ISSUES - Drake University Law School

ISSUESDAN A. MOOREBERENSTEIN, MOORE, HEFFERNAN,MOELLER & JOHNSON, L.L.P.501 Pierce Street, #300P.O. Box 3207Sioux City, Iowa 51102-3207Telephone: (712) 252-0020Fax: (712) 252-0656DRAKE UNIVERSITY LAW SCHOOLREAL ESTATE TRANSACTIONS SEMINARDES MOINES, IOWAFRIDAY, MARCH 15,2013

Corporations/LLCs27. LLC Conveyance.28. Sale of Real Estate by LLC.29. Shares of Corporation in Escrow.Declaration of Value30. Declaration of Value Form.Deeds31. Court Officer Deed or Change of Title.32. Effect of Recorded Deed Not "Accepted" by Assessor.33. Joint Tenancy.34. Legal Description.35. Power of Attorney- Joint Tenancy Property.36. Reservation.37. Spouse Joining in Deed.38. Type of Deed.Dissolution/ Marital Status39. Alternatives to Marriage and Dissolution. (Attachment.)40. Award in Divorce Decree.41 . Dissolution.42. Dissolution/Banker- "Opinion".43. Dissolution - Children of the Marriage.44. Dissolution of Marriage - Lien.45. Dissolution Proceedings in Abstract.46. Dissolution -Title.47. Dissolution- Warranty Deed.48. Divorce Decree.49. Does Dissolution Sever Joint Tenancy?50. Joint Tenancy Severed by Dissolution Decree?51. Marital Status.52. Quiet Title Action- Dissolution- Quit Claim Deed.53. Separate Maintenance.54. Title- Dissolution. (Attachment.)55. Who Has Title?Easements56. Army Corps of Engineers - Easement?64656869707176787980818283858990929596991001011051081111151191221241333

Environmental57. Is a Septic Report Required to be Attached to Groundwater Hazard 137Statement When the Seller Does Not Own the Building on the Landto be Transferred and the Building is Not Transferred?58. Septic Tank. 138Escrow59. Escrow. 139Foreclosure60.61.62.63.64.65.66.67.68.69.70.71.72.73.74.Abandoned Property After Foreclosure.Agent of Service for State of Iowa.Deed in Lieu of Foreclosure.Foreclosure on Agricultural Land.Foreclosure by Bank of America (Possibly) Based on ErroneousAssignment.Foreclosure- Bankruptcy.Foreclosure and Condo Special Assessments. (Attachment.)Foreclosure- Death of Borrower.Foreclosure with Deceased Mortgagor. (Attachment.)Foreclosure- Deficiency- Guarantor.Foreclosure on Property of Deceased Person.Foreclosure - Publication of Notice.Mortgage Foreclosure - MERS.Non-Judicial Foreclosure.Nonjudicial Voluntary Foreclosure.140142143146148149150153154155156158160161162Forfeiture75.76.77.78.Contract Forfeiture - Notice to Child Support Recovery UnitRequired?Deed in Partial Satisfaction and Forfeiture.Forfeiture- Vendee Deceased. (Attachment.)Notice Re Forfeiture.163164166167Gifting of Real Estate79. Annuity as Payment for Land.80. Gifting of Real Estate.Judgments and Liens81. Abstracters Searching for Mechanic's Liens.82. Alimony Judgment.83. Institutional Lien for Mental Health.84. IRS Levy.1681701721751761774

85. Judgment After Death. 17886. Judgment Lien. 17987. Judgment Lien Against Homestead. (Attachment.) 18088. Maximum Interest Rate on a Mechanic's Lien Claim. 18289. Mechanic's Lien. 18390. Mechanic's Lien Defect- Clearing Title. 18491. Mechanic's Lien Regarding Subcontractor. 18792. Release of Lien for Delinquent Utility AccounU County Release of 188Water or Sewer Lien.93. Sales Tax Lien. 19194. Satisfaction of Lien. 19595. Services of Demand for Bringing Suit on a Mechanic's Lien. 19696. Small Claims Judgments. 19997. Tax Sale and Condo Liens. 20098. U.S. Department of Justice Lien.Landlordffenant99. ADA Issue with Apartment.Leases100. Commercial Lease.101. Enforceable Lease?Life Estate102. Fixing the Fertile Octogenarian.103. Life Estate- Required Showings. (Attachment.)104. Who is the Seller When There is a Life Estate?Marketing and Selling Real Estate105. Attorney Showing and Negotiating Sale of Home.Miscellaneous106. Bank of America.107. Checking Tax Debts for FHA Insurance. (Attachment.)108. Electronic Signatures for a Paperless System.109. New Legislation re Tax on Real Estate Sales.110. Notarization in France. (Attachment.)111. Proposed Vital Records Administrative Rules.112. Social Security Numbers and Dates of Birth.Mortgages113. Ancient Mortgage.114. Assignee Mortgage Release.115. Deceased Mortgagors- No Estate Pending. (Attachment.)116. Disclosure of Mortgage Required?2072102112132152162182212222232242262272282292302312325

117. Erroneous Page Number on Mortgage Release. 234118. Marital Status- Deed- Too Many Husbands. 236119. MERS Release by Servicer. 237120. Mortgage Release. 238121. Mortgage Release Missing from First Nationwide Mortgage. 239122. One Land- Three Owners. 242123. Prepayment Penalty on Mortgage. 244124. Pre-recorded Mortgage. 249125. Spousal Signature on Mortgage. 250126. Substitution of Liability on Note/Mortgage. 251127. Who Releases the Mortgage? 253Probate128. Assisted Living Refunds. 254129. Deferred Inheritance Tax. 255130. Executor's Power of Sale. (Attachment.) 257131. Family Settlement Agreement. 258132. Joint Tenants. 260133. Probate - Life Estate - Marketable Title. 265134. Trusts and Iowa Inheritance Tax. 266135. Typographical Error in Legal Description in Inventory and Final 267Report.136. When is a Sale a Sale for Power of Sale Purposes? 268137. Will Without Present Administration. 272Property Tax Appeal138. Tax Reduction Services.Restrictive Covenants139. Restrictive Covenants.Riparian Rights140. Creek as Boundary in Legal Description.141. 1940 River Sketch. (Attachment.)Subdivision and Platting142. Polk County Subdivision Ordinance.143. Subdivisions and Wells.144. Time of Transfer Inspections.145. Vacating Platted Lot.Tax Sale146. Error on Notice of Sheriff's Levy and Sale.2732782812832842852872882906

Transfer Tax147. Transfer Tax.Trusts148. Conveyance from a Revocable Trust.149. Gift of Real Estate in Revocable Trust.150. Sale by Trust.291292297299SECTION II. Title Standards Committee Opinions.A. Doctrine of After-acquired Property- Quit Claim Deed.B. Power of Sale in the Will.C. Contract- Joint Tenancy.D. Mortgage- Parties.E. Judgment Lien- Joint Tenancy Property.F. Bankruptcy Documents.G. Power of Sale in Will- Notice of Sale.H. Conveyance Language in a Will.I. Probate- Tenants in Common- Will.J. Survey Plats.K. Affidavit of Surviving Spouse.L. Agricultural Land- Right of First Refusal.7

SECTION I.ISBA Listserve.The ISBA Listserve for the Real Estate and Title Law Section continues to be avaluable resource for Iowa lawyers. And, as Iowa lawyer Mark V. Hanson pointsout, the responses have been clear evidence for the following principles:A. Lawyers' collegiality in Iowa is good.B. Lawyers with in-depth knowledge on a topic are willing to share and raisethe knowledge level of all lawyers.C. Lawyers wanting to do what they can to have good land titles in Iowa andif they can point another attorney in the right direction, they havecontributed significantly to that goal.D. Good example of what a useful tool the email net is to share among thereal estate lawyers.The following issues and responses have been obtained from the ISBA Listservefor the Real Estate and Title Law Section. The author has edited the facts,issues and responses for the reader.The author encourages Iowa lawyers to participate in the ISBA Listserve and,upon review of these materials, send in additional information or commentswhich can be added to these topics.8

ABSTRACTING/MARKETABLETITLE

1. Abstract Starting at Platting.FACTS: I am examining an abstract from Lee County starting at the platting in2007. All of the Code requirements concerning platting procedures are on theabstract as is a statement from the abstractor certifying that no items of recordaffecting the real estate prior to June 18, 2007 are omitted. Title Standard 1.5allows this shortened title report if the plat was recorded more than ten yearsago.QUESTION: Because the plat was recorded less than ten years ago, can anexamining attorney rely on this shortened title report?Also, in the Title Standard, what does the requirement "the lots or a subdivisionof the lots have been sold and conveyed" mean? On the abstract I amexamining, none of the lots are shown to have been conveyed; the subdivider/developer still owns the property covered by the abstract I am examining.RESPONSE(S): I think you may fairly rely upon the 2007 abstract, provided thatthe subdivision plat was approved and recorded as required by Iowa CodeSection 354.11. That Section requires, as part of plat approval process: 1) a priorattorney's title opinion revealing all title problems; 2) approval by governmentalbody; and 3) clearance from tax liability.If no encumbrances appear in your new lot's abstract then we may fairly assumethat the prior abstract for the unsubdivided premises likewise showed noproblems. I should think that the new abstract would at least show the plat withits required attachments.* * *Having examined abstracts from a number of counties, it appears to be a localcustom thing. I believe I have seen Poweshiek County doing as you describeand you definitely should speak with an attorney in Black Hawk County. Wenormally don't like anything less than 40 years in Scott County because we tooare a bit more conservative, or cautious.* * * *How do we reconcile this with the Title Standard 1.5 requirements? I admit I tendto err on the more conservative approach, but I do not see how I could defendmy position to ignore the title standard.* * * *9

This is the practice in Black Hawk County, and when I once asked about it, I wastold that it's just the way their local practice has evolved. While I agree with yourreading of the Title Standard, I decided I wouldn't raise the objection in BlackHawk County. You may want to check on the local practice in Lee County.* * * *In Kossuth County we still have a fully continued abstract in the subdivision at theCourthouse. The ones for the individual lots are thence continuations from thedate of the last Certification in the Courthouse abstract. In my 21 years of doingthis, I've never had a client have to expand. In such a case we open with thefollowing:1. ABSTRACT FROM PLAT. Your attention is called to the fact that the abstractbegins with the filing of the plat of on , by alocal rule of the Kossuth County Bar Association. The remainder of the root oftitle abstract is of permanent record in the subdivision file forinthe Kossuth County Courthouse. Title Standard 1.5 of the Title StandardsCommittee of The Iowa State Bar Association might be read to require that youpossess a more extensive abstract because the plat is less than ten years old. Inthe event that you are required to establish title to the satisfaction of a buyer orlender who was relying upon a title examiner, not located in Kossuth County, youmight be required to incur the expense of expanding your abstract to include theroot of title. In our judgment, this is a calculated risk which you should be willingto take. Finally, you are advised that any requirement for expansion of theabstract will expire after the ten year period.* * * *All the abstracts for "new" lots amount to continuances of an existing abstract forthe entire subdivision property.The Iowa Code's legal demands for valid platting (effectively) require a "cleantitle" for the subdivision's lots. If you don't have that clear title (includingpublished title opinion!) then you don't get your subdivision plat recorded, and ofcourse then no one will purchase the lots. No one would purchase any lot that arecorded title opinion shows contains an existing, uncleared encumbrance. Anysubdivision proprietor that marketed such a lot would quickly gain a reputation foruntrustworthiness; his sales would cease, and he'd go bankrupt.So for all practical purposes a proper subdivision really cannot come intoexistence lacking a clear title for each of its lots.10

Perhaps someday the appellate courts will so rule, whenever a case may raisethe issue. I can't see the courts ruling any way other than that title to the new lotnecessarily starts "clean".Now my conservative side makes me want to include the past 40 years of historyin each "new lot" abstract. But creating the abstracts with all that "extra" text wellmay raise a serious cost issue for the plat proprietor.****I also own an abstract company and we typically charge about $125.00 per newsubdivision abstract; and our county (Johnson) does not have abstracts startingfrom the platting, as per determination of our local bar association. This issuewas specifically addressed within the past two years.* * * *I'd respect the title standard. It's 10 years with conditions as previously stated.We like 40 year abstracts in Story County, too, but the title standard is what it is.Just be careful, however, because the 10-year abstract still needs to show a fewthings prior to the filing of the subdivision plat. I had a situation once where theattorney's title opinion for platting did not show a mortgage. The reason was thatthe title opinion for the platting was done several months before the plat wasultimately filed. In the interim the client went and put a mortgage on the propertywithout telling the attorney. So the platting procedure did not include a consentfrom the mortgagee. As you may surmise that attorney was yours truly.* * * *Title Standard 1.5 is defective, in my opinion, by allowing the abstract forland within a ten year old subdivision plat to commence "with the date ofthe filing of the plat". In every case, you are placing your clients at risk if theabstract for any platted lot does not extend back to the date of the last abstractupdate referenced in the platting opinion, which will be days or weeks before theplat was recorded.In 21 years of reviewing the legal documents for every subdivision plat for landlocated within the City of Des Moines, I frequently receive platting opinions thatcontain statements to the effect that the title opinion is "preliminary" and basedupon un-certified pencil notes, and that the opinion must be finalized after theplat is recorded and the abstract is updated. This is an admission that theseattorneys do not realize that a title opinion for platting purposes must be finalizedbefore the subdivision plat is approved, and may be based upon an abstract thatis relatively stale before the subdivision plat is recorded.11

The subdivision regulations for the City of Des Moines require that the titleopinion for a subdivision plat be based upon an abstract that has been updatedto within 30 days of the date the subdivision is approved by the City Council andthe plat must be filed, with a few exceptions, within 30 days after the City Councilapproves the plat. Therefore, it is normal for the platting title opinion to be basedupon an abstract that is more than 30 days old before the subdivision plat isactually recorded. In a few rare situations, the abstract may be more than 60days old before the subdivision plat is recorded. Intervening mortgages andencumbrances could easily be recorded during that gap.This practice is not unique to the City of Des Moines. In every jurisdiction, theabstract used for the platting opinion will be at least several days old before thesubdivision is recorded.It is also very likely that at the point in time when a subdivision plat is ready to berecorded, the plat proprietor will be seeking to refinance the construction loan(s)used to buy the land and to finance the streets and public infrastructure within theplat, and to obtain financing to construct a model home or two. It would be veryeasy for a mortgage to be recorded within the gap between the date when theabstract relied upon by the platting title opinion is updated, and the date when thesubdivision plat is recorded. There is nothing illegal or wrong with the platproprietor doing so, but it can create a huge problem for the unwary, and anyattorney who relies upon an abstract that "commences on the date the plat isrecorded".Iowa Code Section 354.11 (1 )(c) specifically provides that: "Utility easementsshall not be construed to be encumbrances for the purpose of this section." As aresult of this provision, platting title opinions are not required to show pre-existingutility easements, and I suspect that at least a few attorneys choose to ornitrecorded utility easements from their platting opinions. This means that anyonerelying upon the platting opinion, is also relying upon the surveyor to identify allthe pre-existing utility easements on the plat map, and is relying upon their clientto actually review and understand the contents of the plat map. While mostattorneys place boilerplate language in their title opinions to the effect that theplat map should be reviewed for easements and setbacks not referenced in theabstract, how often will your client actually receive or know how to find a copy ofthe plat map?* * * *While there may be some risk with commencing an abstract with the recording ofa plat filed more than ten years earlier, I do not believe that the risk is of anextent to warrant doing away with Title Standard 1.5. The basis for the title12

standard is not the existence of a prior abstract prepared and examined inconnection with the platting procedures. Rather, it is based primarily on the tenyearlimitations provisions of Iowa Code Section 592.3. Those matters notaddressed by this statute of limitation, such as easements filed prior to therecording of the plat, nevertheless should be reflected in the abstract, and it hasbeen my observation that this is generally accepted practice among Iowaabstracters.I have also had my experiences where real estate agents, getting their fullpercent cut, tell the lender or closer, or buyer, don't pay Attorney xxx'x feebecause Attorney zzz will do it for $1 or $10 less. My reaction is, I wish I couldinsert into the transaction a different agent willing to under cut the first one by x%and see how the first agent likes it.Probably all we can do is provide experienced advice to our clients at areasonable price, and hope that the word on the street is that we know what weare doing, and the clients continue to utilize our services.13

2. Cost of Abstract Update.FACTS: I just had an abstracter in a county in Southwest Iowa charge $1,600.00to update an abstract initially and then provide an estimate of $830.00 to updatethe abstract again after closing for the final title opinion to show the deed and themortgage. I asked why so much for the final update and I was told they are nowcharging based on the value of the property. Only one part of the one abstract tobe updated after closing.QUESTION: Has anyone else experienced this manner of charging for abstractupdates?RESPONSE{S): I have often wondered about attorneys charging for their titleopinions based upon value of the property. Especially when the real estatebroker is getting commission based on the value of the property.****I've had a few abstracters "run that up the flagpole" but when they met withstrong resistance they backed away. Would I be correct in assuming that there isonly one abstracter in this county?* * * *Yes, only one in the county.* * * *Abstracters charge for their time, in my experience.* * * *I think there has been some discussion among lawyers to charge for their titleopinions based on the consideration for the property in question. Issues:purchase price or assessed value? Different charge for a mortgage than a sale(e.g., 65% LTV)? Mergers where no stated consideration?* * * *When I practiced in Illinois in the early 60's it was the practice of most counties tocharge a fee for preliminary title opinions and final title opinions based on thevalue or the consideration of the transaction. As I recall it was not a fixed percentbut the rate was reduced at the upper series of levels somewhat the way banktrust departments have computed their fees. Of course, at some point it was14

determined that recommended fee schedules by Bar Associations were inviolation of the Sherman Anti-Trust Act or some such act.Since then competition took over and in Illinois the fee for preparing title opinionsdeclined drastically.****When I started practicing, we had minimum fee schedules. Don't remember theexact structure. I believe it was primarily based upon the sales price - minimumfee up to certain dollar amount, and then increase based upon percent of valueabove that. If it was not a sale situation, reversion to the minimum fee on theschedule. This may be the type of thing you were discussing above. The timesdid indeed change then because minimum fee schedules were struck down. Ialways thought it was reasonable to charge a fee for our title opinion (insurance)based upon a value, but things went a different direction. Most people nowcharge a flat fee, though there was also a time when some attorneys tried tocharge an hourly rate for exam and opinion. Time is a factor in abstracter fees,but difficulty and complexity of the chain of title can also factor in. However, thisis the first I have ever heard of basing charge on value of the property. How didthis abstracter know the value unless he/she was using assessed valuation?* * * *As I remember in Rock Island County, Illinois it was based on the consideration,that is the sale price, and not the value.* * * *Black Hawk County used to base fees on value or amount of mortgage. Oneabstracter in the area used to charge by the page. In fairness, it's hard to makea living as an abstracter in some of our rural counties without some creativeapproach to fees. Also lack of competition leads to some unique pricingschemes.****Some counties in Northeast Iowa are also charging based on the value of theproperty.****I am not convinced on that issue, but there is a certain logic to charging for titleopinions and abstracting based on the value of the property involved since thepotential liability for a mistake is greater. The abstracter and title examiner are15

"insuring" the validity of the title and it can be argued that the "premium" paid forthat "insurance" should reflect the value of the property being "insured".The Monona County Minimum Fee Schedule dated June 1, 1968 for a titleexamination is $15.00 for the first 20 entries plus $.25 for each additional entryand $.50 per page for probate and court proceedings. For each chain of title with10 entries, an additional $7.50 is to be added. A re-examination is $7.50.****The problem with charging fees for title opinions is that we lawyers have allowedbanks to play us, one against the other to race to the bottom for fees. I have hadseveral banks tell me what I will be paid for title examinations because Joe Blowover in Other City will do it for that fee if I am not interested. We can try to fightthis but it will not be successful because there's always a Joe Blow who is willingto do the work for $1 less.* * * *The greater the value of the property if an error in your work the greater the riskof liability, that is why we have higher insurance premiums and greater risk. Iknow several years ago the firm I was with increased our limits to cover thehigher values of farmland abstracts being examined for the lenders. So I believethere is good reason for charging higher rates for opinions based on expense ofinsurance and higher risk.* * * *Which is, after all, how title insurance companies determine their prices.****Unfortunately, in the minds of many, the title opinion is a "fungible commodity".They see no value in obtaining a title opinion from a highly experienced realestate attorney at a higher price (and in our mind a more reasonable price), whenthere is either the ( 1) experienced real estate attorney willing to do it for $1 less,or (2) an attorney looking at his or her first abstract, and willing to do it for $10less.!.I have had my share of experiences observing attorneys who think because theyhave a law degree, that automatically rnakes them abstract examining experts.(These are usually attorneys experienced in other areas of law, and one of theirclients now needs some real estate matter handled, and everyone knows itdoesn't take any real effort to be an experienced real estate attorney.)16

This kind of goes along with a comment new Judge McDonald made when askedabout his transition into the bench "I made a list of stuff I knew; a list of stuff Iknew I didn't know; and a list of stuff I didn't know I didn't know." The aboveattorneys thinking they are now experts at examining abstracts because theyhave a law degree suffer from not knowing what they don't know. And anexperienced real estate attorney invariably needs to sort stuff out later.I have also had my experiences where real estate agents, getting their fullpercent cut, tell the lender or closer, or buyer, don't pay Attorney xxx'x feebecause Attorney zzz will do it for $1 or $10 less. My reaction is, I wish I couldinsert into the transaction a different agent willing to under cut the first one by x%and see how the first agent likes it.Probably all we can do is provide experienced advise to our clients at areasonable price, and hope that the word on the street is that we know what weare doing, and the clients continue to utilize our services.17

3. Forty-Year Marketable Title.FACTS: An abstract starts with an undivided one-half interest in an estate goingto three beneficiaries (1971) and the other one-half interest is mentioned withinthe estate documents as being owned by the decedent's sister which says "withsurviving sister as co-tenant". There is no Court Officer Deed completed at thetransfer or at close of the estate.After a request to have more information in the abstract, the abstracter hasstated that he cannot locate any prior history; except two Quit Claim Deeds fromthe 1890s which only give a portion of the legal description pertaining to theundivided one-half interest which starts this abstract. The Quit Claim Deeds donot even give it to the same decedent from the estate, but is later in an affidavitidentified as the mother of the decedent.In 1990, a Quiet Title Action for the whole piece of property was filed (as in thefull and correct legal description) but fails to list anyone as a defendant other than"unknown defendants" and does not have any proof of publication containedwithin the abstract; this resulted with the Court granting judgment to theindividuals in current possession. The judgment was in February 1991.QUESTION: Does this correct any issues with the failure to have informationpertaining to the undivided one-half interest problem from the beginning?Doesn't the Quiet Title Action have to be published if there is no listeddefendants? Does the judgment from 1991 if there was published notice andsince more than ten years have passed, give me the ability to pass on it understatute of limitation issues?RESPONSE(S): Your abstract recites a due process nightmare. I'm not sure itcan be claimed that diligent efforts were made to notify potential claimants whenthe heirs of the decedent's sister were not personally notified. I don't think thevendors have marketable title, even if the notice was published in the Quiet TitleAction.* * * *Assuming that you are trying to sell this real estate, I would think you might wantto consider a partition action (see Court Rule 1.1201 and following), and thistime, do a diligent search for the sister, the "surviving sister" and the mother, andany of the heirs, beneficiaries and/or descendants if any of them are deceased.This is easier these days since there is a good chance someone in the family isdoing family genealogy research as a hobby. Presumably all your clients willwant to join as plaintiffs, and you will name as defendants any of the people youfind who refuse to join as plaintiffs (and agree in advance as to how the proceedswill be shared), any lienholders disclosed by your title search, plus all unknown18

persons with a claim to the property. The receiver could be the real estate brokerselling the property. Presumably, if all those appearing consent to the sale andthe proposed division of the proceeds and if the sale is an arms-length sale to anunrelated party, you can get the court to waive the requirement of appraisal andthe posting of a bond by the receiver and to allow a private sale. Court Rule1.1223 specifically validates the recorded sheriffs deed against any party to theaction.19

4. GIS Maps in Abstracts.FACTS: Our abstracter is inserting a copy of the County GIS map in the front ofour abstracts. These maps indicate the lot lines and sometimes are showingbuildings encroaching onto street rights of way or adjacent properties. The mapsare not numbered as an entry and are not really a plat or based on an actualsurvey. I have just been adding a note stating that the map is not a survey butindicates a possible encroachment.QUESTION: Are other examiners encountering this and how are you handling it?RESPONSE(S): I think you are handling it well. I think the abstracter is trying toprovide some location information. I also believe that your friendly county GISperson will readily admit that the lines in their systems don't always match upwith the actual surveys.20

5. Root of Title.FACTS: Abstract states that it is from Root of Title to recent date. There is anestate proceeding recorded, stating that the decedent died in 1957 owning theland. In the entry it states, concerning the final report, that the property vests asprovided in the will to decedent's daughter. There is no Court Officer Deed orother type of conveyance recorded. The order approving the final report andclosing the estate isn't filed until June of 1976 (obviously not 40 years). The onlyentries before this are a Patent from the United States and an Official Plat to thepublic for the town.Under Iowa Code Sections 614.29 and 614.31 it states that the 40 year chain oftitle can be created in "2. Some other person from whom, by 1 or moreconveyances or OTHER TITLE TRANSACTIONS OF RECORD, SUCHPURPORTED INTEREST HAS BECOME VESTED in the person ... "Title transaction is defined in Iowa Code Section 614.29 and includes anytransaction affecting title to any interest in land, including title by will or descent.QUESTION: Would you consider this a transaction to base Root of Title off of,even though the Final Report was approved less than 40 years ago? Or, as webelieve, we may have to send back to the abstracting company to get some otherkind of conveyance? If the latter, is this a valid title objection because of notransfer document?RESPONSE(S): I would assume there was an order admitting the will? Upondeath isn't title vested on death in the beneficiaries subject to possession by theexecutor to administer it? A Court Officer Deed to the named beneficiaries, orchange of title to the beneficiaries I think have been agreed by the list serve asnot themselves muniments of title or actual documents transferring title. Ratheras a means to get the County records changed to reflect the title in thebeneficiaries. I do not think the order approving the final report is the keyelement either. With the record of admitting the will and the probate of the will,and this passage of time, I would be inclined to accept the abstract and title asshown.* * * *Title vests in beneficiaries upon death subject to administration. Death in 1957serves to vest title in the beneficiaries.****21

Iowa Code Section 633.350 states that on decedent's death, propertyimmediately passes to devisees/intestate heirs subject to executor/administrator's possession for administration purposes.Based on my reading of that section, I'd argue that the will (which I'm assumingwas admitted in 1957) qualifies as a muniment of title in the decedent's daughterand a transfer for root of title purposes. The filing of the final report in 1976 isonly significant in that it confirms that the property wasn't sold during probate,and thus eliminates the only caveat to the daughter's absolute title.* * * *I concur with the Will being root of title. Also, if it's a city lot in a subdivision plat,remember Title Standard 1.5.* * * *Title by devise or descent from a death occurring in 1957 creates a valid root oftitle for 2012. See Iowa Code Section 633.350:"Except as otherwise provided in this probate code, ***when a person dies, thetitle to the person's property, real and personal, passes to the person to whom itis devised*** by the person's last will, or, in the absence of such disposition, tothe persons who succeed to the estate as provided in this probate code, but all ofthe property shall be subject to the possession of the personal representative asprovided in section 633.351 and to the control of the court for the purposes ofadministration, sale, or other disposition under the provisions of law, and suchproperty, except homestead and other exempt property, shall be chargeable withthe payment of debts and charges of the estate."The estate proceeding is of public record. Presumably the court file includes atleast an inventory, and if decedent died testate then also a will. The will amountsto a muniment of title.Any reason why the executor and/or attorney waited some 19 years to close theestate? With no Court Officer Deed given, I presume the reason didn't otherwisecloud the title to the property received by the devisee/descendant.22

ACKNOWLEDGEMENTS

6. Acknowledgements.FACTS: We have always required an acknowledgment on a satisfaction.QUESTION: Does the new language in Iowa Code Section 624.37 (referring toIowa Code Chapter 9E) allow the "subscribed and sworn to" statement in lieu ofthe traditional acknowledgement because Iowa Code Section 9E.15(3) allows the"signed and sworn to" language?RESPONSE(S): That is correct. When the legislature passed SF244 (copyattached) in 2011, it amended Iowa Code Section 624.37 to provide that ajudgment release could be acknowledged or notarized. This was to take intoconsideration of the fact that a lot of judgment creditors (and their lawyers) oftenuse "Subscribed and sworn to before me by" instead of a properacknowledgement, and that the important thing is that we have a notarialendorsement of the genuineness of the signature. It is my feeling that using aproper acknowledgement form is the best practice.[Attachment.]23

Senate File 244AN ACTRELATING TO THE RELEASE AND SATISFACTION OF JUDGMENTS.BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:Section 1.Section 624.23, subsection 2, paragraph c, Code2011, is amended to read as follows:c. A party serving a written demand under this subsectionmay obtain an immediate court order releasing the claimed lienby posting with the clerk of court a cash bond in an amount ofat least one hundred twenty-five percent of the outstandingbalance owed on the judgment.The court may order that in lieuof posting the bond with the clerk of court, the bond may bedeposited in either the trust account of an attorney licensed topractice law in this state or in a federally insured depositoryinstitution, along with the restriction that the bond not bedisbursed except as the court may direct. A copy of the courtorder shall be served along with a written demand under thissubsection.Thereafter, any execution on the judgment shall beagainst the bond, subject to all claims and defenses which themoving party had against the execution against the real estate,including but not limited to a lack of equity in the propertyto support the lien in its proper priority. The bond shall bereleased hy tfle eleFk ef eeHrt upon demand of its principal orsurety if no execution is ordered on the judgment within thirtydays of completion of service of the written demand under thissubsection.

