New Mexico Administrative Code
Title 20 - ENVIRONMENTAL PROTECTION
Chapter 5 - PETROLEUM STORAGE TANKS
Part 124 - LENDER LIABILITY
Section 20.5.124.2402 - FORECLOSURE ON A STORAGE TANK OR STORAGE TANK SYSTEM OR FACILITY OR PROPERTY ON WHICH A STORAGE TANK OR STORAGE TANK SYSTEM IS LOCATED, AND PARTICIPATION IN MANAGEMENT ACTIVITIES POST-FORECLOSURE
Universal Citation: 20 NM Admin Code 20.5.124.2402
Current through Register Vol. 35, No. 18, September 24, 2024
A. Foreclosure.
(1) Indicia of ownership that are held
primarily to protect a security interest include legal or equitable title or
deed to real or personal property acquired through or incident to foreclosure.
The indicia of ownership held after foreclosure continue to be maintained
primarily as protection for a security interest provided that the holder
undertakes to sell, re-lease a storage tank or storage tank system or facility
or property on which the storage tank or storage tank system is located, held
pursuant to a lease financing transaction (whether by a new lease financing
transaction or substitution of the lessee), or otherwise divest itself of the
storage tank or storage tank system or facility or property on which the
storage tank or storage tank system is located, in a reasonably expeditious
manner, using whatever commercially reasonable means are relevant or
appropriate with respect to the storage tank or storage tank system or facility
or property on which the storage tank or storage tank system is located, taking
all facts and circumstances into consideration, and provided that the holder
does not participate in management (as defined in 20.5.124.7 NMAC) prior to or
after foreclosure.
(2) For purposes
of establishing that a holder is seeking to sell, re-lease pursuant to a lease
financing transaction (whether by a new lease financing transaction or
substitution of the lessee), or divest in a reasonably expeditious manner a
storage tank or storage tank system or facility or property on which the
storage or storage tank system is located, the holder may use whatever
commercially reasonable means as are relevant or appropriate with respect to
the storage tank or storage tank system or facility or property on which the
storage tank or storage tank system is located, or may employ the means
specified in Subsection B of this section.
(3) A holder that outbids, rejects, or fails
to act upon a written bona fide, firm offer of fair consideration for the
storage tank or storage tank system or facility or property on which the
storage tank or storage tank system is located, as provided in Subsection B of
this section, is not considered to hold indicia of ownership primarily to
protect a security interest.
B. Holding foreclosed property for disposition and liquidation.
(1) A holder may
conduct the following activities without voiding the security interest
exemption, subject to the requirements of this part:
(a) A holder, who does not participate in
management prior to or after foreclosure, may sell, re-lease, pursuant to a
lease financing transaction (whether by a new lease financing transaction or
substitution of the lessee), a storage tank or storage tank system or facility
or property on which the storage tank or storage tank system is located,
liquidate, wind up operations, and take measures, prior to sale or other
disposition, to preserve, protect, or prepare the secured storage tank or
storage tank system or facility or property on which the storage tank or
storage tank system is located.
(b)
A holder may arrange for an existing or new operator to continue or initiate
operation of the storage tank or storage tank system.
(2) A holder establishes that the ownership
indicia maintained after foreclosure continue to be held primarily to protect a
security interest by, within 12 months following foreclosure, listing the
storage tank or storage tank system or the facility or property on which the
storage tank or storage tank system is located, with a broker, dealer, or agent
who deals with the type of property in question, or by advertising the storage
tank or storage tank system or facility or property on which the storage tank
or storage tank system is located, as being for sale or disposition on at least
a monthly basis in either a real estate publication or a trade or other
publication suitable for the storage tank or storage tank system or facility or
property on which the storage tank or storage tank system is located, or a
newspaper of general circulation (defined as one with a circulation over
10,000, or one suitable under any applicable federal, state, or local rules of
court for publication required by court order or rules of civil procedure)
covering the location of the storage tank or storage tank system or facility or
property on which the storage tank or storage tank system is located.
(a) For purposes of this provision, the
12-month period begins to run from the date that the marketable title or deed
has been issued, approved and recorded, and the holder has obtained access to
the storage tank, storage tank system, storage tank facility and property on
which the storage tank or storage tank system is located provided that the
holder acted diligently to acquire marketable title or deed and to obtain
access to the storage tank, storage tank system, storage tank facility and
property on which the storage tank or storage tank system is located.
(b) If the holder fails to act diligently to
acquire marketable title or deed or to gain access to the storage tank or
storage tank system, the 12-month period begins to run from the date on which
the holder first acquires either title to or possession of the secured storage
tank or storage tank system, or facility or property on which the storage tank
or storage tank system is located.
