An unrecorded deed is when the title to a property, usually real estate, has not been registered with the local records department. This can create a number of issues, particularly for the seller and buyer. Although an unrecorded deed can be valid, it is not seen as a perfect document since it is not simple to track the transfer of title when a deed is unrecorded.

Unrecorded deeds offer the seller a certain degree of anonymity, as they are not required to list all details of the deed publicly. However, they also present risks and unknowns to the buyer, such as the possibility that the title might not be clear. The buyer of a property with an unrecorded deed may be unaware of any legal issues or liens on the property, which could affect its value or the buyer’s ability to obtain financing.

In addition, an unrecorded deed does not guarantee clear title to the buyer. This means that if a dispute about the ownership of the property arises later, the buyer may or may not have the ability to prove his or her rights with the unrecorded deed. Therefore, it is important for the buyer to thoroughly vet the seller, the deed itself, and the property before purchasing.

Apart from the risks listed above, the buyer of property with an unrecorded deed also risks having to pay property taxes on the property even if they are not the legal owner of the property. If the deed is not registered with the local tax assessor’s office, the tax assessor may send out a tax bill based on the individual in the record as the owner of the property. To avoid paying taxes on property they do not own, a buyer should ensure that the deed is registered with the local records department and the proper taxes get paid.

Overall, when dealing with an unrecorded deed, buyers should always proceed with caution and be aware of all of the potential legal consequences that may arise.