Senate File 244, p. 2Sec. 2. Section 624.37, Code 2011, is amended to read asfollows:624.37 Satisfaction of judgment -- penalty.1. When the amount due upon judgment is paid off, orsatisfied in full, the party entitled to the proceeds thereof,or those acting for that party, must acknowledge satisfactionof the judgment by the execution of an instrument referring toit, duly acknowledged or notarized in the manner prescribed inchapter 9E, and filed in the office of the clerk in every countywherein the judgment is a lien. A failure to de-sa acknowledgesatisfaction of the judgment in such manner within thirty daysafter having been requested to do so in~ writing containinga draft ·release of the judgment shall subject the delinquentparty to a penalty of eHe four hundred dollars pl~s reasonableatternej fees ineerrea Sj tHe part] a~§rie.ed, to be recoveredia aa aetien fer tHe satisfaetien ei aekaevlea~meat bj the part]a§§:rie.ea by a motion filed in the court that rendered theoriginal judgment requesting that the payor of the judgment,if different from the judgment debtor, be subrogated to therights of the judgment creditor, that the court determine theamount currently owed on the judgment, or any other relief asmay be necessary to accomplish payment and satisfaction of thejudgment. If the motion relates to a lien of judgment as tospecific property, the motion may be filed by a person with aninterest in the property.2. Upon the filing of an affidavit to the motion thata judgment creditor cannot be located or is unresponsiveto requests to accept payment within the thirty-day perioddescribed in subsection 1, and upon court order, payment upona judgment may be made to the treasurer of state as providedin chapter 556 and the treasurer's receipt for the funds isconclusive proof of payment on the judgment.Sec. 3. Section 631.1, Code 2011, is amended by adding thefollowing new subsection:NEW SUBSECTION. 8. The district court sitting in smallclaims has concurrent jurisdiction of motions and ordersrelating to releases of judgments in whole or in part includingmotions and orders under section 624.23, subsection 2,paragraph -c- and section 624.37, where the amount owing onL

Senate File 244, p. 3the judgment, including interests and costs, is five thousanddollars or less.JOHN P. KIBBIEPresident of the SenateKRAIG PAULSENSpeaker of the HouseI hereby certify that this bill originated in the Senate andis known as Senate File 244, Eighty-fourth General Assembly.Approved2011MICHAEL E. MARSHALLSecretary of the SenateTERRY E. BRANSTADGovernor

AGRICULTURALISSUES

7. Effect of Disclaimer of Interest.FACTS: Will reads as follows with regard to farm real estate: "The remainderinterest to said farm real estate shall pass equally and to share and share alikethe children of (the life tenants) to be theirs absolutely and in fee simple."Granddaughter disclaims her remainder interest bequeathed by the decedent.No other language in Will as to effect of a disclaimer.QUESTION: Does the property pass as if she predeceased the decedent?RESPONSE{S): Presumably.Cases don't shed a lot of light on the effect of a renunciation of devise. But itseems to produce a "pretend the bequest never happened" effect. I think theproperty just goes to the other beneficiaries; the other grandchildren split therenouncing granddaughter's share. (Did renouncer have some judgmentcreditors floating around out there, who she didn't want filing liens on the realestate if she got it?)In re Murphy's Estate, 2171owa 1291,252 N.W. 523 (1934):"If a beneficiary named in a will may renounce the provision thereof designed forhis benefit, certainly public policy places no limitation upon his right to voluntarilyshare such provision with other beneficiaries upon a different or modified basis.The rights of creditors, if any, are fully preserved in this case by the appointmentof administrators of the estate."In re Stone's Estate, 132 Iowa 136, 109 N.W. 455 (1906):"While the assent of the devisee or legatee to a provision apparently for hisbenefit will be presumed, it is well settled that such assent may be expresslywithheld, and the benefits of the will renounced, and in such case no interestwhatever passes to the intended beneficiary. [Citations.]"Schoonoverv. Osborne, 1931owa 474,187 N.W. 20,27 A.L.R. 465 (1922):"It is universally presumed, from the beneficial character thereof, that a legateewill accept a bequest to him, if no obligation or burden is imposed upon him byreason of such acceptance. The rule that a legatee may reject or renounce abequest made for his benefit, even without casting a burden upon him, is quite asuniversally recognized as that of presumed acceptance. The more difficultquestion here is: Did the renunciation of Lewis D. Osborne, evidenced by thewritten instrument filed in probate, after the levy of the execution and thecommencement of this action to subject his interest in the trust estate to thepayment of appellee's judgment, render the levy ineffectual and defeat her claim .... Counsel have not called our attention to any case squarely in point. We haveheld, however, that a renunciation by a devisee defeats the right to the collection24

of a succession tax. In re Estate of Stone, 132 Iowa 136, 109 N. W. 455, 10 Ann.Cas. 1033; In the Matter of the Estate of George Wells, 142 Iowa 255, 120 N. W.713."We have been able to find but few decisions in other jurisdictions touching themain question, but with one or two possible exceptions, such as have beenbrought to our attention, they hold that the right of renunciation is superior to theright of creditors. Bradford v. Calhoun, 120 Tenn. 53, 109 S. W. 502, 19 L. R. A.(N. S.) 595; Bradford v. Leake, 124 Tenn. 312, 137 S. W. 96, Ann. Cas. 19120,1140; Strom v. Wood, 100 Kan. 556, 164 Pac. 1100; Albany Hospital v. AlbanyGuardian Society and Home for Friendless, 214 N.Y. 435, 108 N. E. 812, Ann.Cas. 19160, 1195; Tarr v. Robinson, 158 Pa. 60, 27 Atl. 859. The SupremeCourt of Tennessee in Bradford v. Calhoun, supra, said:"The true rule, founded upon principle, is that it is optionary with the devisee toaccept the devise, however beneficial it may be to him; that when he elects torenounce, before any act on his part indicating an acceptance, his renunciationshall relate back, and will be held to have been made at the time of the gift, andwill displace any levy of creditors that may in the meantime have beenmade ... The renunciation is not a voluntary conveyance, void as against existingcreditors, because, when he has properly renounced, the renunciation relatesback to the date of the gift, and, as he has never accepted the gift, he has hadnothing that could be made the subject of a voluntary conveyance.""All of the courts hold that the renunciation, when filed, relates back to the timewhen, under the law, the will became effective. Albany Hospital v. AlbanyGuardian Society and Home for Friendless, supra; Bradford v. Leake, supra;Strom v. Wood, supra."The presumption of acceptance does not operate to vest title to the devisedestate in the beneficiary and is conclusively overcome by any act amounting to abinding renunciation thereof. Renunciation is not equivalent to a conveyance bythe debtor, for the purpose of defeating the claims of creditors, nor is the motivethat prompted it material in the absence of collusion or fraud. By renouncing thebequest, the beneficiary is deprived of any interest in the subject-matter thereof,and nothing passes to him upon which an execution could be levied or made alien. Creditors have no right, nor courts jurisdiction, to compel acceptance, or toprevent the beneficiary from renouncing or rejecting a gift. Robertson v. Schard,142 Iowa 500, 119 N. W. 529, 134 Am. St. Rep. 430; Bains v. Bank, 136 Ky. 332,124 S. W. 343, 136 Am. St. Rep. 263; *23 Harding v. Harding, 140 Ky. 277, 130S. W. 1098, Ann. Cas. 1912B, 526."Voit v. Schultz, 232 Iowa 55, 4 N.W.2d 410 (1942) refers to the Schoonoverruling and in particular the ALR citation, notes and cases.McGarry v. Mathis, 226 Iowa 37, 282 N.W. 786 (1938) also cites Schoonover toeffect that:25

"A renunciation may not be looked upon as the equivalent of a conveyance ofproperty by a debtor."34A Am. Jur. 2d Federal Taxation~ 143,226 (2012) "Property can be included ina decedent's estate under the lifetime transfer rules only where there is an actualtransfer by the decedent. There is no transfer where a legatee renounces hisbequest during administration of the estate causing the property to go to otherbeneficiaries.[FN1 0] But renunciation by an heir is regarded as a transfer by him.This is because the laws of intestate succession force title upon an heir. (A willmerely offers title to a legatee. )[FN 11 ]"[FN10] Routzahn v. Brown. Fayette, exr, (1933, CA6) 12 AFTR 335,63 F2d 914,cert den (1933, S Ct) 290 US 641, 78 L Ed 557.[FN11] Hardenberqh, Ianthe, (1951) 17 TC 166, affd (1952, CAS) 42 AFTR 314,198 F2d 63, 52-2 USTC ~10859, cert den (1952, S Ct) 344 US 836, 97 LEd 650.26

8. Execution on USDA Payments.FACTS: I have a judgment against a debtor who receives CRP payments.QUESTION: Has anyone had any luck trying to execute on CRP payments? Ifso, can you serve execution on the local FSA office? Any special hoops I willneed to jump through?RESPONSE(S):27

9. Farm Acreage Forfeiture. Can Contract Vendee Summarily State Land Isn'tAgricultural and Therefore Mediation is Inapplicable?FACTS: I am examining an abstract where a farm acreage is sold on contract in2009 in excess of $100,000.00. Affidavit of forfeiture is filed in August of 2012.The affidavit shows the unpaid contract, including the balloon payment due June1st in excess of $100,000.00, as unpaid. The abstract doesn't show any requestsfor notice under Iowa Code Section 656.2(2). The acknowledgment of serviceshows service on both vendees in June of 2012. The abstract shows a secondacknowledgment of service on the spouse of the vendee in June of 2012. Thisacknowledgment of service states:"The undersigned further acknowledge that the real estate which is the subject ofthis Forfeiture is not agricultural property real estate under Chapter 654 of theIowa Code, and that the farmer/creditor mediation provisions of Iowa Code 654.Ado not apply to this matter."Code References:a. Section 656.6 provides, in part, that a person shall not initiate forfeiture of areal estate contract for the purchase of agricultural property defined in Section654A.1 which is subject to an obligation of $20,000 or more unless ...b. 654A.1 "Agricultural property" means agricultural land that is principally usedfor farming as defined in section 9H.1 ...c. 9H.1 (2) "Agricultural land" means land suitable for use in farming.d. Section 654A.6 and Section 656.8 both provide in part that, "Title to land thatis agricultural property is not affected by the failure of any creditor to receive amediation release, regardless of its validity."Additional Facts:a. The vendor has several mortgages and each of the mortgages contains thestandard notice of homestead exemption waiver per Iowa Code Section 561.22.Concern:a. This is a farm acreage. As an examiner, I have no idea if the acreagecontains hog buildings, grain bins, whatever.QUESTION: a. Is the vendee's statement noted above sufficient, or does theattorney for the vendor need to go back and get a mediation release?b. Do the provisions in Iowa Code Sections 656.8 and 654A.6 which indicatethat title is not affected by the failure of any creditor to receive a mediationrelease solve this?28

RESPONSE(S): I would accept the vendee's (spouse's) acknowledgmentstatement. Title Standard 1.1. Effectively it's a statement against interest. Onlythe vendees would desire to call in Iowa Code Section 656.6 to set aside theirforfeiture. No one else would do so.Good luck to the vendees, raising that issue if in the future they tried to claim theforfeiture was deficient due to failure to obtain mediation notice.Court: "Mr. Vendee, in 2012 your wife already said that your acreage was notsubject to farm mediation. How can you now argue that it is subject? Oh, andalso Iowa Code Section 656.8 says vendor's title is good despite any failure byvendor to get a mediation release."Doubtless, the attorney preparing the forfeiture documents thought of the issueyou raise, and attempted to forestall it. Instead, he just drew your attention to it.Let's look at the practical impact.IF the "farm acreage" did contain ag-useable outbuildings, those buildings wouldhave to be "suitable for use in farming." Buildings are fixtures, not land surfaceper se. But Iowa Code Chapter 9H does not define "land". The common lawwould include fixtures within a broad definition of "land".But, are any buildings "Suitable for use", i.e. in usable shape? And, "farming" isdefined in Iowa Code Section 9H.1(12) as "cultivation of land for the productionof' various commodities, or "raising of poultry" or "production" of other crops.Building "use" would be only incident to that "cultivation", "raising", or"production".No abstract is likely to ever show any of these facts.If we accept the idea that Iowa Code Section 656.6 potentially covers forfeiture ofrural acreages, and requires mediation notices, then we hamstring all transfers ofrural acreages.I've never seen anyone obtain a mediation notice in these circumstances. IowaCode Chapter 654A (and Iowa Code Section 656.8) was NOT enacted to dealwith this sort of situation. I believe a court would find that the legislature did notintend to dragnet forfeitures of acreages into the scope of that 1 980s farmdepression statute.Speaking personally, for 21 years past !live on just such a farm acreage as youdescribe. Over the years most of the outbuildings have collapsed or burned.Those remaining, with two exceptions, are tumbledown and unusable for theiroriginal purposes.29

Exception one is still-marginally-usable tool shed. Not an agricultural use.Exception two is a building originally constructed probably a hundred years agoas an ear-corn crib. It was later hollowed out and used as a barn, its currentstatus.In this barn we store bicycles, motorcycles, the lawnmower, various other junk,and occasionally cars. My renter, a farmer who farms the land from which myacreage was taken, also sometimes uses part of that building to store roundbales of hay he intends to later sell. Is that building "use in agriculture"?Somehow I doubt that a court would so find. (Although I do rent 3.5 acres to thetenant, so that's a separate issue I could raise!)30

10. Termination of Farm Lease.FACTS: My client is the executor of his late mother's estate. The estate consistsprimarily of 160 acres of farm ground. Executor desires to sell the ground. Foryears the ground has been leased on an oral year to year lease. No notice wasgiven prior to September 1, 2012, of termination of the lease.QUESTION: I am of the opinion that the tenant has the right to lease the groundfor an additional year and that we should give a termination of lease prior toSeptember 1, 2013. I am also of the opinion that we need to sell the farm subjectto the lease. Am I correct?RESPONSE(S): I agree.* * * *Agreed, unless the tenant will enter into an agreement to voluntarily terminate thelease as of March 1, 2013.* * * *The estate and the farm tenant could always enter a written termination of thelease, if mutually agreeable, so the property could be sold free and clear of thefarm lease for 2013. Has the tenant incurred any expenses in reliance on therenewal of the lease that cannot be moved· to other land and for which theexecutor may need to reimburse the tenant if the lease is terminated?The tenant may also be a potential buyer.If the tenant is unwilling to terminate the lease, then the tenant has a right tolease for the 2013 crop year. I see no reason why you cannot immediately givenotice so you don't miss the 2013 deadline.* * * *Agreed to all of the above. I'd make sure to give notice thirty days prior to thescheduled termination to avoid any potential Iowa Code Section 562.4complications, however.* * * *Consider an offer to buy out the 2013 lease from the tenant. I have done it from$75 to $150 per acre buyout, plus reimbursement for any fall tillage ISU ratesand fall fertilizer. New farm buyer always wants to start farming ground.31

****Agree, also, and you need not wait to terminate. I would do it as soon aspossible. Also, we sell a lot of land "subject to current year lease". It seems tohurt it about $500 per acre in value, give or take a couple hundred. If the cashrent lease amount is extremely low, like $200, then it is probably advantageousto supplement it with another $100 to $150 per acre. In other words, in the caseof a lease of $200, we would advertise the auction like this: "Buyer gets 2013cash rent equal to $330 per acre, half credited at closing, half December 1" orwhatever the case is.32

11. UCC Filing of Landlord Lien.FACTS: I was wondering what everyone's expert opinion was relative to therequirements of filing a UCC filing statement to perfect a landlord's lien ingrowing crops by the tenant.QUESTION: After the initial UCC is filed, what is everyone's practice with regardto after a lease is terminated and a new lease is entered with the same tenant, isa new UCC Financing Statement required? Recommended?RESPONSE(S): So long as the lessor and lessee remain the same, I don'tbother re-filing the UCC-1 for my landlord client. Although unlikely I'd refile ifother lease terms changed, such as increase in the number of leased acres.33

12. When Is a Sale a Sale for Step-Up Purposes.FACTS: Auctioneer has a farm auction set. Owner is in a nursing home neardeath. Her son holds a power of attorney. A question has arisen whether theauction should be postponed until after death for step-up in basis. There will besignificant capital gain using mom's basis. Auctioneer claims that his legaladvisor is saying that family will still get a step-basis if closing occurs followingdeath; actual auction date is irrelevant. I say if auction is immediately followed bya 10% down payment and signed contract binding successful bidder then there isno step-up with mom still living. Mom is seller through the power of attorney.QUESTION: Am I wrong? Is there any way to obtain a step-up in basis short ofpostponing the auction until after death?RESPONSE(S): You are correct. I think the auctioneer is wrong on tax law.Postpone the auction. And with a power of attorney, Son's power to sell mostlikely expires at mom's death. You'll have to take a look at the will to see whereto go thereafter.Purchase of auctioned property occurs at the auction (at acceptance of the lastbid), even though title does not pass at that moment. See:Van Sickle Canst. Co v. Wachovia Commercial Mortq .. Inc., 783 N.W. 2d 684(Iowa 201 0) ("Van Sickle purchased the Peterbilt tractor and the Internationalsemi-tractor at the auction. When he asked, he was told that he would receivethe title to the vehicles after his check cleared ... ")Moser v. Thorp Sales Corp., 256 N.W. 2d 900 (Iowa 1977) ("We agree the salebill and consequent auction, bidding, and down payment constituted anenforceable contract, and the 'offer to buy' was a memorial of that agreement.See Severson v. Elberon Elevator. Inc., supra, 250 N.W. 2d at 421.") Cited byShivvers v. Hertz Farm Management, Inc., 595 N.W. 2d 476 (Iowa 1999) (as tononliability to buyer of auctioneer as agent of disclosed principal).In re H.W.G. Folkers Revocable Trust, 682 N.W. 2d 81 (Table) (Iowa App. 2004)("Here, Firstar conducted a private auction which became final upon theauctioneer's acceptance of the final and highest bid.")Starr v. Liberty Specialties, Inc., Not Reported in N.W. 2d, 2004 WL 3488072(Iowa Dist. Ct. for Scott Co. 2004) ("Starr sold the property at public auction inApril 2003. Liberty Pattern Co., Inc., another corporation in which Bill August hasan ownership interest, was the high bidder at $55,000. The company's attorney,David A. Dettmann, examined the abstract of title. Several objections were raisedin his title opinion. Following months of communication back and forth between34

Starr's attorney and Mr. Dettmann, the title objections were corrected and theclosing was held in November 2003.")In a recent case the Iowa Court of Appeals treated an auction sale of farmland asoccurring on one day. See dicta in: Estate of LeClere v. LeClere, 791 N.W. 2d427 (Table) (Iowa App. 2010):(" ... on May 23, 2008, Bessie's land was sold in three parcels at public auction fora total purchase price of $775,882.") This outcome comports with Moser v.Thoro Sales Coro., above. I can't imagine that a typical farmland sale/transferprocess actually concluded in a single day. Especially since the LeClere litigationwas contentious. So I'd bet that the Court took the date of auction as effectivedate of sale. To confirm, you might check the court filings in this DelawareCounty probate case.Or, you might demand that the overeager auctioneer direct his "legal advisor" putin writing that opinion about non-liability for capital gain tax! Citing authorities!Then, after your claim of exemption fails, you can sue the auctioneeragent/fiduciary, and his legal advisor, for breach of duty to correctly advise yourclient (the third-party beneficiary of legal advisor's advice ... ) Auctioneer probablywants to rush the sale because he fears losing a fat commission if/when theproperty passes into a decedent's estate.****Prior to 2001 the argument could be rnade that the signing of a contract evenwith a down payment did not constitute a sale. However, with the Tax Court caseof Keith v. Comm. 115TC605 the law changed. The assumption of the benefitsand burdens of ownership constitutes a sale. The right to obtain legal title bypaying the purchase price is such a benefit.Clearly it would be a costly mistake to sell before the imminent passing of theowner.* * * *The argument made in Moser v. Thorp Sales was that, in Iowa, when thehammer falls and the auctioneer cries, "Sold", a sale is made and the deal isdone. The contract is effective as of that moment. The court agreed.35

BANKRUPTCY

13. Lien Avoided in Bankruptcy.FACTS:QUESTION: Is there any redress at all in state court when a mortgage lien isavoided in bankruptcy? Equitable lien or something like that is what I wasthinking but there may be nothing that can be done.RESPONSE(S): No. Are you saying the lien was improperly avoided? PurchaseMoney Security Instrument liens are almost impossible to avoid. !f you have avalid point you would have to reopen the bankruptcy- but the Court will want toknow why the matter was not raised when the motion to avoid lien was filed.****The mortgage is NOT a purchase money mortgage. Client did not appear inbankruptcy to contest proceeding to avoid lien. I am the foreclosure attorney forthe property and tasked with attempting to clean it up.* * * *It is a first mortgage though, and while I need more evidence though it couldhave refinanced a purchase money mortgage if that makes any difference.* * * *Seemingly, a lien avoided in bankruptcy would be res judicata before any othercourt.36

CONTRACTS

14. Ancient Contract.FACTS: I represent the Sellers of real estate. I received a title opinion objectingto a contract dated September 10, 1969, recorded October 18, 1977. Theexaminer is requiring that the "contract be completed and a Warranty Deedprovided in satisfaction of the contract." Both the contract Sellers and Buyers aredeceased, so this creates a legion of problems. My position is that this contractis barred by virtue of Iowa Code Section 614.17. It is over 40 years old. There isa proper deed at Entry 68 from these same Sellers to my clients in 1979. TheBuyer's attorney says that he cannot determine when this claim will arise, andtherefore, when it will be barred by Iowa Code Section 614.17.QUESTION: Is this contract barred by virtue of Iowa Code Section 614.17?RESPONSE(S): If the concern is that the 1979 deed from contract vendor tocontract vendee does not recite that it is in fulfillment of the contract, there isnothing to be fixed. If there were no deed, or if the deed recited a different legaldescription than the contract, then you would have a problem. Under the facts asstated, however, there is no objection to be made.* * *If the parties to the contract are exactly the same as the parties to the laterrecorded deed, and the legal description is the same, there are no possibleclaimants on the Sellers' side of the "unsatisfied" contract. An examiner mustask, as a practical matter, who could interject a claim against title. The Sellers(and their heirs and assigns) gave up any claim that the contract was not paid infull by giving a deed to the property. Whether full price was paid or not should notmatter to the examiner since the persons holding legal title under the contractconveyed said title to the persons owing them money. That is all vendeesneeded to receive complete title, legal and equitable. The recitation would havemade it clear, but I don't believe an objection exists on the basis that therecitation is omitted.* * *So, let me get this straight. The objection is the Warranty Deed at Entry 68 isinsufficient to be a satisfaction of the recorded contract, because it lackedlanguage, "this deed is given in satisfaction of the recorded contract of October18, 1977?" The contract sellers were the grantors on the Entry 68 WarrantyDeed. The contract buyers were the grantees on the Entry 68 Warranty Deed. Ifthat is the correct restatement of the objection and facts, then no objection exists.With the Warranty Deed, they conveyed full fee and warranted it against anyclaims whatsoever. Omission of the words "given in satisfaction of contract37

ecorded at Book and Page" is an omission of no consequence. Why create anobjection when none exists?* * * *The Seller is the same in both transactions. The Buyer is different; the contracthad the individuals named as Buyers, the Deed had their corporation as theGrantee. Does that change your opinion?* * * *1. Seller's claim to the real estate would be barred by the 1979 deed.2. Buyers' claim would have arisen on the date of the 1979 deed, and would bebarred by Iowa Code Section 614.17.I wouldn't think it changes the marketability of title, just the route you take to getthere.****I considered whether I would like to see an affidavit explanatory of title to theeffect the corporation is the alter ego (or some such thing) of the Buyers on thecontract. But, I decided not. Seller's interest is conveyed. So no claim from them.Buyers' interest is either barred by Iowa Code Section 614.17 or under IowaCode Section 558.5, the buyers' claim would be deemed abandoned 10 yearsfrom performance date, or 10 years from recording date. (This ties to Statute ofLimitations 614.5 - written contracts and recovery of real property- 1 0 years.)So my inclination is to pass title as is.38

15. Contract Forfeiture by Agent.FACTS: I am examining an abstract containing a Real Estate Contract­Installments executed by the parties on an ISBA form (although it was clearlyfilled out without the assistance of an attorney, and no attorney name wasattached). The contract was executed by A, as power-of-attorney forB (Seller)."A" is designated as "Agent". To this matter, I have called for a Power ofAttorney to be filed granting ability of agent to sign at the time of execution.However, five years later the contract is forfeited (forfeiture provision included inthe contract). The same "Agent" signs both the notices and the affidavit on behalfof the seller. Cassady v. Molt, 203 Iowa 17, 212 N.W. 332 (1927), allows for anattorney to sign on behalf of his client (without the need for filing any form ofPower of Attorney), but seems limited to that exception. Iowa Code Chapter 656appears to be silent on the issue, referencing only that the "seller" issue suchnotice. I'm curious whether anyone has encountered legal authority stating thatan agent (not attorney) has the ability to file a forfeiture notice on behalf of aprincipal.QUESTION: Would a Power of Attorney filed of record be appropriate in thiscircumstance, or should the notice be re-served and re-filed by the Seller?RESPONSE(S): Can you have the Power of Attorney sign an affidavit that hisPower of Attorney has not been revoked during the time periods they havesigned this?****No need for a re-filing of forfeiture. The legal "fiction of identity" should allow theforfeiture to stand. Principal and agent are both the "seller", so to speak.No case Jaw addresses agents' actions for principals under Iowa Code Chapter656, specifically. But the Supreme Court authorized agent's action givingdemand for suit under Iowa Code Chapter 572 (an action substantially akin togiving forfeiture notice). In doing so the Court addresses the same question youraised.Woodruff & Son v. Rhoton, 251 Iowa 550, 101 N.W. 2d 720 (1960):"The general rule applicable as stated in most jurisdictions is that noticesrequired by law given by one party to another party in order to establish rightsand obligations must state with reasonable certainty the essential facts requiredby Jaw. And the legislative intent must be ascertained from all the terms of thestatute, related statutes, plus common sense and sound reasoning.Commissioner of Corporation & Taxation v. City of Springfield, 321 Mass. 31, 71N.E.2d 593; Hunter v. Harlan, Ohio App., 34 N.E.2d 467; 36 Am. Jur., Mechanics'Liens, § 241, p. 153; 39 Am. Jur., Notice and Notices, §§ 12, 25; 66 C.J.S. Notice§§ 11' 13b.39

"II. It is appellants' further contention that one acting or purporting to be theattorney for the owners is not such a party as may under the statute give thedemand notice provided for in Section 572.28. We cannot agree, and must holdthat the term 'agent' used in that section does include an attorney acting for andin behalf of his clients. The relation of attorney and client is predicated on thedoctrine of agency or representation. Farnsworth v. Hazelett, 197 Iowa 1367, 199N.W. 410, 38 A.L.R. 814. We said therein on pages 1369 and 1370 of 197 Iowa,at page 411 of 199 N.W.: 'Historically speaking, the doctrine of representation oragency is bottomed on the fiction of identity, the unity of principal and agent. Thegeneral notion is expressed in the maxim, 'Qui facit per alium facit per se.' * * *'At any rate there is a presumption that where an attorney purports to representhis client, he does so as the agent of the employer or client. It is said in 5Am.Jur., Attorneys at Law,§ 6, p. 264: 'In acting for a client, the attorneyoccupies, in a sense, the position of agent or employee.' He is bound by thesame degree of reasonable care as is required of any other agent, although he isa particular type of agent. 5 Am.Jur., Attorneys at Law,§§ 45, 47, pp. 286, 287; 7C.J.S. Attorney and Client§§ 66, 67, p. 850. Also see Restatement of the Law ofAgency, § 36, p. 93. *556 Epperson v. Helbron, 145 Ark. 566, 225 S.W. 345, 15A.L.R. 597, held that the notice given by an attorney is the act of the client."We are satisfied here that by the use of the term 'agent' in Section 572.28,attorneys purporting to act for and in behalf of their clients are included and thaton the face of the 'Demand' it clearly appears E. J. McManus was purporting toact in the capacity of agent for Albert L. Rhoton and Hazel V. Rhoton, owners."Since you have initial entry into contract by the agent, acting under a POA onbehalf of the principal (seller), then I should think that the POA can and would beconstrued as also allowing the agent to "undo" the contract he first made. As younote, the Bar form contains the specific forfeiture provision.Johnson v. Arkfeld, 705 N.W. 2d 340 (Table)(lowa App. 2005):FN2: "A power of attorney is an instrument ... by which one person, as principal,appoints another as his or her agent and confers upon the agent the authority toperform certain specified acts or kinds of acts on behalf of the principal.''3 Am. Jur.2d Powers of Attorney§ 21, at 445 (2002).Kabe's Restaurant Ltd. v. Kintner, 538 N.W. 2d 281 (Iowa 1995), citing FortDodge Creamery Co. v. Commercial State Bank, 417 N.W. 2d 245, 246 (IowaApp. 1987) (acquiescence by principal in series of acts by agent indicatesauthorization to perform similar acts in the future).40

16. Death of Real Estate Contract Vendee.FACTS: I represent an LLC who bought the assets of a sole proprietorship fromthe member's father-in-law. My client, the organizer of the LLC, also informed methat the father-in-law was buying real estate for the company operations oncontract, which would be assumed by the LLC. The vendee on the contract was"Father-in-law, DBA Company". After the business purchase was completed, butbefore any formal, recorded assignment of the vendee's interest in the contractcould be formally transferred, the vendee/father-in-law fell ill and passed away.The LLC continued paying the amounts due under the contract for some time.Since the business assets had already been sold, the father-in-law/vendee hadfew other assets, most of which (I believe) were held jointly with (common-law)wife, so no estate has been opened. Vendee/father-in-law has children with(common-law) wife, but also kids from outside that relationship. I don't believe heleft behind a Will.I want to make sure that, as intended by vendee/father-in-law, the LLC gets"credit" for all previous payments made toward the contract. The Vendor'sattorney and I have contemplated doing a forfeiture, but are concerned that if justa forfeiture without an estate would result in title objections if the property is eversold or re-financed.QUESTION: Given the nature of these circumstances, is a forfeiture appropriate(assuming the LLC has stopped making payments)? Would it also require anestate be probated to clear title? Or is there another method to transfer thevendee/father-in-law's interest to the LLC that would result in a clear title?RESPONSE(S): To whom were all those contract payments made, if father-inlawwas dead? Is the common-law wife commonly recognized as father-in-law'swife? If so, then she might have some statutory share interest in his businessreal estate.Forfeiture sounds like an attractive option. I presume that Vendor then would turnaround and make out deeds to your client. But, should Vendor forfeit contract, Ithink, he would have to direct the notice to all of the heirs of father-in-law. Ifsome of them are unknown then that could get messy, and might be questionedas to whether everyone was properly identified.If you can identify all of the heirs then forfeiture followed by new deed probablywould provide clear title for your client, in the most expeditious manner.If not, then your situation seems to call for a creditor-initiated estateadministration, to sort out the title mess. Establish by Court Order the fact of the41

contract assignments. Also establish to court satisfaction and any and alloutstanding balances due. Once those steps are achieved you can find out iffather-in-law was entitled to deeds at his death; if not, then what yet remains toget them.Naturally the expense and time required for administration make it the leastdesirable course of action.42

17. Election Out of Installment Method.FACTS: I have a number of clients that want to sell real estate and close by theend of the year. Impossible to get abstracts updated in time.QUESTION: Can we enter into a real estate contract calling for closing inJanuary, 2013? Take nominal payment in 2012 but then file 2012 return electingout of the installment method and reporting the entire sale income in 2012?RESPONSE(S): Just try to get final payment prior to due date of return so clienthas the money to pay for it.And I would warn against nominal payment- get something heavy in casesomething happens between now and when final payment needs to be made.****I also have assumed that possession should be given in 2012 under theinstallment sale contract so that it can be reported in 2012.* * * *Does anything need to be placed of record (such as a memorandum of thepurchase agreement) before December 31 51 ?* * * *Document recorded and possession date all pretty much need to be in 2012.* * * *Not to belabor the point, but does this apply to a standard purchase agreement(with earnest money paid at execution) or must it be in the form of an installmentagreement?* * * *It is believed that an enforceable real estate document that meets all of therequirements of the statute of frauds and is recorded showing possession prior tothe change of the calendar year will suffice. I am aware of some that have takenan informal realtor's purchase agreement or a Bar form Offer to Buy, etc., andhave added notary jurats and recorded them to meet the requirement.* * * *43

Funds have to be truly exchanged and into seller's hands- not held in escrow orin a trust account.****I am going to do all of the documents: contract, escrow, deed, escrow statementwith recorder, declaration of value and groundwater hazard statement. Then tellmy clients they have to be executed, delivered and recorded prior to the end ofthe year. I think execution and delivery is enough but I want a solid paper trail.The nice thing about these transactions is most law firms also do the 1 099reporting so why is the IRS ever going to question a return if the 1099 andSchedule D match.****Interesting discussion, assume it may work, but I would advise my clients,although assume this will work, understanding the time frame we are workingwith; the unknown status of tax laws on January 1, 2013, we make no guarantee,warranty, whatever, that Internal Revenue Service and/or Iowa Department ofRevenue will accept the tax ramifications as contemplated by structuring thistransaction in this fashion.44

18. FED Action Against Party in Possession.FACTS: A client sold commercial property on contract (Iowa Bar AssociationForm). The purchaser defaulted under the contract. The contract was forfeitedwith the notice and an affidavit recorded. The contract provided that in case offorfeiture that purchaser may be treated as a tenant holding over, etc. I served athree-day notice to quit pursuant to Iowa Code Section 648.1 (2), and am ready tofile an FED. I just found out that the purchaser previously rented the property toa third party who is living on the premises. My intended course of action is asfollows (a) I need to serve a three-day notice to quit on this party in possession;(b) the grounds for the three-day notice would be pursuant to Iowa Code Section648.1(2); and (c) then include the party in possession in the FED.QUESTION: Any comments or suggestions?RESPONSE(S): You might get away with it if no one objects, but you might haveto re-serve notice of forfeiture on the third party tenant.45

