Volume 10 Number 2

 

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Title Tips by Tute

Volume 10, Number 2

 

 Dear Tute:

 

Husband and wife own several properties out in the County.  In performing a title examination of one property, I discovered a deed of trust that appears to encumber one property, or maybe two, I can't tell.

The deed of trust has an exhibit attached, which describes the property by reference to a previously recorded deed and includes a tax account number ("certain property . . . . more particularly described in . . . DB 555 page 1212" . . . with parcel ID number 12345 . . . and includes a reference to a deed date and and a recording date).  The front page of the deed of trust states the property's street address and has (hand written) map parcel number 99-1A. 

The deed of trust was later modified, but the modification does not clear things up at all!  The attached exhibit describes the property by lot and block in a recorded subdivision, has the same street address, but states the map parcel number is 55G(5)-55. 

I looked up all the properties they own on the tax assessor's computer.  The property they acquired in DB 555 page 1212 doesn't match the street address on the front page of the deed of trust, but does match the typed parcel ID number and the handwritten map parcel number.  The lot and block described in the modification matches the street address in the original, the map parcel number given in the modification and the parcel ID number in the original.  There are other properties which don't match by address, tax parcel number, parcel ID number (and are not worth enough to secure the deed of trust)

How do I write it up?  Do I include it at all, and for which property?

                                                            - Befuddled

 

Dear Befuddled:

            This sounds like a game my children beat me up on all the time.  My answer is "Jane is wearing the yellow hat and Ruth is wearing the red sweater."  Seriously, there is nothing wrong with your eyes or your examination skills.  Full credit for your confusion goes to the drafter of the deed of trust and its modification.  I think you have come across what the litigators call a "patent ambiguity." 

 

            You definitely need to write it up.  You didn't indicate what sort of transaction you were involved in, but this should be cleared up before the parties take another step.  A "patent" ambiguity is one that is apparent from the document itself (as opposed to a "latent" ambiguity, which you don't discover until receiving information that is not in the document).  

 

            Tute is not going to suggest how the underwriters in your office should handle this.  But should I come across this title in the future, I would like to see a resolution something along the lines of the following two possibilities.  My first choice, vindictive though it might be, is for a new modification to be prepared to your satisfaction (preferably by whoever messed up the first two - and at no charge - even old dogs might learn when it costs them time or money), specifically pointing out the ambiguity arising from the multiple methods of describing a property, specifically stating the property intended to be encumbered, describing it fully and correctly, and releasing any claim to any other property of the borrower.  The more likely (and more economically efficient - though not nearly as psychically pleasing) is for the lender to record a certificate of partial satisfaction, releasing its lien against the "wrong" property.

 

            You may have noticed that I didn't say which property is the "right" one and which is the "wrong" one.  That's because you just can't tell (that's why it is an ambiguity), although I do think you narrowed the choice down to the two most likely candidates. One possibility you didn't mention is that this might have been a construction loan, and the deed of trust exceeds the value of the properties you rejected because proposed improvements will increase their value to a point exceeding the loan amount. 

 

            This suggests a future topic . . . how good does a description need to be . . . any interest?

 

                                                                        Tute 

 

 

Dear Readers:

            In between the multiple demands on my time last month (to my esteemed, benevolent and all-knowing corporate powers-that-be, what drop in order count?), Tute glanced over the last issue of the VLTA Examiner and was excited to see not just one, but two articles dealing with a very sticky problem - conveyances of the property of a deceased owner.  Walter Wilson's article Pews to Periwinkle - Part 2 contained a brief summary that said either the executor or the devisees could convey.  Bill Amrhein analyzed the judicial source of confusion in his article Yamada v. McLeod:  The Good, the Bad and the Ugly, but never quite mentioned what we were to do in the future.  Still on my reading list is the November 2003 issue of the Virginia State Bar Real Property Section newsletter, which had an article by Doug Dewing entitled Power of a Personal Representative to Sell Real Estate: What is a Settlement Attorney to Do in the Twenty-First Century?  Can I can just use the box at the end and not read the whole thing?  While all three authors are a lot smarter than I am, they just didn't help me figure out what to look for in the record room.

 

What do you look for?  How do you treat these sales?  If underwriting counsel were to quit being so "wishy-washy" and send out a bulletin for the title examiners, it would be helpful.  Maybe your counsel is better than mine.  Feel free to e-mail me at theunknowntitleexaminer@mail.com.  Title examiners aren't subject to those anti-trust laws that keep managers and counsel from talking to each other, are they?

 

                                                            Tute

 

 

 

 

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