This is an inherent feature of the real property recording system. Only a small minority of jurisdictions use the Torrens system for real estate. In the recording system, anyone can file anything. Filing a false instrument is a felony. But nobody is going to stop you from filing anything. The county recorder doesn’t really have a duty to investigate the authenticity of what gets filed. Obviously there is a duty to not allow knowingly fraudulent instruments to be filed. But that line isn’t black and white either.
The registration system used in 99% of the country is merely for notice. Just because there is some recorded deed showing you own a given piece of property is no guarantee you actually do. One has to “effectively” record, and that means that you have to acquire your interest via all sorts of rules involving prior chain of title. Some states have statutes that real property must have a conveyance deed filed in order to lawfully have title. But that is a more recent phenomena…historically it has not been so. It is possible to have title but not have recorded the conveyance.
This is how massive money laundering in the luxury real estate world happens. Numerous transfers over time to alter ego shell companies without recording the deed at ever increasing purchase prices. Prior entity has “clean” real estate profits after each transaction. It is also why real estate in certain areas appreciates at absurd rates…they are driving that price sky high in endemic level laundering. It would shock the shit out of you all how much this is done here.
Torrens, on the other hand, is like a registration system. One applies to convey a property to someone else. Instead of a deed, you get “title.” Government basically manages that. If they give you “title” that property is yours in 999/1000 instances.
Every deed registry in the country is vulnerable to fraudulent filings. So what Fontes said isn’t really meaningful. Like for example: Say Hobbs did file a deed of trust on her house from a company that didn’t exist. It isn’t the recorder’s duty to determine this before filing it. Nor after filing it. If they had to do this, it would take months to file; this would be highly problematic for purposes of “constructive knowledge” of various title conditions and subsequent conveyances. Such a delay in the current framework would lead to making it really easy to (1) sell the property to multiple separate buyers at the same time; (2) get simultaneous multiple mortgages without the banks finding out when title searching; and (3) create virtually uninsurable broken chains of title on various exploited real estate.
Edit: If you want to find malfeasance, go thru the grantor/grantee index and look for conveyances where the grantor is not the same as the prior conveyance grantee. This indicates a break in the chain of continuous title and is a huge enormous red flag for laundering. It is far more likely than not said property has some laundering connection.
Or put another way, when searching the grantor/grantee index, look for properties where the seller conveying the property to the latest buyer is not the same name as the last buyer on the prior conveyance. This name, if chain is unbroken, should be the exact same. The newest sale seller name should be the prior sale’s buyer name. If they don’t match, either (1) the latest conveyance is bogus, and that seller has no rights to sell; or (2) there are prior unrecorded conveyances indicating probable fraud/laundering.
This is an inherent feature of the real property recording system. Only a small minority of jurisdictions use the Torrens system for real estate. In the recording system, anyone can file anything. Filing a false instrument is a felony. But nobody is going to stop you from filing anything. The county recorder doesn’t really have a duty to investigate the authenticity of what gets filed. Obviously there is a duty to not allow knowingly fraudulent instruments to be filed. But that line isn’t black and white either.
The registration system used in 99% of the country is merely for notice. Just because there is some recorded deed showing you own a given piece of property is no guarantee you actually do. One has to “effectively” record, and that means that you have to acquire your interest via all sorts of rules involving prior chain of title. Some states have statutes that real property must have a conveyance deed filed in order to lawfully have title. But that is a more recent phenomena…historically it has not been so. It is possible to have title but not have recorded the conveyance.
This is how massive money laundering in the luxury real estate world happens. Numerous transfers over time to alter ego shell companies without recording the dead at ever increasing purchase prices. Prior entity has “clean” real estate profits after each transaction. It is also why real estate in certain areas appreciates at absurd rates…they are driving that price sky high in endemic level laundering. It would shock the shit out of you all how much this is done here.
Torrens, on the other hand, is like a registration system. One applies to convey a property to someone else. Instead of a deed, you get “title.” Government basically manages that. If they give you “title” that property is yours in 999/1000 instances.
Every deed registry in the country is vulnerable to fraudulent filings. So what Fontes said isn’t really meaningful. Like for example: Say Hobbs did file a deed of trust on her house from a company that didn’t exist. It isn’t the recorder’s duty to determine this before filing it. Nor after filing it. If they had to do this, it would take months to file; this would be highly problematic for purposes of “constructive knowledge” of various title conditions and subsequent conveyances. Such a delay in the current framework would lead to making it really easy to (1) sell the property to multiple separate buyers at the same time; (2) get simultaneous multiple mortgages without the banks finding out when title searching; and (3) create virtually uninsurable broken chains of title on various exploited real estate.
Edit: If you want to find malfeasance, go thru the grantor/grantee index and look for conveyances where the grantor is not the same as the prior conveyance grantee. This indicates a break in the chain of continuous title and is a huge enormous red flag for laundering. It is far more likely than not said property has some laundering connection.
Or put another way, when searching the grantor/grantee index, look for properties where the seller conveying the property to the latest buyer is not the same name as the last buyer on the prior conveyance. This name, if chain is unbroken, should be the exact same. The newest sale seller name should be the prior sale’s buyer name. If they don’t match, either (1) the latest conveyance is bogus, and that seller has no rights to sell; or (2) there are prior unrecorded conveyances indicating probable fraud/laundering.
This is an inherent feature of the real property recording system. Only a small minority of jurisdictions use the Torrens system for real estate. In the recording system, anyone can file anything. Filing a false instrument is a felony. But nobody is going to stop you from filing anything. The county recorder doesn’t really have a duty to investigate the authenticity of what gets filed. Obviously there is a duty to not allow knowingly fraudulent instruments to be filed. But that line isn’t black and white either.
The registration system used in 99% of the country is merely for notice. Just because there is some recorded deed showing you own a given piece of property is no guarantee you actually do. One has to “effectively” record, and that means that you have to acquire your interest via all sorts of rules involving prior chain of title. Some states have statutes that real property must have a conveyance deed filed in order to lawfully have title. But that is a more recent phenomena…historically it has not been so. It is possible to have title but not have recorded the conveyance.
This is how massive money laundering in the luxury real estate world happens. Numerous transfers over time to alter ego shell companies without recording the dead at ever increasing purchase prices. Prior entity has “clean” real estate profits after each transaction. It is also why real estate in certain areas appreciates at absurd rates…they are driving that price sky high in endemic level laundering. It would shock the shit out of you all how much this is done here.
Torrens, on the other hand, is like a registration system. One applies to convey a property to someone else. Instead of a deed, you get “title.” Government basically manages that. If they give you “title” that property is yours in 999/1000 instances.
Every deed registry in the country is vulnerable to fraudulent filings. So what Fontes said isn’t really meaningful. Like for example: Say Hobbs did file a deed of trust on her house from a company that didn’t exist. It isn’t the recorder’s duty to determine this before filing it. Nor after filing it. If they had to do this, it would take months to file