19. Liens on Property Being Bought on Contract.FACTS: Contract buyer did not have the abstract examined prior to buying theproperty on contract. He was unrepresented by counsel. Contract calls for aWarranty Deed to be given when contract is paid in full. Total sales price is$15,000. Buyer goes to the bank to borrow $2,500 to pay the contract off inadvance. The abstract shows an $11 ,000 tax lien to the Department of Revenueand some judgments that were entered prior to the contract being recorded.Those are over $10,000. Contract buyer is not sure how to proceed. He has beenin the house for four years and has made $4,000 in improvements.QUESTION: (1) It appears that the vendor cannot warrant the property is free ofliens as he warranted that he would, but what would buyer accomplish by suingthe seller for specific performance as he has no resources and the court cannotremove the liens. There are also liens that occurred after the contract wasrecorded.(2) If buyer does not keep making the payments, even with the liens, can sellerforfeit him out? From a practical standpoint if he was to pay if off and get a quitclaim deed will he be just putting the property at risk and will he have anypersonal liability?(3) Can he sue the seller for the payments he made under a fraud andmisrepresentation theory?RESPONSE(S): You don't give execution and delivery date of the contract nor ofthe lien entries. So I presume that these liens all have several years to run beforeexpiring.For what kind of tax is the lien to the Department of Revenue? Income?Inheritance? Something else? Most common Department of Revenue liens fortaxes last for ten years from date tax becomes due and payable, and take effectagainst particular real estate when indexed. See Iowa Code Sections 422.26 and450.7.One key question, when your client purchased the residence, had the seller beenusing the property as his homestead? If so, then the seller would have beenprotected by various court rulings. Judgment liens don't attach to homesteads;see, e.g., Baratta v. Polk County Health Services, 588 N.W. 2d 107, 109 (Iowa1999). So those pre-sale judgments would not attach. A homestead owner mayconvey his homestead free and clear of preexisting judgment liens.Don't know about the tax lien, might have to test that one in court to see whetheror not homestead is free of Department of Revenue lien. Iowa Code Section46

561.16 declares that "The homestead of every person is exempt from judicialsale ... "Seems to me that the Department of Revenue, if it desires to collect a tax debtsecured by lien, has two options: 1) collection of the tax debt from proceedsreceived by taxpayer upon sale of his property, or 2) proceed to foreclose itsliens by seeking "judicial sale" of the property which secures the payment of thetax debt.Seems to me that homestead status does not protect against attachment of a taxlien against the homestead owner, but does at least protect against executionand sale on the lien. (But maybe the Department of Revenue doesn't pushparticularly hard against homesteads. Might look bad to the public.)I think that tax liens probably do attach to a homestead, and at sale of theproperty may be asserted against the proceeds received by the seller/taxpayer.See dicta in: American Sav. Bank of Marengo v. Willenbrock, 209 Iowa 250, 228N.W. 295 (1929).Post sale judgments against the seller of course do not attach since the seller'slegal title is a mere vendor's lien, and not an interest in the real estate that's nowyour client's.If the seller did not occupy the premises as his homestead before the sale, well,then your client might best deal with this mess by letting the liens lie there quietlyand hope they expire without their owners enforcing them.Just continue to pay on the contract, and treat such payments as a "rentsubstitute". Alternatively, get the seller to agree to treat the $4,000improvements as rent equivalent, and not pay cash to seller. Unless and untilseller can give that warranty deed, your client basically "rents" his residence(because he might be dispossessed at any time). He should act on thatassumption.For what it's worth, when our firm represents contract buyers who offer no largedeposit of earnest money down, we recommend that the buyer have an abstractexamination done after a year occupying the property. And in the meantime,make no significant improvements. After a year or so the buyer has built up alittle equity. But no so much that he couldn't walk away from the deal if hediscovers a mess like your client faces.47

20. Maximum Interest Rate on a Real Estate Contract.FACTS: Iowa Code Chapter 535 looks to me to say that the maximum rate ofinterest that can be charged on a real estate contract is 2 points above themonthly average ten year constant maturity interest rate of the United Statesgovernment notes and bonds. I, however, find that hard to believe. It seems fartoo low.QUESTION: Does anyone know what the maximum rate of interest that can becharged on a real estate contract is?RESPONSE(S): Iowa Code Section 535.2(2)(a)(3): Vendee under a contract fordeed to real property may agree in writing to pay any interest rate.48

21. Past Real Estate Contract.FACTS: Husband and Wife along with Wife's sister and her husband sold oncontract in 1986 to Buyers. Real Estate Contract was recorded. Apparently thecontract was completed in 1989, however, it appears that no deed was everrecorded and I have no documentation on the completion of the contract. At leasttwo of the Grantors have passed away with their estates probated. The Buyer'sWife has passed away and a quit claim deed was done to the Husband of herinterest. Now the Buyer is looking to sell and has requested a Warranty Deedfrom a surviving Seller and the testamentary trust of one of the Sellers (Wife) (myclient). However, looking through our files, it does not appear that the propertywas ever in the trust.QUESTION: Can a deed be done? How? Who would have to sign the deed?RESPONSE(S): Under current law, you may have to do a quiet title action toplease the title examiner. I suspect your client is basically at the title examiner'smercy. However, you should be aware that the ISBA Real Estate Section isproposing legislation for the next legislative session which would make clearanceof title in such cases easier.* * * *First, your client gains the benefit of Iowa Code Section 614.21. Foreclosure ofancient mortgages.No action shall be maintained to foreclose or enforce any real estate ... contractfor the sale or conveyance of real estate, after twenty years from the datethereof, as shown by the record of such instrument, unless the record of suchinstrument shows that less than ten years have elapsed since the date ofmaturity of the indebtedness or part thereof, secured thereby, or since the right ofaction has accrued thereon, or unless the record shows an extension of thematurity of the instrument or of the debt or a part thereof, and that ten years fromthe expiration of the time of such extension have not yet expired ....The contract is unenforceable because barred by the statute of limitations. SeeRamiller v. Ramiller, 236 Iowa 323, 18 N.W.2d 622 (1945)(parties entitled toadjudication that mortgage was unenforceable; "equity aids the vigilant, not thosewho slumber on their rights") Newqirq v. Black, 174 Iowa 636, 156 N.W. 708(1916)(1egislature enacted this section to cut off old, unreleased liens cloudingtitles & avoid "multiplicity of actions to quiet title") Day v. Baldwin, 34 Iowa 380(1872)(action to foreclose a 'title bond'--contract equivalent--is barred in 10 yearsfrom the time the cause of action accrued)49

On these authorities no attorney should object to the state of the title. TitleStandard 1.1.Next, the question becomes: how does one properly assert and prove full legaltitle, without that quiet title action and getting a judge to rule that the title's clear?Idea: Accept the Warranty Deeds from the surviving heirs, "given in satisfactionof one certain contract dated and filed .... "(The Deeds might also contain the vendors' disclaimer of any interest in vendor'slien after the contract was paid in 1989.) And together with the Deed( s) prepareand file an Affidavit explanatory of title (Iowa Code Section 558.8). In theaffidavit, explain:1) Prior satisfaction of the mortgage2) Failure by vendors to release (or loss of earlier deed supplied by them)3) Death(s) of vendor(s)4) Relationships of current grantors to deceased vendors (heirship connections)5) Fact that no Iowa Inheritance tax was due (or was paid in the estate)6) Fact that no U.S. Estate tax was due (or was paid in the estate)Jesse Marshall addresses this "deceased vendor of old contract" question in acouple of his title opinions.G. F. Madsen, Marshall's Iowa Title Opinions and Standards,(~"econd Edition,Section 20.2, pp. 443-44, 447-48.(A) TESTATE DESCENT OF VENDOR'S INTEREST IN REAL ESTATECONTRACT "Of course, a vendor should always execute a deed at the sametime that he executes a contract of sale, depositing the deed in escrow andendorsing on the deed, so it will be self-proving, the fact that it is deposited inescrow to be delivered to the vendee upon completion of the contract payments.However, this is frequently overlooked, and the vendor may die, as in this case,with legal title still undisposed of. In such a situation, the vendor holds title aspersonalty, as security only for the debt, which descends to his personalrepresentatives; the vendee holds title as realty, which descends on his death tohis heirs. 30 "[FN 30] = citations. Emphasis in section by Marshall, not me.(B-2) CONVEYANCE OR RELEASE OF INTEREST--INSTALLMENTCONTRACT--NO PROBATE OUT OF STATE "It is also possible that thevendee might be willing to accept a deed from the heirs of the deceased ifsatisfactory evidence can be furnished showing who were the heirs and thatthere are no federal or state taxes which constituted a lien. Since the date ofdeath was only three years ago, however, it is doubtful whether the purchaser50

would be justified in relying upon affidavits only for proof of heirship. Anothermethod which might be pursued would be an action to quiet title."Given that the contract in your case is a quarter-century old, I think acceptance ofaffidavits would be fine, along with acceptance of the deed from surviving heirs.I've had some clients in similar situations, and we've "erased"' the old liens insuch manner. I think a quiet title action would not be needed.51

22. Prepayment Contract.FACTS: I am dealing with an issue involving the ability to prepay a real estatecontract involving commercial property and to do so without penalty. Thecontract is silent except for the fact that the monthly payments are referred to asbeing a minimum amount. I suspect, but don't know for certain, that the partiesmay have discussed that the stream of payments to include interest wouldcontinue. Nothing though in the offer either way. I have always understood thatin the absence of a restriction one could prepay. I could not find any specificcase either way.QUESTION: In the absence of a restriction in the contract, can a person prepaya real estate contract without penalty?RESPONSE(S): Generally, in the absence of a specific permissive statement,there is no right to make prepayment.However, you may be able to pass that on the buyer's side if the language ofpayment says "on or before" or something similar with respect to the dates forpayment. There are some cases out there, may not necessarily be Iowa, that saythe before language necessarily implies prepayment.* * * * *Considering relevant authorities, I speculate the following: in a case where Iowacourts are asked to find "what language makes a prepayment penalty clauseeffective?", courts would rule that express language must create the right to apenalty; penalties will not be presumed where the contract language doesn't callfor one. Equity does, after all, still abhor a forfeiture. And in your client's casethe contract calls for "minimum" payments. To hold that the contract's lack oflanguage directly allowing prepayment means "no prepayment allowed", wouldamount to reading out of the contract the word "minimum."Prepayment penalty clauses attempt to create guaranteed rates of return forobligees, contracted for in their agreements with obligees.11 Am. Jur. 2d Bills and Notes § 366 (2012) "A party may not be excused from itsobligation on a note under the tender of payment doctrine when tender is madebefore the note is due, unless the loan agreement provides the borrower with aright to prepay the loan.[FN3] Even an absolute prohibition against prepaymentwill not be invalidated as unduly restrictive as a lender's interest in guaranteeinga certain net return by loaning money at a particular interest rate for a specificlength of time is entirely legitimate.[FN4]1f a note holder waives the right torefuse early payment, any prepayment penalty or premium must be specificallyprovided for in the note.[FN5] However, a lender typically loses its right to apremium when it elects to accelerate the debt..."52

55 Am. Jur. 2d Mortgages § 307 (2012):"Generally, a prepayment clause in the mortgage contract may validly provide forpenalty for prepayment.[FN1]1ndeed, long-term real-estate mortgagessometimes contain stipulations that payment of the principal debt may be madeprior to its due date, but that in order to entitle the mortgagor to make suchprepayment, he or she must pay the mortgagee an additional sum, whichadditional payment is variously spoken of as a "bonus," a "penalty," an"additional premium," or the like.[FN2] However, a mortgagee is not entitled tothe specified prepayment penalty where the mortgaged property is taken byeminent domain[FN3] or when the mortgage is paid off by an insurance companyas a result of a fire destroying the premises.[FN4] Moreover, there may bestatutory restrictions on imposing the prepayment penalty.[FN5] Prepaymentpenalty clauses may also be enforced upon default and acceleration of the debt,according to their terms. Notes and deeds of trust may provide, for example, thatlienholders have the right to retain a prepayment penalty even where theborrowers have not exercised their right of prepayment.[FN6] However, wherethe exercise of a prepayment option by the mortgagor is required for there to bea prepayment penalty, acceleration by the mortgagee may not be viewed as theexercise of the prepayment option,[FN7] as acceleration by the mortgageeplaces the mortgagor under duress in making the prepayment.[FN8] Where thedefault by a mortgagor in a commercial setting is intentional, and the notecontains both a provision for acceleration of payments and a provision forprepayment penalties, the mortgagee's exercise of an option to acceleratepayments owing under the mortgage note following the mortgagor's intentionaldefault does not preclude the mortgagee from collecting a prepayment penaltyfee, at least where the mortgagor purposefully tries to avoid the prepaymentpenalty.[FN9] On the other hand, a subsequent repayment of the entire debt aftera default or acceleration may not be enough to prevent prepayment penalties,even where the holder cancels a notice of default and sale proceeding under anacceleration clause, and the debtor subsequently pays off the whole debt,[FN 1 0]or where another creditor of the mortgagor arranges for payment of arrears, themortgage returns to good standing, and the mortgage is paid off in advance as aresult of the sale of property forced by the other creditor.[FN11]"60 Am. Jur. 2d Payment§ 8 (2012):"There is some confusion as to whether at common law there was no right tocompel a creditor to accept the prepayment of a debt where the contract wassilent as to prepayment.[FN3] However, when a debt is payable on or before acertain date, the obligor has a right to discharge the debt at any time before thetime stated.[FN4] "As a general rule, a debtor has no right to acceleratedprepayment of an installment obligation[FN5] unless the creditor consents[FN6]or the agreement expressly provides a prepayment option.[FN7]"ri53

[FN3] Hatcher v. Rose, 329 N.C. 626, 407 S.E.2d 172 (1991 ).[FN4] Daley v. Earven, 166 Ariz. 461, 803 P.2d 454 (Ct. App. Div. 2 1990).[FN5] Eubanks & Eubanks. Inc. v. Colonial Pacific Leasing, 757 So. 2d 437 (Ala.Civ. App. 1999); Carey v. Lincoln Loan Co., 165 Or. App. 657, 998 P.2d 724(2000).[FN6] Carey v. Lincoln Loan Co., 165 Or. App. 657, 998 P.2d 724 (2000).[FN7] Eubanks & Eubanks. Inc. v. Colonial Pacific Leasing, 757 So. 2d 437 (Ala.Civ. App. 1999); Careyv. Lincoln Loan Co., 165 Or. App. 657,998 P.2d 724(2000).-A claim for the entire balance due on an installment contract that contains anacceleration clause accrues upon the exercise of the acceleration clause, andthe period of limitation with regard to the entire balance due begins to run whenthe claim accrues. Diversified Financial Systems. Inc. v. Schanhals, 203 Mich.App. 589, 513 N.W.2d 210, 23 U.C.C. Rep. Serv. 2d 621 (1994).Iowa appellate case rulings considering prepayment penalties don't address theprepayment subject directly, just in passing. See, e.g.:Anderson Financial Services. LLC v. Miller, 769 N.W. 2d 575 (Iowa 2009)("Aborrower may repay his loan as promptly or slowly as desired, subject to monthlypayment of a minimum amount and a finance charge assessed against theoutstanding balance.") Kristerin Development Co. v. Granson lnv., 394 N.W. 2d325 (Iowa 1986)("The accompanying promissory note provided for decreasingpenalties if paid off with funds from another lender before August 10, 1981."-­clause apparently assumed by the Court to be a prepayment penalty clause andtreated as waivable by the lender.) Brvan v. Norwest Bank of Iowa, N.A., NotReported in N.W. 2d, 2001 WL 1658906 (Iowa App. 2001) ("The note included aterm penalizing early payment of the mortgages ... ")All Iowa rulings noting penalties see them arising from express clauses presentin mortgage contracts, imposing penalties as part of the overall bargain.Prepayment clauses may be enforced, if the obligee prepays voluntarily. Ifprepayment is involuntarv. as when an obligor accelerates the underlying note,then prepayment penalty will not be enforced.See Broadway Bank v. Star Hospitality, Inc., 695 N.W.2d 43 (Table)(lowa App.2004):"The district court found the ability of Broadway Bank to collect a prepaymentpenalty depended upon whether the prepayment was voluntary or involuntary.The court concluded Broadway Bank's decision to file a foreclosure actionaccelerated the debt and led to involuntary prepayment, therefore the bank wasnot entitled to a prepayment penalty. The court further concluded the prepaymentpenalty would unjustly enrich Broadway Bank.54

"The language of the promissory note does not distinguish between voluntaryand involuntary prepayment. However, the Seventh Circuit has held that where alender accelerates a debt, the right to prepayment penalty is lost. In re LHDRealty Co., 726 F.2d 327, 330 (7th Cir.1984). We agree that Broadway Bank'sdecision to file the foreclosure action accelerated the debt, and under the Illinoislaw governing this action Broadway Bank is not entitled to the prepaymentpenalty. Accordingly, we affirm."IV. Conclusion. We affirm the portion district court's ruling denying BroadwayBank an award of prepayment penalty .... "* * * *I dealt with this issue recently and also had difficulty finding legal authority on thesubject. I had always assumed that one could prepay a contract at any time. Theonly Iowa authority I found was in Iowa Practice 1-10.13 where Volz asserts thata right to pay off the contract must be explicit. This assertion is not footnoted.Although I did not spend a lot of time researching the issue, I did not find anyIowa cases on the subject. My WestlawNext search results provides previews ofsome documents outside my subscriptions and I noticed some of the secondarysources followed Volz' assertion. The Iowa Practice section is attached.* * * *There is an excellent review of prepayment premiums/penalties in Volume 96 ofthe Iowa Law Review (2011 ), authored by Megan Murray, although the articleinvolves a national survey and analysis of the issue and is not limited to Iowalaw.****Interestingly, I could find nothing definitive case law wise on what I thought mightbe a fairly common issue. I suspect the language minimum required amountmay suggest that the contract can be prepaid. On the other hand collateral factsthat attended the formation of the agreement might arguably be presented to "fillin the blanks" in so far as the intent of the parties. I was less concerned about a"penalty" relative to prepayment than the simple ability to prepay to takeadvantage of interest rates. This may afford the option of increasing the size ofthe payments to shorten the duration of the contract as opposed to a one timepayment of the entire balance.****Lett v. Grummer, 300 N.W. 2d 147 (Iowa 1980).55

"Ill. In this court Donald still insists that he is entitled to pay off the balance of thecontract and have his deed. As the trial court held, however, the law has longbeen to the contrary here and elsewhere. Mrs. Grummer cannot be compelled totake the money until it is due. Anderson v. Haskell, 45 Iowa 45, 47 (1876);Annat. 17 A.L.R. 866 (1922)."****For those of us who went through the Carter years with mortgage rates at 12%and 10-20% down, the installment sale was a standard item. Many sellers wouldjust as soon be paid off. But there were a number of sellers that did not wantprepayment for two basic reasons. One, inflation had driven up prices to wherethe gain (at higher cap gain rates than today) was significant. The seller wantedSection 453 treatment to spread the gain. Plus, when rates went back down, theseller wanted to enjoy the high contract rate for awhile. I think the basicargument in any debate is this: it's a contract. It says you have to pay $500 amonth for the next ten years. Period.****And if the contract says "at least $500.00 per month", then paying it off in fullcomplies with the contract. Doesn't it? Probably have to look at the wholecontract or at least the payment paragraph.* * * *On review of the Lett and Anderson cases, I find that neither recites the actualcontract language before their respective courts. So we don't know what clausesor language covered the payment issue.And, neither ruling offers anything in the way of analysis. They just set a generalrule prohibiting prepayment. That's fine as far as it goes.Given the existence of the word "minimum" modifying "payment", I still think wehave to also apply the maxim that the court will try to give effect to every term ina contract.That modifier "minimum" directly implies that more money may be paid than thefixed monthly dollar amount recited in the contract. And, paid at any time, in anyadditional amount desired.T.M. Sinclair & Co. v. National Sur. Co., 132 Iowa 549, 107 N.W. 184 (1906):"One of the canons of construction is to give effect to every provision of acontract, if possible and practicable; for the reason that the parties themselvesevidently intended something thereby, and it is not for courts to reject the sameunless it be so vague and uncertain that neither a general nor a particular intent56

can be gathered therefrom. In other words, a contract should be construed, ifpossible, as to give effect to each and every provision thereof." [citationsomitted] Vorthmann v. Great Lakes Pipe Line Co., 228 Iowa 53, 289 N.W. 746(1940) and Buser v. Grande Ave. Land Co., 211 Iowa 659, 234 N.W. 241 (1931)quote this Sinclair passage in full.Haggin v. Derby, 209 Iowa 939, 229 N.W. 257 (1930):"The rule of primary importance in the interpretation of contracts is that the courtmust, if possible, ascertain and give effect to the mutual intention of the partiesso far as that may be done without contravention of legal principles. 13 C. J. 521.It is also a well-recognized rule in the construction of contracts that theinstrument must be construed as a whole, and that individual clauses andparticular words must be considered in connection with the rest of the contract,and that all parts of the writing and every word in it will, if possible, be giveneffect. 13 C. J. 525. Another well-recognized rule of construction of contracts isthat it is the duty of the court to place itself, as nearly as may be, in the situationof the parties at the time of the making of the contract, so as to view thecircumstances as the parties viewed them. The court should consider the natureof the agreement itself, together with all the facts and circumstances leading upto and attending its execution, the relation and condition of the parties, the natureand situation of the subject-matter, and the apparent purpose of making thecontract. 13 C. J. 542. In dealing with the subject now under consideration, theauthor in 6 R. C. L. 798, aptly states: "In ascertaining the intention of the parties,the court will look to the whole subject-matter of the contract, the situation of theparties, the nature and extent of the business, the purpose to be accomplishedby the restriction, and all the surrounding circumstances to which the partiesmust be supposed to have referred in making it. If, construed in the light of thesesurrounding facts and circumstances, the covenant is limited in territory to thatreasonably necessary to the protection of the purchaser, it will be sustained."* * * *Dealing with an issue involving the ability to prepay a real estate contractinvolving commercial property and to do so without penalty. The contract is silentexcept for the fact that the monthly payments are referred to as being a minimumamount. I suspect, but don't know for certain that the parties may have discussedthat the stream of payments to include interest would continue. Nothing thoughin the offer either way. I have always understood that in the absence of arestriction one could prepay. I could not find any specific case either way.[Attachment.]57

IAPRAC, § 10:13. Setting forth terms of payment, 1 Ia. Prac., Methods of Practice§ ...1 Ia. Prac., Methods of Practice§ 10:13 (2012 ed.)Iowa Practice Series TMMethods of PracticeDatabase Updated August 2012Marlin M. Volz, Jr. aOPart I. Real Estate Transactions"'Chapter I 0. Land Contracts and RemediesThe revision of this chapter was reviewed by Stephen P. Wing, a member of the Iowa Bar.West's Key Number Digest, Vendor and Purchaser P2lC.J.S., Vendor and Purchaser§§ 19,23 to 25§ 10:13. Setting forth terms of paymentWest's Key Number DigestLegal EncyclopediasFollowing the designation of the parties and the description, the sum of the down payment and the terms of future paymentsare to be set forth. Naturally, they will vary greatly from case to case, and it will be the main task of the draftsman to uselanguage giving expression to the agreement of the parties in each instance. However, in representing the seller, the attorneymay want to add a provision indicating the order in which the payments are to be applied, as for example, thatpunohaser the attmnevpayments may be applied on future installments at the option of the purchaser. Ascertain from the parties the date when thepayments are to begin and when installment payments are to be made thereafter. If the seller is to retain physical possessionfor some time after the execution of the contract, determine from the parties if the payments are to begin as of the date of thecontract, of possession, or on some other date.In the first blank followed by the word "dollars", the total aroount of the purchase price is to be filled in. In the next blankfollowed by the same word, the aroount of the down payment should be stated and in the large space immediately below, theterms of future payments. The following illustrative provisions may be helpful.Balance of Forty Thousand ( 40,000) dollars to be paid as follows: Four Hundred dollars, or more, payableon or before the first day of each month beginning July I, 1993, and continuing until said sum is paid infull, with interest at ten (10) percent per annum, interest to be computed and paid quarterly on or beforeOct. I, Jan. I, Apr. I and July I in addition to said monthly payments.Balance of Forty Thousand ( 40,000) dollars to be paid as follows: Four Hundred dollars, or more, payableon or before the first day of each month beginning July I, 1993, with interest at ten (10) percent per armum,said monthly payments to be applied first on interest and thereafter on principal and to continue until thesaid balance is paid in full.·west!awNexr © 2012 Thomson Reuters. No claim to original U.S. Government Works.

' -'....IAPRAC, § 10:13. Setting forth terms of payment, 1 Ia. Prac., Methods of Practice§ ...The party of the second part shall have the privilege of making additional payments on principal on interestdue dates. [Note: Use in place of "or more" provision.] 1Westlaw. © 2012 Thomson Reuters. No Claim to Orig. U.S. Govt. Works.FootnotesaO Member Of The Iowa Bar.* *Except as otherwise indicated, the revision of the chapters in this part was reviewed by Stephen P. Wing, a member of the Davenportlaw firm of Dwyer & Wing, PC.~·~""'3E..'iit~%':i! .. ~~~;t:.~~~~~i$l{iitl)i.']!)J1~,iB~Y~-L~Jl!i'HIJ~~.llrd?-l9l!~@m&End of Document ((,~ 2012 Thomson Re-tJters. No claim to original U.S. Government Works.WestlawNext © 2012 Thomson Reuters. No claim to original U.S. Government Works. 2

23. Prior Judgment Liens on a Forfeited Real Estate Contract.FACTS: Real estate contract purchaser had several judgments against him priorto entering into the real estate contract. Purchaser subsequently defaults. Sellerserves forfeiture notice, and properly takes back the property. None of the priorjudgment creditors had filed a Section 656.2 request (obviously not being awareof the subsequent real estate contract).QUESTION: Does the contract seller take the property back free and clear ofthese prior judgment liens?RESPONSE{S): Yes.58

24. Voidable Real Estate Contract.FACTS: I have a client who accepted $500.00 earnest money on a house andsigned a statement "Received from xxx $500.00 towards the sale of house andproperty at xxx for $12,999.00 cash offer." Both parties signed. No dates wereagreed upon or anything else. Another buyer came along the next day andoffered $20,000.00 and my client signed a fully detailed agreement.QUESTION: Could the first agreement be considered of having such insufficientand indefinite details to not be enforceable? Or maybe we should offer them asettlement amount.RESPONSE(S): I'd offer a settlement. I believe that dates of performance arenot required for a valid contract (even if they are a good idea).****Your client likely can legally avoid the first contract on the indefiniteness groundyou chose. Existing case law supports your instinct.Marti v. Ludeking, 1931owa 500, 185 N.W. 476 (1921) Donovan v. Murphy, 203Iowa 214, 212 N.W. 466 (1927) "It is urged that the contract is too indefinite topermit of its enforcement by decree of specific performance. It is a familiar rulethat contracts, to be specifically enforced, must be so certain and definite in theirterms as to leave nothing to conjecture or to be supplied by the court. Olive v.Dougherty, 3 G. Greene, 371; Batie v. Allison, 77 Iowa 313, 42 N. W. 306; Wolfv. Lodge, 1591owa 162, 140 N. W. 429; Monroe v. Crabtree, 1781owa 546, 159N. W. 979; Marti v. Ludeking, 193 Iowa 500, 185 N. W. 476."The contract in question is silent as to when final payment is to be made andpossession of the premises is to be given, and as to the form of the conveyanceto be made."In Marti v. Ludeking, supra, nothing was said about the form of instrument bywhich the land was to be conveyed. The time of final payment was stipulated, butno provision was made as to when possession should be given. We said:"Before the court below could decree specific performance of the contract, it mustfind this fact from the contract. Without some provision therein fixing the time forconsummation of the agreement by the delivery of possession, it was incompleteand indefinite in this respect. * * * Of course, the court might infer that possessionwas to be given March 1st, when the balance of $9,500 would be paid and a notefor $7,200 and a mortgage upon the farm to secure the payment thereof wouldbe executed. Such finding could not, however, be based upon the expressedterms of the oral agreement of the parties."59

"If, contrary to this holding, an inference could be indulged in here thatpossession should be given at the time of final payment, the uncertainty wouldnot be removed, for no time of final settlement is stipulated in the contract."In Carter v. Bair, 201 Iowa 788, 208 N. W. 283, we enforced specificperformance of an accepted option to purchase contained in a lease. The time ofpayment was fixed in the contract, and the purchaser was already in possessionof the premises under the lease. The only claim of uncertainty in respect to theconveyance in that case was as to the time when it should be made. We said thelaw would imply a covenant to convey [sic] when the purchase money was paid.The holding there is not in conflict with Marti v. Ludeking, supra."The doctrine announced in Marti v. Ludeking, supra, is controlling here, and thecourt properly denied specific performance. It is unnecessary to consider otherquestions presented."The judgment is affirmed."Relatively small amounts of money involved, here. I can't see either partywanting to litigate over a $13,000 contract, especially for "specific performance."I'd try to get out of the first contract by just offering to pay back to the first wouldbebuyer his $500.00. However, should he object to being told that his contract is"void for vagueness" (or some excuse along those lines), then pay him somesmall additional amount.* * * *I would not be as confident if the first buyer wanted to push the issue. There is awritten and signed document prepared by your client setting forth the purchaseprice. House transactions have very commonly accepted understandings fordivision of closing expenses and timing of sale could be interpreted as when yourclient can deliver title. Your client is trying to avoid a contract he made justbecause he got a better offer. What is first buyer saying? I would sure want thatpotential problem resolved prior to closing. Is this something you are obligated todisclose to the second buyer?* * * *Given that case law addresses exactly the factual situation raised, and given that· the rulings favor finding of indefiniteness in these circumstances, I stand by theanswer I gave originally. But I wasn't happy about it, so I added therecommendation to "buy out" the first buyer.May I here add what I see as the critical point. Beyond the mere legality of thiscontract lies an ethical issue.60

The client did sign the contract. Thereby he gave his commitment to sell thespecific real estate for a specific price. One's word ought to be one's bond. If theclient wants to welsh on his own commitment then he needs to know that, for thesubsequent contract's "extra gain" (a mere $7,000.00), he exchanges hisintegrity.And if we care about our client's wellbeing and public reputation for truthfulness,then we'll warn hirn to keep the first contract, and not violate the NinthCommandment. .. "Thou shalt not bear false witness." An old proverb offers analternative outcome "Blessed is the man who swears to his own hurt." (i.e.,keeps his promises even when he appears to "lose out" in a deal.)****I believe that while the first "contract" is in and of itself unenforceable, it doescreate a duty to negotiate in good faith to fill in the missing terms before taking abetter offer.61

COOPERATIVES

25. Cooperative Ownership of Apartment Building.FACTS: Under property tax laws and provisions of the Iowa AdministrativeCode, any commercial use of property owned by multiple housing cooperativesorganized under Iowa Code Chapter 499A are to be classified as residential realestate.QUESTION: Does anyone have any experience with changing the ownership ofan apartment building to a multiple housing cooperative organized under IowaCode Chapter 499A to take advantage of the lower real estate tax rates or withthe issues involved in changing ownership?RESPONSE(S):62

26. Housing Cooperatives.FACTS:QUESTION: Do any of you know whether you can still form housing cooperativesin Indianola and Knoxville without triggering compliance with the latest buildingcode?RESPONSE(S):63

•CORPORATIONS/LLCs

27. LLC Conveyance.FACTS:QUESTION: If a deed from an LLC dated November 2003 does not have therequired language of Title Standard 15.3, do I need to require a statement ofauthority? This conveyance was two owners back.RESPONSE(S): I do not believe so. That deed would have been executed anddelivered prior to the adoption of the Revised Uniform Limited Liability CompanyAct which gave rise to the necessity of the protocol outlined in Title Standard15.3.****This is another reason we in the real estate section need to persuade thebusiness section that the new LLC law creates problems for conveyancing thatneed to be fixed.Suppose this deed was after the new LLC law but still two conveyances back.What a problem to try and get signatures on a document that satisfies TitleStandard 15.3. It may not even be possible.We need a provision just like that for deeds from revocable trusts- after oneyear the deed is good even if there were no Trustee or Grantee affidavitsrecorded. Title Standard 4.7 -Iowa Code Section 614.14(5).64

