Opinions on This Convoluted Situation? - Posted by Hawkeye
Posted by Hawkeye on January 10, 2007 at 15:24:49:
This question is based on a situation I am observing. However, it does not affect me personally. So, I just want whatever free insights I can get.
In 1980 an individual with clear ownership to a piece of land granted title (warranty deed) for that land to non-profit (non-taxable) Corporation A. There were no unusual restrictions on the future use of the land. Corporation A had clear, un-clouded title to the land. This deed was recorded at the county Registrar of Deeds.
In 1985 non-profit Corporation A granted title via Quit Claim Deed to non-profit (non-taxable) Corporation B. The land was to be used by Corporation B for a specified community purpose. Special conditions, ?running with the land,? were that Corporation B put the property to the specified use within 3 years; and if Corporation B did not use it as specified, or if Corporation B should dissolve, then title would revert to Corporation A. This deed was recorded at the Registrar of Deeds.
The land was not used for the purpose specified, and Corporation B was dissolved in 1995.
Between 1995 and 2006 everybody forgot about the land because it was in an undeveloped area and nobody had a use for it. And, since it was owned by a tax-exempt entity (either Corporation A or Corporation B) there were no property taxes to be paid.
Now, in 2007, the property has become valuable because of development near it.
Complication: There is some belief (but no one is sure) that Corporations A and B may have jointly deeded the property to the city in which it is located and removed the restrictions ?running with the land? that were imposed when Corporation A granted title to Corporation B. However, nothing is on record at the county Registrar of Deeds.
If the deed to the city does exist, is valid, found and registered before Corporation A can establish clear title, then the city clearly owns the land.
However, suppose the city does not even know about this possibility.
Disregarding concerns with ethics of the situation:
Question 1: How would Corporation A re-establish clear title to the property in order to sell it to a willing buyer?
Question 2: Suppose Corporation A establishes apparently clear title to the property, registers whatever document provides the clear title, and then sells it. However, the city does later find a valid, but unregistered deed from 1993. Can the city then assert a valid claim for the land? Or, has their failure to register the deed before Corporation A re-established clear title basically resulted in the city forfeiting all claims on the land?