What happens when a co-beneficiary fails to make payments when due?
In the event of default, the party or entity acting as “landlord” would issue a 3-Day Notice to Pay or Quit, which notice would, if necessary, be followed by an Unlawful Detainer Action. By the defaulting partys own agreement, the default itself (within itself) becomes constructive notice (to the non-defaulting beneficiary/ies) of the defaulting partys intent to sell his/her beneficiary interest in the Trust to the non-defaulting parties at Fair Market Value as would have to be determined by an MAI Appraisal, following a substantial default fee and payment of all past-due payment. Should any sum more than is offered by the non-defaulting parties be proven, then that amount would be paid to the defaulting party in the form of an unsecured promissory note to be paid when the property eventually is sold t the natural termination of the trust.
