Dispell this rumor of recording your home...?

Question

i read an article from a financial newsletter that was talking about alloital title, and the "trick" where if you buy a home and then dont ever record it with the city you live in, you dont have to pay property taxes. the logic behind it was that you are assigning the property to them so that they can then use your property value to bond out. so my question is 2 fold. are you required (by law) or other statute to record your home, what happens if you dont record it?

Answer 1

I'd strongly suggest that you toss that "newsletter." The writers are either clueless OR they're sitting back and waiting to steal your home away from you.

The property taxes will still be assessed, just the wrong person will get the bill. If they go unpaid for too long, the property will be sold for back taxes and you will no longer be the owner. Property taxes are not so much a debt against the owner as against the property. Even if the bill doesn't arrive in your mailbox, the taxes are still due and payable according to the law.

If you don't record the deed, someone else could potentially record a fraudulent deed that would appear to be superior to any claim you might have. If that interest was then sold to a 3rd party you might have a HELL of a time proving that your claim of title to the property was valid.

BTW, there's no such thing as "alloital title" that I can find anywhere. Sounds like the author of the newsletter is making something up.

Answer 2

Here is the only problem with that theory...

Until you record it, you don't legally own it. That is people's incentives to record.

That means that you can never legally claim that you live there, b/c legally the people you bought it from still owns the property.

A signed deed does not legally transfer property until it is recorded....that is why some real estate attorney's refuse to do a closing, if it cannot be recorded the same business day.

Plus, when your former tenant's get the tax bill, they will be suing you for it, and will win, b/c the responsiblity to record the Deed is yours, and not theirs. Furthermore, some states say if a Deed isn't recorded in 30 days it's void.

Also, you would be hard pressed to find a seller that would be willing to sign a deed over without an attorney preparing it to ensure that it closes and is recorded. An attorney would NEVER give you a copy of the deed to have you record it, and a seller won't do it directly....b/c they are on the hook if you don't record.

Great idea in theory, too bad it doesn't work in reality.

Answer 3

Property gets assessed no matter what. Why wouldn't you want to record the deed to prove you own the property? Taxes are not something you want to play around with because they can cause trouble in other areas of your life not only with property but the law regarding liens, mortgage,credit,renting,buying,selling,etc.