County Refuses Perfectly Okay Filing... Again.

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County Refuses Perfectly Okay Filing... Again.
by Robert Franco | 2008/01/04 |

In May, I wrote about a transfer on death deed that was void because it purported to only transfer an undivided one-half interest and the grantor actually held title to the entire interest (see Avoid The Use Of The Transfer On Death Deed). I mentioned that the deed was void and in a follow-up comment, I indicated that the attorney for the estate was going to have the property added as a newly discovered asset. That should have taken care of the problem, however, we still had a challenge ahead of us.

Unfortunately, the county had accepted the void transfer on death deed and transferred the property in their records. When the attorney transferred the property out of the estate, he prepared the certificate of transfer directly from the decedent to our new buyers. Because the county showed the decedent's two children in title, they would not accept the certificate of transfer.

I tried to explain to them that the transfer on death deed was void and it was as if it never happened. Thus, our new certificate of transfer was sufficient to transfer the property to the buyer. They asked me how they were supposed to know that? Further, they said, "how would the next title company know that?" I told her it was easy enough for us to figure out that the transfer was void - anyone else looking at the title should recognize that as well. Still, she insisted that she needed something that "told her that the deed was void." Apparently the Ohio Revised Code was not enough.

Ohio Revised Code section 5302.22 (B) states in part:

Any person who, under the Revised Code or the common law of this state, owns real property or any interest in real property as a sole owner or as a tenant in common may create an interest in the real property transferable on death by executing and recording a deed as provided in this section conveying the person's entire, separate interest in the real property to one or more individuals, including the grantor, and designating one or more other persons, identified in the deed by name, as transfer on death beneficiaries.

Our deed and mortgage were not able to be filed until we obtained quit-claim deeds from the decedent's children to the new buyer. Of course, the quit-claim deeds had no legal effect - they only served to appease the county officials. We got it done, but it delayed our filing by a couple of weeks because the grantors lived in different states.

My question is, shouldn't the county officials know enough about the transfer of real property to understand that title isn't necessarily vested as they show in their records? I can understand them not recognizing the first deed was void when they accepted it. However, once the problem is explained and documents are present to correct it, shouldn't they accept them for recording? Holding up the recording of perfectly valid documents to satisfy their own desire to obtain ineffectual deeds that make their records "look nice" could have disastrous consequences if an intervening lien cropped up.

Source of Title Blog ::

Yesterday, we had a similar problem in another county. This time, it is a sheriff's deed that was refused. Apparently, the owner, who was being foreclosed on, transferred the property after the foreclosure was filed. Because the county showed a different owner in their records, they will not accept the sheriff's deed.

On February 9, 2007 a foreclosure was filed against John and Jane Doe. Service was perfected on February 26, 2007 and lis pendens prevented anyone from subsequently acquiring any interest in the property. On March 7, 2007 John and Jane Doe transferred the property to Bob and Sally Smith. There was an updated judicial report filed on April 16, 2007 at which time the attorneys for the bank became aware of the transfer to the Smiths. There was a note on the docket which stated "Attorney said to follow through with the sale and that the new owners would then take title."

I assume from the facts that there was no fraudulent intent. The Smiths are most likely supposed to take title after the bank reacquires the property. Furthermore, the attorneys evidently determined that lis pendens applied and there was no need to include the Smiths as defendants in the case. Thus, the sheriff's deed makes no mention of the Smiths and purports to transfer the title from the Does to the foreclosing bank.

The county refused the Sheriff's Deed because "they [the Does] do not own the property." Again, the county has a skewed view of ownership. Just because they show the Smiths as the record owners does not mean that they are the legal owners. If it were only that simple, title abstracting really could be automated. But, there are several cases where the operation of law conflicts with the recorded documents that still requires a knowledgeable and experienced abstractor to review all of the documents to determine when all is not as it seems. These are two recent examples our office has come across... and I'm sure there have been more.

