May 23, 2018

Land records of ownership extend, depending upon the state, to a multitude of federal, state and local government records repositories.

A. Recorder or Register of Deeds

1. Conveyances

Conveyances such as deeds, mortgages, easements by express grant, along with satisfactions of mortgage, restrictive covenants and affidavits, comprise the majority of instruments that are recorded in the office of the register of deeds or county recorder. However, there are many other instruments, a sampling of which includes:

•  Bankruptcy court orders to sell free and clear of liens

• Boundary agreements
• Civil forfeiture judgments in rem against property purchased with proceeds traceable to exchange of money for controlled substance (verified complaint by United States Attorney)
• Condominium declarations
• Declaratory judgments (judgments that quiet title)
• Development rights
• Disclaimers
• Divorce judgments
• Installment land contracts
• Land patents
• Leases
• Licenses
• Lis pendens
• Mineral claims
• Notices of bankruptcy
• Options to purchase
• Pledges not to encumber real estate
• Powers of attorney
• Partial releases of mortgage
• Resolutions authorizing conveyance by officer of corporation
• Resolutions discontinuing streets and alleys
• Spurious documents that purport to create property rights, or liens against public officials
• Subdivision plats
• Subordinations of mortgage
• Transfers on death
• Uniform Commercial Code financing statements
• Zoning ordinances

2. Federal tax liens

Notices of United States tax lien are filed in the office of the register of deeds or county recorder if the state enacted the Uniform Federal Lien Registration Act. (Exhibit 14) The county register is required by the Act to maintain an index listing the names of taxpayers in alphabetical order. Therefore, the federal lien index is distinctly separate from the public tract and alphabetical indexes in which conveyances are entered. For states that enacted the Act, federal liens that are filed in the office of the United States district court do not, except when the land is located in the county where the district court clerk is located, impart constructive notice of or create liens against the real estate of the debtor.

The Act also requires that the register file “other federal liens, if any act of congress or any regulation adopted under an act of congress requires or permits...” As a result, the index is also required to display liens, if any, filed by the United States Environmental Protection Agency under the Superfund Amendment of Authorization Act of 1986 (“SARA”) for costs authorized under the Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”) (42 U.S.C. §9601 et. seq.). (Exhibit 15) The index is also required to display liens filed by the United States Attorney pursuant to the Anti-Terrorism and Effective Death Penalty Act of 1996 [18 U.S.C. §3613(c)]. (Exhibit 16) The index is also required to display liens filed by the Pension Benefit Guaranty Corporation against an employer that fails to pay amounts owed to the corporation [29 U.S.C. §1368(a)]. Finally, the index is require to display federal judgments in favor of the United States pursuant to the Federal Debt Collection Procedures Act of 1990 (28 U.S.C. §3001-§3308).

Complicating the federal lien index is the fact that each of the different types of federal liens filed in the federal lien index, because they are governed by different statutes, has a distinctly different duration or time-bar. Federal tax liens generally expire ten years after date of assessment, but liens under the Anti-Terrorism and Effective Death Penalty Act of 1996 are valid for 20 years after the fine is imposed or the end of the person’s imprisonment, whichever is later.

The Internal Revenue Service also files federal tax liens with the central statewide registry for Uniform Commercial Code financing statements, typically the office of the secretary of state. However, the filing of a federal tax lien with the office of the secretary of state, in the absence of a filing of the federal tax lien in the county where the land is located, does not constitute a lien against the real property of the taxpayer.

B. Court Records

1. Judgment liens

Most states recognize judgment liens: A lien that attaches upon docketing with the court against all real property of the defendant in the county where the judgment was docketed. (Exhibit 17) Under the statute laws of most states, judgment liens extend only to lands within the jurisdiction of the court of the county: The lien does not attach to real estate of the debtor in an adjoining county unless a transcript of judgment is filed in that county.

2. Statutory liens

Many states recognize any number of statutory liens, including mechanics’ and materialman’s liens (known in some states as construction liens), child support liens, and state tax liens. A public lien docket where a compilation of lien information is found is typically mandated by statute. Some statutory liens are required by statute to display the property description of the debtor’s real estate. (Exhibit 18) It is important to remember that the filing in and of itself of a lien does not necessarily mean that the lien is valid. (Exhibit 19) The lien docket is a compilation of all liens filed only in a single county but, in the case of certain types of liens, have statewide

impact on debtors: The entry of a lien in the statewide docket constitutes the establishment of a lien against all property of the debtor in the state, regardless which county the debtor’s land is located.

3. State and local court proceedings

Any number of civil actions filed in the court of the county may affect the title of a party to the action, and the court, by virtue of its subject matter jurisdiction, may ultimately divest the interest of a party and award the real estate to another.

