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I am preparing a demand to the maker on the $130,000 note now

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I am preparing a demand to the maker on the $130,000 note now due and payable. As the note, on a commercial property, contained a balloon payment on a note made for more then a year, I am required to provide a minium of 90 days upon receipt of the demand. However, a NOD had been filed, described in previous question, by PLM Services. The note became due, January 2, 2009.The default was filed 10/27/2008.

Should I extend the demand for repayment of the note and all other expenses incurred 90 days after they have received the demand? I've included CA CC 2966 to save you time.

California Civil Code Section 2966
Legal Research Home > California Laws > Civil Code > California Civil Code Section 2966

(a) In a transaction regulated by this article, which
includes a balloon payment note when the term for repayment is for a
period in excess of one year, the holder of the note shall, not less
than 90 nor more than 150 days before the balloon payment is due,
deliver or mail by first-class mail, with a certificate of mailing
obtained from the United States Postal Service, to the trustor, or
his or her successor in interest, at the last known address of such
person a written notice, to include:
(1) A statement of the name and address of the person to whom the
balloon payment is required to be paid.
(2) The date on or before which the balloon payment was or is
required to be paid.
(3) The amount of the balloon payment, or if its exact amount is
unknown a good faith estimate of the amount thereof, including unpaid
principal, interest, and any other charges (assuming payment in full
of all scheduled installments coming due between the date of the
notice and the date when the balloon payment is due).
(4) A description of the trustor's right, if any, to refinance the
balloon payment, including a summary of the actual terms of the
refinancing or an estimate or approximation thereof, to the extent
If the due date of the balloon payment of a note subject to this
subdivision is extended prior to the time notice is otherwise
required under this subdivision, this notice requirement shall apply
only to the due date as extended (or as subsequently extended).
(b) Failure to provide notice as required by subdivision (a) does
not extinguish any obligation of payment by the trustor, except that
the due date for any balloon payment shall be the date specified in
the note, or 90 days from the date the delivery or mailing of the
notice, or the date specified in the notice, whichever date is later.
If the operation of this section acts to extend the term of any such
note, interest shall continue to accrue for the extended term at the
contract rate and payments shall continue to be due at any periodic
interval and on any scheduled payment schedule specified in the note
and shall be credited to principal or interest under terms of the
note. Default in any extended periodic payment shall be considered a
default under terms of the note or security instrument.
(c) Any failure to comply with the provisions of this section
shall not affect the validity of a sale in favor of a bona fide
purchaser or the rights of an encumbrancer for value and without
(d) Every note subject to the provisions of this section shall
include the following statement:
"This note is subject to Section 2966 of the Civil Code, which
provides that the holder of this note shall give written notice to
the trustor, or his successor in interest, of prescribed information
at least 90 and not more than 150 days before any balloon payment is
Failure to include this notice shall not invalidate the note.
(e) The provisions of this section shall apply to any note
executed on or after July 1, 1983.

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What is the date when they first defaulted on the note?

Customer: replied 6 years ago.

Note required payment of Notes and taxes.

first default was non payment of 1 year property taxes Apr 9, 2008. Paid a cashier check to Tax Collector. .

May 24, 2008 paid 2 months on 1st note. Brought lender current.



It appears that you provided the written notice as per 2966 (a) on 10/27/08. That is something that had to be provided with or without default just to give the borrower notice that a balloon payment was coming up to be due.



If you complied with 2966(a) on 10/27/08, then it would appear that the note was past due as of 90 days after that date. If they were in breach of the note as of that date, then yes, you can now make a demand for any accrued interest and unpaid principal balance since that time as per the rate terms of the note.



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Customer: replied 6 years ago.

I can not find the original demand. So I only have the NOD on 10-27-2008. So would I have to make demand for everything owed, and give note maker 90 days because the note had a balloon payment?


Thus, I would be complying with 2966 (a) and giving the guarantor proof of making a proper demand.



Yes, then in that case you should comply with 2966 (a) at this point but you can charge for interest for all this time that the note has remained unpaid.
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