2 different deeds recorded on same day...question - Posted by Steve

Real Estate Investing Bed & Breakfast
1

Posted by JohnBoy on June 08, 2004 at 10:32:23:

Why does it need resolved before the auction? If it goes to auction then it doesn’t matter. Everything gets wiped out.

What were your plans for this property? Were you planning to cure the default or pay off the lender to stop the foreclosure?

Is your state a race state to where the first recorded has priority over the second to be recorded? If so, then I don’t think you have anything to worry about. The deed the other investor recorded wouldn’t be valid. The seller had no right and no interest in the property to deed to someone else after they already deeded their interest away to someone else. Based on the chain of title recorded they had no property to deed to someone else.

I assume the other investors deed was notarized as well? Did you check to see the date his deed was notarized vs the date your deed was notarized? If yours is recorded first and if it was notarized first then you should be OK. What does your attorney say?

If his deed was notarized first then that may possibly create a problem. He may be able to prevail in court with that. But I don’t know for sure. You need to talk to your attorney and find out what the law is in your state pertaining to this matter.

2

2 different deeds recorded on same day…question - Posted by Steve

Posted by Steve on June 07, 2004 at 21:09:06:

Today I took title to a preforeclosure into a land trust. After getting my deed signed, witnessed and notarized I went down to the courthouse and recorded it. As I was finishing up with the recording another investor came in to record a deed from my seller to him. Obviously, my deed was recorded first and even though I told him it was already recorded, he still recorded his. The recording office let him go ahead and record it even though the deed he wass recording was from someone who no longer had any interest in the house.

So, there is about 40k equity in this property and it will go to auction in 3 weeks. Obviously, that is not enough time to decide this in court.At this point, no real money has exchanged hands with any parties involved (other than the $10.00 to make it legal).

So, is there anything I can do to save this deal? Is this legal? Any advice would be appreciated.

3

Take the test on Texas Deeds below… - Posted by JT-IN

Posted by JT-IN on June 08, 2004 at 19:37:11:

Steve:

I think that your answer to your situation lies below, in this quiz about TX Deeds and conveyance. The circumstances of You informing the other investor about your recorded Deed, prior to him recording, has great significance here…

Your biggest obstacle is whether or not you had a valid, bona fide purchaser, as indicated in questions 4, 7 & 9… Read up on this and it should be helpful to you and your specific situation.

JT

z: You Be the Judge:
Who Gets Title?
By Cindy Finley and Judon Fambrough
The December 1998 lead article in Letter of the Law is entitled “Deeds and Texas Recording Statutes.” The article describes the application of the race-notice statute used in Texas to protect bona fide or innocent purchasers. These are buyers who pay valuable consideration for the property and take title without notice of a third party?s claim to the property. “Race” refers to the competition (or race) to be first to record the deed correctly.
Based on the race-notice statute as described in the article, determine who gets the title in Texas. Select either Buyer No. 1 (B1) or Buyer No. 2 (B2).

  1. The seller conveys title to B1 via a warranty deed. B1 does not record the deed immediately, so the seller conveys the same property to B2 via a warranty deed. B2 is unaware of the prior conveyance at closing. B2 records the deed before B1.
    B1 B2
  2. Same facts except B2 becomes aware of the prior conveyance to B1 after closing but before recording the deed. B2 still records first.
    B1 B2
  3. Same facts except B1 learns of the second conveyance before B2 records the deed. B1 is able to beat B2 to the courthouse to record first.
    B1 B2
  4. The seller conveys title to B1 via a warranty deed. B1 does not record immediately, so the seller conveys the same property to B2 via a quitclaim deed. B2 records the deed before B1.
    B1 B2
  5. The seller conveys title to B1 via a warranty deed for full market value. B1 does not record immediately, so the seller conveys the same property to his sister (B2) via a gift deed without monetary consideration. B2 records the deed before B1.
    B1 B2
  6. The seller conveys title to B1 via a warranty deed. The property lies in two counties. B1 records in only one. The seller then conveys the property again to B2. B2 checks the records in the county where B1 did not record before buying. B2 then records the warranty deed after closing.
    B1 B2
  7. Seller conveys title to B1 via a warranty deed. B1 does not record the deed but moves on to the property. The seller then sells the property to B2 while B1 is in possession. B2 records the deed before B1.
    B1 B2
  8. Seller conveys title to B1 via a warranty deed. B1 records the deed but the county clerk indexes it incorrectly. The seller then sells the property to B2. B2 does a title search before buying but does not discover the prior conveyance due to the clerk?s error. B2 then records the deed after closing.
    B1 B2
  9. The seller conveys title to B1 via a special warranty deed. B1 does not record immediately, so the seller conveys the same land to B2 via a warranty deed. B2 is aware of the prior conveyance to B1 at closing. B2 records before B1.
    B1 B2

Quiz Answers: Who Gets Title?

