Do you know the name Dean Gerard Winters? He’s the actor who plays the character “Mayhem” in Allstate commercials. The character acts out cringe-worthy scenes involving car accidents, fires, falls and other calamities and advises us to buy insurance to protect against “Mayhem like me”.
I’ll never forget the name of a character who created mayhem in the midlands title world several years ago. That name is Matthew Cox.
A telephone call tipped us off that we had a serious mortgage fraud situation in Columbia. Representatives of several closing offices were recording mortgages describing the same two residential properties in Blythewood, as if the properties had been refinanced multiple times in the same day by different closing offices.
At first, we thought our company and our attorney agent were in the clear because our mortgage got to record first. South Carolina is a race notice state and getting to record first matters. Later, we learned that deeds to the so-called borrower were forged, so there was no safety for anyone involved in this seedy scenario. Thousands of dollars were lost.
Next, we learned about the two fraudsters who had moved to Columbia from Florida through Atlanta to work their mischief here. The two names were Matthew Cox and Rebecca Hauck. We heard that Cox had been in the mortgage lending business in Florida, where he got into trouble for faking loan documents. He had the guts to write a novel about his antics when he lost his brokerage license and needed funds, but the novel was never published. With funds running low, Cox and his girlfriend, Hauck, moved to Atlanta and then Columbia to continue their mortgage fraud efforts.
We didn’t hear more from the pair until several years later, when we heard they had thankfully been arrested and sent to federal prison.
How do you protect against Mayhem like Matthew Cox? Beaufort County has found a way. My friend and excellent dirt lawyer, Sarah Robertson, who practices with Burr Forman in Bluffton recently sent out an article to her clients advising that Beaufort County has set up a program to allow property owners to register at no charge to receive alerts from the ROD regarding possible fraudulent activity involving their properties. Sarah’s article indicates some other counties are beginning to offer this service.
This is a great service for clients that could be championed by real estate lawyers in other locations to protect against Mayhem like Matthew Cox!
The official who records our deeds should not be selected via popularity contest!
I’m all about the democratic process. But when it comes to the Register of Deeds, I believe that person should be appointed locally based on a very specific skill set. Popularity and politics should have nothing to do with choosing the appropriate person to handle the very meticulous administrative process that deals with recording public documents.
Apparently, the Executive Committee of the Charleston County Bar Association wants to take action to make sure the ROD for Charleston County is qualified. Take a look at this letter that body wrote to County Council on January 19.
If you follow this blog, you know that the Finkel Firm has brought suit against the Charleston County ROD asking for a writ of mandamus based on the horrific lag involved with recording documents in that county. This letter provides additional evidence that something is terribly wrong in the Charleston County ROD office, and action needs to be taken sooner rather than later.
As this letter points out, South Carolina is a race notice state. If our deeds, mortgages and other documents are not recorded in a timely manner and in the proper order, then the proper priorities among parties is thrown to the wind. The rights of parties relating to real property are based on when the documents establishing those rights are properly recorded.
The letter lists eighteen counties where the RODs are currently appointed. The letter also states that no constitutional provision or statutory edict requires an election in this case.
What do you think? Should the Register of Deeds be appointed by County Council?
This post may be the first and last time this blog deals with a criminal case*, but the warning from South Carolina’s Supreme Court to Clerks of Court presents a worthy discussion for dirt lawyers.
The case involved a post conviction relief (PCR) application following a murder and attempted armed robbery conviction. The application was fraught with problems including a prison lockdown and incorrect forms. The Court said that the Clerk of Court’s ministerial duties required to Clerk to simply accept the application for filing, give it the appropriate docket number, and distribute it as required by law. Instead, the Clerk returned the application based on the statute of limitations. After chastising the Clerk, the Court granted the petition and instructed the petitioner to file his successive application within thirty days of the decision.
Omitting the citations and a significant footnote to be discussed later, here is the warning:
“We take this opportunity to remind the clerks of courts of their ministerial duty to docket filings irrespective of potential procedural flaws that may exist. It is not within the Clerk of Court’s authority to refuse to perform her duty based on her opinion that a filing lacks legal merit or is untimely. This duty is not discretionary. Unless specifically authorized by statute or a court rule, a clerk of court may not exercise any judicial power reserved for a judge. The clerk cannot, without express constitutional or statutory authority, exercise any judicial functions. This includes the prohibition of performing any action contingent on deciding a question of law. It follows that a clerk of court cannot ordinarily determine questions of law. Accordingly, a clerk of court does not have the authority to reject a filing based on ostensible or perceived failures, including whether the document is contained on the proper form. Because the clerk’s role is ministerial in this respect, the clerk shall not be concerned with the merit of the papers or with their effect and interpretation. Stated differently, a clerk of court may not reject a pleading for lack of conformity with requirements of form; only a judge may do that. In the absence of an order from a judge, clerks may not refuse to accept a notice of appeal, even if they believe that no appeal is untimely or otherwise defective. Instead, the clerk shall accept the filing, thereby permitting the court to decide any issues the parties may have with it.”
If you ever have an ROD office reject your deed, mortgage or other real estate documents, you may need to cite this case!
