§7.4 - Lost Instruments

• Jurisdiction: Washington

§7.4 LOST INSTRUMENTS

An instrument is considered lost when the party who had possession of it cannot find it following a diligent search. Instruments that have been destroyed or stolen are treated in the same manner as lost instruments under applicable case law and statutes. This section deals with lost, destroyed, and stolen instruments, and how such instruments may be proven or enforced. The term "instrument" is a broad one, and can encompass any legal document that creates, transfers, or evidences rights; imposes obligations; or confers knowledge on the parties to the instrument. For purposes of this section, we will primarily consider lost deeds and lost promissory notes when discussing issues relating to lost instruments.

(1) Recorded instruments

In most real estate transactions, a great number of instruments are executed and delivered. Some are recorded, and others are not. Under statute in Washington, any instrument that creates, mortgages, transfers, or assigns an interest in real property, with certain exceptions, is considered to be a "conveyance" of real property. RCW 65.08.060(3). Any conveyance, if properly acknowledged, may be recorded in the county where the property is located. RCW 65.08.070. Most other states have similar statutes permitting or mandating recording of documents. Recording imparts constructive notice to the world of the existence and terms of the conveyance recorded. Failure to record in Washington renders the conveyance void against subsequent good-faith purchasers for value who take title to the same real property without notice of the prior interest. RCW 65.08.070.

For purposes of proving lost instruments, there is a secondary purpose in recording. Under RCW 5.44.060, whenever a deed, conveyance, bond, mortgage, or other instrument is recorded as permitted by law, then a certified copy of the recorded instrument is entitled to be received into evidence in any legal proceeding as if it were an original itself. Thus, for a recorded instrument, there is no need to prove the execution, delivery, or content of the recorded instrument.

For most real estate transactions, this means that originals of prior recorded instruments are never needed for any purpose. Ownership is proven by the record vesting contained in the chain of title. So are other interests like easements, restrictive covenants, mortgages, liens, and other encumbrances. Although, as a condition of executing a deed of reconveyance, most title companies and institutional trustees require delivery of the original promissory note and deed of trust, they will typically accept an affidavit of lost note and/or deed of trust. So, whether original counterparts of prior recorded documents can be found or obtained is of little relevance in modern real estate transactions.

(2) Unrecorded instruments

Lost, unrecorded instruments, however, can present a problem. At least between the original parties themselves, whether the instrument has been lost or destroyed does not affect their respective rights and obligations under the instrument. The same may not be said, however, for intervening third parties. As mentioned above, failure to record a written conveyance may render that conveyance void against subsequent bona fide purchasers for value who take their title or interest without notice of the prior conveyance. Thus, if an instrument of conveyance is lost prior to recording, it will be difficult for the grantee to protect itself against a subsequent transfer from the record owner to a bona fide purchaser.

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