Depending upon the state, such actions may include:

• Construction lien or mechanic’s lien foreclosure
• Declaratory judgment action (Quieting title to real estate)
• Divorce
• Execution
• Foreclosure of installment land contract
• Guardianship
• Mortgage foreclosure
• Partition
• Probate
• Receivership
• Specific performance of executory contract to purchase real estate
• Tax foreclosure
• Vacation of public street

Access to court proceedings are of particular importance to those who purchase real estate from a party who has acquired title through the administration of the estate of a decedent, through a divorce proceeding, or who in a state where foreclosures are by judicial proceeding, consummated the foreclosure of a mortgage. Without access to court case files that contain pleadings, judgments and orders of the court, it is not possible for the title examiner to verify whether the claim of the plaintiff was properly pled, whether service of process occurred, and what the judgment of the court provided by way of relief. For example, in a foreclosure action, without examining the court case file, it may not have been apparent that the holder of a subordinate mortgage was not named a party defendant, leaving the subordinate lienholder with rights that survive the foreclosure, and which therefore cloud the title. (Exhibit 20)

4. United States district court

In counties in which a United States (federal) district court is located, some states provide that the filing of a judgment in the office of the federal district court constitutes a lien against the land of the defendant in the county. As a result, prospective purchasers must search for and examine the docket of the federal district court in addition to the docket of the state court for that county. In the event that a notice of an action or lis pendens that pertains to an action in federal district court was filed in the public land records, the case file for the federal district court proceeding must be examined for the purpose of ascertaining the status of the action. Actions that affect title to real estate include mortgage foreclosure actions, actions for civil forfeiture, and eminent domain proceedings. Access to federal court actions may, depending upon when the action was filed, be accessible via the federal court website, http://pacer.psc.uscourts.gov/, known as PACER. The PACER Service Center is the federal judiciary's centralized registration, billing, and technical support center for electronic access to U.S. District, Bankruptcy, and Appellate court records.

Unfortunately, PACER provides access to only those cases filed in recent years. Older cases require that the user travel to the clerk or request a case file from a federal archive warehouse, a process that may take several weeks. Some federal court case files have been destroyed or lost and are no longer accessible to the parties interested in the proceeding.

Example:

June 5, 1952: A residential subdivision is created that is accompanied by restrictive covenants providing for single-family use, setback lines of a minimum distance of 25 feet from the street, and other provisions.

May 2, 1955: The United States commences an action in federal district court to condemn land for a new U. S. military air base.

Later, a judgment is entered vesting title in the United States and divesting all private landowners.

August 10, 2006: The United States closes the air base and enters into an agreement to sell the real estate to a private developer. The clerk of federal district court indicates that the case file for the 1955 condemnation proceeding is missing. The restrictive covenants, if enforceable, will interfere with the development of the site.

In this example, the restrictive covenants were not time-barred under state law. Because the case file that would have revealed the complaint brought to condemn the land was purged or is missing, it is not possible to know whether all parties having a right to enforce the restrictive covenants retain a right to enforce them as against the developer seeking to purchase the land from the United States. The only way to obtain protection against these rights is for the developer to commence an action in state court to declare the restrictive covenants void, or to obtain title insurance from a title insurer willing to assume the risk of a future action to enforce the restrictive covenants against the developer.

5. United States bankruptcy court

Bankruptcy case information for bankruptcy proceedings filed in recent years is accessible via the federal court web site, http://pacer.psc.uscourts.gov/, known as PACER. However, older bankruptcy case information may require the records user to contact the clerk of bankruptcy court to request retrieval of the case file from the federal archive location. On occasion, the owner of real estate has filed a petition for bankruptcy in United States bankruptcy court, which is located in a county other than that where the land is located. Unless a notice of bankruptcy is filed in the local land records, or the prospective transferee has actual knowledge of a pending bankruptcy, the bankruptcy proceeding of the prospective transferor does not impart notice to the prospective transferee. Under 11 U.S.C. §549(c), the bankruptcy trustee may avoid post-petition transfers, but only if the transferee was (1) not a good faith purchaser, (2) with knowledge of the commencement of the case, (3) did not pay fair equivalent value or (4) a copy or notice of the petition was filed in the office of the public land records. (Exhibit 21) However, in the event that the land of the debtor is located in the same county in which the United States bankruptcy court where the debtor’s petition was filed is located, a question arises: Is the bankruptcy petition in and of itself constructive notice on prospective purchasers? The answer varies with the state and will depend upon whether the laws of the state provide that the filing of the bankruptcy petition constitutes constructive notice.

C. Corporations and Business Entities

Articles of incorporation of corporations and articles of organization of limited liability companies (LLC’s) are available from the office of the secretary of state of the state where the company was organized. Many states provide access on-line to certain information, such as the status and filing dates, though it may not be possible in all cases to view the company’s documents on-line.

In some states, by operation of law the filing of mortgages and deeds of trust in a central statewide registry imparts constructive notice of such instruments to prospective purchasers of certain types of real property as though the instrument were recorded in the office of the county register of deeds. Real property of railroads and public utilities are examples of such properties.

D. Zoning

Though zoning ordinances or portions thereof are occasionally recorded in the public land records, in most instances a separate investigation of the ordinances and regulations must be made with the zoning authority before any conclusions can be drawn concerning the current ordinances and land regulations. Units of government that have power under state law to enact zoning ordinances may include any number of towns, villages, cities, counties, and state departments. Thus, information about current ordinances, variances and non-conforming uses must be procured from the administrators of each of the units of government having authority to enact ordinances. The zoning administrator may conceivably provide general zoning information by correspondence. (Exhibit 22) In contrast to public land records of ownership, where state statutes govern records format and hours of public access, zoning ordinance information is non-uniform both in content and accessibility. Securing authentic zoning documents from among a broad spectrum of local government offices, where public access and custodial control is variable, requires persistence and proper planning on the part of the user.