[WSBARP] 2nd DOT invalid?

Wed Mar 30 07:58:00 PDT 2022

Thank you for that additional detail about the default.  I had thought 
the only issue was priority.

Quit claim deeds pick up after-acquired title, but AFAIK, SWDs do not.  
Perhaps case law (or a statute) on deeds could be applied to DOTs.  Of 
course it's really whatever the title company thinks

Kary L. Krismer

206 723-2148

On 3/29/2022 1:42 PM, Douglas Scott wrote:
> 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 <http://www.rainieradvocates.com/>
>
>
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> 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 2^nd 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 2^nd 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 2^nd 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 2^nd DOT understood what
>     the terms of the purchase price would be and that there would be a
>     1^st 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 2^nd
>     DOT, and that it was recorded nine days after the closing (and
>     presumably after recording of the 1^st 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 2^nd DOT
>     was executed.  I think the more interesting question is what would
>     have happened if the seller knew of the 2^nd DOT before closing? 
>     At the time of execution, the grantor under the 2^nd DOT had no
>     interest in the subject property, and could not have validly
>     recorded the 2^nd DOT.  So, does this knowledge kick in and put
>     the 2^nd 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 1^st 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 <http://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
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