Legal Question in Real Estate Law in California

Re: Grant deed

The first rule to remember and use is that a deed (assuming it is in proper form) does its work of transferring title when it is DELIVERED by the grantor to the grantee. Delivery is deemed to take place when effective custody and control passes to the grantee; in other words, delivery can be accomplished by delivery to the buyer/grantee or the grantee's agent, or even a stranger, if the intent of the grantor is that the deed be given to the grantee. Obviously, however, giving a deed to an escrow holder does not constitute delivery, because the intent is that title not pass until the close of escrow.

So, the answer to the question about whether the first-mentioned deed is valid is "yes, it appears to be valid, at least it is not rendered invalid by failure to record it at the time of execution and delivery."

HOWEVER, the law applicable to this kind of situation isn't that simple and the analysis of various parties' rights must go several steps further.

When deeds are left unrecorded, there is a possibility, maybe even a likelihood, that someone without knowledge of the deed will acquire an interest in the property adverse to the interest created by the unrecorded deed -- for example, a third party might buy the property from the former owner, or make the former owner a loan with the property as collateral, unaware that the former owner no longer has any rights in that property. Such third parties are known as "bona fide purchasers (or encumbrancers) without notice (of the prior unrecorded deed)" and their claims to or against the property may be superior to those of the prior grantee who failed timely to record.

Your question doesn't say what was conveyed by the grant deed, but from the balance of the first sentence of your question it looks as though maybe the deed conveyed a half interest. Then you speak of "one individual." It this individual one of the parties?

A delivered but unrecorded deed is effective as between the parties thereto and those with actual or constructive notice thereof. It is probably ineffective with respect to competing claims of a bona-fide purchaser (or encumbrancer) for value without notice.

Other issues an attorney would look for in analyzing a situation like this is the presence of fraud, probably a willful failure to disclose something that ought to have been disclosed. In general, someone who has acted honestly, openly and in good faith will almost always prevail against a player who has practiced deception.

If you want a further analysis, please contact me directly with a fuller and clearer set of facts, maybe using X, Y and Z to identify the players, and also explaining what each of the parties was trying to accomplish with all this deeding, dealing, and refinancing. Also please identify the interests deeded as "a tenancy in common between X and Y" or whatever.