Statute of Frauds – Page 2 – Joseph William Singer

Forged acknowledgment in recorded deed means that it does not transfer title

October 12, 2015 / Real Estate Transactions, Statute of Frauds

In a dispute between a brother and sister over ownership of the family home, the sister contended that a deed from her mother to her should prevail over an earlier deed from her mother to the brother because she was never made aware of the earlier deed and because the acknowledgment on the deed was forged. An acknowledgment is a notarized statement that the grantor personally signed the deed. In this instance, the grantor (the mother) had not personally signed the deed in the notary’s presence. The acknowledgment was therefore defective. The court held in Allen v. Allen, 16 N.E.3d 1078 (Mass. App. Ct. 2014), that state statute prohibited such a deed from providing constructive notice to a later purchaser. Thus the sister’s property claim prevailed over that of the brother.

Developer stopped from converting golf course into housing by implied servitude arising out of marketing the golf course as an amenity for nearby homes previously sold by the developer

October 12, 2015 / Easements, Servitudes, Statute of Frauds, Title Issues

A developer marketed homes as being next to a golf course with the golf course noted on sales material and the recorded plat. When the developer later tried to convert the golf course into residential lots, the homeowners sued, claiming an implied servitude. Despite the lack of any express covenant in the deeds, the court found the presence of the golf course with the designation as a “golf course” to be sufficient to find the property restricted to golf course purposes. Riverview Cmty. Grp. v. Spencer & Livingston, 337 P.3d 1076 (Wash. 2014). Similar cases include Agua Fria Save the Open Space Ass’n v. Rowe, 255 P.3d 390 (N.M. 2011); Reagan v. Brissey, 844 N.E.2d 672 (Mass. 2006).

No statute of limitations bars a claim to set aside a forged deed and subsequent mortgage

October 12, 2015 / Adverse Possession, Consumer Protection, Mortgages, Real Estate Transactions, Statute of Frauds, Title Issues

The New York Court of Appeals had reaffirmed the traditional rule that forged deeds do not convey title. It has clarified that no statute of limitations bars a challenge to a forged deed even if the purported owner has subsequently transferred interests in the land to a subsequent mortgagee who had no notice of the forgery. Faison v. Lewis, 32 N.E.3d 400 (N.Y. 2015). The Court ruled that the third party purchaser is not a “bona fide” purchaser protected by the recording act because a forged deed can never be the basis of a valid transfer even if the third party did not know and could not have known about the forgery. To do otherwise would allow the forger to “steal” property and get away with it.

Third Circuit supports MERS, holds that Pa. law does not require mortgage transfers to be recorded to be valid

August 11, 2015 / Mortgages, Real Estate Transactions, Statute of Frauds, Title Issues

Pennsylvania statutes have language that might have been interpreted to require transfers of interests in land (through deeds or mortgages) to be recorded to be valid. If true, that would have undermined the MERS system of mortgage registration. But the Third Circuit gave MERS a win and interpreted Pennsylvania law to recognize mortgage transfers at the moment they are signed; recording is not required for the transfer of the property interest to be valid but is simply for the convenience of the parties and subsequent conveyees. The case, Montgomery Cty. v. MERSCORP, Inc, 2015 U.S. App. LEXIS 13482 (3d Cir. 2015), is another win for MERS among the federal Circuit Courts in a series of cases that challenged its business model. The result of the case, as with other MERS-registered mortgages, is that there is no longer a public record of mortgage transfers since those records appear, if at all, on the …

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Express easement is permanent even if created out of necessity and the necessity ends

July 21, 2015 / Easements, Servitudes, Statute of Frauds

The Montana Supreme Court has affirmed a traditional rule of property law that express easements are presumed to be permanent even if they are created for reasons that later cease to exist. In this case, the easement was originally necessary to link the property to a public road. When such easements are not created expressly, courts imply them over remaining land of the grantor to ensure that properties do not become landlocked. Such easements traditionally last as long as the necessity lasts. Express easements however are permanent even if created to link a landlocked parcel to a public road and the necessity ends because another means of access (over land of a stranger to the title) becomes available. Woods v. Shannon, 344 P.3d 413, 2015 MT 8 (Mont. 2015).

