest or any part thereof described in the mortgage, orof any promissory note or other instrument or obligation for which suchmortgage is given as security, the whole of the principal sum for which themortgage is given, which shall be then unpaid, shall become forthwith payable,although the time expressed in the promissory note or notes or other obligationor obligations shall not have arrived.

10. CovenantNo. 10. That it is understood and agreed that all the natural increase,during the existence of this mortgage, of any livestock which shall at any timebe subject to the lien hereof, and all other livestock of the same kind as thatdescribed in the mortgage which in any manner is acquired by the mortgagorduring the life of the mortgage, and all wool grown upon or produced by anysheep which shall at any time be subject to the lien of the mortgage, isproperty mortgaged hereunder and subject to the lien of the mortgage.

11. CovenantNo. 11. That the mortgagor covenants and agrees to keep all livestockmortgaged or subject to the lien of the mortgage in good condition, and carefor, inspect and protect the same, and provide and maintain sufficient blooded,graded breeding stock to properly serve any female livestock at any timesubject to the lien of the mortgage, and in general to exercise such care inrearing, branding, ranging and feeding all livestock subject to the lien of themortgage as is consistent and in accord with good business, and with thecustomary manner of handling that kind of livestock which is subject to thelien hereof. Should the livestock or any part thereof at any time, in theopinion of the mortgagee, require care, attention or protection other than thatprovided by the mortgagor, then the mortgagee may enter or cause entry to bemade upon any property where the mortgaged livestock or any part thereof may befound, and assume control, custody and possession of the same, and at theexpense of the mortgagor care for, protect, and attend to the same in suchmanner as it may deem necessary.

12. CovenantNo. 12. That it is further understood and agreed that the mortgagee, itsagents or attorneys, shall have the right at all times to inspect and examineany property which may at any time be subject to the lien of the mortgage, forthe purpose of ascertaining whether or not the security given is beinglessened, diminished, depleted or impaired, and if such inspection orexamination shall disclose, in the judgment of the mortgagee, that the securitygiven or the property mortgaged is being lessened or impaired, such conditionshall be deemed a breach of the covenants of the mortgage on the part of themortgagor.

13. CovenantNo. 13. That upon default of any of the terms, conditions, covenants oragreements of any chattel mortgage whereby livestock is mortgaged, it is agreedthat the mortgagee may, without foreclosure and without legal proceedings andwithout any previous demand therefor, with the aid or assistance of any personor persons, enter upon the premises and ranges of the mortgagor or such placeor places as any of the property subject to the lien of the mortgage is or maybe found, and take, lead, drive or carry away the mortgaged property or anypart thereof, and with or without notice to the mortgagor, at either public orprivate sale, sell and dispose of the same or so much thereof as may benecessary to pay the amount and sums secured by the mortgage, for the bestprice it can obtain, and out of the moneys arising therefrom it shall retainand pay the sum or sums then due or payable under the lien of the mortgage, andinterest thereon, and all charges and expenses incurred in gathering, feeding,caring for, and selling the property or any part thereof, and any otherexpenses and charges incurred by the mortgagee, and all other sums secured byany of the terms of the mortgage, and any overplus shall be paid to themortgagor. The mortgagee is expressly authorized and empowered, upon any suchsale, to make and execute such bills of sale or other conveyances necessary toconvey to the purchaser or purchasers thereof an absolute title in the propertyso sold. It shall not be necessary for the purchaser or purchasers at any suchsale or sales purported to be made under the powers granted hereunder toinquire into or in any way be or become responsible for the actual existence ofthe contingency or contingencies upon which such sale or sales shall be made bythe mortgagee, and title to the purchaser or purchasers of the property so soldshall be good and sufficient; and the mortgagor agrees that the decision of themortgagee as to the actual existence of the contingency or contingencies uponwhich the sale or sales as aforesaid is or may be predicated shall beconclusive and binding upon the mortgagor.

14. CovenantNo. 14. That it is expressly agreed by and between the mortgagor andmortgagee that, in the event suit shall be instituted for the foreclosure ofthe mortgage, the mortgagee may, at its option and without notice, apply forthe appointment of a receiver for the purpose of taking possession of themortgaged property pending foreclosure, and with the approval of the courtwherein such suit is instituted, such receiver as may be designated by themortgagee shall be appointed. All costs in connection with the appointment of areceiver or in connection with the discharge of the duties of the receivershall be taxed as costs in the suit.

