For MtnWizard
Below is an exaggerated record of events that transpired on a foreclosure that I was following. My question to you is, “what exactly did the third party bidder buy”?
RECORD OF EVENTS
1. On January 15, 1999 a grant deed was recorded and John became owner of real property located in Los Angeles.
2. On May 1, 2005 John irrevocably granted 100% legal and equitable title to his real property, to Ted as trustee of his (John’s) trust, subject to his right to reclaim the real property in 10 years. Even though notarized, the trust transfer grant deed conveying said real property wasn’t recorded.
3. On October 5, 2005 after entering a normal real estate transaction and for valuable consideration, John grant deeded the real property to Bill.
4. On the same day, as security for the performance of obligations created in a promissory note which he had signed, Bill subsequently executed a deed of trust in favor of ABC Bank.
5. On October 31, 2005 both the grant deed from John to Bill and the deed of trust from Bill to ABC bank were recorded.
6. On July 18, 2006 Ted as trustee of John’s trust recorded the trust transfer grant deed he received from John back on May 1, 2005.
7. On August 11, 2006 Bill recorded a quitclaim deed, conveying all right, title, interest and claim to the real property, which he held, to Ted as trustee of John’s trust, making sure to attach a copy of John’s earlier recorded trust transfer grant deed to Ted as trustee of his trust, as an exhibit.
8. On November 1, 2006 which was several months after Bill had defaulted on his obligations under his promissory note and after ABC Bank had complied with all statutory laws regarding California’s non-judicial foreclosure process, the real property was purportedly sold to a successful third party bidder at a pubic auction.
9. On November 10, 2006, the successful third party bidder recorded his trustee’s deed upon sale in an effort to perfect title.
10. On November 16, 2006 for valuable consideration, Ted as trustee of John’s trust, recorded a document which purportedly granted Jim a 5 year option to buy John’s reversionary interest in the real property.
11. On November 16, 2006 Ted as trustee of John’s trust, executed then subsequently recorded a deed of trust in favor of Jim as security for the performance of the obligations created in he and Jim’s option agreement.
My question again, what exactly did the third party bidder buy?
1. If on May 1, 2005 John irrevocably granted 100% legal and equitable title to Ted even though the transfer wasn’t recorded, how was it possible for the third party bidder to buy the subject property if John lacked the authority to grant deed the property to Bill on October 5, 2005 in the first place?
2. Although the transfer to the trust wasn’t recorded right away it did happen and was valid. However I believe that John is guilty of attempting to sell property that he owned which he lacked the authority to transfer.
I have been to lots of auctions and have bought properties where the previous owner tried to cloud the title in various ways,
I stand by my post.
[addsig]
Bargain76,
Since John lacked the authority to transfer the property to Bill, what exactly do you believe Bill purchased? What do you think ABC encumbered?
MtnWizard,
Since on November 10, 2006, the successful third party bidder recorded his trustee’s deed, thereby extinguishing the deed of trust, how is it possible that the 5 –year option granted on November 16, 2006 violated the due on sale clause?