Title and closing

Dealing with an unrecorded deed of trust discovered after closing

Finding an unrecorded deed of trust after your property closing can create a significant headache, potentially clouding your title. This means a prior lien was not properly cleared or recorded, leaving a claim against the property.

October 20, 2026 · 3 min read

Confirm the nature of the unrecorded deed of trust

First, verify what this unrecorded deed of trust actually is. Is it a mortgage that was paid off but never released? Is it a lien from a previous owner that was overlooked? Get all the details, including the original parties, the amount, and the date of the deed.

Gather any documentation you have from your closing, specifically your title insurance policy and the final settlement statement. These documents will be crucial in understanding how this slipped through the cracks. This is a critical first step before taking action.

Contact your title company immediately

Your title company is your first point of contact. They performed the title search and issued your title insurance policy. This is precisely the kind of issue that title insurance is designed to protect against. Notify them in writing as soon as you discover the problem.

Provide them with all the details and documentation you have. They will initiate an investigation to determine how the unrecorded deed of trust was missed and what steps need to be taken to clear it. Do not try to resolve this directly with the original lienholder without involving your title company.

Understand your title insurance policy

Review your title insurance policy carefully. It should outline what is covered in situations like this. A standard owner's policy typically covers defects in title that existed at the time of purchase but were unknown to you.

The title company, through your policy, is responsible for either defending your title in court or paying to clear the lien. This is why having a robust title insurance policy is non-negotiable for investors. It protects your investment from past mistakes.

Work towards a resolution

The title company will guide you through the process. This might involve contacting the original lender to obtain a release of the deed of trust, even if it is an old or defunct company. In some cases, a quiet title action might be necessary, which is a legal proceeding to establish clear ownership.

Be patient, as these processes can take time. Your role is to provide any information or documents requested by the title company or their legal counsel. Follow up regularly to ensure progress is being made. The goal is a clean, insurable title for your property.

Preventative measures for future deals

While this issue is usually on the title company, you can still be diligent. Always use a reputable title company with a strong track record. Ask for a copy of the preliminary title report and review it yourself, looking for any red flags or unusual entries. Do not solely rely on the closing agent.

If you encounter any ambiguous language or unreleased liens on the preliminary report, question them before closing. Insist that all known liens are explicitly released and recorded prior to the final transfer. An ounce of prevention is worth a pound of cure, especially in title matters.

Questions people ask

Who is responsible for clearing an unrecorded deed of trust?

Typically, your title insurance company is responsible for resolving an unrecorded deed of trust that existed before your purchase, as it falls under the coverage of your owner's policy.

Can an unrecorded deed of trust prevent me from selling the property?

Yes, it can. A cloudy title makes it difficult or impossible to sell or refinance the property, as future buyers or lenders will require a clear title.

What is the difference between an unrecorded deed and an unreleased deed of trust?

An unrecorded deed means the transfer of ownership was not publicly registered. An unreleased deed of trust means a lien (like a mortgage) was not properly removed from public record even if it was paid off. Both cause title issues.