15. CovenantNo. 15. That it is expressly agreed and understood that in any sale ofany of the property at any time subject to the lien of the mortgage, under theterms of the mortgage or any of the covenants adopted by reference, theproperty may, at the option of the mortgagee, be sold in one lot or parcel orin such other lots or parcels as may be designated by the mortgagee; and it isfurther covenanted and agreed that the mortgagee may become the purchaser ofthe property or any part thereof at any sale made under any of the terms of themortgage, or upon foreclosure.

[1:109:1927; NCL 4330](NRS A 1967, 120)

NRS 106.025 Adoptionby reference on and after March 1, 1967. Inany mortgage of real property, made on or after March 1, 1967, the parties mayadopt by reference all or any of the following covenants, agreements,obligations, rights and remedies:

1. Covenant No.1. That the mortgagor will perform each and all of the promises and obligationsof the mortgage and all covenants thereof, adopted by reference as providedherein, and will pay the indebtedness therein described with interest astherein provided.

2. Covenant No.2. That the mortgagor will pay a reasonable attorney fee in case suit isstarted for the collection of the mortgage debt or any part thereof, and willpay all costs and expenses of the suit, whether the suit be prosecuted to judgmentor not, and will also pay all costs of any sale made thereunder without courtproceedings, including in case of such sale an attorney fee equal to ........percent of the amount due at the date of the sale upon the principal andinterest of the mortgage debt.

3. Covenant No.3. That the mortgagor will pay, in lawful money of the United States, all sumsexpended or advanced by the mortgagee for taxes or assessments levied orassessed against the mortgaged property, fire insurance upon the same, oradvanced for any other purpose provided for by the terms of the mortgage or thecovenants thereof adopted by reference, together with interest upon any suchsums from the date of the payment by the mortgagee until repaid, at the rate of........ percent per annum.

4. Covenant No.4. That this mortgage will be security for the payment in lawful money of theUnited States of any and all moneys that may hereafter become due or payablefrom the mortgagor to the mortgagee, from any cause whatsoever.

5. Covenant No.5. That this mortgage shall be security for any and all renewals of themortgage debt or of the promissory note or notes evidencing the same, which maybe executed and delivered by the mortgagor to the mortgagee, and any and alladditional or future advances or loans which may be made by the mortgagee tothe mortgagor.

6. Covenant No.6. That the mortgagor agrees to pay and discharge at maturity all taxes andassessments and all other charges and encumbrances which are, or shallhereafter be, or appear to be, a lien upon the mortgaged property, or any partthereof, and he will pay all interest or installments due on any priorencumbrance. And in default thereof, the mortgagee may, without demand ornotice, pay the same and the mortgagee shall be the sole judge of the legalityor validity of such taxes, assessments, charges or encumbrances and the amountnecessary to be paid in the satisfaction or discharge thereof.

7. Covenant No.7. That the mortgagor will at times keep the buildings and improvements, whichare now or which shall hereafter be erected upon the mortgaged premises,insured against loss or damage by fire to the amount of at least $........ insome reliable insurance company or companies, approved by the mortgagee, andwill deliver the policies therefor to the mortgagee to be held by the mortgageeas further security. In default of the mortgagor to obtain such insurance, themortgagee may procure the same, not exceeding the amount aforesaid, and may payand expend for premiums for such insurance such sums of money as the mortgageeshall deem necessary.

8. Covenant No.8. That if there be more than one mortgagor in a mortgage, all covenants,terms, promises and obligations set forth in the mortgage or adopted byreference are agreed to be joint and several covenants, terms, conditions,promises and obligations of each of the mortgagors thereto.

9. Covenant No.9. That this mortgage is made upon the express condition that if all sumssecured hereby shall be paid at the time, place and manner mentioned in themortgage, or in any of the covenants provided by this section which shall beadopted by reference, the mortgage and the estate therein mentioned anddescribed shall cease, determine and be void, and the mortgagor, for himself,his heirs, executors, administrators, successors and assigns, covenants and agreesto pay in lawful money of the United States to the mortgagee all sums securedby the mortgage, or by the terms of the covenants adopted by reference at thetime and in the manner therein provided, and if default be made in the paymentof the principal or interest or any part thereof described in the mortgage, orof any promissory note or other instrument or obligation for which suchmortgage is given as security, the whole of the principal sum for which themortgage is given, which shall be then unpaid, shall become forthwith payable,although the time expressed in the promissory note or notes or other obligationor obligations shall not have arrived.

