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<p>Thank you for that additional detail about the default. I had
thought the only issue was priority.<br>
</p>
<p>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</p>
<p>Kary L. Krismer</p>
<p>206 723-2148<br>
</p>
<div class="moz-cite-prefix">On 3/29/2022 1:42 PM, Douglas Scott
wrote:<br>
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<div dir="ltr">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. <br clear="all">
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<div dir="ltr" class="gmail_attr">On Tue, Mar 29, 2022 at 12:46
PM David R. Ambrose <<a
href="mailto:drambrose@ambroselaw.com"
moz-do-not-send="true" class="moz-txt-link-freetext">drambrose@ambroselaw.com</a>>
wrote:<br>
</div>
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0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex">
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<div class="gmail-m_-3740762690433407494WordSection1">
<p class="MsoNormal">To the collective:</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">1. As to the direct question, I am
not aware of any Washington law which would render the 2<sup>nd</sup>
DOT invalid if executed before the grantor even held
title to the subject property. There could certainly be
language in the 2<sup>nd</sup> DOT and presumably some
promissory note which provided that the 2<sup>nd</sup>
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<sup>nd</sup> 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<sup>nd</sup> DOT understood what the terms of the
purchase price would be and that there would be a 1<sup>st</sup>
DOT in favor of the seller?</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">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<sup>nd</sup> DOT,
and that it was recorded nine days after the closing
(and presumably after recording of the 1<sup>st</sup>
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<sup>nd</sup> DOT was
executed. I think the more interesting question is what
would have happened if the seller knew of the 2<sup>nd</sup>
DOT before closing? At the time of execution, the
grantor under the 2<sup>nd</sup> DOT had no interest in
the subject property, and could not have validly
recorded the 2<sup>nd</sup> DOT. So, does this
knowledge kick in and put the 2<sup>nd</sup> 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<sup>st</sup> DOT?
Of course, if the seller had notice, presumably the
seller would never have closed on the sale without
addressing this issue. </p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Best,</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">David Ambrose</p>
<p class="MsoNormal"><a
href="mailto:drambrose@ambroselaw.com" target="_blank"
moz-do-not-send="true" class="moz-txt-link-freetext">drambrose@ambroselaw.com</a></p>
<p class="MsoNormal"> </p>
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<div
style="border-right:none;border-bottom:none;border-left:none;border-top:1pt
solid rgb(225,225,225);padding:3pt 0in 0in">
<p class="MsoNormal"><b>From:</b> <a
href="mailto:wsbarp-bounces@lists.wsbarppt.com"
target="_blank" moz-do-not-send="true"
class="moz-txt-link-freetext">wsbarp-bounces@lists.wsbarppt.com</a>
<<a
href="mailto:wsbarp-bounces@lists.wsbarppt.com"
target="_blank" moz-do-not-send="true"
class="moz-txt-link-freetext">wsbarp-bounces@lists.wsbarppt.com</a>>
<b>On Behalf Of </b>Kary Krismer<br>
<b>Sent:</b> Tuesday, March 29, 2022 11:49 AM<br>
<b>To:</b> <a
href="mailto:wsbarp@lists.wsbarppt.com"
target="_blank" moz-do-not-send="true"
class="moz-txt-link-freetext">wsbarp@lists.wsbarppt.com</a><br>
<b>Subject:</b> Re: [WSBARP] 2nd DOT invalid?</p>
</div>
</div>
<p class="MsoNormal"> </p>
<p>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.</p>
<p>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.</p>
<pre>Kary L. Krismer</pre>
<pre>206 723-2148</pre>
<div>
<p class="MsoNormal">On 3/29/2022 11:41 AM, Douglas
Scott wrote:</p>
</div>
<blockquote style="margin-top:5pt;margin-bottom:5pt">
<div>
<p class="MsoNormal">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?
</p>
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<p class="MsoNormal"><b><span
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W. SCOTT</span></b><span
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<p class="MsoNormal"><span
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