28. Sale of Real Estate by LLC.FACTS: Iowa Code Section 489.407(3)(d)(1) provides that in a managermanaged LLC, ALL members must consent to the sale of all or substantially all ofthe company's assets outside the ordinary course of business.I am dealing with an LLC with four members. Organized before the new statute.Manager managed. The only asset of the company is a farm. The operatingagreement says 75% of the members must consent to the disposition ofsubstantially all of the company's assets. Three of the four members consent tothe sale of the farm. The fourth does not consent.QUESTION: Does the operating agreement or the statute govern? From a titleexaminer standpoint, what would you want to see in the abstract?RESPONSE(S): I have nearly the identical situation. Operating agreementrequires 80%, and we have 6 of the 7 members voting to sell. In my situation,the no vote is one of the two Co-managers authorized by the operatingagreement to execute documents for the LLC. I am relying on the operatingagreement and expecting both to sign the Deed at closing.****Iowa Code Section 489.11 0(2) provides that "to the extent the operatingagreement does not otherwise provide for a matter described in subsection 1,this chapter governs the matter." Iowa Code Section 489.11 0(3) lists the fewitems set forth in Iowa Code Chapter 489 that the operating agreement cannotchange. The rule for approval of sale of real estate in Iowa Code Section489.407(2)(d) is not on the list of items that the operating agreement cannotchange. Therefore, it would appear that the operating agreement can allow forsale of real property not in the ordinary course of business by approval by lessthan all of the members and that approval is valid as long as the approval ismade in accordance with the operating agreement. Shouldn't an affidavit recitingthat although the sale was not in the ordinary course of business it was approvedby the members in accordance with the operating agreement be sufficient?* * * *Why not recite it in the deed in lieu of "This conveyance is in the ordinary courseof Grantor's business"?****65

I have no problem with a recitation in the deed, but suspect some cautious titleexaminers may require more information regarding the approval process andterms of the operating agreement than would normally be placed in a deed. Ithink it can either be in the deed or a separate affidavit.****Probably 90% of the LCs we see in our county have a single property as theirsole asset. There's no way the sale of that single property can be in the ordinarycourse of business. De we really want to encourage incorrect statements indeeds?I'm somewhat okay with the suggested Affidavit, but it still has the Kristerin risk.What if the dissenting member objects that the procedures of the operatingagreement were not properly followed? The Affidavit in this situation doesn't giveus the protection the self-serving Affidavit in the Trust situation does.This illustrates the problems created by the new LLC chapter. We didn't have thisproblem before.We don't have these discussions with respect to deeds from corporations.Why don't we just let deeds from entities (including trusts) stand on their own twofeet, just like corporations.At least LCs, partnerships and corporations should be treated the same.* * * *May I please suggest that the Iowa Land Title Standards and the Code of Iowaprovide for placing of record in the records of the Recorder a "Statement ofAuthority" certified by the Secretary of State that, in all likelihood, could recite thenecessary information. Beyond the record instruments, the careful purchaser'sattorney is going to have a copy of the operating agreement and a resolution ofthe entity authorizing the sale.* * * *The problem with a Statement of Authority is that it expires after five years fromthe date it was filed in the Secretary of State's Office. If one could file it and itwas good until revoked, then it might be useful.****66

I agree that the Statement of Authority is not ideal and, further, that getting onefiled and getting back timely a certified copy from the Secretary of State is achore, but it does work (and five years is not an issue) to satisfy the needs ofsomeone looking for authority on a one-time sale of substantially all of the assetsof the LLC as the original question provided.* * * *The problem is with the context. If I am representing the buyer or the lender on alarge property then, yes, asking for a Statement of Authority, reviewing operatingagreements, etc. isn't any different than the due diligence we might do if theproperty were owned by a corporation.But in the context of doing a title opinion for a lender for a deal that's going toclose in a week and for the normal fee we charge for a title opinion, it's a pain.And, in my opinion, totally unnecessary.Why can't we have our old LC statute back? Or give us a choice between the oldand the new in forming LCs.Or at least have a blanket statute that allows a good faith purchaser for value torely on the deed being proffered, whether it's from a corporation, a partnership oran LLC and whether or not it's in the ordinary course of business. I don't see whythat's so difficult to accomplish.All this certificate of authority, reviewing operating agreements matters raisetransaction costs for no good reason.67

29. Shares of Corporation in Escrow.FACTS: I remember discussing this issue with someone who had this situation ayear or two ago, but I can't remember who it was.QUESTION: Has anyone had experience holding shares of a corporation inescrow (lien) for the IRS where there has been a special use election?RESPONSE(S):68

DECLARATIONOF VALUE

30. Declaration of Value Form.FACTS: I was looking at exemptions and noticed the new form doesn't have #1exemption anymore, "Any deed given in fulfillment of a recorded real estatecontract provided the deed has a notation that it is given in fulfillment of acontract."QUESTION: Why not? Is it gone? An error? So do we file a second one whenrecording the deed? Am I missing another exemption somewhere else?RESPONSE(S): Iowa Code Section 428A.4 still allows it. Perhaps only loadedthe 428A.2 exemptions.* * * *No Declaration of Value is required when a deed in satisfaction of a recordedcontract is presented for recording, pursuant to Iowa Code Section 428A.4(2).Just refer to that code section on the deed, and also include (on the deed) therecording information for the contract.This situation is not listed in Iowa Code Section 428A.2 because you still need topay the transfer tax when you record the deed in satisfaction, you just don't needto file a Declaration of Value.69

DEEDS

31. Court Officer Deed or Change of Title.FACTS: I am representing the estate of A. A, Band C each owned a 1/3 interestin land. A's will gave her interest to B and C. B and C have contracted to sell theland to X and are ready to close. I am ready to close the estate of A and do achange of title to B and C. The attorney for X demands that A's Estate give aCourt Officer Deed to X.QUESTION: I don't want to make it tough on the lawyers forB and C, but I don'tknow why the estate should go through the time and expense to do a CourtOfficer Deed. Is a Court Officer Deed necessary?RESPONSE(S): Have the attorney take a look at Iowa Code Section558.66(3)(a), and ask him to reconsider the objection:3. Each of the following instruments shall be accepted by the recorder for thepurpose of updating the county transfer books and index if a conveyance has notoccurred:a. A certificate issued by the clerk of the district court or clerk of the supremecourt indicating that the title to real estate has been finally established in anynamed person by judgment or decree or by will.Considering that this is a tenancy in common situation, I can sympathize withbuyer's attorney here, but you shouldn't need a Court Officer Deed directly tobuyer, or even to B and C if the will is clear.70

32. Effect of Recorded Deed Not "Accepted" by Assessor.FACTS: Approximately 7 years ago individual "A" was constructing acommercial building on a lot owned by A. In the process of planning the buildingA determined she needed some additional land for an access and contacted therailroad company that owned adjoining land. Railroad company eventuallyprovided a Quit Claim Deed with a description something like the following: "theeastern 1/3 of Lot 27 .... " The deed was recorded in the Recorder's office butapparently the Assessor did not accept the deed because it did not conform to alocal statute requiring such deeds to be based on a surveyed legal descriptionand plat. Assessor's records shows title to the property that was quit claimed tobe in railroad company.QUESTION: What is the effect of the deed that was recorded and appears in theabstract but was not "accepted" by the Assessor. As to title, what controls,Recorder's records or Assessor's? Any other issues?RESPONSE(S): Why should you care what the Assessor accepts or does notaccept? Harken to first principles: delivery of the deed constitutes the transfer ofthe property, recording merely puts subsequent purchasers on notice. Quotingfrom Pat Bauer's outline:"An unrecorded deed is valid against all persons except subsequent purchasersfor a valuable consideration without notice of the deed. (Bell v. Evans, 10 Iowa353, 1860 WL 155 (1860)). The recording of a deed is not essential to passingfull title (Potter v. Potter, 1851owa 559, 170 N.W. 773 (1919)), and failure torecord a deed does not validate an adverse title that is absolutely void (Chase v.Kaynor, 78 Iowa 449, 43 N.W. 269 (1889))."Whether the Auditor, Treasurer, or Assessor accepts or rejects a transfer out oftheir individual fussiness or friendly desire to help keep title in order does notaffect whether there is a completed transfer of the described property. Thequestion then becomes whether these administrative officers have some validlegal remedy (e.g., Auditor requiring a subdivision plat) and whether anyonecares whether these administrative officers refuse to adjust their records (i.e.,notices contain the wrong names).* * * *This is thinking like a title lawyer, which is something we all should do. However,we can't just stop there. The practical problem lies with the Auditor (andAssessor) refusing to change the taxation records, which can cause thetitleholder all sorts of headaches, like not getting property tax bills, and not beingable to sell or refinance a property because the Appraiser, Lender, whomever,discovers that the assessment and tax records do not correspond to the71

Recorder's records. Worst case the taxes don't get paid because the billingsdon't go to the titleholder and the property is sold at tax sale.Just this summer I obtained a Court Decree in a Chapter 650 action resolving aprotracted boundary line dispute. The Commissioner's report clearly found thatthe fences had been in place for 50-75 years, maybe more, and recognized asthe boundary lines for all that time. The Auditor will not recognize the CourtDecree or the Quit Claim Deeds accompanying that and change the tax records.(Ironically, my client has been paying the taxes on improvements in the disputedarea for years, even though the Auditor will not transfer the underlying real estatefor taxation.)That is still work in progress, but ultimately we may have to see if a Writ ofMandamus will get to the County records, other than the Court's and Recorder's,to recognize my clients as titleholders. Mandamus should not be necessary.* * * *A, to assure his record title, took his railroad land deed to his county Recorder tobe placed of public record [as is impliedly required by Iowa Code Section558.41(1) so as to pass good title].The Recorder filed A's railroad land deed in the public records. So far so good.By presenting the document and obtaining its recording A fulfilled his legalobligation to place the deed of record.558.41 Recording1. Effect of recording. An instrument affecting real estate is of no validityagainst subsequent purchasers for a valuable consideration, without notice, oragainst the state or any of its political subdivisions during and after condemnationproceedings against the real estate, unless the instrument is filed and recorded inthe county in which the real estate is located, as provided in this chapter.Looking in the Code Annotated under Iowa Code Section 558.41 I find thisinteresting quote from a very useful case.Keefe v. Cropper, 196 Iowa 1179, 194 N.W. 305 (1923) "The verity of publicrecords are [sic] not subject to impeachment for slight or transient reasons. Asolemn recital in a deed must be accepted as true and upon which a subsequentpurchaser can rely. To hold otherwise a court would penalize an innocentpurchaser and reward the person who made possible the loss."Courts look dimly upon people contradicting the truth of what public records say.72

Likewise the Recorder fulfilled his statutory duty by recording A's Deed. See IowaCode Section 331.602 General duties:"The recorder shall:1. Record all documents or instruments presented to the recorder's office forrecordation upon payment of the proper fees and compliance with otherrecording requirements as required by law."For the foregoing reasons I think the railroad company deed passes good title to"The east 1/3 of Lot 27"*** to A so far as Iowa law, and A, are concerned.***Whatever that "east 1/3" is or may be. We may hope that Lot 27 is a regularrectangular lot laid out with north-south-east-west boundaries. If so, thencalculating "the east 1 /3" of it should be a simple arithmetic exercise. But if Lot27's sides do not face the compass points, or (worse) if they do not lie generally90 degrees from one another, then we may well face a serious problemcalculating just what land area of Lot 27 passes to A. The geometry required tocalculate the "east 1/3" then grows a bit more complex.May I guess that your County Assessor objects to the description as subdividinga larger piece of railroad company land, and also insufficient to precisely specifythe land area conveyed. Therefore he likely thinks the description violates atleast one of Iowa Code Sections 354.4(1 ), 354.5(1 ), or 354.6(1 ).When a document is received by the Recorder, the Recorder will file it. But thenan internal courthouse record-expansion process begins. To record landownership transfers for tax purposes, the Recorder will pass a Deed to theAuditor, who keeps official county real estate transfer books and plat books (SeeIowa Code Sections 331.508(10, 558.60-67). Then the Auditor forwards the landdescription and ownership information on to the Treasurer and Recorder. Inyears past I occasionally experienced our former County Auditor objecting tolegal descriptions after the Recorder had filed the instrument. Invariably theAuditor thought the Deed description violated the standards fixed by Iowa CodeChapter 354 "Platting--- Division and Subdivision of Land" (a/k/a the "FullEmployment For Surveyors Law"). I learned to run drafts of possibly-hinky, nonsurveyed,subdivision parcel descriptions past the Auditor for his blessing, beforepreparing the deeds to which I'd affix them.I bet that situation's what you have here, except your Assessor (not the Auditor)waves the red flag.Declaratory preamble to Iowa Code Chapter 354, Iowa Code Section 354.1, says"It is therefore determined to be in the public interest:73

1. To provide for accurate, clear, and concise legal descriptions of real estate inorder to prevent, wherever possible, land boundary disputes or real estate titleproblems.No objection from us real estate lawyers to those goals. But then we go on tomore-critical sections:354.4 Division requiring a plat of survey or acquisition plat1. The grantor of land which has been divided using a metes and boundsdescription shall have a plat of survey made of the division ... "354.5 Descriptions and conveyances according to plat of survey or acquisitionplat.1. A conveyance of a parcel shown on a recorded plat of survey shall describethe parcel by using the description provided on the plat of survey or by referenceto the plat of survey, which reference shall include all of the following:a. The parcel letter or number designation.[A's deed has that, at least arguably.]b. The document reference number of the recorded plat of survey.[Done, or not??]c. The lot number or letter, and name of the official plat, if the parcel lies withinan official plat. [Applicable, or not??]d. The section, township, and range number and reference to the aliquot partof the section, if the parcel lies outside of an official plat. [Presumably done.]354.6 Subdivision plats.1. A subdivision plat shall be made when a tract of land is subdivided byrepeated divisions or simultaneous division into three or more parcels, any ofwhich are described by metes and bounds description for which no plat of surveyis recorded ....Three points to note:1) A's "grantor" of "the east 1 /3" is not A but the railroad company. So as deedgrantee A has no duty to comply with Iowa Code Section 354.4. He may get bitby the others, which don't assign plat-surveying duty.2) Use of the phrase "Lot 27" suggests a pre-existing survey of some kind.3) The description in A's railroad company deed is not a "metes and bounds"description.Assuming that the Assessor looks to Iowa Code Chapter 354 as ground for hisobjection, I'd argue that Iowa Code Chapter 354 does not apply to this deed anymore than it does to A.74

Cite this section, if the "Lot 27" reference goes to some "official plat".354.7 Conveyances by references to official plat.A description of land by reference to lot number or letter designation and block, ifblock designations are shown on the plat, and the title or name of the official plat,is valid.75

33. Joint Tenancy.FACTS: Husband and Wife own Blackacre as joint tenants. They sell Blackacreon contract; contract preserves joint tenancy ownership. Buyers cancel thecontract and deed Blackacre back to Husband and Wife without any reference tojoint ownership. Wife dies.QUESTION: Is her ownership of Blackacre as a tenant in common?RESPONSE(S): No case law in Iowa addressing this point, so far as I can find. Ican see arguments either way.Possibly of use to you:20 Am. Jur. 2d Cotenancy and Joint Ownership§ 23 (2012) "A conveyance ofthe joint tenancy property joined in by both or all of the joint tenants necessarilyterminates the joint tenancy in the property conveyed. [FN12] However, whereall the joint tenants execute a deed, there is not a complete severance of the jointtenancy, and the mutual interest they retain is legal title as security for paymentof the purchase price. [FN13]"20 Am. Jur. 2d Cotenancy and Joint Ownership§ 28 (2012) "In somejurisdictions, a contract of sale made by both or all of the joint tenants operatesas a severance, [FN1] while a contrary view is taken by other courts. [FN2]Under the latter view, the proceeds of joint tenancy property, until they aredivided or disposed of, may retain their joint tenancy character, in the absence ofan agreement stating otherwise. [FN3] Therefore, where one joint owner diesbefore a contract of sale has been fully executed, the incident of survivorshipmay be transferred to the proceeds of the sale, and the surviving vendor maybecome entitled to the balance of the proceeds of sale. [FN4] "There is alsoauthority, however, that proceeds do not retain the joint tenancy character of theproperty, absent an agreement to the contrary. [FN5] .... "If you have access to ALRs then check out 39 A.L.R. 4th 1068:"Contract of sale or granting of option to purchase, to third party, by both or all ofjoint tenants or tenants by entirety as severing or terminating tenancy," 39 A.L.R.4th 1068. Perhaps you may find some relevant cases cited therein.***Prior to the Johnson case, I would have said that the cancellation of the landcontract would not have restored the original joint tenancy. But now that theIowa Supreme Court has fully embraced the "intent" theory for analyzing jointtenancy survivorship issues, including severance, I think there is a decent76

argument that the Husband and Wife intended their original joint tenancy to berevived in the case the land contract was cancelled. This intent is further shownby their expressly providing that the proceeds from the land contract would beheld in joint tenancy. The analogue would be to the dependent relativerevocation doctrine Iowa applies in revocation of wills.77

34. Legal Description.FACTS: I have a legal description on a Corporate Warranty Deed as follows:"Abstract of Title to the West 122 feet of Lot Eighteen (18) and the West 122 feetof the North 14 feet of Lot Seventeen ( 17), Block Sixteen ( 16), Town of Clarence,Cedar County, Iowa."QUESTION: Is this legal description sufficient on a deed to transfer theproperty?RESPONSE{S): Sounds fine to me.78

35. Power of Attorney- Joint Tenancy Property.FACTS: Husband and Wife acquire property in joint tenancy.Real estate is eventually sold. Deed, as prepared, shows Husband and Wife inindividual capacities with regular Husband and Wife notary. Wife is notcompetent so realtor/notary has Husband sign as himself and for Wife as "Powerof Attorney". No Power of Attorney has ever been in existence. Deed wasrecorded. This was 7 years ago.Property now comes around again for sale by the purchaser who took the baddeed, and with no post-closing title examination. In the interim, both the Husbandand Wife who conveyed to the purchaser have died.QUESTION: Any thoughts on if there is a way around an estate for the Wife,who was the second to die?RESPONSE(S): I'm assuming it has been less than five years since the wifedied, since you mention opening an estate for her. If so, I would go with a quiettitle action as being easier than an estate.If it's over five years, then perhaps the heirs would grant quit claim deeds, andyou could then do an affidavit of possession and explanatory of title, to show theheirs and the date of death.79

36. Reservation.FACTS: In 1958 grantor gave a deed to the City with the following reservation:"To be used as public access to lake only."City now wants to sell the parcel to my client.QUESTION: What is the status of this reservation made by the 1958 grantor?RESPONSE(S): Iowa Land Title Standard 1 0.6. Unless a verified claim for theextension of the reservation was filed within 21 years, and within each 21 yearsafter the filing of the previous claim, the reservation expired.* * * *I think this is eliminated by Iowa Code Section 614.24 unless the City did thefiling.80

37. Spouse Joining in Deed.FACTS: North Carolina married person with Iowa real estate titled in his nameonly. A Memorandum of Premarital Agreement prepared by North Carolinaattorney executed by both husband and wife is recorded indicating essentially" ... by virtue of the document [Premarital Agreement], both parties are 'freetraders' and may buy, sell, or transfer real or personal property owned by themindividually without the joinder of the other. .. " and " ... each partymay ... convey ... in any manner, as though unmarried and without the consent,joinder or interference of the other ... "I am taking the position Iowa Land Title Standard 5.3 applies and the spouseneeds to join in the deeding. Spouse has agreed to sign the deed.QUESTION: What are your thoughts or suggestions?RESPONSE(S):81

38. Type of Deed.FACTS: I have a trust which owns real estate. The trust was created in arevocable trust after the death of the grantor, very similar to a testamentary trustin a will.After the grantor's death and the initial trust administration the real estate wastransferred to the trust created under the revocable trust, let's call it XXX FamilyTrust.The second spouse has passed and it is now time to transfer the property out ofXXX Family Trust.I am wondering what type of deed, i.e. Trustee Warranty Deed (Inter VivosTrust), general Warranty Deed, or some other form, you as a title examiner wouldlike to see in the abstract.When the real estate was transferred into the XXX Family Trust, a TrusteeWarranty Deed (Inter Vivos Trust) was used and a modified Individual Trustee'sAffidavit was filed to show death tax requirements.QUESTION: What type of deed should be used?RESPONSE(S): I would say Trustee Warranty Deed plus Trustee Affidavit.82

DISSOLUTION/MARITAL STATUS

39. Alternatives to Marriage and Dissolution.FACTS: When examining an abstract recently, I came across the attached twoentries. I thought you would find these two documents as fascinating as I did.QUESTION: The questions leap to mind:1. Is the Private Treaty essentially a prenup?2. Can one bypass the dissolution laws via a Private Treaty?3. Is the one year waiting period enforceable?4. Do we recognize the Statement of Dissolution of Marriage as if it were a validdissolution decree?5. If they own the real estate as joint tenants, does the Statement of Dissolutionof Marriage sever it?6. If the Statement of Dissolution of Marriage includes an "orderly division ofcommonly acquired property" can it also contain a requirement that one partypay the other some sum? Would this create a judgment lien?RESPONSE(S): This document seems to go a long way to overcome thecommon law marriage test but I don't think it would be conclusive. I think there isa continuous cohabitation test as well. It is evidence of being common lawmarried, but I don't think it rises to common law marriage on its own.I don't believe the one-year period would have any validity as you can getcommon law married, but once you are deemed common law married it is myunderstanding that you cannot declare yourselves "common law divorced". So Idon't think that "dissolution" language can be recognized. In my opinion, if thereal estate is in joint tenancy, it would not be severed.* * * *Lack of recitation of consideration, was this properly executed prior to themarriage?* * * *I think the most that can be said is that, to some extent, a "Private Treaty" wouldlikely be treated as a prenup and nothing more.I think it can operate also to satisfy the requirements for common law marriage,but cannot circumvent the steps necessary under the law to dissolve such amarriage. It would be for the dissolution court to determine whether and to whatextent other provisions of the "prenup" will be operative and incorporated into thedissolution decree.83

I would not, for example, want to be relying on the declaration of dissolution toovercome the survivor's right to elect against the decedent's will.While interesting, it seems to me to be an open invitation to protracted litigation ifthere's any real money at stake, and possibly even if there isn't.* * * *Iowa recognizes common law marriages, but there is no common law divorce. Anormal dissolution of marriage action will be required.Part of the "Treaty" could be enforced as an amateurish premarital agreement if itwere proved that it was signed prior to establishment of the common lawmarriage and if the requirements of Chapter 596 [e.g. full disclosure,conscionableness, etc.] were met. However, it is possible that the elements of acommon law marriage were achieved prior to October 7, 1998, or that the'Treaty" was signed prior to the common law marriage declaration. If so, theTreaty would not qualify as a premarital agreement.In addition, the one year waiting period is unenforceable. We of the Family LawBar will welcome homemade premarital and postmarital agreements. Suchagreements will create more litigation than they avoid.* * * *Was this relationship between a man and a woman? If not, was this an attempt tomemorialize a relationship contrary to what Iowa law allowed at that time?[Attachment.]84

I21-----..:Lynne W. BrookesDerrick p. GrimmerToWhom It Hay concernPrivate Treatyoated October 7, 1998Filed Uove.lnber 10, 1998Inst. No. 98-155873~

ABSTRA= NUMBER 80130(Continuation of Abstract of Title to The North EightHundred (BOO) Feet of the East Five Hundred Forty-four and Five Tenths(544.5) Feet of the Northeast Quarter (NE~J of the southeast Quarter (SE\-)of section Eleven (11), Township Eighty•four (84) North, Range Twenty-two(22) west of the 5th P.M., story county, Iowa, containing .Ten (10) Acres,From April 2, 1999 at 8:00 A.M.*----------------------------------------*20------Lynne w. BrookesDerrick P4 GrimmerToWhom It Hay ConcernDeclaration of MarriageDated october 7, 1996Filed october 14, 1996Inst. No. 98-14220"This document declares that Lynne Wood Brookes and Derrick Peter Grimmer,both residing at 17615 670th Avenue, Nevada, Iowa are spouses in common-lawmarriage, with all rights and privileges thereto attendant.This agreement, arri-ved at by Private Treaty, is effective this 7th day ofoctober, 1998.In testimony herewith, our names are affixed.,,Lynne W. Brookes Date: 7 October 1998Derrick P. GrimmerDate: 7 October 1998Wherefore, the following parties sign this instrument o.n this 7 day ofoctober, 1998.Brady suttonWitness3910 w. Lincoln , AmesAddressRyan (Illegible)Witness3910 w. Lincoln Way, Ames"Lynne w. BrookesSpouse ADerrick P. Grimmerspouse a(Duly Verified)SEE PRIVATE TREATY RECORDED AS INST, 198-15587 - 11/10/1996- SUSAN L, VANDEKAHPI·*------------------~---------------------·,.

40. Award in Divorce Decree.FACTS: Husband and Wife divorce more than 10 years ago. Prior to divorce thereal estate is held in Husband's name alone. Divorce decree awards real estateto Husband but also goes on to state "Husband shall assume and pay theindebtedness thereon holding the Wife harmless from the payment thereof. Wifeshall be awarded the lower of $xxx or one-half of the sale net price (after theusual customary costs of sale), at such time as either real estate is sold."Husband subsequently mortgages property without ex-wife signing mortgages.Husband later passes away and estate has sold the property at auction for aprice that is insufficient to payoff mortgage. Title objection is made asserting thatex-wife may be entitled to some amount of the proceeds.QUESTION: Does Wife have an equitable ownership interest in the real estateas a result of the language in the decree? Did the decree give Wife a judgment,and did a judgment lien attach at the time of rendition and is it now expired, ordoes the judgment lien spring into existence upon the sale of the real estate? Isthe mortgage superior to her interest in the property? What, if anything wouldyou require as a title examiner from the ex-wife in order for the buyer to receiveclear title to the property?RESPONSE(S): In the facts you give I think Wife gained no actual ownershipinterest in the real estate. Instead Husband bore a "personal liability" to makethe payment; the land was not otherwise subject to any judicially-createdequitable lien. At most Wife appears to claim what courts would call an "equitablecharge" against the real estate.Trustees of Iowa College v. Baillie, 236 Iowa 235, 17 N.W. 2d 143 (1945):"Restatement of the Law of Trusts, Volume I, page 35, states: 'Ordinarily whereproperty is transferred to another 'subject to the payment of' a certain sum to athird person, or 'paying' such a sum, an equitable charge and not a trust iscreated, since the transferor does not thereby manifest an intention to impose aduty upon the transferee to deal with the property for the benefit of a third person.On the other hand, where property is transferred to another with a direction topay to a third person a certain sum out of the property or its proceeds, or 'subjectto the payment from the property or its proceeds' or 'paying from the property orits proceeds' such sums, a trust, and not an equitable charge is created, sincethe transferor thereby manifests an intention to impose a duty upon thetransferee to deal with the property in part at least for the benefit of a thirdperson.'"Equitable charges do not, in and of themselves, necessarily create liens in thesame manner as do judgments under Iowa Code Section 624.23. Equitable liensonly appear if the creator of the interest intended to create them as security forpayment of the charge. See, e.g.:85

Mohn v. Mohn, 148 Iowa 288, 126 N.W. 1127 (1910)(will term devising land toson subject to payment to estate of "45 an acre" created "charge" upon land;Supreme Court makes no reference to any accompanying lien) Anderson v.Anderson, 234 Iowa 277, 12 N.W. 2d 571 (1944):"Both sides quote from 28 R.C.L. 307, as follows: "When a devisee accepts landswhich have been charged with a legacy the general rule is that he becomespersonally liable for the payment of the legacy, which obligation may be enforcedwithout resort to the land. The rule rests upon the *280 reasonable principle, thathe who takes a benefit under a will must take it subject to its conditions. Theacceptance of the devise therefore imports a promise to pay the legacies.""In 69 C.J. 1215-1217 is a similar statement: "*** if a devisee accepts a devisecharged with the payment of legacies, such as by a direction or on condition, thatsuch legacies be paid by devisee, as a general rule he is personally liable fortheir payment in accordance with the terms of the will, as on a contract, ***. Theattachment of personal liability upon the devisee by reason of his acceptance ofthe devise does not affect the lien of the charge on the land, or bar a proceedingagainst the land." ..."Most authorities hold a provision, such as those here involved, creates anequitable charge or lien, and not a trust."(Anderson will provision explicitly created a lien. Note the disjunctive "or" thattwice appears in between "equitable charge" and "lien".)Why does the quoted portion of the decree refer to "either real estate"?Does some other portion of real estate also bear the duty to compensate the wifethe lower of $XXX or one-half the sale price? Or does the quotation extend, so asto read "either real estate is sold OR" something else happens?* * * *I don't think the decree was sufficient to create a judgment lien against theproperty at all. It appears to me that any interest the decree may have created isnot an interest in the real estate itself, but rather the proceeds thereof. This mayin the end result in a malpractice claim against the attorney who failed to securea recorded lien against the property in the divorce proceedings, such that Wifedid not have an interest superior to the subsequent mortgage. It should not,however, impair the marketability of the real estate.The practical reality, however, is that a purchaser cannot be expected to acceptthe risk of litigation by the ex-wife. I'd require that she execute a quit claim deedto the estate before accepting a deed from the estate.****86

The decedent was awarded both the homestead and a rental property in thedivorce. During the marriage he held title to both in his name alone. The decreeawarded Wife the lesser of a set specific amount or one-half of the sales priceminus costs for each property. The decree did not require Husband to sell theproperties at any time and Wife was only entitled to payment if a property wassold. It was a strange decree but I have a suspicion that Wife wasunrepresented in the divorce so unfortunately for her she probably doesn't haveany malpractice claim as previously suggested.Would you require a quit claim deed from ex-wife as suggested if yourepresented the buyer?****Interesting. Did the husband bring both properties into the marriage? Or acquirethem during the marriage? If the former then I think that the divorce effectivelyerased any statutory forced share interest, which is all that Wife could require. Isuspect that they were acquired during the marriage, which would explain thecourt's affording Wife a share in the equity. Presumably she contributed to thefamily earnings which went to pay Husband's mortgage. Anything in the recordthat indicates prior sale of the other property, and/or prior payment of thecharge?I am not sure that I'd require a quit claim deed on the language you recite, giventhat the court did not explicitly create by the decree an equitable lien in theproperty in favor of Wife. Title Standard 1.1.The award of equity payment does not constitute a judgment lien because it fixesno specific amount for Husband to pay. The decree merely sets a ceiling amount.So Iowa Code Section 624.23 does not apply.But, discretion usually makes the better part of valor. So I can see why onewould require a quit claim deed.****Another possible course of action occurred to me.A quit claim deed I still think legally unnecessary, since Wife has no title to norlien upon the real estate. A quit claim deed may be either expensive orunobtainable if Wife demands cash for her signature or doesn't cooperate at all.However, to protect your client (and probably also his lender), you might go sofar as to require either of the following: 1) Prior to closing, Husband (Executor)files with the Clerk of Court a proof of payment of the judicially-imposed equitable87

charge (and supplies a copy to you). Perhaps he's already sold one property andpaid off Wife, but forgot to record the satisfaction. Proof may be either Wife'ssigned satisfaction/release (best) or an unappealed-from judicial order declaringthe charge satisfied. If not available, then,2) At closing with your client, Husband (Executor) shall set aside part of yourclient's payment for satisfaction of the charge through payment from the closingagent's trust account; remaining payment to Husband (Estate) shall be escroweduntil he secures her signed release and satisfaction and files the same with theClerk of Court. Thereupon the remaining cash may be released. If Wife won'tcooperate then closing agent can make the payment to the Clerk of Court andHusband (Estate) can give notice and a hearing to Wife; after which he should beable to gain judicial clearance.Basically, treat satisfaction of the equitable charge like a mortgage release froma seller's mortgagee.88

41. Dissolution.FACTS: Husband and Wife were divorced in December of 2005. As part of thedissolution proceedings they entered into a Stipulation and Agreement whichprovided that the marital home would be listed for sale through a licensed realestate agent. It further provided that the net proceeds would be distributedpartially to Petitioner and partially to pay real estate taxes and related debts.After the dissolution was finalized the Petitioner listed the real estate for sale.The Respondent was then arrested and convicted and is now incarcerated atFort Madison. To complicate matters, there is now an offer on the real estate.The Petitioner has signed the acceptance of the Offer to Purchase; however, theRespondent refuses to sign the Offer to Purchase. It does not appear that theRespondent will be released any time soon.QUESTION: How should the lawyer proceed?RESPONSE(S): Per one Iowa lawyer's recommendation: Make application tothe divorce court for authority to sell, without incarcerated's signature. The courthas authority to enter a self-executing decree.Another Iowa lawyer stated: Bring a contempt (show cause) action under thedissolution proceeding asking for the remedy that the decree be amended to titlethe house solely in the Petitioner.Caveat: Be aware a guardian ad litem may need to be appointed for theincarcerated spouse and the incarcerated spouse may be entitled to a courtappointed attorney under a contempt proceeding.89