I had a situation early in my practice where properties had been accumulated across county lines for the development of a mall. To comply with seller and lender requirements, I had to record all the documents in a single day. Prior to cutting the recording checks, I had to apportion the documentary stamps between the two counties, which I did carefully and with much tax advice. The first county readily accepted all the documents. I was halfway home. The other county, however, rejected all the documents by jumping to a legal and tax decision about the sufficiency of the doc stamps for that county. I was in a proverbial pickle! I couldn’t un-record documents in the first county to take the time to sort out the situation. I had to convince the second county to accept the documents. Luckily, I had a good friend who was on the legal staff of the Department of Revenue. After several hours of running that friend down and explaining the situation to him in great detail, he agreed on my behalf to convince the second ROD to record the documents to allow the DOR to sort out the tax issue later. Whew! (And, by the way, my calculations turned out to be correct because I got great advice in advance.)
My position about this topic has always been that the ROD did not have the authority to decide a legal question about my documents! After this case, I believe the Supreme Court would agree.
Dirt lawyers love to tell stories about the treatment of documents in different counties. The stories go something like this…. County A will record a leaf that floats in from an open window, but County B will refuse to record a document on the flimsiest of legal technicalities.
I hope this case will help even the playing field.
One significant footnote in the case relates to real estate transactions. Referring to the rule that indicates a clerk cannot exercise judicial power unless authorized by statute, footnote 2 reads: “For example, in the context of real or personal property, section 30-9-30 authorizes a clerk of court to remove a sham document from the public records upon proper notice if the clerk reasonably believes the document to be fraudulent.”
This statute and this power could be important in cases of forged signatures and other fraud, but I still believe the ministerial official would at least need sound legal advice.
Pull this case out the next time one of your documents is rejected!
*Barnes v. The State of South Carolina, South Carolina Appellate Case No. 2020-001360 (June 3, 2021).
This blog reported on May 29 that South Carolina Governor McMaster signed House Bill 3243 into law on May 16. This legislation, called the Predictable Recording Fee Act (S.C. Code §8-21-310), will streamline document filing in ROD offices by creating predictable fees for many commonly recorded documents such as deeds and mortgages. The new law will take effect on August 1, 2019. You and your staff will no longer have to count pages for documents to be recorded!
My friend and colleague, Jennifer Rubin, was instrumental in the creation and passage of this legislation. Jennifer drafted the legislation and spearheaded Palmetto Land Title Association’s efforts to get the bill passed. Since the legislation was enacted, Jennifer has worked with members of South Carolina Court Administration, as well as leaders in ROD offices throughout the state, to draft a uniform recording fee schedule. Attached is the newly created official recording fee list.
This law should simplify and streamline your practice and result in significant time and money savings for you and your clients.
August 1, 2019 is the effective date for this time-saving law
On May 16, 2019, Governor Henry McMaster signed House Bill 3243 into law. You can read the short but effective statute here. House Bill 3243, better known as the Predictable Recording Fee Act (S.C. Code §8-21-310), will streamline the filing of documents in the register of deeds offices across the state by creating predictable fees for many commonly recorded documents such as deeds and mortgages. The new law will take effect on August 1, 2019. You and your staff will no longer have to count pages for documents to be recorded!
My friend and colleague, Jennifer Rubin, began work on this predictable recording Bill in the fall of 2016 when she was the President of the Palmetto Land Title Association. Our Agent and friend, Cynthia Blair, who is currently the American Land Title Association President, asked for Jennifer’s help in crafting, drafting and helping to turn the idea of predictable filing fees into law. Accepting that challenge and with the help and support of Chicago Title and PLTA, Jennifer began work on the Bill and began coordinating with the various stakeholders who were: The American Land Title Association, The South Carolina Association of Clerks of Court and Register of Deeds, The Association of Counties, The South Carolina Association of Realtors, The South Carolina Bankers Association, The Mortgage Bankers of the Carolinas, The South Carolina Bar Association, and the American Resort Developers Association on various versions of the Bill.
Jennifer said she was particularly thankful for the efforts of PLTA’s Legislative Committee led by attorney John Langford and the major contributions of her friend Julie Stutts, the deputy RMC for Aiken County. She also appreciated the advocacy, guidance and support of lobbyists James Knox, Sharon Wilkerson, Neil Rashley, and Kali Turner and their respective groups. Without everyone pushing this bill forward along and along, the creation of this law would not have been possible.
This new law will finally allow South Carolina real estate attorneys to fully comply with TRID regulations, provide clients and other parties with accurate final closing costs, and keep our bank accounts orderly. Please note that while the new law does not go into effect until August 1st, there is no grace period. So if you have closings on or near the first of August, please be sure to review the new statute to ensure that you’ve collected the correct amount for recording fees.
York County’s Register of Deeds office recently informed local dirt lawyers that it will begin using a new system on January 23. The new system will require labels containing recording information to be attached to recorded documents.
This County will require a three-inch margin at the top or bottom of the front page of each recorded document. Documents that do not meet the margin requirement may be rejected because the label may conceal a portion of the document.
I am confident York County lawyers are informed of this development but wanted to get the word out to the remainder of the state to benefit lawyers who may handle a transaction in that County from time to time.