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Show County perplexed over land sale practices The seemingly common practice of land developers in the area of selling land in unrecorded subdivisions using unrecorded contracts held in escrow by title companies is causing problems in Iron County. At the Iron County Commission's last . meeting in January, Iron County Recorder ?oan Wasden asked for a directive oh whether or not to record deeds which have questionable title. While the commission and County Attorney felt that she is obligated to record all deeds, they pointed out that recording the deed does not necessarily prove ownership. Many of the deeds appear to involve land purchased on contract from a party who is also purchasing the land on contract and does not have clear title to the land. "You can file a deed on anything but it doesn't mean that you own it. The difficulty is when it is recorded because there may be various interests in-terests on one piece of ground," said County Attorney Jim Shumate. Problems-who gets taxed, how are they taxed, how does the county get clear title to land for roads and how can the consumer be protected, are some of the issues raised by these practices. According to Shumate as many as 150 lots in the county may be involved in such questionable transactions. While illegalities may be involved in some of these cases, in many the statute of limitations for any prosecution may have run out. Most such land purchases use contracts ranging from five to ten years while the state's time limitation on prosecution is six years. The land could also be sold to several people-a practice which does not seem to be common but could occur under such circumstances- and could involve expensive civil litigation between the parties claiming to own the land. There is also the possibility that the original contract purchaser could go bankrupt leaving the second contract purchaser without his property. Land sold before a subdivision is recorded may have a legal descrip- Continued on Page Two s Land sale perplexities Continued from FrontPage tion by township and range and usually will not be described as a subdivision lot. This can cloud the county's title to land for county raods unless the deed was carefully drawn up to provide the county that right of way. This land is clearly provided for in most subdivision deeds filed with the corresponding and proper subdivision sub-division plats. Shumate said that a provision in the county's subdivision ordinance minimizes this problem by requiring that all unrecorded interests be named on the subdivision's plat. While an ordinance requiring the recording of land contracts within the county could be adopted, Shumate questions the effectiveness of such an innovation which could ; easily be circumvented by working with title companies outside of the county and also questions the practicality of such a measure. The "owner of record" is the person who receives the county's bill for taxes. However, most developers seem to indicate that their contract buyers are assessed their share of taxes on the land. Since these transactions are not a matter of public record, the possibility of purchasers being taxed for a subdivision lot while the developer is actually paying taxes on agricultural or undeveloped land and pocketing the difference does exist. The county is investigating these possibilities although no cases of such circumstances have been shown to exist or have surfaced among land purchasers. According to County Assessor Steven Grimshaw there may also be a problem if the "owner of record" does not forward the tax bill to the buyer. "After several years this property comes up for sale at the county's tax auctions and the people buying the land don't even know about it," said Grimshaw. What can be done to protect the consumer? "Let the buyer beware," says Shumate. "I would advise people buying property to get an abstract, title report or a policy of title insurance in-surance showing that the person selling the property actually has it in his name. They should have their real estate contract notarized and record it with the county. Even developers can sometimes make the mistake of selling a lot twice when they are dealing with a number of lots." |