land record documents

Validation of Defective Documents Recorded on the Land Records

Can Land Records Documents be Valid if Defective?

The land records of a town or county contain the relevant documents in regards to land ownership in the that location. Whenever buying or selling property, a title search must be performed to make sure the seller is giving the buyer clean title. Sometimes during these searches, attorneys come across documents that are defective, or missing something require by Connecticut law to make that document effective. One of the common areas where we have seen this is when individual attempt to create or manage their on trusts, but it happens in other situations as well.

The good news is, Connecticut General Statute 47-36aa can validate certain defects in recorded documents, as long as those documents were recorded 2 or more years earlier and have not yet been challenged in court.

What Kind of Defective Documents Can Be Validated?

CGS 47-36aa, known as the Validating Act, can cure defects in a multitude of common land records documents. The documents which can be validated if defective include:

  • Deeds
  • Mortgages
  • Powers of Attorney
  • Releases
  • Notices of Lease
  • other documents affecting real estate

What Kind of Document Defects Can Be Cured?

When searching land records, it is not simply enough that the document is there. Documents must be drafted in a specific manner, contain specific information, must be executed via specific procedures and be recorded in a specific manner; all of which is regulated by Connecticut law. While it is impossible to go over every type of defect that can occur in land record documents, here are the types of defects that can be cured by the Validating Act:

  • defective or non-existent acknowledgement (the person signing the document did it wrong or forgot to do it)
  • lack of a witness or witnesses
  • missing, incorrect or conflicting dates
  • where a business or trust entity is the grantor, but an individual signs the document in their individual capacity
  • where a business or trust entity is the grantor, but an individual signs without disclosing their authority to sign
  • a document signed under a power of attorney, but signed without referencing the power
  • if a document is signed under a power of attorney which is effective but not recorded until after
  • a document transferring property to a recipient who does not have the legal capacity to hold interest in real estate

What Kind of Defects CAN NOT be Cured?

The validating act does not cure any and all defects in documents that have been recorded yet unchallenged for 2 or more years. The following defects are NOT cured by the Validating Act and therefore make their documents invalid:

  • errors in or missing property description
  • errors in the names of relevant parties
  • Incorrect references in deeds, mortgages and releases (to other land record documents)
  • documents not signed by the original signature of the grantor
  • unrecorded or missing documents
  • defects in foreclosure proceedings
  • gaps in chain of title

How Do You Stop Defective Documents from Being Validated?

If you want to make sure that a defective land records document is not cured and validated, you must challenge the document by bringing a court action and recording a lis pendens within 2 years of the document being recorded.

What is the CFPB Closing Disclosure Addendum to Real Estate Purchase & Sale Contract

What is the CFPB Addendum and Why is it Necessary?

The CFPB Closing Disclosure addendum is a document that is often attached to standard form real estate purchase and sales contracts after October 1, 2015. It became necessary because the CFPB, the Consumer Financial Protection Bureau, passed TRID, TILA RESPA Integrated Disclosures, a law that changed the settlement practices for real estate purchases and sales.

The purpose of the CFPB Addendum is to set forth the respective responsibilities of Buyer and Seller, and to specify the consequences of failure to comply.

How does the CFPB Addendum modify the Real Estate Purchase and Sale Agreement?

Due to the strict requirements of TRID, lenders for Buyers have strict time line requirements. Since they have to have the Closing Disclosure acknowledged by the Buyer at least 3 business days before closing, most Lenders are requesting final figures from all parties 10 days and sometimes even 14 days before closing.

The CFPB Addendum contains terms that:

  1. Make parties aware that CFPB regulations of the Lender may cause delays ;
  2. Make parties aware that any delay in getting the Lender figures may result in financial hardship for the other party, and lists the information that must provided to the Lender;
  3. Waive any “time is of the essence” requirements in the contract;
  4. Seller to provide figures 10 days before closing or waive their right to collect the adjustments;
  5. Address discrepancies in real estate adjustment figures;
  6. Seller agrees to meet Buyer requirements for any discovered condition issues during walk through;
  7. Waive any Seller damages that may result from Closing Disclosure acknowledgement delays.

It should be noted that the CFPB Addendum is heavily in favor of the Buyer and drafted against the Seller. It protects the Buyer from Seller delays and Protects the Buyer from Lender delays, however, it places the burden of Buyer or Lender delays on the Seller without compensation.

ct real estate title law

2016 Connecticut Law Changes How A Trust Handles Real Estate

Trusts and Real Estate Conveyance

Trusts can be used for a variety of purposes in estate and wealth planning. A common use for a Trust is to hold real estate property. Whether holding the real estate is the sole purpose of the Trust, or just one of the assets with which the Trust is funded, the real estate must be conveyed into the Trust, and one day the property may be sold and will need to be conveyed out of the Trust to a Buyer.

The Current Law for Conveying Real Estate into a Trust

Currently, the law regulating transfers of real estate property into a Trust holds that a Deed conveying real estate to a Trust directly does not convey good title because a Trust does not have the capacity to hold title to land. In order to properly convey title the Deed must name the Trustee of the Trust as the “Grantee”, or individual receiving the property. The idea here being that the Trustee is holding and caring for the property on behalf of the Trust.

If the property is in fact conveyed to a Trust directly, it is not validated until 2 years have passed without issue.

When it came time to transfer the property out of the Trust, once again the Trustee would be needed, but it is in fact the Trustee who is holding the property.

New Law Takes Effect October 1, 2016

Coming into effect this October is Public Act 16-194 which changes the procedure for transferring real estate property into a Trust. The Act reads:

“Any conveyance of an interest in land to a trust rather than the trustee or trustees of the trust shall constitute a valid and enforceable transfer of that interest. Any conveyance by the trust, which conveyance is signed by a duly authorized trustee of such trust, shall be treated as if the conveyance was made by the trustee.”

The new law should resolve any confusion or problem when transferring property into or out of a trust by allowing the trust, and therefore any trustee, to convey the real estate.