(3) A holder that outbids, rejects, or fails
to act upon an offer of fair consideration for the storage tank or storage tank
system or the facility or property on which the storage tank or storage tank
system is located, establishes by such outbidding, rejection, or failure to
act, that the ownership indicia in the secured storage tank or storage tank
system or facility or property on which the storage tank or storage tank system
is located are not held primarily to protect the security interest, unless the
holder is required, in order to avoid liability under federal or state law, to
make a higher bid, to obtain a higher offer, or to seek or obtain an offer in a
different manner.
(a) Fair consideration, in
the case of a holder maintaining indicia of ownership primarily to protect a
senior security interest in the storage tank or storage tank system or facility
or property on which the storage tank or storage tank system is located, is the
value of the security interest as defined in this section.
(i) The value of the security interest
includes all debt and costs incurred by the security interest holder, and is
calculated as an amount equal to or in excess of the sum of the outstanding
principal (or comparable amount in the case of a lease that constitutes a
security interest) owed to the holder immediately preceding the acquisition of
full title (or possession in the case of a lease financing transaction)
pursuant to foreclosure, plus any unpaid interest, rent, or penalties (whether
arising before or after foreclosure).
(ii) The value of the security interest also
includes all reasonable and necessary costs, fees, or other charges incurred by
the holder incident to work out, foreclosure, retention, preserving,
protecting, and preparing, prior to sale, the storage tank or storage tank
system or facility or property on which the storage tank or storage tank system
is located, re-lease, pursuant to a lease financing transaction (whether by a
new lease financing transaction or substitution of the lessee), of a storage
tank or storage tank system or facility or property on which the storage tank
or storage tank system is located, or other disposition.
(iii) The value of the security interest also
includes environmental investigation costs (which could include a site
assessment, inspection, and/or audit of the storage tank or storage tank system
or facility or property on which the storage tank or storage tank system is
located), and corrective action costs incurred under 20.5.118, 20.5.119, or
20.5.120 NMAC or any other costs incurred as a result of reasonable efforts to
comply with any other applicable federal, state or local law or regulation;
less any amounts received by the holder in connection with any partial
disposition of the property and any amounts paid by the borrower (if not
already applied to the borrower's obligations) subsequent to the acquisition of
full title (or possession in the case of a lease financing transaction)
pursuant to foreclosure.
(iv) In
the case of a holder maintaining indicia of ownership primarily to protect a
junior security interest, fair consideration is the value of all outstanding
higher priority security interests plus the value of the security interest held
by the junior holder, each calculated as set forth in this paragraph.
(b) Outbids, rejects, or fails to
act upon an offer of fair consideration means that the holder outbids, rejects,
or fails to act upon within 90 days of receipt, a written, bona fide, firm
offer of fair consideration for the storage tank or storage tank system or
facility or property on which the storage tank or storage tank system is
located received at any time after six months following foreclosure, as defined
in 20.5.124.7 NMAC.
(i) For purposes of this
provision, the six-month period begins to run from the date that marketable
title or deed has been issued, approved and recorded to the holder, and the
holder has obtained access to the storage tank, storage tank system, storage
tank facility and property on which the storage tank or storage tank system is
located, provided that the holder was acting diligently to acquire marketable
title or deed and to obtain access to the storage tank or storage tank system,
storage tank facility and property on which the storage tank or storage tank
system is located.
(ii) If the
holder fails to act diligently to acquire marketable title or deed or to gain
access to the storage tank or storage tank system, the six-month period begins
to run from the date on which the holder first acquires either title to or
possession of the secured storage tank or storage tank system, or facility or
property on which the storage tank or storage tank system is located.
C. Actions that are not participation in management post-foreclosure.
(1) A holder is not considered to be
participating in the management of a storage tank or storage tank system or
facility or property on which the storage tank or storage tank system is
located when undertaking actions under 20.5 NMAC, provided that the holder does
not otherwise participate in the management or daily operation of the storage
tank or storage tank system as provided in Subsection A of this section and in
20.5.124.2400 NMAC. Such allowable actions include, but are not limited to,
release detection and release reporting, release response and corrective
action, temporary or permanent closure of a storage tank system, storage tank
upgrading or replacement, and maintenance of corrosion protection.
(2) A holder who undertakes these actions
shall do so in compliance with the applicable requirements in 20.5
NMAC.
(3) A holder may directly
oversee these environmental compliance actions and voluntary environmental
actions, and directly hire contractors to perform the work, and is not by such
action considered to be participating in the management of the storage tank or
storage tank system.
Disclaimer: These regulations may not be the most recent version. New Mexico may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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