H.K. v. State of New Jersey, Department of Human Services, Division of Medical Assistance and Health Services, __ N.J. __ (A-90-04; Decided July 21, 2005)
The Supreme Court of N.J. has held [this is a paraphrase (almost verbatim; without citations)] that ownership of real property is transferred by deed; and that a transfer of a real property interest by deed is complete upon execution and delivery of the deed by the grantor, and acceptance of the deed by the grantee. In other words, a deed transfers a property interest “upon delivery.”
Whether delivery and acceptance have taken place is a matter of intention. Therefore, if there is physical delivery without the requisite intent that the deed be presently effective as a conveyance of the grantor’s title, there is no delivery.
Delivery can be shown by anything that clearly manifests the grantor’s intention that the deed become immediately operative and that the grantee become the owner of the estate purportedly conveyed.
The deed does not need to be recorded in order to pass title; however, an unrecorded deed is void and of no effect against subsequent judgment creditors without notice, and against all subsequent bona fide purchasers and mortgagees for valuable consideration, not having notice thereof, whose deed shall have been first duly recorded or whose mortgage shall have been first duly recorded or registered; but any such deed or instrument shall be valid and operative, although not recorded, except as against such subsequent judgment creditors, purchasers and mortgagees.
Thus, an unrecorded deed is perfectly efficacious in passing title from grantor to grantee, subject to all subsequent recorded liens against the grantor and subject to potential divestment by a subsequent bona fide grantee without notice.
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