Robo-signing mortgage servicer may have violated state false document statute

July 10, 2014 / Consumer Protection, Mortgages, Real Estate Transactions, Statute of Frauds, Title Issues

The Ninth Circuit held that a mortgage servicer that allegedly engaged in robo-signing may well have violated an Arizona statute, Ariz. Rev. Stat. § 33-420, that criminalizes filing false property title documents with the state recording offices. In re Mortg. Electronic Registrations Systems, Inc (Robinson v. Am. Home Mortg. Serv. Inc.), 2014 WL 2611314, 2 014 U.S. App. LEXIS 10934 (9th Cir. 2014). There was evidence that trustee’s sale documents were notarized in blank and signed later by a person other than the one who was supposed to sign the document. Such signings were also done in bulk (robo-signing) and because not signed by the correct person were forged. In addition, notaries are supposed to witness the signature not notarize a blank document before any signature appears. The case is notable because the servicer was MERS (Mortgage Electronic Registration Systems, Inc.). Judge William Fletcher engaged in a detailed discussion about the advantages …

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Mortgage can be equitably reformed because of mutual mistake

July 10, 2014 / Mortgages, Real Estate Transactions, Statute of Frauds

In a classic application of a traditional doctrine of contract law, the Massachusetts Land Court allowed a mortgage document to be reformed because of mutual mistake. Citibank, N.A. v. Heywood, 2014 WL 2158409 (Mass. Land Ct. 2014). While courts are very reluctant to amend written property documents or contracts because of unilateral mistake, it is standard practice to ignore the written terms of the agreement, despite the statute of frauds, when the evidence shows that it does not reflect the intent of both parties. The court noted that [A] court acting under general principles of equity jurisprudence has broad power to reform, rescind, or cancel written instruments, including mortgages, on grounds such as fraud, mistake, accident, or illegality” as long as the mistake was mutual.

Easement can be narrowed by servient estate owner

February 17, 2014 / Easements, Servitudes, Statute of Frauds, Title Issues

The Massachusetts Supreme Judicial Court ruled in Martin v. Simmons Props., Inc., 2014 WL 128537 (Mass. 2014), that the servient estate owner is entitled to narrow an easement as long as this does not interfere with the uses for which the easement was initially created. The court applied the traditional rule that easements are encumbrances on land and to be construed narrowly. At the same time, the touchstone was the intention of the parties that created the easement, determined both by the language in the easement and the circumstances at the time of creation of the easement. Because the documents and plan creating the easement did not specify an exact width of the easement or require that it be kept open through its full extent, the easement owner was entitled only to such use as was needed to afford access to the dominant estate. The court also reaffirmed the traditional rule that …

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No mandatory duty to record titles or mortgages so no evasion of law by MERS

November 27, 2013 / Mortgages, Real Estate Transactions, Statute of Frauds, Title Issues

Several lawsuits have been in progress arguing that MERS violated state recording statutes by not recording mortgage assignments and thus cheating recording offices out of fees they otherwise would have earned. Interpreting Illinois law, the Seventh Circuit rejected that claim as have other courts that addressed the issue. Union County v. MERSCORP, Inc., 2013 WL 6017394 (7th Cir. 2013) (applying Ill. law). The court explained that Illinois law agrees with almost all other states in providing a voluntary recording system that is intended to protect those who record; that system does not require property transactions to be recorded for them to be valid. It merely protects bona fide purchasers from prior claims against which they had no notice

Court rules that designated open space on plat is insufficient to establish an easement absent proof the developer induced buyers to purchase in reliance on promises of open space

May 19, 2012 / Consumer Protection, Easements, Estates and Future Interests, Real Estate Transactions, Statute of Frauds

Disagreeing with the ruling of the Massachusetts Supreme Judicial Court in Reagan v. Brissey, 844 N.E.2d 672 (Mass. 2006), an appeals court in New Mexico held that open space designated on a recorded plat is not sufficient to create an easement of access by owners of lots on the map in the absence of evidence the developer made representations to buyers inducing them to buy in reliance on promises those lots would remain open. The mere presence of open space on the map was insufficient to prevent the developer from selling that open space for development purposes. Agua Fria Save The Open Space Ass’n v. Rowe, 255 P.3d 390 (N.M. 2011)