42. Dissolution/Banker "Opinion".FACTS: Mary Doe owns homestead before marriage to George and keeps titlein her name after marriage. Mary and George get divorced and the decree statesthat Mary retains title to the homestead.Following is Mary's banker's opinion: You have to explain that you are doing anew mortgage because your open end feature is not open high enough. Whenthe abstracter does a lien search it is going to show the marriage with George.Any attorney I know of is going to say George had rights under Iowa law and thathe needs to sign a quit claim deed. If your attorney disagrees with that, I wouldneed to run it by the bank's attorney, because it would go against anything I havebeen taught. Again, if you want to use just your current mortgage and yourcurrent Home Equity Line of Credit, you do not need to have George signanything, but if for no other reason, I would take care of it now because when theday comes you want to sell your house the attorney for the prospective buyer willmore than likely require this, and if that is 20 years down the road, it could getway more expensive than doing it now. Again, I am not the attorney. I am justtelling you what I have seen in the past."QUESTION: Any thoughts?RESPONSE(S): My opinion- tell the banker he's dead wrong, to run it by hisattorney. All dear George had was a dower interest which was extinguished bythe dissolution.****My understanding is that the homestead would be solely in Mary's name freefrom the claims of George subsequent to the divorce whether the property wasspecifically awarded to Mary in the decree or whether the decree was silent on it.The only time George would have gained an interest would be if the decreeawarded some interest in the property to George. No quit claim deed or anythingelse is needed.I guess a question would be whether the divorce decree gave George anyjudgment against Mary such as alimony, which could possibly attach to theproperty. I assume from the statement of facts that there is no such judgment.* * * *I'd tell the banker to have the abstract continued instead of doing a "lien search".The dissolution will show up and case closed.* * * *90

By taking a quit claim deed, the abstracters in Linn County will do a lien searchon George, and show judgments, tax liens, etc. that may be out there. I wouldnot require anything on these facts at all, and to get another quit claim deed, willonly imply that George has something to give in the first place, to which a liencould attach.91

43. Dissolution- Children of the Marriage.FACTS: Mom and dad get divorced.Dad is in title on his own at the time of the divorce and in the stipulation there is aprovision that he will mandatorily devise the real estate to the children of themarriage "share and share alike." Throughout a series of years, portions of theland have been sold off with all of the children of the marriage also signing off ondeeds. Now one of the out-of-state children of the marriage has becomedeceased with no spouse and only a minor child surviving.QUESTION: What do you now require if you are being asked to approve title andtransfer to your buyer?RESPONSE(S): A family settlement arrangement (Good!) that has never beenmemorialized in a formal land transfer (Bad!). A deed conveying to the children,retaining life estate for Dad, should have fixed the rights. Maybe it's not yet toolate.From your description I conclude that the property in question is what remains inDad after the lesser parcels have been excised. I also conclude that Dad stilllives, and has the land titled in him.So then the question becomes: What interest, if any, does the equity court'sdivorce decree (adopting stipulation) create in the children?The court appeared to leave Dad's property in his hands. That transfer to Dadwas "subject to" a commitment from him to retain and convey the property to hischildren."The parties own farm real estate which the parties agree to set over to thePetitioner as his sole and absolute property ... and subject to the Petitionerspecifically agreeing herein that all real estate will ultimately pass to the childrenof the parties equally and to share and share alike, upon the death of thePetitioner ... "Ordinarily that sort of limitation on land alienability constitutes "fee tail".Classic "fee tail" does not exist in Iowa and never has. See Skoog v. Fredell, 332N.W. 2d 333 (Iowa 1983):"[l]n medieval England ... a fee tail [was] a device long used to bind and holdintact the title to realty. The words were used to con notate a blood relationshipbetween the grantor and the holder of the estate. See 28 Am. Jur. 2d, Estates,92

§ 45, at 130-31 (1966); 31 C.J.S. Estates§ 22 at 47 (1964). Fee tails were neverallowed in Iowa. Here, as in other American jurisdictions, we resolved questionsof title to real estate when language which was historically used to create a feetail found its way into the words of limitation in a deed or will. See Pierson v.Lane, 60 Iowa 60, 61-63, 14 N.W. 90, 91-92 (1882)."Therefore, the Court's decree cannot be interpreted as an estate limitation onalienability. What might then it be?The order does not create an option to purchase. It creates no mortgage. It is nojudicial lien of any recognized sort, like an execution lien.Seems like the court's employment of the words "subject to ... agreeing ... thatall real estate will ultimately pass to the children" amounts to a kind of "equitablecharge" on Dad's real estate.Bennett v. Bowers, 238 Iowa 702, 28 N.W. 2d 618 (1947):"We quote from Restatement of Trusts, Section 10. 'Ordinarily where property istransferred to another 'subject to the payment of' a certain sum to a third person,or 'paying' such a sum, an equitable charge and not a trust is created since thetransferor does not thereby manifest an intention to impose a duty upon thetransferee to deal with the property for the benefit of a third person.' See also,Anderson v. Anderson, 2341owa 277, 12 N.W. 2d 571."For same quotation see: Trustees of Iowa College v. Baillie, 236 Iowa 235, 17N.W. 2d 143 (1945).Equitable charges do not rise to the level of liens. But they do give rights to theirbeneficiaries to sue for the cash value of the payment due. See cases cited.If you represent the seller, then offer a deed from Dad only, as sole owner, withpromise as part of sale contract to distribute money to the children on settlement.See if the buyer accepts.Assuming this attempt doesn't work, or in the event that you represent the buyer,let's ask:How might this decree provision be clarified/enforced, if the buyer objects todeed from Dad alone? Looks like, by reopening the divorce decree for a judicialinterpretation of its meaning.24A Am. Jur. 2d Divorce and Separation§ 1066 (2012):"By merging a property settlement agreement into a divorce decree, a courttransforms it from a contract between the parties to a decree of the court. [FN1]A property settlement agreement that is incorporated, but not merged, with a93

divorce decree must be viewed as a separate and independent contract thatsurvives the divorce decree. [FN2] A contractual stipulation that is whollyincorporated into a divorce judgment ceases to be independently enforceableand is merged into the divorce judgment. [FN3] "If an agreement, althoughincorporated or approved in the decree, is not merged into it, the parties mayenforce it by suing on the agreement rather than on the judgment. [FN4] Where,however, the incorporation of a property settlement in a decree, with directionsthat the parties perform all its obligations, merges the contract in the decree, theparty who desires enforcement must enforce the decree and not the agreementitself. [FN5]."The deceased child most likely needs an Iowa ancillary estate, with executor tosatisfy the equitable charge and collect settlement cash. I imagine that the cashmay then be kept in an Iowa conservatorship if the child is 16 years or less. (Theestate could be kept open some time, to distribute money to a child soon to turn18 years.) In event that a deed from Dad to children, "pursuant to judicialdecree", will work, then a conservatorship will be necessary to convey the child'sshare of the remainder interest.For a case involving an estate-related "promise to convey", and what partiesthereafter understood about it, see: Conn v. Williams, 353 N.W. 2d 411 (Iowa1984). Don't know if it's close enough to your situation to provide any guidance.* * * *I've had two off-the-board responses both of which have asked for the exactlanguage in the Stipulation. So here it is:"The parties own farm real estate which the parties agree to set over to thePetitioner as his sole and absolute property. . .. and subject to the Petitionerspecifically agreeing herein that all real estate will ultimately pass to the childrenof the parties equally and to share and share alike, upon the death of thePetitioner. .. "Not surprisingly, both of the responses also suggest that the parties to thedissolution go back and open it up to clarify what that means or agree tosomething passable by a title examiner without having to resort to questioningthe board, all at the expense of the attorney who drafted it.94

44. Dissolution of Marriage - Lien.FACTS: I have a divorce decree filed in March of 1997. It gives the house to thewife with a $17,500.00 lien on the real estate. It states that the wife shall pay theex-husband approximately eight years after the divorce filing date when the realestate contract is fully paid. The contract was paid in 2003. Wife has never paidhusband. Husband is very ill and wants to know if his heirs can collect.QUESTION: Did this lien expire in March of 2007? Can wife claim it was herhomestead and is exempt from execution?RESPONSE(S):95

45. Dissolution Proceedings in Abstract.FACTS: Item 4 of Stipulation states, "Children's Expenses.paythe sum of $400.00 each month for children's clothing,school lunches, etc."willAlso in the Stipulation 'The parties agree that neither shall pay child support tothe other."Clerk and ICIS do not show any judgments.QUESTION: Do you require a release or receipt for the Children's expenses?RESPONSE(S): On first response I was prepared to accept title without aclearance. After some research I still think that probably will serve, but I am notabsolutely sure of that. Certainly a receipt and disclaimer of interest in supportwill resolve any dispute.For background I set out some basic legal principles about judgmentinterpretation.Chaderv. Wilkins, 2261owa 417,284 N.W. 183 (1939):"A judgment, duly entered, has been described as a contract of record.[Citation.]"Minton v. Ozias, 115 Iowa 148, 88 N.W. 336 (1901 ):A blank form (in Minton, an appellate surety bond) that imposes no obligation onanyone amounts to a legal nullity.49 C.J.S. Judgments section 21 Definitiveness, p. 51 (1947):"A judgment must be definitive. By this is meant that the decision itself mustpurport to decide finally the rights of the parties on the issue submitted, byspecifically denying or granting the remedy sought by the action. The converseof this position is also true, and every definitive determination of the rights of theparties in a proceeding before a competent tribunal is a judgment."[Citations omitted]46 Am.Jr.2d Judgments section 100 Parties, pp. 453-54 (1994):"A judgment should identify the parties for FN 18 and against whom it is rendered,FN19 with such certainty that it may readily be enforced, FN20 and a judgmentwhich does not do so may be regarded as void for uncertainty. FN21 Suchidentification may be achieved by naming the persons for and against whom thejudgment is rendered. FN22 ...96

"A judgment is not void for vagueness or indefiniteness, however, because itfails, in its body, to state the names of persons for and against whom it isrendered. FN25 While it is a better practice to recite the names of all parties inthe judgment, when the names of all of the parties and the relief each is entitledto is easily ascertainable from the record, it is not necessary for the court toremand the entire cause for the purpose of amending the judgment to include thenames of all the parties. FN26 ... "FN18: Chicago v. American Nat'l Bank & Trust Co. 171 III.App.3d 680, 525 N.E.2d 915, 121 III.Dec. 608; Ferrell v. Simmons, 59 S.E. 752, 63 W.Va. 45FN19: Thompson v. Liberty Mut. Ins. Co., 390 F.2d 24 (10th Cir. 19--); Chicago v.American Nat'l Bank & Trust Co. 171 III.App.3d 680, 525 N.E. 2d 915, 121III.Dec. 608; Diane Co. v. Beebe, 131 Ind. App. 164, 169 N.E. 2d 542FN20: Saline Branch Drainage Dist. v. Urbana-Champaign Sanitary Dist., 395Ill. Dec. 26, 69 N.E. 2d 251, 167 A.L.R. 1210FN21: Diane Co. v. Beebe, 131 Ind. App. 164, 169 N.E. 2d 542FN22: Saline Branch Drainage Dist. v. Urbana-Champaign Sanitary Dist., 395III.Dec. 26,69 N.E. 2d 251,167 A.L.R. 1210FN25: State v. Haney, 277 S.W. 2d 632, 55 A.L.R. 2d 717 (Mo. 19--); Laros v.Hartman, 152 Tex. 518,260 S.W. 2d 592FN26: Crystal City lndep. Sch. Dist. v. Wagner, 605 S.W. 2d 743 (Tex. Civ. App.19--)(writ ref. NRE 7 Jan 1981)Caution--in conjunction with the second paragraph of the Am.Jr.2d cite above,this case gives me some pause. Finnagan v. Manchester, 12 Iowa 521 (1861).The case begins with this explanatory note by the Court:"FORECLOSURE of a mortgage, commenced in July 1860. Complainant asks aforeclosure of the equity of redemption of the mortgagors, and a judgment andexecution against the maker of the note (Richard Manchester), for any balanceunpaid after the sale of the mortgaged premises .... Here is the secondparagraph of the two paragraph opinion:"The order for the recovery of money is against one of the defendants, withoutname. It is most manifest, however, from the whole record and the entirelanguage of the decree, that it can only refer to the husband (Richard). Theobjection, therefore, to this part of the order is overruled." (Emphasis by theCourt).Your case appears to be one of those where checking out the actual Stipulationat the Clerk's office, and directly examining the file, may help answer questions.Seeing blanks like those you list, I suspect that this divorce Stipulation may bethe parties' own 'home-brewed', fill-in-the-blank internet creation.In re A.Y., 805 N.W. 2d 397 (Table)(lowa App. 2011) Form judgments are notunheard of in support actions.97

Audas v. Scearcy. 549 N.W. 2d 520 (Iowa 1996)Did the divorce petition show that the parties actually had children?1) If no, then Item 4 is a legal nullity.2) If yes, then the Stipulation deserves careful examination to see how theparties got away by NOT assessing support.---·--·------'WithotJt-a-forma1-namffig-a-pafl:y-as-jutlgment-tlebtCJr;-l-thirtk-tfiat-nCJ-periCJdile----­judgments for support exist. In showing no liability I think ICIS probably iscorrect.Item 4 appears to be, purely and simply, a child support award. The "for ... etc."language appears to provide justification for what courts order as a matter ofcourse.I have never seen any support judgment issued by an Iowa court bother to recitethe sorts of uses to which child support may be put.But, in light of the authorities above, you probably should find and review therecord file, to ensure that the Stipulation provision "neither shall pay child supportto the other" is the correct reading.98

46. Dissolution Title.FACTS: Person A purchased Blackacre in 1949 with then wife, B, as jointtenants. Wife B dies in 1985. At some point A gets remarried to C. A and Cdivorce in 2006. Decree regarding the dissolution appears in the abstract withreference to a Stipulation Agreement between A and C. Upon review, theStipulation Agreement between A and C does not even mention Blackacre andno quit claim deed from C is ever filed. At no time was C listed on title toBlackacre. A sold Blackacre in 2007 to D and now D is looking to refinance.QUESTION: As Blackacre is not dealt with in the Stipulation Agreement andtherefore not in the Decree, and C never executed a quit claim deed, is there acloud on the title? Or did C's marital interest expire as of the date of thedissolution?RESPONSE(S): No cloud on title. From the facts, the best C had was a dowerinterest which was extinguished upon entry of the Decree.****C would not have any interest. The rights of a spouse acquired by virtue ofmarriage were divested by divorce.****No cloud.99

47. Dissolution- Warranty Deed.FACTS: A divorce is pending. Wife has judgments against husband in adomestic abuse case. Husband and wife join in a warranty deed to a third party.QUESTION: Are wife's liens against the property released by her signing thedeed?RESPONSE(S): I would say yes. Unless there is any qualifying language in thewarranty deed, she is warranting title to the property is free of liens.* * * *My opinion is that the liens against the property are released by her joining in thedeed.****Yes, both spouses are passing all title to the property free and clear of liens theymay hold.* * * *Generally, a warranty deed creates an estoppel, barring a grantor from raisingclaims against the property. However, I would get the release anyway, because itwill save you grief in dealing with future title examiners whose knowledge ofproperty law lacks sophistication.****A deed to the third party passes all interests owned by the grantor( s ), includingclaims against each other.100

48. Divorce Decree.FACTS:QUESTION: Could someone please point me in the direction of a title standardor relevant authority (if any) setting forth that a divorce decree conveying realproperty to one spouse is enough without ex-spouse then having to record a Quit-- ---·----elatrrrEleeu'-. ------RESPONSE(S): Currie v. Currie, 90 N.W. 2d 13 (Iowa 1958). In husband's suitin equity against divorced wife to quiet title in himself to an undivided one-halfinterest in farm land which had been held in joint tenancy with divorced wife, inwhich divorced wife by cross-petition sought to quiet title in herself, wheretestimony showed that husband, upon procuring divorce from wife, paid her$25,000 cash in accordance with stipulation, by which wife waived all right to anyreal estate owned by her, but wife refused to execute deed to husband and,since divorce, had never paid any share of taxes or expenses for operating farm,evidence disclosed that suit of divorced wife for decree to quiet title in herself tothe real estate involved was without merit.I think that case would at least provide grounds to defend any potential claim thatex-spouse would have to the property if it came to litigation.That being said, I would be somewhat hesitant to accept title merely on the basisof a divorce decree without a deed or other transfer between the parties. Theway I read Iowa Code Section 598.21, I would argue that a Quit Claim Deed isnecessary to show enforcement of the decree after it's been entered.* * * *I would think that some record of the conveyance would need to be filed with theRecorder. I reviewed Iowa Code Section 598.21 previously and note that itrequires that the court order the parties to execute a quit claim or order a changeof title. I, like you, would argue that the quit claim deed or Iowa Code Chapter558 certificate would have to be recorded in order to follow the language of IowaCode Section 598.21.* * * *We request the court to quiet title in our decree.* * * *101

Isn't the issue a matter of how carefully crafted the divorce decree's language iswith regard to title. If it expressly awards title to a named party and a recordedcopy of the decree is filed, it should convey title. However, if it states that if oneparty does x, then title will pass, or states that the party A is to deed title toBlackacre to party B, then the delivery of the deed (or subsequent lawsuitcompelling delivery of the deed) is required to pass title.****I think the argument could be made for actually recording the divorce decree if itspecifically conveys title; but not if the decree merely states that named partygets the property and upon entry of the decree other named party shall file a QuitClaim Deed to transfer title. The problem that we often find is that either theother named party fails to record a Quit Claim Deed; or that if the divorce decreeexpressly awards title, it has not been recorded. We oftentimes find a divorcedecree which sets out who gets the property, but no subsequent reflection of thetransfer of title is recorded (in which case, we name the ex-spouse in ourforeclosure suit).* * * *For over 40 years we have accepted a properly drafted decree that incorporatesappropriate language to transfer title.****Why do you want to fill the Recorder's records with dissolution decrees? QuitClaim Deeds are much more efficient and effective.****If it is of record with the Clerk of Court, the abstracter will pick it up. No need tofile elsewhere.****I think the point being made is that Quit Claim Deeds aren't always filed with theRecorder despite direction in the decree to do so. Divorce decrees, though, allget filed with the Clerk of Court, and should be picked up and shown in theabstract if they are crafted appropriately, including a legal description of theproperty being transferred.****102

There's no reason I can think of for a decree to require a Quit Claim Deed. Thedecree is a "muniment of title." I would think the family law bar would appreciateNOT having to obtain a Quit Claim Deed from the ex-spouse. Saves time andmoney.The other reason for getting together is so the family law bar could beencouraged to draft their decrees so there is a separate section entitled "LIENS"which would begin by stating "The following shall become judgment liens against---------,--·" We had a long discussion in Story County over whether astatement in a decree that said "each party shall pay his/her own attorney"constituted a judgment in favor of the attorney. Ditto with college expensesawards that benefit adult children. I don't care which it is, I just need to knowfrom whom I have to obtain a satisfaction.* * * *It is cheaper to record a Quit Claim Deed (normally $12.00) than get a change oftitle from the clerk ($20.00) and record it ($12.00). Sometimes out of statelenders of finance companies do on line lien or title searches and if nothing isrecorded in the recorder's office after a dissolution of marriage then they will wanta Quit Claim Deed, etc. from the ex-spouse, even though not legally required.But to get the loan you have to do it.To require a Quit Claim Deed after sufficiently describing and awarding title in adecree or stipulation has no meaning. I suggest only doing it if signed at time ofstipulation and in your hands at the time the decree is entered otherwise you maynot see it later. SO you can save your client $20.00.* * * *Agreed that the decree passes title, however, the Auditor will not change the taxrecords without something filed with the Recorder, generally a Quit Claim Deedor certificate of change of title.* * * *Unless of course, the former spouse fails or refuses to execute the deed anddisappears into the mist.* * * *As long as the decree has the "magic" language you can do a change of title,record it and then the property gets transferred on the Auditor's books. That wayyou don't have to worry about if a Quit Claim Deed gets signed and recorded.103

****"This document shall be considered self-executing with no other additionaldocuments of transfer required or to be recorded. The Clerk shall issue a ChangeofTitle ... "****If the divorce decree contains the actual language transferring title, couldn't theparties file a Memorandum of the Divorce Decree reciting reference to the wholedecree, but only recording the provisions that transfer title. Similar to amemorandum of a lease or of an option or right of first refusal that is placed ofrecord. This would avoid the change of title process.* * * *Most Clerks will require that the decree include a direction that the Clerk issuethe change of title.104

49. Does Dissolution Sever Joint Tenancy?FACTS: Stephen and Cheryl are conveyed property as joint tenants. They getdivorced and the stipulation reads: Cheryl and the children shall remain in andlive in the property as long as they desire and Cheryl will be responsible forhouse payments, utilities, etc. It is expressly agreed that in the event the propertyis sold the net proceeds shall be divided: $15,000.00 to Cheryl and the amountremaining after said payment of $15,000.00 shall be divided into equal sharesand paid directly to Stephen and Cheryl. (Stephen and Cheryl have two children:Joseph and Jessica.)Stephen gets remarried to Beverly and then divorced from her. They have twochildren: Cecil and Bethelyn.Stephen dies and Cheryl is claiming full title to the property as the surviving jointtenant. The estate proceedings are a CIT proceeding.QUESTION: Was the real estate still owned as joint tenants by Stephen andCheryl on the death of Stephen or did his divorce from Cheryl sever the jointtenancy?RESPONSE(S): We see divorce judgments all the time in abstracts. But,interestingly the divorce judgments are in a high percentage of the time draftedby attorneys who seem not to be versed in real estate law, and seem to give nothought to what the title effect is by the way they draft the judgment.No mention of the house in the divorce decree means to me nothing haschanged. A mere divorce does not change title unless there is language in thejudgment which does so. I have seen nothing in all my reading which says themere act of divorce severs the joint tenancy. Maybe someone else has and cancorrect me.In your case, I think Cheryl had a claim against the sale proceeds for the first$15,000.00. But, I think after that it is still in joint tenancy. That may not havebeen the intent, but that may be the effect with no mention in the judgment of anyother aspect of the title to the real estate.Another question is, if she takes by surviving joint tenant, does she owe Iowainheritance tax because she took Stephen's interest but is not surviving spouse?(Excluding the $15,000.00 she was to receive off the top.) I would think so.****105

The only case I found remotely on point is Estate of Bates Matter of, 492 N.W. 2d704 (Iowa App., 1992), which states that the intent of the parties in a divorcegoverns whether a divorce severs joint tenancy. However, in that case, the intentwas implied from a provision in the divorce documents in which the partiesagreed that the property should be sold and the proceeds equally divided.Perhaps we should consider recommending to the General Assembly a statutewhich says that in the default of contrary language in a divorce decree, jointtenancies on real property will be severed into tenancies in common.On the same topic, might we also want to reverse the presumption in deeds oftenancy in common where the parties are married and, at a minimum, where theproperty is to be used as a homestead? It would more correctly reflect theoverwhelming number of conveyances to married couples.****The probate code provides once you divorce, provisions in your will for your exspouseare ineffective. But after the divorce one spouse can certainly draft anew will and leave assets to the former spouse.Why not do this for non-probate assets which makes sense that the spouseswould not want to continue to own as joint tenants with rights of survivorship, likethe former family home? If they do want to continue to own as joint tenants, theycan draft the decree to so provide.I have no problem doing a 180 on presumption for a deed to husband and wifefor their homestead.Question 1, would you have any retroactive effect?Question 2, in instances of second marriage, and often intent to leave assets torespective children, would you include that in the presumption of joint tenancy,and put the burden on the husband and wife to make their intent for tenants incommon known by stating it on the deed, or would you not include this situationin the presumption of joint tenancy?* * * *Question 1: Absolutely not. In fact, the statute should have an educationalwindow to allow attorneys and their CLE lecturers to react, such as "This sectionapplies to conveyances executed after December 31, 2011."Question 2: Maybe we can make it only apply to case where the spouses haveno issue other than by each other, similar to the intestacy provisions of IowaCode Section 633.211.106

Another thing along the same lines. To defeat the current presumption, lawyersgenerally feel that they have to repeat themselves, e.g., "to [husband] and [wife],husband and wife as joint tenants with full rights of survivorship, and not astenants in common." Would it not make sense to have the statute read that "to[husband] and [wife], husband and wife, as joint tenants" is sufficient to defeatthe general presumption of tenancy in common?By the way, have any of you seen where a court held that a joint tenant had onlypartial rights of survivorship?****As to your last point, in my opinion that language is already sufficient.****See, Estate of Epstein, 561 N.W. 2d 83, 85-86 (Iowa 1996) on issue whethersimply stating "as joint tenants" creates a joint tenancy. This case was notcommented upon when it came out, at least not that I noticed. Yet it appears tome to have overturned the prior rule that "as joint tenants" created a tenancy incommon.107

50. Joint Tenancy Severed by Dissolution Decree?FACTS: Husband and wife take title as joint tenants with full rights ofsurvivorship. Both execute a mortgage on the property. Three years later, theyget a divorce and a dissolution decree is entered. The decree provides thefollowing:Paragraph 2: "Each party shall, within 15 days of the entry of the Decree, signany and all documents of title necessary to effectuate the transfer of any propertygranted in this Decree. If either party fails to sign any document of titlenecessary to effectuate the transfer of any property granted herein, the Clerkafter the expiration of 15 days from the entry of this Decree, shall be empoweredto sign any document of title necessary to effectuate any transfers of propertyordered in this Decree."Paragraph 3: "The Petitioner [Husband] is awarded all right, title and interest inand to said real estate. The Petitioner shall assume the mortgage secured bysaid property and shall hold harmless the Respondent from the debt secured bythe mortgage. As between the parties the Petitioner shall be responsible for anyand all other liabilities or indebtedness with respect to said real estate of theparties and the Petitioner shall hold the Respondent harmless from said liabilityor indebtedness."No deed is ever filed either by the wife or the Clerk (and we have no knowledgeas to whether one was ever signed). Husband dies two years later, with noprobate of the estate, and later a foreclosure action is filed. Wife is served notice(by publication); the Estate and heirs of the husband are not joined asdefendants.Position 1: Because no deed was filed pursuant to the dissolution decree, theproperty remained in joint tenancy, full title vested in the wife upon husband'sdeath, and the lender acquired marketable title at sheriff's sale.Position 2: The decree in and of itself either transferred title to husband or atleast severed the joint tenancy such that his Y:z interest went into his estate and tohis heirs. Therefore, title is not marketable because the interest of husband'sestate/heirs were not extinguished in the foreclosure action.QUESTION: Which position is correct? Alternative position?RESPONSE(S): The Decree effected change of title. Husband's heirs shouldhave been named in the foreclosure action, and as a result of the failure to do so,title is not marketable.* * * *108

I believe if an estate were opened for the ex-husband, the ex-wife could becompelled to convey her interest to the personal representative to carry out herobligations under the decree. But she may be personally liable for the debtbecause the mortgagee was not a party to the dissolution. Perhaps she couldoffer to cooperate for a release of her liability.I had a reverse situation, but the decree required the ex-husband to convey tothe wife and to pay the mortgage. After ex-husband died, I was able to get thepersonal representative to convey to the wife. In my case, the mortgage was notsignificant.****Position 2, assuming that the real estate in question was legally described in thedivorce decree. If so, then that decree acts as a muniment of title. The judicialdecree vests 100% ownership in the husband. His heirs should have beenjoined to the foreclosure.If the decree did not legally describe the real estate, then the issue is a bitmurkier. But I would still find a serious cloud on title, because apparently theparties and the court did intend to transfer a certain piece of real estate.* * * *See Court of Appeals case: In re Estate of Bates, 492 N.W. 2d 704.* * * *Bates generally says that the court will follow the intent of the parties indetermining whether there was intent to sever a joint tenancy in divorce. Itspecifically states that a contract or provision in the decree to convey the realestate and divide the proceeds manifests such an intent. What it does not do ismake a general presumption that divorce severs a joint tenancy, and thus leavestraps for the unwary divorce lawyer and the lawyer's client.****The Bates case does not support the proposition that divorce automaticallysevers a husband and wife joint tenancy, leaving one to parse the language ofthe decree to search for controlling evidence of intent. I have always thought it israther odd that Iowa Code Section 633.271 provides for such automaticrevocation of will provisions in favor of a spouse on divorce, where the otherspouse could easily change the will to effect such a result, but that no matter how109

carefully a divorce decree is written, there is still a chance that a husband andwife joint tenancy is not severed.****I have been involved in situations where it was deemed not in the client's bestinterest to sever joint tenancy in dissolution. Isn't this a classic situation wherecounsel drafting the decree/stipulation ought to be more careful and/or figure outhow to correctly state the desired results in the documents and/or have partiesexecute appropriate transfer documents when completing the dissolution.****There is a stark difference between Will considerations and the divorce involvingreal estate. I would venture a guess that probably 70-80% of all jointly heldspousal property encumbered by a mortgage has an indebtedness secured byboth spouses. Joint and several liability puts 1 00% of the repayment on thesurviving spouse. Custodial parents who pass away will have the surviving exspousebecoming the custodial parent, and odd situations may occur where theparent is paying down the debt for the half interest that passed to the children. Ifthe spouse had re-married, new spouse can live in the homestead for freedestroying ex-spouse's credit until he/she brings a partition action.* * * *Severance would not affect either the liability under the note (which is onlyimportant, of course, where the lender pursues a deficiency, which is pretty mucha dead letter in owner occupied residential properties) nor the lien under themortgage.Under the Real Estate Section's proposed language of severance of jointtenancy, the severance would only apply where the decree (or presumably, astipulation incorporated in the decree) does not explicitly address the issue. Youcan keep a joint tenancy by putting language in the decree preserving the jointtenancy. You can also deal with problems in the case of a new spouse squattingin the property by appropriate language in the divorce decrees.110

51. Marital Status.-----FACTS: Debtor held title to a number of properties in his own name. Heexecuted an Agreement for Alternative Nonjudicial Foreclosure (also recorded)and a Deed in Lieu. In both he represented that he was a single person. Debtorhad been recently divorced so it was assumed his representation that he wassingle was correct. He was represented by counsel at the time of the foreclosure.Sometime after the conveyance, a different lawyer recorded an Affidavit that hehad personal knowledge that the Debtor had married again prior to the time hesigned the deed and agreement. There was nothing in the chain of title fromwhich anyone might discern he had again married. The Bank has sold some ofthe properties. Title examiners, relying on Title Standard 5.2, have passed ontitle.The Bank recently entered into an agreement to sell three more of the propertiesand the title examiner objected based on this "marriage". Her rationale is that theBank may not have known of the marriage so it could rely on the Debtorsrepresentation as to his marital status, but since she now knows, she cannot relyon the representation. I responded to her that the Bank had good title becauseof Title Standard 5.2 and she needed only to rely on the status of the Bank's title.And, of course, the Bank will give a Corporate Warranty Deed. She has notresponded.QUESTION: Any ideas on what may convince the attorney that the Bank doeshave good title?RESPONSE(S): Your opposing title examiner accepts a low bar as to quantityand quality of evidence to object to title on grounds of 'married landowner' status.To clear title she wants you to, in effect, prove a negative: the former landownerwas not married. If he was in fact married then the former landowner perpetrateda fraud upon the Bank, and the spouse's interest is not disposed. She's notwrong to raise that point--the Iowa Supreme Court seems to set a very lowthreshold standard for 'evidence' of a marriage.Smith v. Fuller, 108 N.W. 765 (Iowa 1906):"[T]he first and most vital question to be considered is whether the plaintiff was infact married to Smith in the year 1875 as she claims to have been. It is true that ifrecord evidence were to be held essential to establish the fact of marriage thenshe must fail for there is admitted lack of such testimony. But this court hasrepeatedly held that record evidence of marriage is not required to prove themarriage relation. [Extensive citations; nothing dealing with single status claimedin real estate dealings.]"111

