Sandra is purchasing a home in Jefferson County, Colorado. During the title search, the examiner discovers a deed of trust recorded in 2015 that was never released, even though the seller claims the loan was paid off in 2019. The closing is scheduled for next week. What is the most appropriate course of action to clear this encumbrance from title before closing?
Correct Answer
B) Obtain a recorded release of deed of trust or a deed of reconveyance from the lender to be recorded before or at closing
Under Colorado recording law, a deed of trust that appears in the public record as an unreleased encumbrance clouds the title. To clear this lien, the lender must issue a release of deed of trust (also called a deed of reconveyance or release of lien), which must be recorded with the county clerk and recorder. Until a recorded release appears in the public record, the deed of trust remains a valid encumbrance against the property. Colorado title companies require a recorded release to issue a clear title insurance policy.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A freehold estate represents ownership of real property with an indefinite duration.
Joint tenancy is a form of co-ownership in which two or more persons hold equal, undivided interests in property with the right of survivorship. When one joint tenant dies, their interest automatically passes to the surviving joint tenants.
A leasehold estate grants the right to possess and use property for a defined period of time, without conferring ownership.
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