Legal Question in Real Estate Law in California

Re: Does Civil Code 1217 Legitimize Unrecorded Deed?

The deed is valid. You should have it notarized (the signature acknowledged before a notary) and have it recorded. Whether or not the transaction can be set aside as a transfer in fraud of creditors is a complex factual question. Should you file bankruptcy in the future, it can only be set aside by a creditor if it was transfered within one year (I believe - it could be six months) of filing.

You should contact an attorney and consult on this since you need to discuss issues which should be discussed with the benefit of attorney/client privilege.

Re: Does Civil Code 1217 Legitimize Unrecorded Deed?

You can still record the deed. Just because you are being sued does not effort a transfer as long as it it note a fraudulent transfer to avoid creditors. I will provide you with free consulatiaon concernig the law suit.

Re: Does Civil Code 1217 Legitimize Unrecorded Deed?

The main obstacle to recording the deed is not the lawsuit, it is the lack of notarization. Have the deed notarized; then, if it is otherwise in proper form it can be recorded.

A copuple of other pieces of information may be useful:

First, the primary reason for recording a deed is not to validate the deed, but to give the rest of the world legally-effective notice that the deed exists. As Civil Code section 1217 suggests, persons who do not have knowledge of a deed may not be bound by the legal effects the deed was intended to cause. For example, a subseqent bona-fide purchaser for value may have superior rights to the property over your mother, who received it via an unrecorded gift deed. Thus your mother would not be protected if you were to sell the house to a stranger for full value.....the stranger could probably evict your mother, notwithstanding the deed. There are other scenarios as well where the holder of an unrecorded deed is unprotected, and one of those could be against your creditors claiming a fraudulent transfer.

So, that brings me to the second thing. A transfer of property may be fraudulent as to third-party creditors if the transferor is insolvent just before, or as a consequence of, a transfer where the transferee does not pay a realistic price. Even a properly-recorded deed can be set aside and voided to allow a creditor to reach the asset if it was transferred under circumstances deemed fraudulent under the California Uniform Fraudulent Transfer Act, Civil Code sections 3439 et seq.