Incorrect Tax Deed Recording – Subverting the Hassle

Taking the right measures at the time of the sale can prevent headaches. 

Improper tax deed vesting (the legal assignment of title and ownership of a property) is a common mistake. Scenarios can include everything from invalid LLC’s to misspelled names. Take a few minutes to save yourself thousands of dollars in legal fees and months of time by getting this right from the start.

First, if the clerk issues a wrongly assigned deed due to their error, then you can likely amend this with a corrective deed. 

A mistake by the clerk on a recorded tax deed is referred to as a scrivener’s error. Some examples include:

• Errors in the legal description of the property.

• Misspelling or incomplete name of the tax deed purchaser.

If the error was your own, then the Clerk will inform you that they cannot change it. A misspelling of your company name on a tax deed can be a major problem. It means the tax deed is invalid, as the LLC on the document does not exist as a registered business entity.

There are three ways you can overcome this problem in order of ease:

• Try and persuade the Clerk of Courts to issue and record a corrective tax deed (which fixes a problem in an already recorded Deed, but which does not create a new interest) in the county in which the incorrect tax deed was recorded.

• Consult with your title agent and their affiliate underwriter to see if you can file and record an affidavit (known as a “One and the Same Affidavit”) in the county of record in order to resolve the title issue. As this document is correcting an already recorded document in official records, its construction and wording is better handled by an attorney.

• File a declaratory judgment order against the Clerk of the Court in order to have a judge rule upon correcting the tax deed in your favor.

Make sure you carefully check and read each recorded tax deed you buy so you can discover any mistakes or scrivener’s errors early.  Don’t delay in seeking to get the errors rectified, as the error will only get in the way of you being able to quickly sell the property.

More complicated situations can arise from incorrectly recorded deeds. If you’re vesting a property in the name of an entity such as your LLC or trust, be doubly sure that you’re using the same entity name as is registered with their respective state. Moreover, check that the entity is valid and current with registration at time of vesting.

Similarly, if you’re purchasing the property via quit claim deed, be sure that the selling entity is valid with its respective state (Sunbiz records cover Florida) at the time of sale. Even further, make sure that this is the same entity that bought it in the transaction prior.

When bidding online, make sure that the name given on your account is exactly that of the entity in which you’d like to vest the property, and include the state of incorporation.  For example, you should register as “ABC Tax Deed Investment Company, a Florida Corporation” or “ABC Tax Deed Investments, LLC, a Delaware limited liability company”. The winning bidder will have this name automatically applied to the deed, so be prepared in advance.

Perhaps the most complex scenario is a deed recorded to another existing entity (maybe just one letter different than your own)! If there is an error, you may need to file a quiet title action or declaratory action to put the property back into your correct entity name. If the other entity is not amicable about relinquishing interest, this can become a more drawn out legal battle.

Again, make sure you’re approaching every vesting cautiously so that you don’t wind up in trouble because of a simple oversight. Double checking at the time of sale can prevent delays and additional expenses later.