  1. B2 wins. B2 was the first to record the deed without actual or constructive knowledge of a prior deed to the land.
  2. B2 wins again. The key is whether B2 had actual or constructive knowledge at closing. What transpires thereafter is irrelevant for purposes of the Texas Recording Statutes.
  3. B1 wins. B1 is the first to record the deed without actual or constructive knowledge of a prior deed. B1’s knowledge at closing is critical.
  4. B1 wins. Only bona fide purchasers are protected under Texas Recording Statutes. A bona fide purchaser must take title via a warranty deed, not a quitclaim. Because B2 took a quitclaim, B2 cannot be a bona fide purchaser.
  5. B1 wins. Again, a bona fide purchaser must pay fair market value and take title by warranty deed. A gift deed is without monetary consideration. Consequently, B2 is not a bona fide purchaser.
  6. B1 wins. To receive protection under Texas Recording Statutes, a purchaser must record the warranty deed in only one county in which the land lies. B1 met this minimum requirement.
  7. B1 wins. B2 is not a bona fide purchaser. Construction knowledge is imparted by someone other than the seller being in possession of the property. B2 should have visited the property before buying.
  8. B1 still wins. A recording error does not strip B1 of the protection of the Texas Recording Statutes.
  9. B1 wins. Any warranty deed, general or special, gives the buyer protection. B2 is not a bona fide purchaser because B2 was aware of the prior warranty deed to B1.
4

FAQ about Texas Deeds - Posted by JT-IN

Posted by JT-IN on June 08, 2004 at 19:09:51:

This verbage has come from a FAQ section about TX Deeds… It does not unequivically state that TX is “Race State”, but I would draw that conclusion, since this was written specifically about Q’s on TX Deeds… but the following information is NOT Waranted, but Quit Claimed to you…

Procedural Requirements

Name, Address, phone - The names of the grantor and the grantee should appear on the deed. The address and phone numbers are also usually included.

Recording or Filing Place -

Generally, deeds should be recorded in the county in which the real estate is located. Although generally a deed does not have to be recorded to be a valid conveyance, there are practical reasons for recording a deed. Deeds usually do not take effect as to creditors and subsequent purchasers without notice until the instrument is recorded. Thus, unrecorded deeds may be void as to all subsequent creditors and subsequent purchasers without notice until they are filed for record. Recording a deed places subsequent purchasers on constructive notice in that subsequent purchasers are deemed to have actual knowledge of any recorded instrument. Some states are “race-notice” states, which means that the first grantee without notice to record a deed to property will be protected against the interests of other grantees with unrecorded deeds to the same property.

Acceptance and Delivery -

Another element of a valid deed is that the deed must be delivered and accepted to be an effective conveyance. Most states assume delivery if the grantee is in possession of the deed. The deed also must be accepted by the grantee. This acceptance does not need to be shown in any formal way, but rather may be by any act, conduct or words showing an intention to accept such as recording the deed.

5

Recording Deed… - Posted by JT-IN

Posted by JT-IN on June 08, 2004 at 18:30:58:

Steve:

As far as you know, your Deed was recorded first. However, if the (previous) owner is willing to sign more than one deed, what is to say that he didn’t sign 3, 4, 5 or more of them…? So you were first as far as you know…

Since I’m not an Atty, and not familiar with Tx law, I’m unsure what will prevail here, whether it is time of recordation, like it is in many states, (called a race state), or time of execution…? You will have to determine what prevails on your own research, unless one of your Tx brothers chimes in here with the answer…

You have received some good advice so far as to having a search of the title completed… as well as possibly encumbering the property with another mtg… This could be a performance mortgage by your best friend, or a stated amount 2nd mtg… that absorbs the balance of the available equity.

The advice that you received that I am not fond of is to negotiate with the other investor. Personally, I think that this is weak… You simply need to find out if you have the legal standing here, and if you do, then ignore the other investor. If you don’t have legal standing, then you have nothing to talk about anyway; period… So you need to know that shortly after sun up tomorrow… either way.

