I bought a week recently off ebay and the closing company screwed up by recording the deed incorrectly. The deed had originally been recorded just under the one person. That owner then got married but didn't bother getting the deed rerecorded to reflect the now married couple. They also didn't change their records with the resort's management company.
When I bought the unit, the closing company had both individuals sign the deed and actually recorded that way. However, then the managment company received the new deed, they said they couldn't transfer it to me because the spouse was listed on the new deed as the seller but really wasn't because he wasn't on the original deed.
My question is: wouldn't something like this have been caught on the estoppel letter? Also, isn't it standard practice for the closing company to get the original deed from the seller and then copy that info to the new deed?
You pose several question here that I can attempt to answer.
1. You can not just copy the names off the old deed for the very reason you listed. If the person got married the spouse in many states must join in on the deed, even if they were not originally listed. Has to do with selling what now can be considered marital property. So copying the old deed would have meant the spouse could have come back later and claimed partial ownership because he or she did not sign off. For those of you that buy title insurance that is the protection you get, for those that don't, the old owner that did not sign off just became your timesharing partner.
2. Just because someone gets married, does not mean they have to go out and correct deeds on all the properties they own. Most states look at the marital estate as what values were created during the marriage when they go their own ways later on down the road. So no, you are not required to record a new deed. Falls back to number 1 above.
The closing company actually did what they should have done, have the spouse join in on the deed out to you.
I would say, the management company does not understand how deeds are to be legally recorded. It would not be the first time I have heard that case. The rule of thumb for a closing company is 1 party can go on the deed, but it takes 2 to sell. That is how most states require the passage of the marital property. 1 on, 2 off.
You do not say what state all this took place in, but from my opinion and what I do as a closing company based on what attorneys in the states we do business in tell us their laws require, that is typically the requirement.
Florida does have some non-homestead language that can be added to a deed for 1 on 1 off cases, and timeshares typically qualify as non homestead, but the safest way to do the transaction even in Florida is 1 on 2 off.
I have seen cases where the seller husband had given the property to the ex-wife and before the court papers recorded sold his interest in what should now be the wife's property because it only required him to sign off on the deed as he was the only one listed as non homestead property. So 1 to buy, 2 to sell is usually the standard.
Thank the closing company for watching out for your interests and the management company needs to talk to an attorney that does real estate law, to understand what was done was correct.
For the record, I own a title company, I am not an attorney so the old caveat of seek the advise of an attorney in the state where the property is located surely applies.