Determining Ownership Within Boundary Disputes Part IV: Litigating Unrecorded Land Claims

This blog post is Part IV in a series of blog posts discussing the determination of ownership in boundary disputes.  Part I discussed the different claims and elements of claims that may be asserted in a boundary dispute action.  Part II discussed the different types of information that can be used to prove or disprove ownership in a boundary dispute action.  Part III discussed the determination of ownership of water or land abutting bodies of water.  The focus of this blog post focuses on determining ownership with unrecorded land claims.

The general rule is that all transfers of real property must be established in writing, usually through a deed that is subsequently recorded in the public records of the county in which the property is located.  The very purpose of recording deed transfers is to protect the rights of subsequent bona fide purchasers.  However, the simple reality is that practitioners oftentimes face issues when there is a written document that was never recorded or issues with the exceptions to the writing requirement, including divorce/family transfers, descendent/intestate succession, adverse possession, estoppel, boundary by acquiescence, and boundary by agreement.  Each of these successions in titles will be discussed below.

Unrecorded Instruments

Although most of the discussion in this blog post discusses the exceptions to the writing requirement, when there is no presence of a deed, there are instances in which a deed was completed but not recorded.  The reasons for not recording a deed range from a desire to put off paying the taxes on the outstanding mortgage, the simple forgetfulness or lack of knowledge as to a recording requirement, or some other reason.  Regardless of the reason for failure to record, unrecorded deeds present an issue when one deed is recorded and the individual with the unrecorded deeds attempts to record their deed.

The general rule in Florida is first in time, first in right, such that the first person to record the deed before any other deed has title to the property and subsequent grantees have no claim to title.  There is of course an exception when a subsequent bona fide purchaser records a deed.  A subsequent purchaser without notice of the unrecorded deed will prevail as the owner.  However, the purchaser is no longer considered a bona fide purchaser if he/she has notice of the unrecorded deed.  There are three types of notice that a claimant may use to establish that the purchaser was not a bona fide purchaser: actual notice; constructive notice; and implied notice.  Actual notice is direct knowledge of the existence of the unrecorded deed.  Constructive notice is the ability to discover the unrecorded deed by an examination of the public records.  Implied notice is where a person has the means of learning of the interest through further investigation and an ordinary purchaser would conduct such an investigation.  If a claimant establishes that the purchaser had notice, the claimant may prevail.

Similarly to a deed, a judgment creditor who records a lien without notice of an unrecorded instrument affecting title of the debtor is entitled to priority over the instruments represented in the unrecorded instrument.

Divorce/Family Transfers

Under Florida law, spouses can hold property as joint tenants, tenants in common, tenants by the entirety, or individually.  Property acquired by an independent spouse during marriage is generally owned and titled to that spouse, unless otherwise designated.  However, an “estate by the entireties” is unique to marriage and creates a conveyance to both spouses when no language is otherwise expressly stated.  An estate by the entirety is only severable through death, divorce, mutual agreement, or conveyance from one spouse to the other spouse.

Although property may be jointly owned, Florida adopted the equitable distribution doctrine in 1988.  This doctrine allows the allocation of spouses’ property rights at dissolution—regardless of the property’s prior title.  Thus, even property that had been titled solely in one spouse’s name during marriage may be equitably divided by a court.

The final judgment of dissolution sets forth each person’s interest and functions as an instrument of transfer, conveyance, release, or acquisition.  In dissolutions involving estates by the entirety, each spouse becomes a tenant in common with an equal, undivided property interest.  This interest, although not conveyed through writing, transfers property rights through the dissolution of marriage.  Disputes about a property that is owned by spouses may arise when the creditor of one spouse attempts to take the house as collateral.

Descendent/Intestate Succession

When a person dies without a will that person is considered “intestate” and his/her property is conveyed by law to his/her subsequent heirs.  The heirs immediately receive their vested interest in any property owned by the decedent at the time the decedent dies.  However, expectancy of inheritance before the intestate person dies is not an interest in any property; any potential interest in an inheritance merely gives rise to standing to challenge actions that could affect the rights of inheritance.  The vesting act is the death of the decedent, which automatically vests title of the property to the heirs.  Note, however, the personal representative is granted possession of the property upon death and during the probate proceedings as the normal process is for the estate to go through the probate process to ensure the rightful heirs.  After an heir receives an interest, the heir may transfer his/her interest to a third party.  In order to protect subsequent third party purchasers, the purchaser takes a title of real property free from claims of the estate and incurs no personal liability to the estate—whether the distribution was proper, or not.

Adverse Possession

Adverse possession allows an individual to acquire legal title without a written transfer if the statutory requirements are fulfilled.  In that instance, the title passes the moment the statutory requirements are met, although marketability is dependent upon acquiring quiet title.  Thus, in an action for quiet title, the claimant would be required to every element of adverse possession, with certainty.  However, courts do not favor the acquisition of property by adverse possession, and indeed require clear and convincing evidence that statutory requirements have been met, which is a higher burden of proof than is typically required in civil actions.  For an extensive discussion on the claim for adverse possession and the elements required, refer to Part I of this series.

Estoppel

Equitable estoppel may allow for the transfer of title without a written instrument by virtue of a party’s conduct; however, like adverse possession, courts impose a difficult standard to meet to satisfy a requisite showing of estoppel in boundary dispute cases.  Based upon Florida case law, estoppel may be available only where the claimant asserts adverse possession with color of title and produces a document that establishes title to the property.  More commonly, estoppel is used to defend one’s title to their property.  Specifically, parties utilize claims of estoppel in boundary line disputes involving a boundary agreement or boundary acquiescence, both of which are discussed independently below, or as a defense to a quiet title action.

Boundary by Acquiescence

The title of property can pass through boundary by acquiescence.  When a landowner stands by and allows another party to enter upon or use his land, the land can be bound to the new owner for the prior owner’s failure to act—if the court finds the elements to claim acquiescence.  The transfer of this property would be at the time of acquiescence, regardless of any written transfer or rights.  In Florida, boundary by acquiescence must abide by the statute of limitations of seven years, pursuant to Section 95.13, Florida Statutes.  This is proven in the same fashion as adverse possession.

Boundary by Agreement

Boundary by agreement occurs first when there is a doubt as to the true boundary, the parties enter into an agreement regarding where to recognize the boundary line in question, and an occupation of the boundary based upon the boundary agreement must be sufficient to show recognition of the agreed boundary line being permanent.  This length of time must be reasonable and is dependent upon the courts.  Note that this is similar to acquiescence but does not require a specified time period.  The boundary by agreement occurs through an agreement of some sort, and more often than not, this agreement is implied or oral.  In those circumstances, practitioners must resort to circumstantial evidence of the conduct of the parties.  As you are probably thinking, if the owners agreed to the boundary, why is there a dispute?  Disputes under boundaries by agreement arise many times when ownership of one property transfers to another property who may not be aware of the agreement with the neighbor.

In sum, although title may pass through any of the aforementioned actions or manners, claimants typically still have to refer to the courts to quiet title the property or to resolve the issue of whether the subsequent purchaser was a bona fide purchaser with no notice of the unrecorded instrument.