10. CovenantNo. 10. That it is further understood and agreed that the mortgagee, itsagents or attorneys, shall have the right at all times to inspect and examineany property which may at any time be subject to the lien of the mortgage, forthe purpose of ascertaining whether or not the security given is beinglessened, diminished, depleted or impaired, and if such inspection orexamination shall disclose, in the judgment of the mortgagee, that the securitygiven or the property mortgaged is being lessened or impaired, such conditionshall be deemed a breach of the covenants of the mortgage on the part of themortgagor.

11. Covenant No.11. That it is expressly agreed by and between the mortgagor and mortgageethat, in the event suit shall be instituted for the foreclosure of themortgage, the mortgagee, may, at its option and without notice, apply for the appointmentof a receiver for the purpose of taking possession of the mortgaged propertypending foreclosure, and with the approval of the court wherein such suit isinstituted, such receiver as may be designated by the mortgagee shall beappointed. All costs in connection with the appointment of a receiver or inconnection with the discharge of the duties of the receiver shall be taxed ascosts in the suit.

12. CovenantNo. 12. That it is expressly agreed and understood that in any sale ofany of the property at any time subject to the lien of the mortgage, under theterms of the mortgage or any of the covenants adopted by reference, theproperty may, at the option of the mortgagee, be sold in one lot or parcel orin such other lots or parcels as may be designated by the mortgagee; and it isfurther covenanted and agreed that the mortgagee may become the purchaser ofthe property or any part thereof at any sale made under any of the terms of themortgage, or upon foreclosure.

(Added to NRS by 1967, 123)

NRS 106.030 Mortgagesecures performance of covenants adopted by reference.Whenever, by the terms of any mortgage, any of the covenants in NRS 106.020 or 106.025 are adopted as a part thereof byreference, as provided in NRS 106.020 to106.050, inclusive, the mortgage isintended to secure and does secure the performance of the terms and conditionsof the mortgage and all of the covenants so adopted by reference.

[2:109:1927; NCL 4331](NRS A 1967, 125; 1985, 237)

NRS 106.040 Adoptionby reference in instrument.

1. In order to adopt by reference any of thecovenants, agreements, obligations, rights and remedies in NRS 106.020 or 106.025, it shall only be necessary tostate in the mortgage whichever of the following is appropriate:

(a) The following covenants, Nos. ....., ..... and..... (inserting the respective numbers) of NRS106.020, are hereby adopted and made a part of this mortgage.

(b) The following covenants, Nos. ....., ..... and..... (inserting the respective numbers) of NRS106.025, are hereby adopted and made a part of this mortgage.

2. In order to fix the amount of counsel fees underCovenant No. 2 of NRS 106.020 or 106.025, it shall only be necessary tostate in the mortgage: Covenant No. 2, and set out thereafter the percentageto be allowed.

3. In order to fix the rate of interest under CovenantNo. 3 of NRS 106.020 or 106.025, it shall only be necessary tostate in the mortgage: Covenant No. 3, and set out thereafter the rate ofinterest to be charged thereunder.

4. A mortgage, in order to fix the amount of insuranceto be carried, need not reincorporate the provisions of Covenant No. 7 of NRS 106.020 or 106.025, but may merely state thefollowing: Covenant No. 7, and set out thereafter the amount of insurance tobe carried.

[3:109:1927; NCL 4332] + [4:109:1927; NCL 4333](NRS A 1967, 126)

NRS 106.050 Partiesmay enter into different or additional covenants. Nothingin NRS 106.020 to 106.040, inclusive, prevents the parties toany mortgage from entering into any other, different or additional covenants oragreements than those set out in NRS 106.020or 106.025.

[5:109:1927; NCL 4334](NRS A 1967, 126; 1985, 237)

IMPOUND TRUST ACCOUNTS

NRS 106.105 Contributions;payment of obligations; notice regarding and disposition of excess money; civilpenalty.

1. Except as otherwise provided in subsection 2, alender who requires a borrower to make advance contributions to an impoundtrust account, or an account of similar name, for the payment of taxes,insurance premiums or other obligations related to the encumbered propertyshall:

(a) Require contributions in an amount reasonablynecessary to pay the obligations as they become due.

