What is the Effect of an Unrecorded Deed on a Later Sale of Property?
Full Question:
Answer:
The answer will be a matter of subjective determination for the court, based on all the facts involved. One of the considerations, among others, may be whether fraud was involved in the later sale. A bona fide purchaser is commonly referred to as a BFP in legal and banking circles. A BFP is a person who has purchased an asset for the stated value, with a honest belief that the seller had the rights to make such a sale. A BFP is unaware of any fact which would cause a reasonable person to doubt on the right of the seller to have sold it in good faith. This is relevant in the situation of a seller without good title to an item who sells the item to a BFP and the true owner later shows up to claim title. In this situation, the BFP will be able to keep the asset, and the real owner will have to look to the fraudulent seller for reimbursement.
An unrecorded deed is an instrument that transfers title from one party (grantor) to another party (grantee) without providing public notice of change in ownership. If one party purchases a property and records the deed, a subsequent purchaser is normally held to know about it — to have “constructive notice” of it — as a matter of law since it is a matter of public record. The recorded deed has priority unless the purchaser actually knew about — had “actual notice” of — the unrecorded deed.
Generally, the person(s) named on the title or deed which is recorded in the land recorder's office is the legal owner. However, it is possible that the person named on the title may bring a quiet title action to have the deed transferred into a buyer's name. A quiet title or trespass to try title action is the method of determining title to lands. In a quiet title action, it is possible to ask the court to issue an injunction to force another to do or refrain from doing an act. An injunction is an equitable remedy that the court may order when money damages will be inadequate to remedy the harm suffered. The court may order records to be corrected to reflect true ownership of property. You might also try calling the recorder's office for administrative procedures that may be available. We suggest contacting a local attorney who can review all the facts and documents involved.
Please see the following OH statutes:
5301.01 Acknowledgment of deed, mortgage, land contract, lease or memorandum of trust.
(A) A deed, mortgage, land contract as referred to in division (A)(2)(b) of section 317.08 of the Revised Code, or lease of any interest in real property and a memorandum of trust as described in division (A) of section 5301.255 of the Revised Code shall be signed by the grantor, mortgagor, vendor, or lessor in the case of a deed, mortgage, land contract, or lease or shall be signed by the trustee in the case of a memorandum of trust. The signing shall be acknowledged by the grantor, mortgagor, vendor, or lessor, or by the trustee, before a judge or clerk of a court of record in this state, or a county auditor, county engineer, notary public, or mayor, who shall certify the acknowledgement and subscribe the official’s name to the certificate of the acknowledgement.
(B)(1) If a deed, mortgage, land contract as referred to in division (A)(2)(b) of section 317.08 of the Revised Code, lease of any interest in real property, or a memorandum of trust as described in division (A) of section 5301.255 of the Revised Code was executed prior to February 1, 2002, and was not acknowledged in the presence of, or was not attested by, two witnesses as required by this section prior to that date, both of the following apply:
(a) The instrument is deemed properly executed and is presumed to be valid unless the signature of the grantor, mortgagor, vendor, or lessor in the case of a deed, mortgage, land contract, or lease or of the settlor and trustee in the case of a memorandum of trust was obtained by fraud.
(b) The recording of the instrument in the office of the county recorder of the county in which the subject property is situated is constructive notice of the instrument to all persons, including without limitation, a subsequent purchaser in good faith or any other subsequent holder of an interest in the property, regardless of whether the instrument was recorded prior to, on, or after February 1, 2002.
(2) Division (B)(1) of this section does not affect any accrued substantive rights or vested rights that came into existence prior to February 1, 2002.
Please see the following OH statutes:
5301.48 Unbroken chain of title of record.
Any person having the legal capacity to own land in this state, who has an unbroken chain of title of record to any interest in land for forty years or more, has a marketable record title to such interest as defined in section 5301.47 of the Revised Code, subject to the matters stated in section 5301.49 of the Revised Code.
A person has such an unbroken chain of title when the official public records disclose a conveyance or other title transaction, of record not less than forty years at the time the marketability is to be determined, which said conveyance or other title transaction purports to create such interest, either in:
(A) The person claiming such interest; or
(B) Some other person from whom, by one or more conveyances or other title transactions of record, such purported interest has become vested in the person claiming such interest; with nothing appearing of record, in either case, purporting to divest such claimant of such purported interest.
5301.50 Interests prior to effective date of root of title.
Subject to the matters stated in section 5301.49 of the Revised Code, such record marketable title shall be held by its owner and shall be taken by any person dealing with the land free and clear of all interests, claims, or charges whatsoever, the existence of which depends upon any act, transaction, event, or omission that occurred prior to the effective date of the root of title. All such interests, claims, or charges, however denominated, whether legal or equitable, present or future, whether such interests, claims, or charges are asserted by a person sui juris or under a disability, whether such person is within or without the state, whether such person is natural or corporate, or is private or governmental, are hereby declared to be null and void.
5301.47 Marketable title definitions.
As used in sections 5301.47 to 5301.56, inclusive, of the Revised Code:
(A) “Marketable record title” means a title of record, as indicated in section 5301.48 of the Revised Code, which operates to extinguish such interests and claims, existing prior to the effective date of the root of title, as are stated in section 5301.50 of the Revised Code.
(B) “Records” includes probate and other official public records, as well as records in the office of the recorder of the county in which all or part of the land is situate.
(C) “Recording,” when applied to the official public records of the probate or other court, includes filing.
(D) “Person dealing with land” includes a purchaser of any estate or interest therein, a mortgagee, a levying or attaching creditor, a land contract vendee, or any other person seeking to acquire an estate or interest therein, or impose a lien thereon.
(E) “Root of title” means that conveyance or other title transaction in the chain of title of a person, purporting to create the interest claimed by such person, upon which he relies as a basis for the marketability of his title, and which was the most recent to be recorded as of a date forty years prior to the time when marketability is being determined. The effective date of the “root of title” is the date on which it is recorded.
(F) “Title transaction” means any transaction affecting title to any interest in land, including title by will or descent, title by tax deed, or by trustee’s, assignee’s, guardian’s, executor’s, administrator’s, or sheriff’s deed, or decree of any court, as well as warranty deed, quit claim deed, or mortgage.
5301.51 Preservation of interest in land.
(A) Any person claiming an interest in land may preserve and keep effective the interest by filing for record during the forty-year period immediately following the effective date of the root of title of the person whose record title would otherwise be marketable, a notice in compliance with section 5301.52 of the Revised Code. No disability or lack of knowledge of any kind on the part of anyone suspends the running of the forty-year period. The notice may be filed for record by the claimant or by any other person acting on behalf of any claimant who is:
(1) Under a disability;
(2) Unable to assert a claim on his own behalf; or
(3) One of a class, but whose identity cannot be established or is uncertain at the time of filing the notice of claim for record.
(B) If the same record owner of any possessory interest in land has been in possession of the land continuously for a period of forty years or more, during which period no title transaction with respect to such interest appears of record in his chain of title, and no notice has been filed by him on his behalf as provided in division (A) of this section, and such possession continues to the time when marketability is being determined, the period of possession is equivalent to the filing of the notice immediately preceding the termination of the forty-year period described in division (A) of this section.