Clouded Title????
Will an unrecorded deed cloud the title?
Example:
Joe sells property to John. John forgets to record the deed. John sells property to Jane. Jane records her deed.
What problem if any does John not recording the original deed pose?
Thanks
Interesting question. I'm curious, is this something that you've run into, or is it merely a "what if" scenerio?
Since most recordings are done through closing agents/attornies, I'd doubt that this would happen much.
An unrecorded deed will not cloud title. A cloud is something (a deed, contract, option, etc.) that makes it difficult/impossible for the seller to sell the property without clearing the cloud. To do so, it would have to be recorded.
What you may have however is a uninsureable or high cost insureable title. When a title search is done, they won't find a recorded title with the seller's name. This would make title insurance impossible or expensive. It will probably scare off buyers as well.
Roger
pathway2success,
Glad to meet you.
Q. Joe sells property to John. John forgets to record the deed. John sells property to Jane. Jane records her deed.
What problem if any does John not recording the original deed pose?
A. I guess everyone reads a post differently. So here is my version.
John, should not have sold the property to Jane until his deed was recorded in his name.
Jane will have a problem taking title to the property, because it will only show Joe's name on title.
By rights Joe still owns the property. Jane at this time is out of luck she took title from someone who without recording his deed did not own the property.
Not a cloud for Joe he just says I don't know who Jane is.
This is how I read this deal.
John $Cash$ Locke
I just read of a court case. Sally sells to Jim with Quit Claim Deed. Jim does not record deed immediately. Clerk of the Court sells the property still in Sallys name at Tax Sale via Tax Deed. Jim records deed the day after the sale. Buyer of Tax Deed ends up with property. Jim must now sue Sally to get money he paid to her back. Based on this, the owner who did not record his deed is the one who does not legally own the property until he records the deed. In your case, it would be the buyer's responsibility to see that there was an insureable title. Now, the person who did not record the deed could still legally sell the property using a Quit Claim Deed. This deed does not guarantee that the seller has any equitable interest in the property. Basically, all it says is that the seller is conveying any interest that he "MAY HAVE" in the property. That interest could be "ZERO."