The other wild card here is dependent on what you plan on, or are able to do to stop the foreclosure sale. If the answer is… you aren’t sure, at this late stage of the game, then I would question why you took the deed anyway. If you have a concrete plan on how to stop the sale, and an exit strategy, then good for you… Then all you need to do is figure out your legal standing here… Good luck, protect yourself, and land a nice deal… Let us know how it turns out… either way.

Just the way that I view things…

JT-IN

6

Re: 2 different deeds recorded on same day - Posted by Kristine-CA

Posted by Kristine-CA on June 07, 2004 at 23:37:31:

Just curious: did you get a signed contract in addition to the deed? Kristine

7

Re: 2 different deeds recorded on same day - Posted by Kristine-CA

Posted by Kristine-CA on June 07, 2004 at 23:32:48:

Just curious: did you get a signed contract in addition to the deed? Kristine

8

Re: 2 different deeds recorded on same day - Posted by Bryan (NC)

Posted by Bryan (NC) on June 07, 2004 at 23:15:01:

Sounds like the best bet would be to talk to the other investor. Find out what exactly he is expecting. Cut a deal with him if he can be reasoned with. You should probably get a lawyer before the other guy beats you to the best one in town. That seller sold one of you a bridge.

9

Re: 2 diff deeds recorded on same day…question - Posted by sptk

Posted by sptk on June 07, 2004 at 22:35:50:

Hmmm. Preforeclosure, $10 changed hands. All liens against the property are still in place. What’s going to be left over for you after the auction?

10

Re: 2 different deeds recorded on same day. - Posted by TKP, Houston

Posted by TKP, Houston on June 07, 2004 at 21:56:08:

Steve, Check the chain of title. A title company will do it for free, especially if you tell them that once you sell you will go through them. If you are comfortable with your position as the rightful owner you may also “slap” a 2. lien on the property. That may eliminate any equity for the other investor if he is trying to take over before the foreclosure. With 40K equity you may also try to buy out the other investor. Good luck! TKP, Houston

11

Re: Take the test on Texas Deeds below… - Posted by Chuck Rosenberg

Posted by Chuck Rosenberg on September 06, 2005 at 10:04:27:

wine storage system make wine wire wine rack tuscany wine tour home wine cellar wine country bed breakfasts leather wine carrier wine cellar racks red wine removal wine racks metal

12

Re: Take the test on Texas Deeds below… - Posted by Chuck Rosenberg

Posted by Chuck Rosenberg on September 06, 2005 at 10:04:10:

wine dispensing wine cellar plans wine making press membrane wine press wine rack plans strawberry wine deana carter leather wine carrier napa limousine wine tours red wine removal napa wine tours

13

Re: Take the test on Texas Deeds below… - Posted by Chuck Rosenberg

Posted by Chuck Rosenberg on September 06, 2005 at 10:02:47:

commercial wine racks iron wine wine country hotel wine cellar equipment napa limousine wine tours wine cellar storage iron wine lyrics wine country accommodations table wine racks wine storage scottsdale arizona

14

Re: Take the test on Texas Deeds below… - Posted by Chuck Rosenberg

Posted by Chuck Rosenberg on September 06, 2005 at 10:01:54:

custom wine cellars home wine cellars wood wine barrels wine cellar storage wine making press wine making press wall mounted wine racks basket wine press box wine wine refrigerators

15

Re: FAQ about Texas Deeds - Posted by Chuck Rosenberg

Posted by Chuck Rosenberg on September 05, 2005 at 04:29:19:

wine credenzas wine racks sale wine storage credenzas las vegas wine wire wine rack commercial wine racks las vegas wine shop monthly wine delivery wall wine racks wine rack design

16

Re: 2 different deeds recorded on same day - Posted by Steve

Posted by Steve on June 08, 2004 at 09:58:01:

yes

17

binoculars zoom - Posted by binoculars zoom

Posted by binoculars zoom on October 25, 2005 at 11:01:56:

minolta binoculars image stabilization binoculars eagle binoculars cheap binoculars rangefinder binoculars discount binoculars night vision binoculars simmons binoculars leupold binoculars barska binoculars

18

Re: 2 diff deeds recorded on same day…question - Posted by Steve

Posted by Steve on June 08, 2004 at 09:57:28:

uh…nothing. The point is that the $10 is needed to make it legal and the issue needs to be resolved prior to the auction.