Title Standard 5.2 (see below) by terms of its Comment, "applies only as toreliance on the current marital status of grantor and not as to whether there hasbeen a proper disposition of any record title interest of the previous spouse.""Current" marital status? As of when? Now? More likely, at the time the formerlandowner signed his Agreement and Deed In Lieu of Foreclosure (DILF).Title Standard 5.2 cites Keefe v. Cropper, 196 Iowa 1179, 194 N.W. 305 (1923)in support of its statement that you may rely upon the landowner's DILFstatement of his single status. Reading through the Keefe opinion I think the TitleStandards Committee must have grounded its citation upon this passage:"[A party] clearly had the right to rely upon the positive statements in the deed.He was justified in believing that [another party's] recitals in the deed were true."But the Keefe ruling also includes these additional statements:"If a person is put on inquiry he is bound to investigate. In law he knows all thathe could ascertain by an inquiry. An execution purchaser is put on inquiry by aninstrument properly indexed and recorded by the recitals or matters therein thatwould put a reasonable person upon inquiry and he is bound to take notice of allfacts that he might have learned by pursuing the path thus indicated. [Citations.]It is a sensible rule of law that when a loss occurs and one of two persons mustsustain that loss, it must be borne by the one whose act of omission orcommission made the loss possible."Seems to me that this third-party attorney affidavit likely is an "instrumentproperly indexed and recorded". Your opposing title examiner wisely takesnotice of the 'recitals or matters therein that would put a reasonable person uponinquiry ... "So, where are we now?Sole evidence of marital status is a third-party allegation that landowner wasmarried at the time he conveyed property. No marriage license filed for publicrecord under Iowa Code Section 595.6. (In your County, at least.) State v.Matlock, 70 Iowa 229, 30 N.W. 495 (1886):"Certified transcripts of marriage records are "receivable in all courts and placesas evidence of the marriage, and the date thereof." Iowa Code Section 2197. Thelaw makes marriages a matter of public record, and the record is made evidenceof the fact of the marriage."If a solemnization certificate is filed elsewhere then it can be transcribed to yourcounty and conclusively resolve the issue.112

We find no self-identification by the landowner as married; on contrary, in hisAgreement and Deed in Lieu of Foreclosure he claimed single status. Was thatattorney's affidavit an "affidavit explanatory of title" under Iowa Code Section558.8?If so then you face a 'presumption' that the attorney's statement is true--apresumption rebuttable for three years, then "conclusive" (i.e., unrebuttable, andconciDOing any oe5ate). - ------------------ ---------If not then what kind of affidavit is it? Anything that deserves credibility?No license record does not mean the landowner is not married.A common law marriage is possible, even where the landowner sells land as asingle person. See In reMarriage of Gebhardt, 426 N.W. 2d 651 (Iowa App.1988). But to find a common law marriage usually requires a court ruling in acontested case of some kind.52 Am. Jur. 2d Marriage section 127 p. 979 (1970):"[f]he question may be raised collaterally, in any number of legal proceedings,such as heirship, determination of dower and curtesy rights, and so on."Generally speaking, the existence of a marriage is a fact that may be proved asother facts, either by marriage records and certificates, or other documentaryevidence, by direct testimony of eyewitnesses or of one of the parties to themarriage, by admissions and declarations made by the parties prior tolitigation .... "Bottom line: I think you should investigate the facts. Talk to the affiant attorney.Ask him why he alleges a marriage. Find the former landowner; and find womanalleged to be his wife, and ask her about her status at the time of theconveyances. If the attorney gives a location for the marriage then check thepublic records there.If you find the man was married, and fraudulently claimed single status in hisDILF, then the Bank must act against him to clear the wife's statutory share--atleast with regard to the land conveyed after the attorney filed his affidavit.Arguably the prior reliance on Title Standard 5.2 was good, before the bank asplaced on notice by the affidavit.If you find the former landowner wasn't married then a counter affidavit should befiled, reciting the absence of a marriage and the error in the first affidavit.Now ifthe Bank iswilling to give a Corporate Warranty Deed, well, likely I'daccept that! But apparently the examiner won't...* * * *113

More inquiry is necessary.I am curious what was transpiring that caused the attorney to draft and file theaffidavit? I don't sit around and think about what affidavits I might filegratuitously. So there had to be a "reason" for filing it. And might that "reason"come back and bite the subsequent titleholder later? It is much better to fix nowthan later when bitten.114

52. Quiet Title Action - Dissolution Quit Claim Deed.FACTS: A divorce decree awarded the subject property to my client and orderedthe ex-husband to sign a quit claim deed. Ex-husband refuses to sign and playsa great game of hide and seek. The court found him in contempt for not signingthe quit claim deed but he still refuses to sign. The lower court's award under thedivorce decree has now been appealed (currently at the appeals court). Thelower court alleges it doesn't have authority (jurisdiction) to sign a court officer'sdeed. The ex-husband did not post a bond when he filed the appeal so the wife isselling the property and is ready to close but examining attorney says there is acloud on the title because of lack of the quit claim deed from ex-husband.QUESTION: Can any of you tell me generally how long a quiet title action takesfrom commencement of action to judgment? Am I missing any other option otherthan obtaining a quit claim deed from ex-husband, court officer's deed from courtor initiation of a quiet title action?RESPONSE(S): If there are unknown claimants, it may take as long as 6-8months due to the publication requirements, appointment of guardian ad litem torepresent the unknown claimants, Motion for Summary Judgment, etc.****Read the decree to see if it can be argued that the divorce decree was an actualtransfer of title. They can be self-executing.****The Court found the husband in contempt for failure to comply with a divorcedecree?Two questions:1) Did the Court retain any (residual) personal jurisdiction over the parties andmatters necessary to carry out the decree?If yes, then you needn't track down husband with new personal service. I'd thinkthe answer to be yes, given that wife already obtained at least one contemptproceeding.If no, then you may have to file a separate quiet title action to "regrow" districtcourt jurisdiction, if district court jurisdiction is what you want.2) Did the words of the divorce decree include correct legal description of theproperty?115

If yes, then you have the divorce decree itself serving as a muniment of title, withexactly the same effect as a quiet title decree. No further action needed, exceptas the appeals process might mess up the district court ruling (which you seemto not expect). If not, then apply to the Court for a Supplemental Divorce Decreeto clarify the property award.In the Supplemental Divorce Decree, include the legal description of the property,and reiterate the prior real estate award to the ex-wife. Reasoning for the judge:"The Court clarifies and amends its prior Decree to specifically award property towife without need for a quit claim deed. Husband lost all rights in the property byoriginal decree, and is hereby relieved of the ministerial obligation to sign a quitclaim deed. Title to the described real estate is hereby explicitly confirmed in thewife."You might do this by Nunc Pro Tunc Order, too. But I think a SupplementalDivorce Decree after hearing would be better. This method will obviate the needfor any quit claim deed, and for further use of Court resources for a worthlessquiet title action.As for the appeal issue: You might even prominently recite the property legaldescription in the appellate briefs. If the Court of Appeals affirms the DistrictCourt decree then perhaps the Court of Appeals will copy the specific legaldescription into its opinion. Then its ruling becomes your muniment of title.* * * *That's why I hate to see provisions for a quit claim deed. I prefer decrees that areself-executing, i.e., title awarded to wife and clerk issues a change of title to berecorded (not really a transfer instrument; the decree does that). However, if onappeal, might that still cloud the title?****I have filed a Motion for the District Court Judge to order the Clerk to file achange of title pursuant to the decree.* * * *From my experience in divorce matters and real estate:116

With a Dissolution Decree, even though self-executing if legal is in it, I think thecosts for the Clerk to prepare a change of title or transfer is high (around $20.00)plus recording fees? And these are more than a recording of quit claim deed;and auditor fee. Maybe make the fees the same.Deed is nice as a back up if not made as a legal requirement for transfer ofproperty, in case if you don't want to do the clerk transfer documents. Clerk-----------docoments-aren'tnecessaryio-transfer-property-;-batjastadvise-the-auditorand- ------ -----­treasurer of owner for tax bills; if client doesn't mind ex spouse's name on tax bill,change of title isn't necessary. (Remember title can be held on contract purchasealso.) The title change when doing abstracting the abstract companies pick it upfrom the Decree, but if a new loan or second loan is done and lien or title workdone by someone like Citifinancial, or out of state using on line recorderdocuments, then no title change may show.In a perfect world, I would prefer to do the change of title in a stipulation orrequest in the decree for a Dissolution of Marriage with the full legal, by the courtawarding property and using legal; and provide if requested by the party gettingproperty, or other will sign a quit claim deed. Covers it both ways. Some timesthe judge can mess it up or the other side not understand it.* * * *The cost difference should be minimal, normally less than $10.00. Perhaps Imisunderstand the "Form 109 Memo" in Iowa Docs and cited statutes, but Ibelieve responsibility for preparation and filing of change of title is with theattorney and the Clerk's only responsibility is certifying it. Thus, you should beable to get it certified at the time of filing the Decree and then walk to theRecorder's office and file it. Alternatively, if you prefer to avoid the change of titledocument in Iowa Docs, why not do the quit claim deed contemporaneously withthe Decree, i.e., have Husband (or Wife) sign as soon as the ink is dry on theDecree? If the spouse is reluctant to sign then, he/she may be later also, so allthe more reason to use the change of title, actually much less room for error ifthe attorney prepares it. If the spouse does sign, then you can just file the quitclaim deed and throw away your change of title. With attorneys preparing thedocuments, including the Decree, there should be little room for judge messing itup or other attorney not understanding it. Another pet peeve, why don't allattorneys use the full legal in a Petition, Stipulation and Decree? It can't be thatdifficult to find with resources available today.Some Auditor's are a little more picky about removing a name from their transferbooks without a deed or change oftitle even if Treasurer does have informationon where to send the tax bill.117

My experience is that abstracters always pick up a change of title if properlyrecorded and indexed. Now, if Citifinancial or some other entity wants to use titleinsurance, or a local "searcher", then it may be missed, but should eventually bepicked up in an abstract. I do find these things are routinely missed in preforeclosureone owner searches, or by title insurance companies which arewilling to "insure over" any inconsistencies found. Having handled numerousCitifinancial sales, these title issues often fall on me to try to correct, even if Ihave recommended that it be sent back to foreclosure, though that doesn'thappen often over this type of issue unless you have to add the reluctant spouseas an additional defendant.118

53. Separate Maintenance.FACTS: I am reading an abstract where a court proceeding was conducted in2000 for Separate Maintenance (Iowa Code Section 598.28), which to myunderstanding is basically like a divorce, without ever finalizing the divorce. Inthe proceeding, wife was awarded the real estate, and shortly thereafter husbandquit claimed the real estate to wife. Since the entry of the separate maintenance--- --d~rcre-e-;-th

"Section 598.20, the statute at issue in this case, is another example of aprovision that is not applicable to separate-maintenance actions. First, itsuggests by its language that a dissolution decree is a condition precedent toapplication of the statute. It provides '[w]hen a dissolution of marriage isdecreed .. .' (Emphasis added.) In contrast to this limited scope, the legislaturecould have provided a broad scope to section 598.20, as it did in three--------- --suo-s-ection-s-of-theverynextseelion-.-suosection (rt of seCtion 59KZ1-;-wnlcnis- - -----­applicable to the division of property, begins: 'Upon every judgment ofannulment, dissolution or separate maintenance the court shall divide theproperty of the parties ... ' (Emphasis added.) Identical language is repeated insubsection (3) dealing with spousal support and subsection (4)(a) dealing withchild support."Further militating against the application of section 598.20 to separatemaintenancedecrees is the fact that this section does not mention any rights thatwould be forfeited under chapter 633. We believe if the legislature had intendedto cut off rights of a surviving spouse that are provided by chapter 633, it wouldhave at least referred to that chapter and would not have left it to implication bythe interpretation of a dissolution provision in another chapter of the Code. Inorder for us to say the wife is not entitled to the benefits of a surviving spouse,we would have to say, as the district court did, that 'Dorthy Carlisle is not asurviving spouse'. We do not believe that is correct."We conclude that Dorthy Carlisle is a surviving spouse for purposes of chapter633, and she did not lose those rights by reason of section 598.20 through aseparate-maintenance action. Accordingly, we reverse the judgment of thedistrict court and remand for entry of an order applying this ruling."Estate of Carlisle is the most recent separate maintenance ruling that I can find(and it does directly address your issue). Overall, very little Iowa law deals withseparate maintenance. The only statutory provisions are a couple of mentions inthe divorce statute. To the extent that the divorce statute addresses separatemaintenance, the divorce statute rules the process and provides the outcomes.Marriage of Kurtz, 199 N.W. 2d 312, 314 (Iowa 1972); Marriage of Morgan, 218N.W. 2d 552,559 (Iowa 1974).Otherwise (I think) if the divorce statute clearly does not apply then separatemaintenance in Iowa still relies upon common law.See Keefe v. Keefe, 259 Iowa 85, 86, 143 N.W. 2d 335, 336 (1966).120

Strictly speaking, an action for "separate maintenance" seeks to enforce theobligations of the marital relationship, including mutual duties of support, ratherthan an action seeking to end the relationship. The marriage continues.See: 24 Am.Jur. 2d Divorce and Separation section 4, pp. 231-32 (1998).41 Am.Jur. 2d Husband and Wife section 210, p. 140 (1965).-----------onthose prem1ses theSupreme-courneachecllts conclusion inEstateof ___ --·--··--Carlisle.121

54. Title - Dissolution.FACTS: Husband and wife own their home as joint tenants with full rights ofsurvivorship and not as tenants in common. Husband and wife divorce in 1990.The decree provides:"Title to the home of the parties . . . shall remain in the name of both parties but--------- --tnatsampetitioneT[Wite]snalrnave tile ngnt to occupy sara-nome for apenoa of-------·five years following the date of this decree . . . At the end of five years, from thedate of this decree, said real estate shall be sold and, after the payment ofexpenses of sale, the net proceeds shall be divided equally between said parties.Said sale shall be by agreement of the parties or pursuant to Order of Court."After the divorce, husband and wife continue to reside together at this property,no sale occurred, no change of title was issued. Husband drafted a new Willfollowing the divorce leaving everything to his now ex-wife. Ex-husband dies inJune, 2008.QUESTION: How is title held to the home?RESPONSE(S): Here is the case I relied upon:In the present case, we conclude the stipulation between the parties to sell theproperty and divide the proceeds clearly manifests an intent on the part of thejoint tenants to sever the joint tenancy. Our supreme court in the Baker case, 78N.W. 2d at 866, noted: "It has been held a contract or covenant to convey aninterest which can be enforced in equity will operate to sever a joint tenancy."We determined Roberta and Tim were tenants in common at the time of Tim'sdeath. Therefore, the estate is entitled to an interest in one-half of the propertyas a tenant in common.Matter of Estate of Bates, 492 N.W. 2d 704, *707 (Iowa App., 1992).* * * *It would seem to me that the Dissolution changed the Joint Tenancy to Tenants inCommon, but as far as I can see it did nothing else to alter title. The issuance ofthe Clerk's Change of Title in and of itself adds/subtracts nothing from title.However, since the parties continued to live together after the Dissolution in thehomestead they both retained their rights therein. (Query, were they common· ···· ···law husband andwife?}lftheex-husband after the Dissolution creates a validWill leaving the property to his now ex-wife, I see nothing that would prevent herfrom acquiring all of the interest in the property following a probate of his estate.122

Therefore, assuming that is the status of the abstract, etc. you have, it wouldseem that she should have title at this point.****I agree that the decree changed title to tenants in common. I would make furtherinquiry into the common law spouse issue to save the inheritance tax issue.· [Attachment]123

633.212 SHARE OF SURVIVING SPOUSE IF DECEDENT LEFTISSUE SOME OF WHOM ARE NOT ISSUE OF SURVIVING SPOUSE.If the decedent dies intestate leaving a surviving spouse andleaving issue some of whom are not the issue of the surviving spouse,the surviving spouse shall receive the following share:1. One-half in value of all the legal or equitable estates inreal property possessed by the decedent at any time during themarriage, Which have not been sold on execution or by other jUdicialsale, and to which the surviving spouse has made no relinquishment ofright. ...--·--·--------2·:------AT:r-perso-nar·---p-r~ope!-ty that, at the time of death, was in thehands of the decedent as the head of a family, exempt from execution.3. One-half of all other personal property of the decedent whichis not necessary for the payment of debts and charges.4. If the property received by the surviving spouse undersubsections l, 2 and 3 of this section is not equal in value to thesum of fifty thousand dollars, then so much additional of anyremaining homestead interest and of the remaining real and personalproperty--of the decedent that is subject to payment of debts andcharges against the decedent's -estate, after payment of the debts andcharges, even to the extent of the whole of the net estate, asnecessary to make th~ amount of fifty thousand dollars.Section History: Early Form[C51, § 1410; R60, § 2495; C73, § 2455; C97, § 3379; S13, § 3379,3381-a; C24, 27, 31, ]5, 39, § 12017; C46, 50, 54, 58, 62, §636.32; C66, 71, 73, 75, 77, 79, 81, § 633.212]"Section History: Recent Form85 Acts, ch 19, §2Referred to in§ 633.210, 633.218, 633.267, 633.272, 633.436,633A.3106Previous Section 633.211 Next Section 633.213- ------~-··-·· .. --· ~-----~----·-----,.-------- .. ··~·---'---······------·- -----··---------"·http:f/coolice.legis.state.ia.us/Cooi-ICE/default.asp?categol]'billinfo&service=IowaCod... 11/09/2009

\633.487 LIMITATION ON RIGHTS.No person, having been served with notice of the hearing upon thefinal report and accounting of a personal representative or havingwai-ved such notice, shall, after the entry of the final orderapproving the same and discharging the said personal representative,have anY right to contest,_ in any proceeding, other than by appeal,the correctness or the legality of the inventory, the accounting,distribution, or other acts· of the personal representative, or thelist of heirs set forth in the final report of the personal-- ---- --- --- -------------- --rep-re-sen-t-a-t-i-v-e-,-----pE-0-v-iEi"eEI-, -hewe-v-er-,-----th-a-t ----£+0t-h-i-n~---GOA-t-ai:-Recl--in--- t-h-i-s--­section shall prohibit any action against the personal representativeand the personal representative's surety under the provisions ofsection 633.186 on account of any fraud committed by the personalrepresentative.Section History: Early Form[C97, § 3422; C24, 27, 31, 35, 39, § 12073; C46, 50, 54, 58,62, § 638.36; C66, 71, 73, 75, 77, 79, 81, § 633.487)Previous Section 633.482 Next Section 633.488,,http://coolice.legis.state.ia.us/Cool-ICE/default.asp?category=billinfo&service=lowaCod... 11/09/2009

55. Who Has Title?FACTS: Husband and Wife own their home as joint tenants with full rights ofsurvivorship and not as tenants in common.Husband and Wife get divorced in 1995. Husband "is hereby awarded theparties' real estate." "Upon rendition and filing of this Decree, and······ contemporaneouslywithPetitioner'sdelivery-toRespondentof promissory·notefor property settlement and mortgages referred to herein, the Respondent shallthereupon quit claim her interest in said real estate to Petitioner."Quit Claim Deed is never filed. Marital property settlement is never paid. Partiesmoved back in together approximately two months after the decree is filed andlive as (common law) husband and wife until husband dies in 2012.Decree says that an approved Stipulation has been filed with this Court;however, the Decree itself is not signed by the parties. Joint Tenancy severed, Ithink yes.The language is perfectly ambiguous. It says Husband is hereby awarded realestate; then after setting out the exact legal description, says upon delivery ofmarital property settlement, Wife shall quit claim her interest. The decree is notfiled with the Recorder, but is filed in the same county as the real estate islocated and therefore would show up in the abstract.Husband and Wife have two children together. As you might have assumed, dueto my questions to all of you, there are some lasting family issues.So, if she proves common law marriage, she gets entire estate including realestate. If she does not prove common law marriage, she is entitled to herproperty settlement(+ interest?) and must quit claim.QUESTION: Who has title to the real estate, Wife or the Estate?RESPONSE(S): Arguably the divorce severed the joint tenancy. Title would bein the Estate subject to the Wife's dower interest provided the common lawmarriage could be established. If not, then the terms of the divorce decree wouldseem to control and the title would be in the Estate subject to its payment to theex-wife of what she is entitled to under the decree and forcing her to give a QuitClaim Deed.------------------------ ___ ____j; __ "t;_ __ .J; ___ ..,The decree severed the joint tenancy. You say the marital settlement was neverpaid. Is that of record, or were you just told that. I think you have one of twooptions.124

It was held as tenants in common or Husband owns it.The only way to establish one or the other is by re-opening the dissolution andgetting an order, stating facts that marital settlement was never paid and theproperty is held as tenants in common or that it was paid and it is Husband'sproperty.---- '*--*--*-*These facts raise again the question that has been kicking around on the listserve for some time: Does entry of a divorce decree transfer title on its own forcewhen the Quit Claim Deed it calls for is not delivered and the quid pro quofinancial arrangements (mortgages, etc.) called for are not created?Here the "joints tenants with full rights of survivorship and not as tenants incommon" language adds a new dimension: Was entering of the divorce decreewithout more a severance? Under the old Four Unities regime, there is a goodargument that no severance occurred because, until the deed was delivered, nounity was broken, unless entry of the divorce decree without more is equivalentto a transfer of the land. Under the Iowa Supreme Court's new intent analysis,mere manifestation of an intent to sever is not enough. Severance based onintent requires the completion of some recognized legal act of severance, suchas executing and delivering a deed, etc. Does entry of the divorce decree withoutmore suffice to meet this requirement?With the new analysis comes new questions. For example, here where theparties cohabited as husband and wife after just two months of separation, isthere a possible argument that something akin to dependent relative revocationshould operate to negate the possible severance and continue the joint tenancywith full rights of survivorship holding up until the death of one of the spouses.****I made the assumption that the marriage was ended by the filing of a stipulation,which was signed by both parties, this constituting the act which severed the jointtenancy.If there was a trial and a decree (no stipulation signed by the parties) my opinionwould change.* * * *................ --- - . .. -··-·· ........... - -- -- -------------- -- - --------------]Are you lucky enough that all of his children are also her children or areotherwise friendly, and they might give Mom a Quit Claim Deed? That and anaffidavit would get you a long way toward merchantable title.125

****Isn't there some authority to the effect that a decree by a court with jurisdiction isself-operative, i.e., the entry of the decree changes the title?****·- ·1-pused-this·question b·efore and th-ere was·na definitive authority provided oneway or the other. A controlling issue would be whether the decree is filed with theRecorder, or a Court Officer Deed or the like reflecting same is filed of record.But if nothing is filed of record, is entry of decree enough to adequately transfertitle?* * * *Yes, if that's what the decree says e.g., "title is in Husband."No, if the decree is silent.Or, if the decree is silent on title up to the sentence saying, "Wife shall giveHusband a deed to the real estate to put title in Husband," then Wife does notdeliver the deed.* * * *If there was no decree entered approving the stipulation, they were still married.* * * *I recall there's authority holding that the Wife's claim wouldn't hold up in a quiettitle action (Currie v. Currie, 90 N.W. 2d 13 (Iowa 1958), if I remember the casecorrectly), but the consensus was decidedly undecided as far as whether thedecree alone transfers title without additional action.Regardless, I'd agree that you'd run into dower issues if she can prove acommon-law marriage as well.Even if it does, I think you're still going to run into dower issues if she can proveshe was his common-law wife.* * * *If no decree, wasn't the dissolution dismissed? Thus, stipulation had no effect?* * * *126

I think some of the responses have made the issue more simple than it is. And toanswer the question why family law lawyers might resist a black and white rule isthat requiring one spouse to give a Quit Claim Deed in exchange for somethingelse gives them leverage. Many don't care about the house, they just wantmoney from the other spouse and vice versa. If the decree automaticallytransfers title, the only leverage left is contempt, which is fairly powerful, butinvolves more court time and attorney fees and is much less simple than saying,give-usthemoneyor noQuitelaimiJeed-.- - - - -I think the decree was ambiguous because it purported to award the property toone spouse, then indicated that a deed was necessary when the settlement waspaid. But did the judge intend that Husband get the property outright without anyfurther condition? Clearly not. To do so would have destroyed the equitabledivision of property set out by the Court, regardless of whether or not the decreewas a result of a stipulation or trial.I think this decree created an obligation to transfer when the cash settlement waspaid. Since no settlement was paid, there was no obligation to transfer and notransfer occurred. If the divorce doesn't sever the joint tenants with full rights ofsurvivorship, then it remains. If it does, then they were tenants in common.* * * *I realize that G. F. Madsen, Marshall's Iowa Title Opinions and Standards,Second Edition is a dated work, but in Section 8.2 this issue is somewhataddressed and Marshall says that the Decree is sufficient to pass title "In anyevent, a divorce decree is self-executing." And cites Scheffers v. Scheffers, 44NW 2d 676 (1950). I have relied upon this case when needed.But, I confess to never having read the case until now. Here is an excerpt. Thesecond underlined sentence is of some concern, but I am still generally of theopinion that if the language in the Stipulation or Decree is sufficient to award titlethat the execution of a Quit Claim Deed is not an absolute requirement.'A self-executing order has been defined by this court as one which requires 'noact of a ministerial or other officer to put [241 Iowa 1222] it into effect.' Allen v.Church, 101 Iowa 116, 70 N.W. 127. Generally speaking, a self-executing orderpresupposes that no act of the defeated party is required in order to render itsfruits available to the successful party. A self-executing order is ordinarily onewhich is injunctional and prohibitive, or one which fixes the status of aparty, as in an action of divorce, or in an action to test the right to office, or-----------onewhichadjudicatesthe-title-to-property;-and-especially-where-a-title-is-- -----------­quieted in a party in possession. An order which in its nature and its terms is127

mandatory upon the defeated party, requiring him to perform an affirmative act, isnot a self-executing order, for the simple reason that it is not executed at all whilethe defeated party refuses to perform. In such a case compulsory process isavailable to enforce performance. [Underlining and emphasis added.)This usually implies some physical act vs. passage of title which clearly can beaccomplished by court Decree alone.****Not sure I see why the decree can't be a muniment of title, and state the title is inone spouse, period. If that spouse has to pay the other spouse a lump sum, thedecree can say that and it becomes a lien against the real estate. That's stillleverage, it seems to me.****This is the language I use in the stipulation:"The Petitioner shall be decreed to be the owner of said property and title shallbe quieted in him free of any claim by the Respondent. This stipulation and thedecree shall serve as a muniment of title and are self-executing. The clerk ofcourt is directed to issue her change of title to the county recorder as per thisstipulation.If requested, Respondent shall sign and deliver to Petitioner a Quit Claim Deedfor the above property within 30 days of receipt of the deed by the Respondentor Respondent's Attorney. Cost of preparation and recording shall be theresponsibility of the Petitioner. Failure to execute and deliver the deed within 30days of receipt shall constitute contempt of court."Now, someone tell me if I missed something as I would like to fix it before I runinto a title issue.****You present an apparent conflict between two provisions of what appears to belanguage in a divorce decree (which I presume was filed for record).Bottom line up front: Husband got the property title by and through the divorcedecree. So now Husband's heirs hold title, through and subject to his estate. And-------------also--possibly-subjecttoWife'sestaelishment-ofhercommon-law remarria§e-with--­Husband and consequent claim of spousal statutory share. (As I think someoneelse already asked--in addition to Wife's deed can you get Quit Claim Deeds fromall children, and give an affidavit?)···- -----1!128

To answer your question we must construe the decree. So we must parse themeaning of its key words and phrases. In construing, we much construe so as togive effect to all parts of the decree.By your first quote, Husband "is hereby awarded" the property. According to myWebster's Third New International Dictionary (1971) p.1197, the meaning of the-- wora "is"-is--"to- b-e~~~ "tharwfiiCf'l is-factual-, ·entpirital, -*~rctuallylflEf case*;---- - ------ --- --spatiotemporal--contrasted with ought." The word "award" means: "to determineafter careful consideration: JUDGE, DECIDE ... to give by judicial decree: toassign after careful judgment". Using the suffix-ed indicates past tense: the"careful consideration/judgment" by the court has already happened, and theresult of that consideration is a present reality. Use by the court of "is" to modify"awarded" suggests a present reality of title in Husband. Therefore I think quote 1necessarily takes the dominant, controlling effect in the decree.The second quote reads: "Upon rendition and filing of this Decree, andcontemporaneously with [other actions], Respondent *shall thereupon quit claim*her interest in said real estate ... " This quote appears to contradict the first.The only way I can read the two quotes in harmony, and give effect to both, is totake quote 1 ["Is hereby awarded"] as the operative judicial directive, with quote 2"shall thereupon quitclaim" amounting to a subordinate procedure for post-decreetitle clearance."[A] decree for dissolution of marriage may constitute a muniment of title" toeffect the judge's division of property. Iowa Code section 598.21 (1 ), Martin v.Martin, 720 N.W. 2d 732 (Iowa 2006).Husband "is hereby" [i.e., by this written judgment] "awarded the parties' realestate". This sentence clearly shows judicial intent to transfer title by means ofthe decree.The Supreme Court faced a similar sort of decree construction question inLuedecke v. Luedecke, 195 Iowa 507, 192 N.W. 515 (1923). In this case theproperty claim was of a judicially-created lien, rather than actual title transfer.But the Court declared that the "hereby" language controlled--the decree itselfcreated the property interest/lien.District court's pertinent language in the divorce decree read as follows:'"'It is therefore ordered, adjudged, and decreed that the plaintiff be and she is---~~-~~-~------h-erebyawardedan-absolutedivorce-fromsaid-defendant;-anditis-further ~~~~~~-- - ~-------ordered, adjudged, and decreed that plaintiff have and recover of said defendant129

alimony in the sum of eight hundred dollars ($800.00), with interest thereon at therate of six per cent, from the 12th day of November, 1921, also for an attorneyfee in favor of D. G. Baker, her attorney, in the sum of fifty ($50) dollars, and thecosts of this action taxed at $6. 75, and ***is hereby given judgment*** for all ofsaid amounts, which judgment is hereby made a lien upon any and all real estatenow owned by the said defendant, but said judgment shall not be enforcedagainst said defendant during his lifetime, but shall continue to remain a lien··- - ·up-on his said real-estate until-after his-death,-atwhich time said judgment,together with attorney fees and costs, may be enforced and shall be paid by hisestate to the plaintiff if living, or if dead shall be paid to her legal representativesand to her heirs, and shall be enforceable against any real estate now owned bythe said defendant or any other real estate of which he may die seized."After quoting the decree as above, the Court observed:"The sole question for our determination is whether or not the decree of divorceestablished a judgment for alimony, attorney fees, and costs against thepremises in question, which it is admitted was the homestead of thedecedent... the question in the instant case is one of construction of the decree inthe divorce case."Did the decree of divorce, by its terms, create a lien upon the homestead of thedecedent? ... the decree expressly provided that the judgment "shall continue toremain a lien upon his real estate until after his death," and provided that afterthe death of the said decedent it should be enforced in favor of the appelleeherein, and "shall be enforceable against any real estate now owned by the saiddefendant or any other real estate of which he may die seized."--------"Language could scarcely be used that would be more comprehensive than thelanguage of this decree. It was not necessary, in order to establish the lienagainst the homestead, that the court by said decree should have described thehomestead by name or legal description. The phrase "any and all real estateowned by the defendant" necessarily included the homestead which was thenowned by the defendant in said action. No exception was taken to this decree,and no appeal prosecuted therefrom. We must consider it now in a collateralproceeding, and, construing the language of the decree, we hold that by its termsthe homestead of the decedent, who was the defendant in said action, was madesubject to the judgment for alimony obtained in said action by the appelleeherein. This is not a case where a general judgment for alimony is sought to beenforced against the homestead, but is one where, by the very terms of thedecree, the homestead and all other real estate owned by the defendant in saidaction were expressly made subject to the lien of said judgment for alimony, andit·wasexpressly-provided-that-said-judgment-sh0ulcl-beeAforeeaele-a§aiAstany- --------,of said real estate. We see no escape from the conclusion that the real estate in ,,1question, even though the homestead of the decedent, was subject to the lien of130

the judgment for alimony entered in behalf of the appellee, and which saidjudgment is now a finality, and not subject to impeachment or attack."That the court had power to make such a decree as was entered in the divorceaction, and subject the homestead thereby to the satisfaction of the judgment foralimony, cannot be questioned. [Citations.]"A phrase similar to your quote 2 was interpreted and applied by the Iowa Court of·· - ·Appeals in an unpublished decision ten years ago.ln-rervlarriage oi Pagel; Not ·Reported in N.W.2d, 2002 WL 1973861 (Iowa App. 2002).District court assigned properties to the parties, using the following languagesomewhat similar to yours:"The Respondent [Roger] ***is awarded*** the work ground on the Meyer Farm;and the Petitioner [Diane] ***is awarded*** the 2.7 acre building site on the MeyerFarm and the land lying south of such building site, containing approximately twomore acres of pasture. It is the intent of the parties to award the Petitioner thebuilding site and any land south of the building site and north of the home farmso that the boundaries are contiguous. The Respondent ***shall quit claim*** thebuilding site and pasture to the Petitioner free and clear of all liens andencumbrances. The parties shall split the cost of a survey to determine the legaldescription for this parcel off the Meyer Farm. The parties shall use their bestefforts to obtain the survey and Respondent ***shall deliver a deed based on thesurvey within two weeks after the survey is completed.***"Court of Appeals affirmed the district court. The Court said:"When we interpret a decree, the determinative factor is the intent of the trialcourt as gathered from the decree and other proper evidence. In re Marriage ofKnott, 331 N.W.2d 135, 137 (Iowa 1983). In this case, the parties' stipulationspecifically recognized that a survey would be necessary to arrive at the correctlegal description for the parcel of land to be deeded to Diane by Roger. Until asurvey was completed, there was no way the parties, or the court, could knowprecisely how much land would be included in the conveyance to Diane ...."The parties' stipulation and decree indicate it was the intent of the parties to"award the Petitioner the building site and any land south of the building site andnorth of the home farm so that the boundaries are contiguous." This descriptionwas sufficient to allow TeKippe Engineering to ascertain the boundaries andprepare the survey filed. The survey and accompanying legal description rejectedby Roger set the boundaries of the disputed land contiguous with the home farmand building site."Neith·er·p·artyinthe-f"aqel-case-dispotedlegal-title;-·only-the-location-ofaboundary.So neither district court nor court of appeals specifically addressed131

issue of when title transferred. As written, the case ruling seems to presume thatDiane Pagel's title was good as of the date of decree. In effect, the post-decreesurvey in the Pagel case merely created the legal description for, and the quitclaim deed cleared Roger Pagel's claim to, property already legally transferred toDiane Pagel by the district court's decree. Such assumption likewise allowsharmony and application of both your case's apparently competing legalquotations.132

