[WSBARP] 2nd DOT invalid?

[Douglas Scott]

I appreciate your thoughts.  In clarification, the client seller had no
knowledge of the 2nd DOT.  Buyer defaulted in payments and said he'd Deed
In Lieu the commercial property back to the client.  But when the title was
searched, the client found the $440,000 2nd DOT.  Client would rather not
foreclose.  There was no language in the 2nd DOT about it being signed
before the closing but filed thereafter.
*DOUGLAS W. SCOTT*
Rainier Legal Advocates|LLC

465 Rainier Blvd. N., Suite C
Issaquah, Washington 98027
425.392.8550 (tel)
425.392.2829 (fax)



www.rainieradvocates.com


Notice: This communication, including attachments, may contain information
that is confidential and protected by the attorney/client or other
privileges. It constitutes non-public information intended to be conveyed
only to the designated recipient(s). If the reader or recipient of this
communication is not the intended recipient, an employee or agent of the
intended recipient who is responsible for delivering it to the intended
recipient, or you believe that you have received this communication in
error, please notify the sender immediately by return e-mail and promptly
delete this e-mail, including attachments without reading or saving them in
any manner. The unauthorized use, dissemination, distribution, or
reproduction of this e-mail, including attachments, is prohibited and may
be unlawful. Receipt by anyone other than the intended recipient(s) is not
a waiver of any attorney/client or other privilege


On Tue, Mar 29, 2022 at 12:46 PM David R. Ambrose <drambrose at ambroselaw.com>
wrote:

> To the collective:
>
>
>
> 1.  As to the direct question, I am not aware of any Washington law which
> would render the 2nd DOT invalid if executed before the grantor even held
> title to the subject property.  There could certainly be language in the 2
> nd DOT and presumably some promissory note which provided that the 2nd
> DOT would be recorded on the subject property if and when the grantor
> acquired ownership of the subject property.  And even if there wasn’t any
> such language, as the 2nd DOT wasn’t recorded until after the
> grantor/buyer acquired ownership of the subject property, it wasn’t a lien
> or cloud on title against the seller’s property.  Query whether the
> beneficiary under the 2nd DOT understood what the terms of the purchase
> price would be and that there would be a 1st DOT in favor of the seller?
>
>
>
> 2.  Doesn’t sound like there is a priority issue, assuming the facts as
> stated that the seller didn’t know of the executed 2nd DOT, and that it
> was recorded nine days after the closing (and presumably after recording of
> the 1st DOT.  This would technically satisfy the race/notice provision of
> RCW 65.08.070, and it’s irrelevant from that standpoint as to when the 2nd
> DOT was executed.  I think the more interesting question is what would have
> happened if the seller knew of the 2nd DOT before closing?  At the time
> of execution, the grantor under the 2nd DOT had no interest in the
> subject property, and could not have validly recorded the 2nd DOT.  So,
> does this knowledge kick in and put the 2nd DOT effectively in first
> position, if the seller went ahead and just closed and recorded the
> seller’s deed, followed immediately by the recording of the 1st DOT?  Of
> course, if the seller had notice, presumably the seller would never have
> closed on the sale without addressing this issue.
>
>
>
> Best,
>
>
>
> David Ambrose
>
> drambrose at ambroselaw.com
>
>
>
>
>
> *From:* wsbarp-bounces at lists.wsbarppt.com <
> wsbarp-bounces at lists.wsbarppt.com> *On Behalf Of *Kary Krismer
> *Sent:* Tuesday, March 29, 2022 11:49 AM
> *To:* wsbarp at lists.wsbarppt.com
> *Subject:* Re: [WSBARP] 2nd DOT invalid?
>
>
>
> Assuming no knowledge of the 2nd DOT, wouldn't client be a BFP and thus
> take clear of the 2nd DOT?  If that's not the purpose of recording
> statutes, I don't know what is.
>
> Did client have title insurance?  If so, that would cover the DOT even if
> it recorded a couple of hours or days before the deed.
>
> Kary L. Krismer
>
> 206 723-2148
>
> On 3/29/2022 11:41 AM, Douglas Scott wrote:
>
> Client sells property to buyer securing the substantial balance of the
> payments by a 1st DOT.  Unknown to the client, 2 months before the sale,
> the buyer had signed a 2nd DOT which buyer then recorded 9 days after the
> sale closed.  Would executing the 2nd DOT 2 months before the buyer even
> bought the property render the 2nd DOT invalid?
>
>
> *DOUGLAS W. SCOTT*
>
> Rainier Legal Advocates|LLC
>
>
>
> 465 Rainier Blvd. N., Suite C
>
> Issaquah, Washington 98027
>
> 425.392.8550 (tel)
>
> 425.392.2829 (fax)
>
>
>
>
>
>
>
> www.rainieradvocates.com
>
>
>
>
>
> Notice: This communication, including attachments, may contain
> information that is confidential and protected by the attorney/client or
> other privileges. It constitutes non-public information intended to be
> conveyed only to the designated recipient(s). If the reader or recipient of
> this communication is not the intended recipient, an employee or agent of
> the intended recipient who is responsible for delivering it to the intended
> recipient, or you believe that you have received this communication in
> error, please notify the sender immediately by return e-mail and promptly
> delete this e-mail, including attachments without reading or saving them in
> any manner. The unauthorized use, dissemination, distribution, or
> reproduction of this e-mail, including attachments, is prohibited and may
> be unlawful. Receipt by anyone other than the intended recipient(s) is not
> a waiver of any attorney/client or other privilege
>
>
>
> ***Disclaimer: Please note that RPPT listserv participation is not restricted to practicing attorneys and may include non-practicing attorneys, law students, professionals working in related fields, and others.***
>
>
>
> _______________________________________________
>
> WSBARP mailing list
>
> WSBARP at lists.wsbarppt.com
>
> http://mailman.fsr.com/mailman/listinfo/wsbarp
>
> ***Disclaimer: Please note that RPPT listserv participation is not
> restricted to practicing attorneys and may include non-practicing
> attorneys, law students, professionals working in related fields, and
> others.***
>
> _______________________________________________
> WSBARP mailing list
> WSBARP at lists.wsbarppt.com
> http://mailman.fsr.com/mailman/listinfo/wsbarp
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20220329/d87d577a/attachment.html>