Sunday 21 December 2014

A deed transferring property was signed by the grantor in the presence of notary on March 1, 2013 however, the deed conveying that property...

Question

A deed transferring property was signed by the grantor in the presence of notary on March 1, 2013; however, the deed conveying that property to the grantor was not signed until March 2, 2013, which means the property did not belong to the grantor on March 1 when he signed the deed. It is true that it does not matter the date the grantor signed it, but instead the date that the deed is recorded with the register of deeds in court?



Answer

First of all, you are mixing up some issues.

If the deed is a grant deed, then the grantor is estopped from denying that he had title on March 1, 2013, because a grant deed contains a warranty of title. Thus any title subsequently gained by the grantor inures to the benefit of his grantee, because that grantor warranted that he had title. The result is different with a quitclaim deed, which may not pass title at all if the grantor does not have it.

Deeds don't get recorded with the courts, they get recorded with the County Recorder. A deed does not have to be recorded to be valid, it only has to be delivered. Recording creates a presumption of validity, and recording is important to put third parties on notice.



Answer

The question "does it matter" must be qualified with "to whom for what reason." As Mr. Roach notes, recording is relevant to third-parties who do not have notice of the unrecorded deeds until they are recorded. This affects things like liens and debt. For example if a judgment lien is recorded against the original owner after the deeds were signed but before they were recorded, the lien would still attach to the property. If the lien is recorded after the deeds it would not attach. But if someone makes a loan to the original owner secured by a deed of trust, knowing about the unrecorded deeds, even if the deed of trust is recorded before the deeds it is not effective because the lender knew of the prior unrecorded deeds.

I also disagree in part with Mr. Roach about quitclaim vs grant deeds in this situation. If the middle grantee/grantor never acquired title, the final grantee could sue for breach of warranty of title if the original grantor, or the middle grantee/grantor disputed title and the middle grantee/grantor had given a grant deed. That would not be true if it was a quitclaim deed. So I agree that far. However, it makes no difference if it was a grant deed or a quitclaim deed to whether the final grantee now owns the property. The doctrine of after-acquired title says that if a grantor does not have the title he or she gives to a grantee, at the time the deed is given (recording being irrelevant to this rule) but later acquires the title that was previously given, then the final grantee's title is perfected and they become the owner immediately upon the grantor receiving the title that was granted forward. So the March 2 deed perfected the grant of title in the March 1 deed and the grantee in the March 1 deed actually came into ownership on March 2, regardless of when anything was recorded.



Answer

I agree with Mr. McCormick. In your case, the after-acquired property rule governs and the March 1 grantee got good title, but on March 2nd.



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