My point here is two-fold. First, the county officials really should have a better understanding of real property law. Perhaps they should be required to have some continuing education to ensure that they have the proper skills to carry out their duties. They have more than a mere data-entry responsibility to their county's residents when it comes to their role in the facilitation of real estate transfers.

Second, we still have a great need for knowledgeable, experienced title abstractors who understand the complexities of conveyancing and real property law. The computer doesn't tell you everything you need to know. You must objectively weigh all of the information derived from the public records to make determinations of their effect on title when the data conflicts. Without that added expertise, abstractors really would be unnecessary in the modern world of electronic information.

Robert A. Franco
SOURCE OF TITLE
rfranco@sourceoftitle.com

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Categories: Abstractors, Foreclosures, Public Officials, Title Problems

1391 words | 4021 views | 7 comments | log in or register to post a comment

	When have the county officials been...
	When have the county officials been able to practice law? Isn't that what they are doing here. In my experience, the county could not refuse to accept a document, except for when it did not conform to their filing requirements. Usually a return address, font size, etc. They would even accept if the document was not notarized or at times didn't have a legal. How many times have we found problems that were actually caused by the county? I understand the county trying to keep their tax records accuate, but not excepting a sheiffs deed---a court issued document? It seems that the county officials are either trying to be attornys or they don't care at all. And as always we are stuck in the middle
	by Wanda Steudel \| 2008/01/04 \| log in or register to post a reply

	I agree. It's not their place. Th...
	I agree. It's not their place. They should have legal counsel who will remind them of their role.
	by Diane Cipa, General Manager, The Closing Specialists® \| 2008/01/04 \| log in or register to post a reply

	I agree too. Unless the clerk/reco...
	I agree too. Unless the clerk/recorder is operating under the Torrens system, which vests title, and purports to guarantee it, the recorder/clerk's role is that of custodian of the records. Nothing more, nothing less. I say this, of course, without knowledge of the recording laws in most states. So I could be wrong. It seems to me that when the recorder's employees interfere with the process in the way Robert describes, it affects race statutes, notice statutes, and race-notice statutes, in a potentially perilous way. It does not seem to me that the Ohio recorder's employees should be making these determinations at all.
	by Pat Scott \| 2008/01/04 \| log in or register to post a reply

	My examiners encounter indexing iss...
	My examiners encounter indexing issues on a daily basis. Maybe if the county officials spent more time on their actual job there would be less indexing errors.
	by Shane Kane - TitleSuccess.com \| 2008/01/04 \| log in or register to post a reply

	In Ohio, the county prosecutor's of...
	In Ohio, the county prosecutor's office has the authority to advise the auditor, recorder and their employees regarding acceptance of documents for filing. As a recent transplant into the prosecutor's office from the real estate title insurance business, I would suggest you politely ask the recorder to get a legal opinion from the prosecutor's office before they refuse to file a document.
	by Janice \| 2008/01/07 \| log in or register to post a reply

	We have only once utilized the pros...
	We have only once utilized the prosecutors office to help us get a recording on record. They were very helpful, however, the county officials didn't appreciate it very much. We try not to resort to that, but occasionally it is necessary. This filing was for a recording service client. When I called them to explain the problem, they had to call their client. I assumed they, a large foreclosure law firm, would call the county and take care of it. To my surprise they just asked us to send it back. I'm sure it will sit on someone's desk for a while and we will eventually get it back.
	by Robert Franco \| 2008/01/08 \| log in or register to post a reply

	I'm sure it will, too. You'll prob...
	I'm sure it will, too. You'll probably be dealing with it in a few years when the property is in foreclosure again.
	by Janice \| 2008/01/08 \| log in or register to post a reply

Source of Title Blog

Robert A. Franco The focus of this blog will be on sharing my thoughts and concerns related to the small title agents and abstractors. The industry has changed dramatically over the past ten years and I believe that we are just seeing the beginning. As the evolution continues, what will become of the many small independent title professionals who have long been the cornerstone of the industry?

Robert A. Franco
SOURCE OF TITLE

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