(b) Unless money in the account is insufficient, pay ina timely manner the obligations as they become due.

(c) Within 30 days after the completion of its annualreview of the account, notify the borrower:

(1) Of the amount by which the contributionsexceed the amount reasonably necessary to pay the annual obligations due fromthe account; and

(2) That he may specify the disposition of theexcess money within 20 days after receipt of the notice. If the borrower failsto specify such a disposition within that time, the lender shall maintain theexcess money in the account.

A lender whoviolates any provision of this subsection is liable to the borrower for a civilpenalty of not more than $1,000.

2. A lender, to recover previous deficiencies incontributions to an impound trust account, may require contributions to theaccount in an amount greater than that reasonably necessary to pay theobligations as they become due. The borrower is otherwise entitled to theamount by which his contributions to the account exceed the amount reasonablynecessary to pay the annual obligations due from the account, together withinterest thereon at the rate established pursuant to NRS 99.040.

3. As used in this section:

(a) Borrower means a mortgagor, grantor of a deed oftrust or other obligor on a loan secured by a lien upon real property.

(b) Lender means a mortgagee, beneficiary of a deedof trust or other obligee on a loan secured by a lien upon real property, andhis successor in interest.

(Added to NRS by 1989, 1766)

MORTGAGES OF ESTATES FOR YEARS; POSSESSORY CLAIMS TO PUBLICLANDS OR MINING CLAIMS

NRS 106.195 Mortgageof estate for years. Mortgages may be madeupon an estate for years, however created, unless prohibited by the instrumentwhich created such estate.

(Added to NRS by 1967, 954)

NRS 106.200 Effectof recorded mortgage upon possessory claims to public lands or mining claims. A mortgage for a good and valuable consideration uponpossessory claims to public lands, all buildings and improvements upon suchlands, and all quartz and mining claims, acknowledged in manner and form as mortgagesupon real property are required by law to be acknowledged, and recorded in the officeof the recorder in the county in which the property is situated, shall have thesame effect against third persons as mortgages upon real property.

[76:9:1861; A 1935, 253; 1931 NCL 1547](NRS A1965, 924)

ASSIGNMENTS; SUBORDINATION AND WAIVERS AS TO PRIORITY;DISCHARGE AND EXTINGUISHMENT

NRS 106.210 Recordingof assignments of mortgages or beneficial interests in deeds of trust;constructive notice.

1. Any assignment of a mortgage of real property, orof a mortgage of personal property or crops recorded prior to March 27, 1935,and any assignment of the beneficial interest under a deed of trust may berecorded, and from the time any of the same are so filed for record shalloperate as constructive notice of the contents thereof to all persons.

2. Each such filing or recording shall be properlyindexed by the recorder.

[Part 1:120:1935; 1931 NCL 2122.31](NRS A 1965,924)

NRS 106.220 Filingand recording of instruments subordinating or waiving priority of mortgages ordeeds of trust; constructive notice.

1. Any instrument by which any mortgage or deed oftrust of, lien upon or interest in real property is subordinated or waived asto priority, may, in case it concerns only one or more mortgages or deeds oftrust of, liens upon or interests in real property, together with, or in thealternative, one or more mortgages of, liens upon or interests in personalproperty or crops, the instruments or documents evidencing or creating whichhave been recorded prior to March 27, 1935, be recorded, and from the time anyof the same are so filed for record shall operate as constructive notice of thecontents thereof to all persons.

2. Each such filing or recording shall be properlyindexed by the recorder.

[Part 1:120:1935; 1931 NCL 2122.31](NRS A 1965,925)

NRS 106.240 Extinguishmentof lien created by mortgage or deed of trust upon real property. The lien heretofore or hereafter created of any mortgageor deed of trust upon any real property, appearing of record, and not otherwisesatisfied and discharged of record, shall at the expiration of 10 years afterthe debt secured by the mortgage or deed of trust according to the termsthereof or any recorded written extension thereof become wholly due, terminate,and it shall be conclusively presumed that the debt has been regularlysatisfied and the lien discharged.

[2:37:1917; 1919 RL p. 3352; NCL 9410](NRS A 1965,1229)

NRS 106.260 Dischargeand assignment: Marginal entries; discharge or release must be recorded whenmortgage or lien recorded by microfilm.

