Oregon Commercial Real Estate Loans: Trustee Sales & Deficiency

Commercial property loans in Oregon use the same programs as every other state — SBA 504, DSCR loans, bridge loans, bank and life-company permanent loans. What Oregon changes is mostly in the trust deed: a short list of who may serve as trustee, a 120-day notice before any trustee’s sale, a right to cure that ends five days before the sale, and a rule that a lender who sells by trustee’s sale gives up the deficiency against the borrower. At closing, Washington County charges a transfer tax on top of the recording fees.

Closing costs: per-page recording and Washington County’s transfer tax

Washington County charges one dollar per thousand dollars of the selling price on each transfer of real property in the county — sales, quitclaims, contracts for sale and other transfers of title. The selling price includes the amount of cash the purchaser agrees to pay or assume, and the county leaves it to the buyer and seller to agree who pays. The tax is measured by the selling price, not by the loan amount.

The county clerk charges by the document and by the page: $5 per page (with a $5 minimum), plus three statewide fees on each instrument — $1 for the Oregon Land Information System, $10 credited mostly to the County Assessment and Taxation Fund, and $60 to that fund. That is $71 per document before pages, and the loan amount does not change it. Counties may add a public land corner preservation fee by resolution or order under ORS 203.148 — Washington County’s is $10 per document since August 1, 2025 — and an instrument that does not meet the state’s recording format draws an extra $20 penalty.

Example: a $2,000,000 commercial building bought with a $1,400,000 loan, with a two-page deed and a 15-page trust deed.

• Recording the deed: $71 + 2 × $5 = $81
• Recording the trust deed: $71 + 15 × $5 = $146 — the same at $400,000 or $14,000,000
• All together: $227, before any county corner preservation fee
• In Washington County, with its $10 fee per document: $91 + $156 = $247, plus the transfer tax of $2,000,000 ÷ $1,000 × $1 = $2,000, for $2,247

On the same example, Utah’s recording charges come to $80 or $90 and Arizona’s to $60. Title insurance, the trustee’s and lender’s fees, and third-party reports are still part of an Oregon closing; budget them with the commercial mortgage calculator.

The trustee: five kinds of qualified trustee

A trust deed made under the Oregon Trust Deed Act carries a power of sale. The trustee must be one of five things: an active member of the Oregon State Bar or a law practice that includes one; a bank or trust company authorized under Oregon or federal law; a title insurance company — or its affiliate, insurance producer or branch — authorized to insure Oregon title; a federal agency; or an escrow agent licensed in Oregon. A bank or title company organized elsewhere also needs a certificate of authority from the Secretary of State unless it is registered with the Department of Consumer and Business Services. An attorney-trustee may also represent the lender, and the lender may appoint a qualified successor trustee at any time by recording the appointment.

The lender chooses the path after a default: sell by advertisement and sale through the trustee, or foreclose in court as a mortgage. That choice decides whether a deficiency is possible, as the section below shows.

Foreclosure: 120 days of notice before the sale

A trustee’s sale starts with a notice of default recorded in each county where the property sits, stating the default and the election to sell. The trustee must then serve the notice of sale — or mail it by first-class and certified mail — at least 120 days before the sale to the borrower, any successor owner, junior lienholders of record or known to the lender, and anyone who asked for notice, and serve the occupants on the same schedule. The notice is published in a newspaper of general circulation once a week for four successive weeks, with the last publication more than 20 days before the sale. The sale is an auction for cash between 9 a.m. and 4 p.m. in a county where the property sits; anyone but the trustee may bid, including the lender.

Example: a notice of sale mailed on March 2 allows a sale no earlier than June 30 — 120 days later. The trustee may postpone by announcement at the sale for up to 180 days in total from the original date, but other than a single postponement of two days or less, each new date needs written notice at least 15 days ahead.

The borrower, a successor owner, a junior trust deed beneficiary or another junior lienholder can cure the default at any time prior to five days before the date last set for the sale. Curing a payment default means paying what is due without the accelerated balance, curing any other default that can be cured, and paying the costs actually incurred plus the trustee’s and attorney fees — on a non-residential trust deed, the reasonable fees actually charged, which a court can review. The trustee then dismisses the sale and the trust deed is reinstated as if no acceleration had occurred. In the example above, the cure has to be made before June 25 — five days before the June 30 sale.

If a sale or refinance is your way out of a troubled loan, start well inside the 120 days; use DSCR to see how far the property’s income has fallen short.

Deficiency: none after a trustee’s sale

Oregon’s anti-deficiency rule is not limited to homes. After a trustee’s sale under the Trust Deed Act, no action for a deficiency may be brought against the borrower, a successor in interest or another person obligated on the note, and no one whose interest the sale cut off can redeem the property from the buyer. A lender that wants to keep a claim for the balance has to foreclose in court instead: a judgment foreclosing a trust deed that is not residential can include a money award, and if the complaint asks for it, the judgment lets the lender execute for whatever the sale proceeds do not cover. The rule also does not stop a lender from foreclosing other collateral that secures the same loan, or from suing a guarantor for a deficiency that remains after a judicial foreclosure.

Example: the debt with interest and costs is $1,460,000 and the property brings $1,150,000. After a trustee’s sale, the $310,000 gap cannot be collected from the borrower. After a judicial foreclosure in which the complaint asked for it, the lender can execute for the $310,000 against the borrower’s other assets and can pursue a guarantor. Because the lender chooses the path after a default, read the trust deed’s remedies section, any personal guarantee and any non-recourse carve-outs with your attorney before you sign.

C-PACE: local programs, lender consent required

Oregon’s C-PACE statute lets each city or county set up a program that finances energy efficiency, renewable energy, energy storage, smart electric-vehicle charging and water efficiency on commercial, industrial and multifamily buildings, either with local loans funded by revenue bonds or by arranging private financing. The program can require an energy or water audit and can require that the financed cost not exceed the improvements’ cumulative savings over their useful life. Before any loan or financing agreement, the owner must give written notice to every mortgagee and receive each one’s written consent that the financing is not a default under the mortgage.

The local government can secure the financing with a lien that has the same priority as a local improvement assessment, and can certify it to the county assessor so it is billed and enforced the way property taxes are. Multnomah County’s program, PropertyFit, authorized by the county board in September 2015, offers financing for up to 100% of eligible improvements with repayment over up to 20 years.

Example: under a program that applies the savings test, a $400,000 HVAC and lighting retrofit expected to save $30,000 a year over a 15-year useful life ($450,000 in all) fits; the same project saving $25,000 a year ($375,000) does not. For programs and providers, see C-PACE Desk, a BestLoanUSA site.

Where to start

Choose the program — SBA 504 for an owner-occupied building, a DSCR loan or permanent loan for an income property, a bridge loan for a transition — and if the property is in Washington County, settle in the purchase contract who pays the transfer tax. Size the loan with the commercial mortgage calculator. For financing that isn’t tied to real estate, the Oregon business loan guide covers SBA lenders and state programs.

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Sources: Washington County, Transfer Tax; ORS 205.320, 205.323, 205.327; ORS 203.148; Washington County, Increased Recording Fees (Aug. 1, 2025); ORS 86.710, 86.713, 86.752, 86.764, 86.774, 86.778, 86.782, 86.797; ORS 223.680; Multnomah County, PropertyFit. ORS 2025 edition, checked 2026-11-11.