A Deed can seem like an insignificant document, but without it, you can’t buy or sell a property. In the following example, the buyer hadn’t recorded the Deed, and the title remained in the owner’s name for nearly two decades.
Nearly 20 years later, an unrecorded Deed surfaces
This case study comes from a property manager colleague, Jack, who got a call from Sally, a realtor who wanted to list one of his properties for sale. One big problem—this was a property that Jack had sold way back in 2000. According to public records, that property was still in Jack’s name.
Jack checked with the county recorder, and sure enough, Sally was absolutely right. Public records showed that Jack still owned that house. The buyer had not recorded the Deed and the title was still in Jack’s name. If Jack were dishonest, he could sell that property again and skip town with the illegal second profit. Given the inventory issues of the Bay Area real estate market, this transaction would have represented a significant windfall!
Despite Jack’s efforts to contact the buyers to understand why the deed was unrecorded, he has been unable to locate them. Possible reasons may have included avoiding property tax reassessment or liens on the newly acquired property. What this means for Jack: Without a clear title, he can’t sell this property. Now that he’s re-inherited his own property, he has to assume the responsibilities of ownership, including maintenance and property taxes.
Something that may surprise you: Unrecorded deeds are not uncommon
- There are potential liability issues for both buyer and seller. If the title remains in the seller’s name, he could be named in any lawsuit involving the property.
- If someone is injured on the premises and the buyer’s insurance policy doesn’t pay the claim, the legal title owner would likely be named in a lawsuit.
It is very unwise to become involved with a property without securing a title search and title insurance. Unfortunately, there are many people who try to save a few dollars by skipping a title search and not buying an owner’s title insurance policy.
Another cautionary note about Deeds: Remember the wild west refi market of pre-2008?
Think back to the environment of the mortgage industry before it crashed in 2008—these companies couldn’t process refi’s fast enough. Many of us were eager to refinance to leverage lower interest rates. The lenders were eager to help people take a property out of their Trusts, but in some cases, there was little regard to whether or not it ever got transferred back into that Trust via a Trust Transfer Deed. This might be a good time to check on the whereabouts of your Deed.
Do you need to transfer a Deed?
Have you changed ownership, married or divorced and want to change the name on a property title? In many cases we can transfer a Deed in a day. Schedule an appointment today by contacting us at one of our three Bay Area offices. Our dedicated team is helpful, compassionate and affordable.