EASEMENTS

56. Army Corps of Engineers - Easement?FACTS: I am trying to determine whether the Army Corps of Engineers holds aneasement of any kind on a property.QUESTION: Is it possible there is an easement that would not be located in theCounty Recorder's Office for some reason?RESPONSE(S): Would not the Engineers, as any other party, be subject to theState laws requiring recording of any interest in property?I may well be wrong on this point, but I think the Federal Government looks tostate law of property to delineate whatever rights it acquires in lands, especiallythose the U.S. doesn't own from initial 18th-19th century acquisition.So the Engineers might claim they have property interests in Iowa, includingeasements. But unless the Corps of Engineers complies with Iowa recordinglaws none (beyond persons with direct knowledge) are obliged to recognize theCorps of Engineers' claims of acquisition, due to lack of notice.Some hornbook law, under which I expect the U.S. would be treated legally justas any other landowner. (See especially 65 Am. Jur. 2d on quieting title.)25 Am. Jur. 2d Easements and Licenses § 15 (2012):"Practice Guide: An easement should be properly recorded; an unrecordedeasement may not be enforceable against a subsequent purchaser.[FN12]However, failure to record the easement will not affect its validity where theowner of the servient estate had knowledge of the easement.[FN13]"[FN12] Jackson v. Knott, 418 Mass. 704,640 N.E. 2d 109 (1994); Ellingsen v.Franklin County, 117 Wash. 2d 24, 810 P.2d 910 (1991 ).-As to the enforcement of easements, generally, see§ 107.65 Am. Jur. 2d Quieting Title§ 87 (2012):Real property quiet-title actions against United States under Quiet Title Act(28 U.S.C.A. sec. 2409a), 60 A.L.R. Fed. 645 ''The Quiet Title Act provides thatany civil action brought under it shall be barred unless it is commenced within 12years of the date upon which it accrues.[FN1] An action accrues under the Act onthe date the plaintiff or his or her predecessor in interest knew or should haveknown of the claim of the United States.[FN2] The limitation period does notapply to actions brought by states,[FN3] unless the State is claiming an interest----------inlands:-(-1-) that-the--I:JnitedStates-is-using-fer-natienal defense,-[FN4] er-(-2}te-- -------,which the United States has made substantial improvements, investments, oractivities pursuant to a management plan for range improvement, timber, treeplanting, minerals, farming, or wildlife habitat or a similar plan.[FN5] ''This133

limitations period is jurisdictionai,[FN6J rather than an affirmative defense,[FN7Jand does not allow implied exceptions,[FNSJ regardless of whether thegovernment's claim to the property is legal or equitable.[FN9J The limitationsperiod has been held to be not subject to the doctrine of equitable tolling.[FN1 OJ"A cause of action accrues under the Quiet Title Act when the United States'interest in the property in question becomes physically manifest,[FN11J or whena contract is recorded that evidences a government interest in the specific landsin question,[FN12] or whenthe-plaintiffs or their predecessors in interest conveythe land to the United States,[FN13J or when the owner's predecessors receivednotice of the government's claim of the ownership of the disputed roads, not onthe owners being denied access by being denied a key to the locked gate.[FN14JAn action also accrues when the government denies a landowner access to afederally owned road that provides access to the landowner's property, showingthat the government claims exclusive right to deny access to the road.[FN15JFurthermore, a quitclaim deed disgorging title to the United States places alandowner on notice and triggers the Quiet Title Act statute of limitations.[FN16J"The Quiet Title Act is retroactive, and thus, if the passage of 12 years from thedate of accrual occurred before October 25, 1972, when Congress passed theAct, the action is foreclosed.[FN17J[FN1J28 U.S.C.A. § 2409a(g).[FN2J 28 U.S.C.A. § 2409a(g).[FN3J28 U.S.C.A. § 2409a(g).[FN4J28 U.S.C.A. § 2409a(h).[FN5J28 U.S.C.A. § 2409a(i), excluding tide or submerged lands.[FN6J U.S. v. Mottaz, 476 U.S. 834, 106 S. Ct. 2224,90 L. Ed. 2d 841 (1986);Spirit Lake Tribe v. North Dakota, 262 F.3d 732 (8th Cir. 2001 ); Crooks v. PlacidOil Co., 166 F. Supp. 2d 1104 (W.O. La. 2001), aff'd, 48 Fed. Appx. 916 (5th Cir.2002); Alleman v. U.S., 372 F. Supp. 2d 1212 (D. Or. 2005).[FN7J Crooks v. Placid Oil Co., 166 F. Supp. 2d 1104 (W.O. La. 2001 ), aff'd, 48Fed. Appx. 916 (5th Cir. 2002).[FNSJ Park County, Mont. v. U.S., 626 F.2d 718 (9th Cir. 1980).[FN9J U.S. v. Mottaz, 476 U.S. 834, 106 S. Ct. 2224, 90 L. Ed. 2d 841 (1986).[FN1 OJ U.S. v. Beqqerly, 524 U.S. 38, 118 S. Ct. 1862, 141 L. Ed. 2d 32, 40 Fed.R. Serv. 3d 756 (1998); Crooks v. Placid Oil Co., 166 F. Supp. 2d 1104 (W.O. La.2001 ), aff'd, 48 Fed. Appx. 916 (5th Cir. 2002).[FN11J King v. U.S., 585 F.2d 1213 (4th Cir. 1978); Park County, Mont. v. U.S.,626 F.2d 718 (9th Cir. 1980); Howell v. U.S., 519 F. Supp. 298 (N.D. Ga. 1981 ).[FN12J U.S. v. Mottaz, 476 U.S. 834, 106 S. Ct. 2224, 90 L. Ed. 2d 841 (1986).[FN13J Hart v. U.S., 585 F.2d 1280 (5th Cir. 1978) (abrogated on other groundsby, Calhoun County, Tex. v. U.S., 132 F.3d 1100 (5th Cir. 1998)); Gendron v.-------u~s-:,--402-F:-Supp.-46fE:El:-Gal-:-19'7"4-);·epiAioA·aelepteei,524-F"2el-1-154-f9tM-Gir.·----....;1975).[FN14J Alleman v. U.S., 372 F. Supp. 2d 1212 (D. Or. 2005).[FN15J McFarland v. Norton, 425 F.3d 724 (9th Cir. 2005).134

[FN16] Spirit Lake Tribe v. North Dakota, 262 F.3d 732 (8th Cir. 2001).[FN17] Crooks v. Placid Oil Co., 166 F. Supp. 2d 1104 (W.O. La. 2001 ), aff'd, 48Fed. Appx. 916 (5th Cir. 2002).66 Am. Jur. 2d Records and Recording Laws§ 40 (2012): ***See in particularthe Observation and FN17.***"Recording statutes provide a place and a method by which an intending- -purchas-er or encombrancer may -determine justwhatkind of title he or she is -obtaining[FN1] without searching beyond public records.[FN2] A record of thetitles to land is made and kept so that all persons may obtain knowledge of thestate of titles to real estate by deeds, conveyances, charges, andencumbrances.[FN3] Titles to real estate are protected by the public records andcannot be divested or defeated by matters dehors the record.[FN4] "Recordingstatutes are based on the idea that intending purchasers and encumbrancersshould be protected against the evils of secret grants and liens as well as thesubsequent frauds attendant upon them.[FN5] "The purpose of recording statutesis to protect subsequent purchasers or encumbrancers from unrecordedconveyances by notifying them of the rights that recorded instruments areintended to secure.[FN6]1ndeed, the public records doctrine generally expressesa public policy that interest in real estate must be recorded in order to affect thirdpersons.[FN?] Simply stated, the purpose of a recording statute is to provideprotection to subsequent purchasers, lessees, and mortgagees.[FN8] Statedsomewhat differently, the purpose of the recording statute is to protect asubsequent buyer without notice; therefore, once recorded, deeds andeasements are valid to subsequent purchasers without notice.[FN9] The primaryfocus of the public records doctrine is the protection of third persons fromunrecorded interests,[FN1 0] and the doctrine is founded upon the public policyand social purpose of assuring the stability of land titles.[FN11] Another purposeof a recording statute is to protect recorded titles against the gross negligence ofthose who fail to record their interests in real property.[FN12]1n light of suchpurposes, recording statutes generally provide that an innocent purchaser,having no notice of liens or adverse claims not disclosed by the records in themanner prescribed by the statute, will hold land clear of such claims andliens.[FN13] A recording statute gives protection to those who purchase propertyin good faith, for valuable consideration, and who first record theirinterests;[FN14] it also protects a good-faith purchaser for value from a priorunrecorded interest in real property provided that the subsequent purchaser'sinterest is the first to be duly recorded.[FN15] "Recording statutes are alsointended to bind subsequent purchasers and other affected parties by therestrictions that are clearly set forth in prior conveyances or otherinstruments.[FN16]***"Observation: The purpose of the recording statutes applies with equal forceto transactions with the State.[FN17]*** "The underlying philosophy of registrationstatutes is that if one of two persons must suffer a loss, the person whose135

negligent conduct made it possible for the loss to occur must bear theloss. [FN 18][FN1] Sanchez v. Swanson, 481 So. 2d 481 (Fla. 1986); State v. Young, 238 Ind.452, 151 N.E. 2d 697 (1958); Jeffers v. Doel, 99 N.M. 351, 658 P.2d 426 (1982);Romero v. Sanchez, 83 N.M. 358, 492 P.2d 140 (1971 ); Condos v. Trapp. 717P.2d 827 (Wyo. 1986), on reh'g, 739 P.2d 749 (Wyo. 1987).[FN2]1nre CenturyOffshore-ManagementCorpc, 119F.3d409, 199'7FED-App;0213P (6th Cir. 1997); Schleuter Co .. Inc. v. Sevigny. 1997 SD 68, 564 N.W. 2d309 (S.D. 1997); Grose v. Sauvageau, 942 P.2d 398 (Wyo. 1997).[FN3] State v. Anderson, 241 Ind. 184,170 N.E. 2d 812 (1960); Witterv. Taggart,78 N.Y.2d 234,573 N.Y.S.2d 146,577 N.E.2d 338 (1991).- As to the right to rely on such records, see §§ 72, 73.[FN4]1rwin Union Nat. Bank and Trust Co. v. Famous, 2010 PA Super 145, 4A.3d 1099 (2010).[FN5] Sequin v. Maloney, 198 Or. 272,253 P.2d 252,35 A.L.R.2d 1412 (1953);Weyerhaeuser Co. v. Walters, 707 P.2d 733 (Wyo. 1985).[FN6] Shill v. Careage Corp., 353 N.W.2d 416 (Iowa 1984); Schleuter Co .. Inc. v.Sevigny. 1997 SD 68,564 N.W.2d 309 (S.D. 1997).[FN7] Cimarex Energy Co. v. Mauboules, 40 So. 3d 931 (La. 2010).[FN8] Miller v. LaSalle Bank Nat. Ass'n, 595 F.3d 782 (7th Cir. 201 0).[FN9] Ward v. Evans, 387 S.C. 401, 693 S.E.2d 7 (Ct. App. 2010).[FN10] Cimarex Energy Co. v. Mauboules, 40 So. 3d 931 (La. 2010).[FN11] Cimarex Energy Co. v. Mauboules, 40 So. 3d 931 (La. 201 0).[FN12] Citizens State Bank v. Raven Trading Partners. Inc., 786 N.W.2d 274(Minn. 2010).[FN13] Cox v. RKA Corp., 164 N.J. 487, 753 A.2d 1112 (2000); Security StateBank v. Luebke, 303 Or. 418,737 P.2d 586 (1987).-As to the effect of recorded documents as notice to purchasers, see§§ 71 to134.[FN14] Citizens State Bank v. Raven Trading Partners. Inc., 786 N.W.2d 274(Minn. 201 0).[FN15] Sprint Equities (N.Y.), Inc. v. Sylvester, 71 A.D.3d 664,896 N.Y.S.2d 134(2d Dep't 201 0).[FN16]1n re Barnacle, 623 A.2d 445 (R.I. 1993).[FN17] State v. Anderson, 241 Ind. 184, 170 N.E.2d 812 (1960) (holding that abona fide purchaser took free of an unrecorded state highway easement).[FN18] Universal C. I. T. Credit Corp. v. Walters, 230 N.C. 443, 53 S.E.2d 520,10 A.L.R.2d 758 (1949).136

ENVIRONMENTAL

57. Is a Septic Report Required to be Attached to Groundwater HazardStatement When the Seller Does Not Own the Building on the Land to beTransferred and the Building is Not Transferred?FACTS: In 1950 A enters into a 99-year Ground Lease with B. B constructs acottage. The lease clearly states the building (a cottage on the Mississippi River)is owned by the Tenant B, not by the fee titleholder A.A sells the land to C in 2012. The building (cottage) remains the property of Bunder the lease which does not expire until 2049.The building is served by a private sewage disposal system.A contends that no septic inspection report is required even though theGroundwater Hazard Statement discloses the septic system because the transferof the land does not include transfer of the building which remains the property ofB not C.The Iowa statute that imposes an obligation for a private septic inspection reportis found at Iowa Code Section 4558.172(11 )(a). Here is the statutory language:"11.a. A building where a person resides, congregates, or is employed that isserved by a private sewage disposal system shall have the sewage disposalsystem serving the building inspected prior to any transfer of ownership of thebuilding."QUESTION: Is a septic inspection report required by law even though none ofthe statutory exceptions apply?RESPONSE(S):137

58. Septic Tank.FACTS: I have a client who owns an acreage with another person, not hisspouse. The other person wants to sell her interest to my client.QUESTION: Is this situation exempt from the septic tank inspection?RESPONSE(S): Transfers betwe-en joint nwners are exempt, yes.··****See Iowa Code Section 455B.172(11)(a)(4).* * * *Exempt.138

IlII '·•ESCROW

59. Escrow.FACTS: I have a builder client who has had $3,500.00 held by a local lendersince 2007 for work allegedly not completed. My client indicates that the workhas been completed some time ago but the buyer refuses to sign a release forthe funds. (Of course, this was one of those escrow agreements drafted bylender at closing with no attorney present and no deadline noted on agreement.)QUESTION: Is there new (or existing) legislation requiring disbursement ofmonies held in escrow after a certain time period?RESPONSE(S): Why not sue the buyer and lender in small claims, claiming thatthe conditions for release have been satisfied and asking for a court order torelease the escrowed funds to your client?139

FORECLOSURE

60. Abandoned Property After Foreclosure.FACTS: I have a situation where I have completed a foreclosure of property, andthe Sheriff's Deed has issued. The client inspected the property and found thatthe former owner left personal property on the premises. Rather than proceedunder Iowa Code Chapter 556B (and subsequently sell the personal property atauction in six months), I am thinking of sending notice to the former owner with aaeadline to pick Lip the personal property and ifnot picked up,We Will dispose ofit, as we deem appropriate.QUESTION: Any problem with proceeding in this manner?RESPONSE(S): In 2009, the Legislative Subcommittee of the Real EstateSection of the ISBA, at the request of a then serving legislator, prepared somelegislation, copy attached, which would have provided a safe harbor in suchcases. However, it proved very controversial with certain members of the Barand, because of the internal dissension, we did not proceed any further. IowaCode Chapter 556B is of no assistance because the definition of personalproperty in Section 556B1.1 (6) limits application to personal property found inrespect of a mobile home repossession where the trailer is in a trailer park. Myimpression that your guess as to what the law requires is as good as anyoneelse's, and you are just going to have to use your best judgment on whether toproceed in rem judicially against the personalty, or just "wing it" in the hopes thata subsequent court action will not slap your wrist or worse.* * * *How about an FED?* * * *You could have the Sheriff serve the writ of possession and then do a set-out ofpersonal property under the guidance of the Sheriff's office.****Choice of remedies probably depends on whether the personal property has anyvalue. Assuming it has little or no value, I'd suggest the FED.My theory for the FED is that the people are still "occupying" the property as longas their personal property is there. Court probably won't care and you can get afairly-qoickhearing-andurder~lhen-yoo-c-an-s-enhe-prop-ertyonth-e-corb:------------llI140

Using Iowa Code Chapter 5568 the client has to store the personal property, waitsix months, etc. Who pays? The client. Not a good solution if the personalproperty has no value and the foreclosed upon parties have no money.I think an FED is a far better solution if personal property has no value.****Shouldn't need to do FED. Foreclosure order should include order for writ ofpossession. Just have Clerk issue writ and have the Sheriff execute. No courthearing required.141

61. Agent of Service for State of Iowa.FACTS: We need to serve the State of Iowa in a foreclosure matter. Myrecollection is that we serve the County Attorney and copy the Attorney Generalbut I can't put my hands on anything confirming or refuting this.QUESTION: Can someone advise as to the proper party to serve and where I··· · firidthisprovision-:RESPONSE(S): See Iowa Code Section 613.9.****Iowa Rules of Civil Procedure 1.305(11) directs you to the Iowa Code forauthority which for a foreclosure action would be Iowa Code Sections 613.8 and613.9.-------142

62. Deed in Lieu of Foreclosure.FACTS: B leases real property to C for commercial use. Said real property isencumbered by a mortgage given by B to A. Subsequently, B defaults on themortgage, and in satisfaction of his obligation to A gives A a deed in lieu offoreclosure.QUESTION: Does C's lease terminate uponB'sconlleyance ofthe deed~in~lieuto A, or does A merely assume B's former role as landlord for the remaining termof C's lease? My best guess is that A simply becomes C's new landlord for theremaining lease term, but I can't find any law to back that up. Does anyone knowof useful authority which would answer this question?RESPONSE(S): I submit that C is a "junior lienholder" under Iowa Code Section654.18. You must provide C with the Notice of Right of Redemption under IowaCode Section 654.18( 1 )(e) but once this has been accomplished, C's rights areextinguished.* * * *C is a leaseholder (not a lienholder) and a party in possession. I don't think IowaCode Section 654.18 applies. I would presume that A takes the deed subject tothe lease. Is A arguing otherwise?****If A's mortgage was of record prior to the execution of C's lease, C is at themercy of A. Presumably A would like to keep getting revenue from the property,but if they want to terminate the lease, they can do so. If B granted A themortgage after the execution of C's lease, then A is stuck with C for theremainder of the lease.* * * *If there is a Subordination, Non-Disturbance and Attornment Agreement, that willcontrol. Otherwise, if the mortgage is prior to the lease, then the lender candecide in its sole discretion whether or not to accept the lease. If the mortgageeis unwilling to accept the lease as is, the tenant may be able to negotiate a newlease.* * * *I agree, if otherwise, B could enter into a long term lease after signing themortgage at a favorable rate with a tenant, to the financial detriment of themortgage holder. I'm assuming there is no subordination agreement involved.143

****Here's some law. Check the fact patterns of:Union Central Life Ins. Co. of Cincinnati. Ohio v. Goode, 222 Iowa 716, 269 N.W.762 (1936); Richardson v. Rusk, 215 Iowa 470,245 N.W. 770 (1932)I think you'll find that the post-mortgage tenants of mortgagor found theirtenancies subject to prior mortgagees' interests.54A Am. Jur. 2d Mortgages§ 164 (2012) fixes this general rule (subsequentelaborations omitted):"A mortgage is subject to prior leases of the mortgaged property.[FN1] However,a mortgagor alone, after the execution of the mortgage, cannot create a lease ortenancy which will bind the mortgagee, absent a stipulation conferring that powerin the mortgage or the consent of the mortgagee.[FN2] The general rule, then, isthat a subsequent lessee of mortgaged property, taking under a lease from themortgagor, takes subject to the mortgage.[FN3]"[FN2]Gartside v. Outley, 58 Ill. 210, 1871 WL 7904 (1871 ); Greenebaum Sons Bank &Trust Co. v. Kingsburv, 248 Ill. App. 321, 1928 WL 1525 (1st Dist. 1928);Anderson v. Robbins, 82 Me. 422, 19 A. 910 (1890); Delano v. Smith, 206 Mass.365, 92 N.E. 500 (1910); Ray v. Frick Co., 133 W.Va. 715, 57 S.E.2d 890(1950).- As to an agreement or stipulation permitting a lease, see § 165.[FN3]Schroeder v. Berlin Arcade Real Estate Co., 175 Wis. 79, 184 N.W. 542 (1921 ).55 Am. Jur. 2d Mortgages§ 729 (2012) includes this passage, with footnotecitations:"In the absence of statutory qualifications, the purchaser at a foreclosure sale isentitled to possession of the premises from the time the title vests in him or her,as against a tenant holding under a lease executed after the mortgage.[FN3]"[FN3]Elundee Naval Stores eo. v. McBowell, 65-Fia~-15~61!:h-108-(-191-3);-Smith-v.- -Pritchett, 168 Md. 347, 178 A. 113, 98 A.L.R. 212 (1935) (this is undoubtedly truewhere a statute provides that a lease made subsequent to a mortgage shall notbe valid as against a purchaser on foreclosure of the mortgage); Geo. Benz &144

Sons v. Willar, 198 Minn. 311, 269 N.W. 840, 109 A.L.R. 443 (1936); McFarlandReal Estate Co. v. Joseph Gerardi Hotel Co., 202 Mo. 597, 100 S.W. 577 (1907)(holding that in the absence of a statute requiring notice to be given to a tenant inpossession by the purchaser at a foreclosure sale, a foreclosure sale, by virtue ofa power of sale in a mortgage or trust deed, determines, even without notice tothe lessee, his or her right to possession under a lease given after the date of themortgage or trust deed).55 Am. Jur. 2d Mortgages§ 742 (2012) adds:"Generally, where the interest of a lessee under a lease subsequent to amortgage or deed of trust is terminated by a foreclosure, such lessee continuingin possession becomes liable for the use and occupation of the premises, in theabsence of an attornment.[FN1] There is however, some authority to thecontrary.[FN2] The general rule also operates for the benefit of the tenant whowishes to vacate the premises after the trustee's sale of the property hasextinguished the lease.[FN3]"59 C.J.S. Mortgages section 436(d), p.669 (1949) reads, in pertinent part:"A mortgagee purchasing the equity of redemption succeeds to the mortgagor'stitle as it then stands, with the benefit of any collateral agreements notnecessarily merged in the mortgage, and subject to any easements or rightspreviously granted by the mortgagor."-----------145

63. Foreclosure on Agricultural Land.FACTS: Iowa Code Section 654.18 allows for Alternative NonjudicialForeclosure. Iowa Code Section 654.19 states that " ... if the subject property isagricultural land used for farming ... the mortgagee and mortgagor may enter intoan agreement in which the mortgagor agrees to transfer the agricultural land tothe mortgagee in satisfaction of all or part of the mortgage obligation as agreedupon by the parties. The agreement maygrantthe mortgagor a right to purchasethe agricultural land for a period not to exceed five years ... "Iowa Code Section 524.910(2) had until1992 contained a provision that requiredbanks to first offer the prior foreclosed agricultural owner the right to repurchasethe property on sales within five years. That provisions in 1992 was deleted, andbanks are no longer required to make such an offer.QUESTION: Must a bank follow the provisions of Iowa Code Section 654.19concerning any rights to grant to the debtor/mortgagor following transfer of title?RESPONSE(S): A foreclosing bank "may" comply with Iowa Code Section654.19 but need not comply. It possesses "power" to elect whether or not tocomply. Either way the bank will generate marketable title in the foreclosedagricultural land.Iowa Code Chapter 4CONSTRUCTION OF STATUTES4.1 Rules.In the construction of statutes, the following rules shall be observed, unless suchconstruction would be inconsistent with the manifest intent of the generalassembly, or repugnant to the context of the statute: ...30. Shall, must, and may. Unless otherwise specifically provided by the generalassembly, whenever the following words are used in a statute enacted after July1, 1971, their meaning and application shall be: ...b. The word "must" states a requirement.c. The word "may" confers a power.Context of Iowa Code Chapter 654 appears to specify no alternativeinterpretation of "may".Williamson v. Iowa Dept. ofTransp., 822 N.W. 2d 122 (Table) (Iowa App. 2012)"The word "may," confers a power, unlike "shall" which imposes a duty, or "must"which states a requirement."- citing 4.1 (30). Interpreting an application of the--------.·.,··ord-"may'Lin-ehapter321J-(and-contrastingit-with-"must"-)-the·6ourt-ofAppeals- ---~concludes that "there is no requirement or duty" to take a particular noticeinitiative permitted by the statute. The responsible officials either "may or maynot" take the action contemplated by the law.146

Wieslander v. Iowa Dept. ofTransp., 596 N.W. 2d 516 (Iowa 1999):"The repeal of a statute typically destroys the effectiveness of the statute, and therepealed statute is deemed never to have existed. [citations.]" (exceptions noted,which appear irrelevant here).So we can't import the word "must" to replace "may" in Iowa Code Section654.19.147

64. Foreclosure by Bank of America (Possibly) Based on Erroneous Assignment.FACTS: I am examining an abstract that shows a foreclosure by Bank ofAmerica as successor by merger to Countrywide. I have read through theprevious posts on the listserve about how it is common knowledge that Bank ofAmerica is the successor to Countrywide but I am concerned that I still have atitle problem. The facts are set out below:Jane Doe gives mortgage to Local Bank in January of 2007.Local Bank assigns mortgage to Countrywide in January of 2007.Local Bank assigns mortgage to Bank of America, N.A., Successor by Merger toCountrywide Bank, FSB in April of 2011. In looking at the assignment, I saw thatit was notarized in California. A call to Local Bank confirmed that the personsigning does not work at Local Bank. I believe that the assignment should havebeen from Countrywide not Local Bank.Bank of America files to foreclose against Jane Doe in October, 2011.All defendants default.Foreclosure decree entered April 2012.Sheriff's Deed issued to Bank of America in June 2012.Quit Claim Deed from Bank of America to Federal Home Loan MortgageCorporation in August 2012.QUESTION: Is the foreclosure valid based on the 2007 assignment? If so, whatneeds to be shown in the abstract that Bank of America is the successor toCountrywide? Is a print off from the website sufficient?RESPONSE(S):148

65. Foreclosure - Bankruptcy.FACTS: I am examining an abstract showing a Petition for Bankruptcy filed bythe borrower after a Decree of Foreclosure has been filed but prior to theSheriffs Sale.Bankruptcy Petition lists foreclosure judgment and recites that debtor will"surrender" property. Bankruptcy is still pending.QUESTION: Is anything further required as a result of the Bankruptcy?RESPONSE(S): Please check Title Standard 13.1. That Title Standardcomprehensively covers required abstract showings in Bankruptcy proceedings.I think you will want your abstract to show almost all of the points listed .149

MARKETING ANDSELLING- REAL ESTATE

105. Attorney Showing and Negotiating Sale of Home.FACTS: I have recently been approached by a For Sale By Owner (FSBO) clientwho has requested that I not only handle the document preparation for the saleof her home, but she would like me to handle showing the home when neededand negotiating the sale of the home, in exchange for a fee or a percentage ofthe purchase price. She doesn't want to pay the large percent for a Realtor, butshe also doesn't want to do the work herself.QUESTION: Am I allowed to do this? This would of course have to make sensefinancially for me before I would agree to do so; however, I am not certain if I amallowed to do this. Is this a service we are allowed to provide to our clients astheir counsel, or is this something that would require a Realtor's license?RESPONSE(S}: I would consider whether or not this is in the best interest of yourseller client. Licensed Realtors have the access to information, and the expertiseto help determine and negotiate the best possible selling price and terms for thehome. How many similar homes are on the market and for how long have theybeen there? What have been the latest pricing trends? How will recent changesin financing affect what a typical buyer can offer? Does the buyer have to sellanother home, and if so what is its true value? Obviously, I'm biased, but I'm alsoexposed daily to buyers and sellers who haven't been adequately represented,and it can be very costly.* * * *Even if the real estate commission regulations are okay with it, you also need toknow whether your liability carrier provides coverage for this activity (i.e.negligently negotiating an inadequate sale price). My guess is probably not.****I don't have a cite off-hand, but I believe the standard that permits an attorney toengage in the sale of real estate is when it is "incident to the practice of law." Iwould question whether the physical showing of a home comes under thatpurview.* * * *I think you have two big questions, as evidenced from the discussion:1. Does the particular attorney have the competence to do the work involved?Obviously, unless the attorney has an extensive background in real estate pricingand marketing, I would caution against attempting to do this type of work. Realestate brokers do this all the time, so I would generally counsel using them218

arring exceptional circumstances. Attorneys wandering from their core areas ofcompetence tend to enrage the evil god Malpractice. In addition, even if anattorney has the competence, one questions whether the attorney's servicescould compete in price with a broker's; and the client should be aware of that atthe outset.2. Can an attorney legally do the work of real estate marketing? The Iowa StateBar Association's exhibit at Living History Farms shows what the work of apioneer lawyer was, and it predominately was one of land transactions. Realestate trading has largely slipped from our hands into those of the real estatebrokers, but this has not always been a good thing. For example, myforeclosures of the abominable loans written in the last decade overwhelminglyshowed that there was no attorney present at closing; hiring an attorney wasactively discouraged because of the logical fear that a competent attorney wouldhave urged the borrowers to scotch the deal. The practice of law is regulated bythe court, not by the legislature; and if the court rules that real estate transactionsconstitute the practice of law when done by an attorney, it is likely that the citedrestrictions by the legislature would be invalidated in a proper court action.****My reaction concerning the phrase "incident to the practice of law" beingdiscussed is that I find it interesting that activity could be found not incident to thepractice of law when someone doesn't want you to do it- perhaps such as beinginclusive in what you assist a client regarding sale of his real estate. But, foundincident when someone wants to hold you to standards, such as an attorneyrunning a closing company either in his office or next door, in which case allactivity (if my memory serves me right) of the closing company is attributed to theattorney including considering the bank account of the closing company as "clienttrust funds" and not available to be paid out on the float.I would consider everything I did for the client in regard to sale of his real estateincident to the practice of law, and subject to all aspects of professional rules. Iwould do all I could to assist her, including having the responsibility forrecommendation of professionals to assist in iopic areas in which I lackedknowledge or skill.I second the thoughts regarding the aspect of aversion to having attorneysinvolved in the "routine" sale of real estate. The attorney might actually tell theclient a contract provision is not in their best interest. Or even worse, contrary towhat is "normal" or appropriate.* * * *219

