- December 12, 1989
- All Washington Agents
- Unrecorded Leases
The Washington Court of Appeals has confirmed that a recorded deed of trust is subject to a previously unrecorded 20-year lease. Peoples National Bank v. Birney's Enterprises, 775 P.2d 466 (Wash. App. 1989). In this case the lessee was a corporation and the sole shareholder of the corporation was the owner of the land and grantor of the deed of trust.
Under the circumstances this seems like a crazy result. However, the court of appeals viewed the distinction between the individual and the corporation very strictly.
Please remember that the ALTA Extended Loan policy covers unrecorded leases. You should have an exception in those policies for unrecorded leases if you are insuring commercial property.
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