1. Any mortgage or lien, that has been or mayhereafter be recorded, may be discharged or assigned by an entry on the marginof the record thereof, signed by the mortgagee or his personal representativeor assignee, acknowledging the satisfaction of or value received for themortgage or lien and the debt secured thereby, in the presence of the recorderor his deputy, who shall subscribe the same as a witness, and such entry shallhave the same effect as a deed of release or assignment duly acknowledged andrecorded. Such marginal discharge or assignment shall in each case be properlyindexed by the recorder.

2. In the event that the mortgage or lien has beenrecorded by a microfilm or other photographic process, a marginal release maynot be used and a duly acknowledged discharge or release of such mortgage orlien must be recorded.

[35:9:1861; A 1881, 23; 1935, 253; 1953, 79](NRS A1965, 925)

NRS 106.270 Dischargeof mortgages on filing of certificates specifying satisfaction or payment. Any recorded mortgage shall also be discharged upon therecord thereof by the recorder in whose custody it shall be, whenever thereshall be presented to him a certificate executed by the mortgagee, his personalrepresentative or assignee, acknowledged, or proved and certified, asprescribed in NRS, to entitle conveyances to be recorded, specifying that suchmortgage has been paid or otherwise satisfied or discharged.

[36:9:1861; A 1935, 253; 1931 NCL 1508](NRS A1965, 926)

NRS 106.280 Certificatesof discharge: Recording. Every certificate ofdischarge of a recorded mortgage, and the proof or acknowledgment thereof,shall be recorded at full length, and a reference shall be made to the bookcontaining such record in the minutes of the discharge of such mortgage made bythe recorder upon the record thereof.

[37:9:1861; A 1935, 253; 1931 NCL 1509](NRS A1965, 926)

NRS 106.290 Recordingof discharge of mortgage by mortgagee; liability for failure to recorddischarge; requirements for release of mortgage when discharge not recorded;liability for improperly recording release; criminal penalty.

1. Within 21 calendar days after receiving writtennotice that a debt secured by a mortgage has been paid or otherwise satisfiedor discharged, the mortgagee shall cause a discharge of the mortgage to berecorded pursuant to NRS 106.260 or 106.270 if the mortgagor, his heirs orassigns have fully performed the conditions of the mortgage.

2. If a mortgagee fails to comply with the provisionsof this section, the mortgagee is liable in a civil action to the mortgagor,his heirs or assigns for:

(a) The sum of $500;

(b) Any actual damages caused by the failure of themortgagee to comply with the provisions of this section; and

(c) A reasonable attorneys fee and the costs ofbringing the action.

3. Except as otherwise provided in this subsection, ifa mortgagee fails to cause a discharge of the mortgage to be recorded pursuantto subsection 1 within 75 calendar days, a title insurer may prepare and causeto be recorded a release of the mortgage. At least 30 calendar days before therecording of a release pursuant to this subsection, the title insurer shallmail, by first-class mail, postage prepaid, notice of the intention to recordthe release of the mortgage to the mortgagor and mortgagee, or their successorsin interest, at the last known address of each such person. A release preparedand recorded pursuant to this subsection shall be deemed a discharge of themortgage. The title insurer shall not cause a release to be recorded pursuantto this subsection if the title insurer receives written instructions to thecontrary from the mortgagor, the mortgagee or a successor in interest.

4. The release prepared pursuant to subsection 3 mustset forth:

(a) The name of the mortgagor;

(b) The name of the mortgagee;

(c) The recording reference to the mortgage;

(d) A statement that the debt secured by the mortgagehas been paid in full or otherwise satisfied or discharged;

(e) The date and amount of payment or othersatisfaction or discharge; and

(f) The name and address of the title insurer issuingthe release.

5. A release prepared and recorded pursuant tosubsection 3 does not relieve a mortgagee of the requirements imposed bysubsections 1 and 2.

6. In addition to any other remedy provided by law, atitle insurer who improperly causes to be recorded a release of a mortgage pursuantto this section is liable in a civil action for actual damages and for areasonable attorneys fee and the costs of bringing the action to any personwho is injured because of the improper recordation of the release.

7. Any person who willfully violates this section isguilty of a misdemeanor.

8. As used in this section, title insurer has themeaning ascribed to it in NRS 692A.070.

[38:9:1861; A 1935, 253; 1931 NCL 1510](NRS A 1999, 56)

ENCUMBRANCE TO SECURE FUTURE ADVANCES

NRS 106.300 Definitions. As used in NRS 106.300to 106.400, inclusive, unless thecontext otherwise requires, the words and terms defined in NRS 106.310 to 106.345, inclusive, have the meaningsascribed to them in those sections.

(Added to NRS by 1985, 725; A 1989, 492)

NRS 106.310 Borrowerdefined. Borrower means a mortgagor, grantorof a deed of trust or other debtor.

(Added to NRS by 1985, 725)

NRS 106.320 Futureadvance defined. Future advance means aloan of money to a borrower pursuant to an agreement but made after theagreement is executed.

(Added to NRS by 1985, 725)

NRS 106.330 Instrumentdefined. Instrument means a mortgage, deedof trust or other instrument encumbering real property as security for therepayment of a debt.

(Added to NRS by 1985, 725)

NRS 106.340 Lenderdefined. Lender means a mortgagee,beneficiary of a deed of trust or other creditor holding an instrument.

(Added to NRS by 1985, 725)

NRS 106.345 Principaldefined. Principal means the money a lenderadvances to a borrower as a loan which, separately or together with otheradvances, is intended to be evidenced by the face amount of a note, bond orother similar document. The term does not include any interest, advances madeto protect security or advances which would not have been made if the borrowerand all other parties to the agreement relating to the loan or future advanceshad complied with its terms even if the obligations contained in the agreementwere secured by an instrument.

(Added to NRS by 1989, 492)

NRS 106.350 Applicability. The provisions of NRS106.300 to 106.400, inclusive, applyonly to an instrument or supplement or amendment to an instrument that statesclearly that it is to be governed by those provisions.

(Added to NRS by 1985, 726; A 1989, 492)

NRS 106.360 Execution,contents and amendment of instrument.

1. A borrower may execute an instrument encumberinghis real property to secure future advances from a lender within a mutuallyagreed maximum amount of principal.

2. The instrument must state clearly:

(a) That it secures future advances; and

(b) The maximum amount of principal to be secured.

3. The maximum amount of advances of principal to besecured by the instrument may increase or decrease from time to time byamendment of the instrument.

(Added to NRS by 1985, 725; A 1989, 492)

NRS 106.370 Priorityof lien.

1. The priority of a lien for future advances datesfrom the time that the instrument is recorded in the office of the countyrecorder of the county in which the property is located, whether or not the:

(a) Future advances are obligatory or at the option ofthe lender; or

(b) Lender has notice of an intervening lien.

2. If an amendment to an instrument is recorded whichincreases the maximum amount of indebtedness secured by the instrument, thepriority of any lien for future advances of principal thereafter which exceedthe maximum amount of principal of the original indebtedness dates from thetime the amendment is recorded in the office of the county recorder of thecounty in which the property is located.

(Added to NRS by 1985, 725; A 1989, 493)

NRS 106.380 Noticeof election to terminate operation of instrument; recording of statement bylender.

1. The borrower may at any time personally deliver orsend by certified mail, return receipt requested, a written notice to thelender stating that the borrower elects to terminate the operation of theinstrument as security for future advances of principal made after the date ofreceipt of the notice by the lender.

2. Within 4 working days after receipt of the notice,the lender must record in the office of the county recorder of the county wherethe original instrument was recorded a statement which:

(a) Refers to the original instrument;

(b) Contains the legal description of the encumberedreal property;

(c) States that the notice given pursuant to subsection1 was received by the lender, with the date of that receipt;

(d) States the total amount of principal owed on thedate of receipt of the notice on account of all outstanding debts andobligations secured by the instrument; and

(e) States the total amount of interest accrued on theoutstanding debts and obligations as of the date the statement is recorded.

3. If the lender does not record the statementpursuant to subsection 2 within 4 working days, the borrower may record asimilar statement and that statement has the same effect.

(Added to NRS by 1985, 726; A 1989, 493)

NRS 106.390 Effectof notice of termination. Receipt of notice oftermination by the lender does not affect the priority of any lien for anyfuture advances previously made, obligations previously incurred or interestaccrued thereon.

(Added to NRS by 1985, 726)

NRS 106.400 Advancesmade after notice of termination. Futureadvances of principal made to a borrower after the receipt of the notice oftermination by the lender are not secured by the instrument. The principalamount of indebtedness secured by the instrument is limited to the amountstated by the lender in his recorded statement.

(Added to NRS by 1985, 726; A 1989, 493)