I read your reply and for some reason I have it in my head that there may besome rule or regulation in Iowa that forbids a person from getting a commissionon the sale of real estate if you are not a licensed real estate broker/salesperson.Perhaps the discussion has been framed wrong, it's not the practice of law thatshould be looked at but the type of payment being received and if it is subject toother regulations.* * * *After reading all the comments from other members I would advise against yourmarketing and showing the house. I think you can help your client prepare to sellthe house by checking the real estate taxes, utilities, preparing the real estatedisclosure statement and groundwater hazard statement as well as any purchaseagreement and final closing documents, but I would avoid being directly involvedin any marketing of the property for all of the reasons that other members havegiven you.220

66. Foreclosure and Condo Special Assessments.FACTS: I have a client who purchased a condominium at Sheriff's Sale afterforeclosure. Prior to the decree, but well after the mortgage was recorded, therewas a special assessment imposed by the Condominium Association payable inthree annual installments. The first installment was payable prior to the Sheriff'sSale, but the other two were not payable until after the Sheriff's Sale.We are all in agreement that the Sheriff's Sale wiped out the first installmentpursuant to Iowa Code Section 4998.18, since the mortgage was superior to thelien. However, we have a disagreement about the second and third installments.My position is that the assessment was voted on before the Sheriff's Sale andthat it was "due" before the Sheriff's Sale, and therefore the whole specialassessment is wiped out regardless of when it was payable.The Condominium Association says that since two installments were payableafter the Sheriff's Sale, they were not yet "due", and therefore, are still owed.They have agreed that if I can find authority to support my position, they willconcede, otherwise, they will insist upon payment of the second and thirdinstallments.QUESTION: Are the second and third installment payments due to theCondominium Association?RESPONSE(S): The Condominium Association only tries to squeeze somemoney from your client, that he doesn't owe.Take a look at In re Kelson B.R. (Bankruptcy S.D. Fla2012). Fastcase yields the following interesting though incomplete snippet:"St. Tropez assets the special assessment is not an enforceable obligation until itis due and payable because if payment of the assessment cannot be enforced,then it is not due. The Court disagrees. It is not the date of enforcement thatcontrols the claim but when the obligation arises. Thus, although the board ofdirectors established July 1, 2012 as the date for the first installment of thespecial assessment, the obligation to pay the assessment arose at the time theboard of directors ... "To same effect see Soules v. Ramstack, 95 P. 3d 933 (Alaska 2004)."An assessment does not become valid only when it attaches as a lien. Debtscan exist before they are due, and condominium assessments can be effectivebefore they must be paid. Condominium associations in most states have150

statutory authority to attach liens as a collection mechanism to ensure thathomeowners pay the fees it has assessed. 14 Alaska Statute 34.08.470describes one way for an association to collect assessments from recalcitranthomeowners: It grants the authority to impose liens to collect unpaidassessments, it allows these liens to attach from the time an assessment is due,and it gives these liens priority over other types of liens and encumbrances. 15But it says nothing about when an assessment itself becomes effective. Acondominium association also has other means available to encourage the timelypayment of assessments, including authority to impose late fees and fines 16and to charge up to an eighteen percent interest rate on unpaid balances. 17"Indeed the typical sequence by which an association adopts, announces, andcollects assessments implies that an assessment will be effective before it is due,and almost certainly before the association could attach a lien against a unit tocompel payment. Typically an association board will adopt a budget for plannedexpenses, enact an assessment to meet these expenses, set a deadline forpayment and, if the assessment remains unpaid, pursue various collectionstrategies ranging from sending a reminder letter, charging interest, attaching alien, and even foreclosing on a unit. 18 But the assessment exists even though itmight not be immediately due and payable. Allowing a period of months beforepayment is due is particularly important where, as here, the association levied anassessment of more than $13,000, greater than ten percent of the value of thecondominium, which sold for $126,900. When the announcement of anassessment predates the due date, the assessment is best viewed as anunmatured obligation, a debt for which the sum is certain though the time forpayment is deferred. 19 Though the time for payment had not yet passed whenthe estate sold unit 2F to Ramstack, the assessment existed as an obligation ofthe estate from the time it was enacted. Because the assessment was anexisting obligation when the estate contracted to sell the unit, the superior courtcorrectly found the estate bore the obligation of paying the assessment. ..'The validity of the assessment was not contingent upon whether the associationpurchased the land. Had the land transaction irreparably fallen apart, theassessment payments would have been refunded with interest. Though theassessment was not due until April 30, when the estate sold the unit toRam stack, payment of the assessment was contingent upon nothing but thepassage of time. Thus the assessment must be viewed as an unmatured debtrather than a contingent liability ..."The superior court also found that Schmidt was fully aware of the status of theland transaction and the special assessment, but that this information was notdisclosed to Ramstack or her agent. Because the estate had greater knowledgeof the pending assessment, the superior court correctly ruled that the estate borethe burden of exempting the special assessment from its contractual agreementwith Ramstack if it wished to avoid its obligation to pay the assessment."151

****The critical point for your purposes is when the sum chargeable is "assessed".Take a look at Iowa Code Section 4998.17.* * * *Further yet, I read Iowa Code Section 4998.17 as stating that all assessments forcommon expenses are a lien from the time of assessment which accrue untilpaid.[Attachment.]152

Iowa Code 499B.l7Page I of I499B.17 LIEN AGAINST OWNER OF UNIT.All sums assessed by the council of co-owners but unpaid for theshare of the common expenses chargeable to any apartment shallconstitute a lien on such apartment prior to all other liens exceptonly (1) tax liens on the apartment in favor of any assessing unitand special district, and (2) all sums unpaid on a first mortgage ofrecord. Such lien may be foreclosed by suit by the council ofco-owners or the representatives thereof, acting on behalf of theapartment owners, in like manner as a mortgage of real property. Inthe event of any such foreclosure, the apartment owner shall berequired to pay a reasonable rental for the apartment if so providedin the bylaws, and the plaintiff in such foreclosure shall beentitled to the appointment of a receiver to collect the same. Thecouncil of co-owners or the representatives thereof, acting on behalfof the apartment owners, shall have power, unless prohibited by thedeclaration, to bid in the apartment at foreclosure sale, and toacquire and hold, lease, mortgage and convey the same. Suit torecover a money judgment for unpaid common expenses shall bemaintainable without foreclosing or waiving the lien securing thesame.Section History: Early Form[C66, 71, 73, 75, 77, 79, 81, §499B.l7]Previous Section 499B.16Next Section 499B.I81)(1 ReturnL":'J ToHomehttp://coolice.legis.iowa.gov/Cooi-ICE/default.asp?category=billinfo&service=IowaCode ...2/17/2013

67. Foreclosure- Death of Borrower.FACTS: Foreclosure initiated against Mr. A. On August 3, 2011, Mr. A dies. OnAugust 18, 2011 Motion for Summary Judgment is filed and decree filedSeptember 28, 2011. Sheriff's Deed issued later.QUESTION: Does Mr. A's estate, devisees or heirs have any right to notice or isthe foreclosure good as it stands?RESPONSE(S): Provided the foreclosure proceeding was properly entered in thelis pendens index prior to Mr. A's death, the foreclosure would appear to be validas stands.****I think the writer is right, but some judges don't. A few years ago, I had a similarsituation and the judge required me to open an estate so that it could receive the10 day default notice.****I concur. The legal right is to plow ahead. However, the compassionate thing todo would be to postpone the sale, thereby allowing the estate to either concede,redeem or mount a defense.As a banking attorney who handles commercial foreclosures like this (with deathof guarantors or borrowers) on a daily basis, I exercise the latter.153

68. Foreclosure with Deceased Mortgagor.FACTS: I am doing a foreclosure and the mortgagor is deceased, with nosurviving spouse. Judgment sought is in rem. The Last Will and Testament ofthe decedent/mortgagor has been admitted to probate without presentadministration. The Will shows that the only beneficiary is the decedent's son.There is also an affidavit in the probate file showing that nothing is due to estaterecovery.No liens for state or federal taxes have been recorded and there are no claims inthe estate.I have named the estate as a defendant, as well as the son, a junior lienholder,and any unknown/unnamed persons (parties in possession and those with aninterest in the estate of the decedent/mortgagor).QUESTION: Do I still need to name the U.S. Department of Treasury/IRS andState of Iowa/Department of Revenue as defendants, just to be safe for taxes?RESPONSE(S): I have attached the working language of a proposed titlestandard (September 2012) under consideration by the ISBA Title StandardsCommittee. You should be aware that due to concerns expressed by theProbate Section, it may be a while before this (or anything like it) becomes anactual title standard.[Attachment.]154

Title Standard # .PROBLEM. What showing is needed where a mortgage written by a now deceased borrower isforeclosed on?STANDARD.1. If a foreclosure court had in rem jurisdiction of the persons with an interest in the estateof a deceased borrower, and entered a decree of foreclosure, there is g~nerally no need toopen an estate for the deceased borrower. !;l:gtiJ,~'k~~~~'fo'f~~.\gf"'?{~iflti~?'l:~a, a titleproblem can only arise fti'~l(cift~]cils~ if a person in interest objects to the procedure in theforeclosure case and the court upholds the objection.2. If the property passes outside the probate estate, such as through a deed of joint tenancy,it is generally sufficient to add the successors in interest of the borrowers as defendants.3. If the estate is being administered, the foreclosure should name as defendants thepersonal representative, and those known persons reasonably believed to be entitledunder the will or intestacy to inherit. If there is any doubt about who is entitled to inheritthe property, the foreclosure also should name as defendants all unknown persons with aninterest in the estate.4. If the estate is not being administered, the foreclosure should name as defendants allknown persons who are reasonably believed to have a right to inherit the property, andalso all unknown persons with an interest in the estate.5. Generally, the state should be added as a defendant in respect of death taxes and theestate recovery program. It is generally not necessary to add the federal government inrespect of estate taxes, unless it has filed a lien in the office of the county recorder, orunless the examiner had reason to believe that the deceased mortgagor had an estate largeenough to be subject to federal estate tax.6. It is not necessary to add as defendants, or to serve, unsecured creditors of the estate,unless they have requested notice under §633.42.AUTHORITY:Iowa Code §§633.350 and 654.4A, subsections (4) and (5).26 U.S.C §6324(a)(l) (automatic estate tax lien divested on property used to pay debts andcharges of estate).COMMENT:The State of Iowa should be added as a party in cases where the mortgaged property passes ondeath to a surviving joint tenant, remainderman, or other beneficiary who takes outside of theprobate estate, where the examiner has reasonable grounds to believe that property may besubject to state death taxes or the estate recovery program. Similarly, where the property passesfree of death taxes to a beneficiary of the property in probate, and where there are no reasonablegrounds to believe that the estate is subject to the estate recovery program, it may not benecessary to add the state as a party to the foreclosure.

§654.4A, subsections ( 4) and (5) provide for simplified service of process on persons with aninterest in a deceased borrower's estate for foreclosures commenced after June 30, 2009.The interest of the State oflowa under the estate recovery program is probably not a lien interest,but since the state will generally have to be added in respect of death taxes, it costs nothing toadd the ERP interest to the foreclosure.The question of whether the automatic estate tax lien of 26 U.S.C. §6324 is divested onforeclosure as a charge against the estate is unsettled; but it is rare to see the federal governmentattempting to enforce it against property taken back in foreclosure. In the unlikely event that thefederal government claims an interest after foreclosure because of the automatic estate tax lien,the foreclosure can be reopened under the doctrine of Lincoln Joint Stock Land Bank v. Rydberg,15 N.W.2d 246 (Iowa, 1944) to clear it.If an overplus arises at the sheriff's sale, an estate may be necessary to administer it; however,this does not affect title to the real estate foreclosed against. Best practice indicates that if theestate is not being administered, and the United States was not a party to the foreclosure inrespect of federal death taxes, the US, through the US Attorney and the Internal RevenueService, should be served with copies of any application for, and order for hearing on,distribution of any overplus arising at the sheriff sale. Such an application should reasonablyidentify the deceased mortgagor and indicate that the US is being added in respect of possibledeath taxes and the automatic lien of26 U.S. C. §6324.

69. Foreclosure - Deficiency- Guarantor.FACTS: I have a situation where husband and wife signed a note and mortgageon a house. Husband and wife are getting divorced and move out of house. Noteis guaranteed by husband's parents. Bank wants to foreclose on note andmortgage without right of redemption and waive deficiency judgment and then goafter the parents for any deficiency.It seems to me like I should be able to foreclose on the note and mortgage, sellthe property and then bring an action against mother and father for anydeficiency. I do not believe I am waiving any right to a deficiency against motherand father by proceeding against debtors (in rem) without right of redemption.However, Iowa Code Section 654.26 concerns me.QUESTION: If we foreclose, waiving our right to a deficiency, do we then waivethe right to go after the guarantor for the deficiency as well?RESPONSE(S): See Becker v. Longinaker, 784 N.W. 2d 202 (Iowa ).155

70. Foreclosure on Property of Deceased Person.FACTS: I have reviewed a current pending foreclosure. Sole mortgagor diedAugust 7, 2011. Parties in possession (vacant) and U.S. government and Iowa(for potential death taxes) were listed as defendants and served. No estate wasopened. Judgment is in rem.QUESTION: Must an estate be opened?RESPONSE(S):http://www.iowafinanceauthority.gov/documentslfilelibrary/tgd/2009_regional_academies/Outline_Chuck_CD3AD4E441318.pdfPage 16 would be most helpful here:"Where No Estate is Pending. There is a difference of opinion among membersof the bar as to whether the foreclosing mortgagee must open an estate wherethere is not already an estate pending for the deceased mortgagor. I do notbelieve it is necessary, and I have found no authority requiring that themortgagee open an estate in such case. Nevertheless, where the mortgagor isdeceased and no estate has been opened, the best course is to join as partiesdefendant all unknown successors in interest to the deceased mortgagor and allother unknown claimants to the real estate and ask that the court quiet title to thereal estate. Whether it is necessary for a guardian ad litem to be appointed torepresent the interest of unknown parties may depend upon the nature of therelief being sought in the petition. If the petition seeks only an in rem judgment,and provided the mortgagor is not on active military duty, it is arguable that noguardian ad litem need be appointed. Also, where no estate is pending, the Stateof Iowa and the United States should be made parties defendant so as toaddress the possibility of state and federal death taxes."Based on the above, I would argue that the heirs, if any, should be joined as aparty to the foreclosure, and that a guardian ad litem should be appointed for theunknown heirs as a base-covering measure.****I have never believed it was necessary. In this case, Iowa Code Section 654.4Awould appear to apply and would not require the opening of an estate.* * * *This is one of a very limited number of circumstances where I disagree.It has always been my opinion that if you are within five years of the date ofdeath at the time of foreclosure, the mortgagee (being a creditor) must open a156

creditors' estate. Iowa Code Section 633.227(2). That being one of the specificreasons that statute was adopted and exists. Or so many of my friends in theprobate bar tell me.Some share similar positions that if the foreclosure action indicates thatreasonable steps were taken to identify and serve the heirs or beneficiaries of thedecedent or even if a guardian ad litem is appointed to represent them asunknowns, that is (also?) sufficient. If that wasn't done here, I don't know that Iwould pass on the subject title.* * * *I agree that any known successors to the deceased mortgagor/owner should bejoined as defendants and any potential heirs/beneficiaries whose identitiescannot be determined following reasonable search and inquiry should beidentified in the petition and joined to the proceeding as Unknown Claimants.However, I am not convinced that an estate must be opened in this case;especially in light of the provisions of Iowa Code Section 654.4A.* * * *Another concern would be a due process concern which would trump the Iowastatute. Title passes to someone at the death of the decedent subject to estateadministration. An estate proceeding is a court sanctioned determination of thatpassage. Does Iowa Code Section 654.4A circumvent due process (Mullane, ourmost basic civil procedure due process case) such that the constitutionality ofIowa Code Section 654.4A could be challenged?* * * *Perhaps it does (though I don't believe so), but as title examiners I don't think itunreasonable to rely on the constitutionality of a statute unless and until the courtstrikes it down as unconstitutional. Otherwise, in how many other instanceswould we have to object to the marketability of title despite the existence ofstatutory authority supporting its marketability? If we adopt this philosophy, thenit would call into question any tax title based upon a deed of record for less thanten years. In addition, is this approach consistent with the provisions of TitleStandard 1.1? In this case, is there really any reasonable probability of adverseclaims or litigation?* * * *I had seen a proposed title standard on this issue previously, does anyone knowwhere that stands?157

71. Foreclosure - Publication of Notice.FACTS: I am trying to find authority to present to counsel objecting to title on aforeclosed home (if there is any), or how to get attorneys who handled theforeclosure to fix this problem. I am trying to help the would-be buyer who hasno place to live very soon if the closing of the home doesn't take place.Fact pattern is basically that when the foreclosure action was served it was doneby publication. The objection cited is that the publication in the newspaper failedto state how many days that the defendants had to file an answer. The courtapproved the entry of a default. The decree was entered and the sheriff's saletook place. Lender was purchaser at sale. The default judgment was enteredmore than 60 days ago. We are still within one year of the entry of judgment, butthere doesn't appear to be any grounds for the foreclosure decree to be vacated.The defendants in the foreclosure had abandoned the property long ago, hencethe reason for the published notice. I believe that the likelihood of them coming. back into the picture is minute, but can't be eliminated.QUESTION: Does anyone have any experience with something like this? Whatis the best way to get this resolved? Does the foreclosure action need to berefiled? Can it be fixed short of refiling the foreclosure?RESPONSE(S): Do the Iowa Rules of Civil Procedure (IRCP) concerningpublication of the original notice specifically require that the published notice givethe date by which an answer or other responsive pleading must be served? Theform for published original notice that is set forth in the forms section of the Rulesprovides for this, and the Rules provide that such form is "sufficient," but I do notrecall ever seeing that the Rules specifically require that the original notice forpublication declare the answer deadline.Provided the notice is otherwise proper, and provided the defendants upon whomnotice was published were in fact afforded the proper amount of time to answer(i.e. the decree was not entered until after expiration of said time), I would beinclined to consider title marketable.****You cannot generally re-file the foreclosure due to this little thing we call resjudicata. What you can do is to have the court order that the same case bereopened and that amended service be made on those who were not properlyserved, possibly with a bar date that unless they appear and defend within acertain window after the completion of service, that the decree, Sheriff's Sale andSheriff's Deed will be confirmed as against them without further order of court.* * * *158

I looked and do not see that IRCP require the published notice to give the dateby which an answer or other responsive pleading must be served.* * * *I believe that Rule 1.302( 1) sets forth the requirements for the originalnotices ... including subsection "d", which requires that you include the "time withinwhich these rules or statutes require the defendant. .. to serve, and within areasonable time thereafter file, a motion or answer." The publication rule doesnot state what must be in the original notice, only how publication of the originalnotice shall be made. I believe that since Rule 1.313 sets forth how the originalnotice is to be published, we must refer back to Rule 1.302(1) for guidance onwhat must be included in the original notice that is to be published.159

72. Mortgage Foreclosure- MERS.FACTS: 1. Mortgage given to MERS as nominee for Lender 1 in 2007.2. Lender 2 files foreclosure action in 2010. Statement in petition that MERS hadassigned Mortgage to Lender 2.3. Sheriff's Deed recorded in 2010.4. Assignment of the Mortgage from MERS to Lender 2 dated and recorded in2012.QUESTION: Any problems with the assignment of mortgage filed after theSheriff's Deed? Was Lender 2 the proper party to file the foreclosure if noassignment of mortgage had been recorded prior to the filing of the foreclosure?RESPONSE(S): If Lender 2 had actual possession of the Note and surrendered itto the Court as part of the foreclosure action, then I do not think there is an issue.Possession of the Note is prime facie evidence of ownership, as is anassignment.160

73. Non-Judicial Foreclosure.FACTS: 1. In 2005 property was deeded to Husband only.2. On the same date Husband and Wife sign a note with Bank and a mortgageto secure the note.3. In 2006 Husband and Wife sign an additional note with the same Bank and anew mortgage to secure the second note.4. In 2010 Husband and Wife get a divorce and as part of the proceedings Wifedeeds her interest in the property to Husband.5. Now in 2012 Husband is willing to enter into an alternative nonjudicialvoluntary foreclosure agreement with Bank pursuant to Iowa Code Section654.18. Wife cannot be found to sign agreement.Iowa Code Section 654.18 provides that "Upon the mutual written agreement ofthe mortgagor and the mortgagee, a real estate mortgage may be foreclosedpursuant to this section ... " One could interpret this provision to require Wife'ssignature as she was a "mortgagor". However, it can also be argued,persuasively, that Wife no longer has an interest in title to the property andtherefore has no interest to be foreclosed.QUESTION: Is Wife's signature required on the voluntary foreclosureagreement?RESPONSE(S): You don't need ex-Wife's signature for the foreclosure on landshe does not own. Wife was never a legal owner of the property, aside from herstatutory share rights. Those she gave up as part of her divorce.Wife very likely IS a joint-and-several oblige on the mortgage notes, because shesigned them. Presumably some provision of the divorce decree assigns toHusband the responsibility (as between Husband and Wife) to pay the mortgagedebt on his land and hold Wife harmless.But any such divorce assignment of liability will not bind the creditor. If it canlocate Wife, then creditor can obtain payment from her.161

74. Nonjudicial Voluntary Foreclosure.FACTS: I believe the Internal Revenue Code precludes use of a nonjudicialprocedure to eliminate a federal tax lien, and Iowa Code Sections 613.8 and613.9 (which prescribe the manner of service upon the State of Iowa) may beread to similarly preclude use of a nonjudicial foreclosure.QUESTION: Can the alternative nonjudicial voluntary foreclosure procedure ofIowa Code Section 654.18 be utilized to remove the junior tax lien of the IowaDepartment of Revenue?RESPONSE(S): Yes. I do not agree that the nonjudicial procedure cannot beused. If the legislature wanted that it could have clearly excepted it from thestatute.* * * *I think you can, but I cannot say that for sure. My reasoning:1. Generally, the State has sovereign immunity against suits unless there is astatute to the contrary.2. The statute waiving this in foreclosure and other real estate title actions iscontained in Iowa Code Sections 613.8-613.10.3. I am not aware of the court addressing whether a statute terminating rights onnotice and passage of time needs a waiver of sovereign immunity, but my guessis that such notices would be binding on the State's interest unless the statuteexpressly excepted the State as a notice recipient, which here it does not. This isnot, of course, a judicial proceeding, so presumably sovereign immunity does notapply.162

FORFEITURE''

75. Contract Forfeiture- Notice to Child Support Recovery Unit Required?FACTS: I am examining an abstract in which an installment contract wasforfeited. Notice was properly served on the vendees and the parties inpossession.The abstract shows that the vendees divorced prior to the forfeiture and supportpayments were assigned to the State.QUESTION: Is notice of the forfeiture required to be served on the State in thisinstance?RESPONSE(S): Under Iowa Code Chapter 656 I do not believe that such noticeis legally required. Might be the "better practice" to give such notice, "just incase" someone objected to its absence.****Generally you don't have to serve judgment creditors unless they have requestednotice under Iowa Code Section 656.2.163

76. Deed in Partial Satisfaction and Forfeiture.FACTS: I have a client who sold Parcel A on installment contract to Buyers.Three years into the contract, client amends installment contract to add parcel Bto the contract. The contract is set to end with a balloon payment in six months.Each month payments are a few days late and my client has to remind theBuyers to pay real estate taxes. We do not expect that the Buyers will be able toobtain financing to pay the balloon. Buyers have a number of judgment liensagainst them.Based on the amount that the Buyers have paid on the contract, my client iswilling to convey Parcel A to Buyers in partial satisfaction of the contract if myclient can retain Parcel B.QUESTION: Can my client give a deed for Parcel A in partial satisfaction of thecontract and then follow the forfeiture procedure for Parcel B?RESPONSE(S): Within the limiting parameters set by Iowa Code Section 656.1.I think you can do what you suggest. Assuming that your contract for sale ofIowa real estate provides for a right to forfeit on vendee's breach, then thecontract shall "not be forfeited or cancelled except as provided in this chapter"[656].Nothing in Iowa Code Chapter 656 explicitly prevents your proposed resolution.But the chapter seems to treat forfeiture as all of a piece, not piecemeal.Did you do a "new" separate contract for Parcel B? And did the original contractfor Parcel A survive the "Amendment" process of the subsequent deal?If so then you could1) give Notice of Forfeiture of the new contract for Parcel B, per Iowa CodeSection 656.2(1 )(a).[Notices of Forfeiture shall "reasonably identify 'the contract' and accuratelydescribe the real estate covered" and further "specify the terms of 'the contract'with which the vendee has not complied."] and2) give a deed to Parcel A in satisfaction of contract for Parcel A. with which thevendees appear to have complied. [Judging by your reference to "the amount ofmoney that the Buyers have paid on the contract", which suggests that theoriginal contract could already, or easily, be satisfied.]If not, and the two parcels got wrapped into none new written AB contract thatsubstituted for the old contract for A only, may be best to forfeit the whole thingagainst both A and B, and then enter a revised contract to sell A outright formoney "in hand paid".164

Possible problem (for the vendee, not vendor) with this course: Liens of anyjudgments lurking out in the wilds will immediately attach to the new "afteracquired"property (homestead or not).Partial tender of contract payment will not suffice to avoid forfeiture of a singlecontract. See McWhirterv. Crawford, 1041owa 550,72 N.W. 505 (1904); Moorev. Elliott, 2131owa 374,239 N.W. 32 (1931).But if you can treat the original contract as still in effect then I think you can avoidforfeiture on Parcel A. Just refigure the amounts paid as if in satisfaction of theoriginal contract for Parcel A. Describe only Parcel B in the Notice of Forfeitureof the newer contract, when forfeiting the new contract."In all this, I presume that your vendor client and the vendee are cooperating.165

77. Forfeiture- Vendee Deceased.FACTS: There are provisions in Iowa Code Chapter 654 for foreclosure onpersons interested in real estate of a deceased person whose estate is notprobated in this state, with service by publication.QUESTION: But, what can you do for forfeiture under Iowa Code Chapter 656when vendee is deceased, and no probate of her estate in this state?RESPONSE(S): The Legislative Committee and the Section Council haverecommended to the ISBA Board of Governors a bill (copy attached) which,among other things, would adopt the Chapter 654 provisions for service incontract forfeitures by reference in Iowa Code Section 656.3. However, until thebill passes into law, you may want to foreclose on the contract if you don't wantto have to open an estate for the decedent.[Attachment.]166

558.5 Contract for deed- presumption of abandonment.When the record shows that a contract or bond for a deed has been executed more than ten yearsearlier, and the record discloses no performance of the same and that more than ten years haveelapsed since the contract by its terms was to be performed, or twenty years have elapsed fromthe date of the contract if no due date is stated in the contract or any extensions thereof, thecontract shall be deemed abandoned by the vendee and of no effect and the land shall be freedfrom any lien or defect on account of the contract.On ana after JH!y 1, 1992, tThis section shall apply to a contract or bond described in thissection, if the contract or bond is not filed of record but referred to in another instrument whichis filed of record. The contract or bond shall be deemed abandoned by the vendee ten years fromthe date that the contract or bond is to be performed according to the recorded instrument.However, if the recorded instrument does not refer to a performance date for the contract orbond, the contract or bond shall be deemed abandoned by the vendee ten years after the date thatthe instrument containing the reference is recorded. The limitations of this section shall notapply against a vendee or the vendee's successors in interest where the vendee or the vendee'ssuccessors in interest are in possession of the propertv, or have been substantially continuouslypaying the taxes levied under chapter 444 against the property for the preceding five years.614.21 Foreclosure of ancient mortgages ..L No action shall be maintained to foreclose or enforce any real estate mortgage, bond for deed,trust deed, or contract for the sale or conveyance of real estate, after twenty years from the datethereof, as shown by the record of such instrument, unless the record of such instrument showsthat less than ten years have elapsed since the date of maturity of the indebtedness or partthereof, secured thereby, or since the right of action has accrued thereon, or unless the recordshows an extension of the maturity of the instrument or of the debt or a part thereof, and that tenyears from the expiration of the time of such extension have not yet expired. The date ofmaturity, when different than as appears by the record of the instrument, and the date of maturityof any extension of said indebtedness or part thereof, may be shown at any time prior to theexpiration of the above periods of limitation by the holder of the debt or the owner or assignee ofthe instrument filing an extension agreement, duly acknowledged as the original instrument wasrequired to be acknowledged, in the office of the recorder where the instrument is recorded.Frsm ana after fu!y 4, 19413, tThis section shall also apply to any instrument of the kinddescribed in this section which is not of record but which is described or referred to in any otherinstrument which is filed of record and the limitation shall be ten years from the due date of theinstrument referred to if disclosed in the record and if not so disclosed then within ten years fromthe date of the record of the instrument containing such reference.2. A vendee of a real estate contract, or vendee's successor in interest, barred by this sectionwho is physical possession of the property may personally serve the vendor with a demand for adeed as provided in the contract, which demand shall indicate that if a deed is not providedwithin 45 days of service, and no action has been co=enced to foreclose or forfeit the contract,the vendee may file an affidavit showing service and compliance with this subsection,whereupon the auditor shall adjust the countv records, as provided in section 558.66, to showthat the rights of the vendor have vested in the vendee. Service may be made on personsinterested in the estate of a deceased vendor as provided in section 654.4A, subsections 4 and 5.656.3 Service.

Said The notice may be served personally or by publication, on the same conditions, and in thesame manner as is provided for the service of original notices, except that when the notice isserved by publication no affidavit therefor shall be required before publication. Service bypublication shall be deemed complete on the day of the last publication. Notice may also beserved on judgment creditors or on persons interested in the estate of a deceased person asprovided in section 654.4A.656.9 Defect in forfeiture proceedings -limitation of actions ..L An action shall not be commenced after July I, 1992, which asserts a claim against real estatepreviously subject to a forfeiture proceeding, based upon a defect in the forfeiture proceeding, inwhich the proof and record of service of notice of forfeiture required by section 656.5 has beenfiled for record in the office of the county recorder prior to July 1, 1991.2. Except as provided in this subsection, a claim by a vendee not in physical possession or aparty to the forefeiture other than the vendor or vendee, against real estate previously subject to aforfeiture proceeding, based upon a defect in the forfeiture proceeding, in which the proof andrecord of service of notice of forfeiture required by section 656.5 has been filed for record morethan 10 years, is barred. A claim valid on June 30,2013, may be commenced at any time prior toJuly 1, 2014.Chapter 656.9, subsection 1, and the first six words of the first sentence, and the second sentenceof subsection 2, as amended by this act, are repealed July 1, 2014.

78. Notice Re Forfeiture.FACTS: Child support assigned to DHS and remains unsatisfied at time offorfeiture of real estate contract.QUESTION: Must DHS receive notice of the forfeiture?RESPONSE(S): By the language of the relevant statute I'm fairly sure that youhave no duty to notify DHS of forfeiture against their vendee/obligee.656.2 Notice. ...2. The vendor shall also serve a copy of the notice required in subsection 1 onthe person in possession of the real estate, if different than the vendee; on all thevendee's mortgagees of record; and on a person who asserts a claim against thevendee's interest, except a government or governmental subdivision or agencyholding a lien for real estate taxes or assessments, if the person has done bothof the following:a. Requested [notice, given substantially in the form set forth in the statute] ...b. Filed the request form for record in the office of the county recorder afteracquisition of the vendee's interest but prior to the date of recording of the proofand record of service of notice of forfeiture ...Obviously DHS will not be a "person in possession", nor is DHS a mortgagee.DHS would fit the description of a "person who asserts a claim" (i.e., as legalassignee of the support obligor). Almost certainly DHS will not have filed arequest for notice, though, so it should also fail to qualify for this third class ofnotice entitlement.Perhaps the wiser practice would be to notify DHS in the manner in which theState is served with notice of legal actions. Iowa Rule of Civil Procedure1.305(11) or (13). And if you've given notice and they've not acted, then I'm surethat a court of equity would not give the State even more grace than the vendoralready extended. Call this extra notice 'insurance'.167

GIFTING OFREAL ESTATEI

79. Annuity as Payment for Land.FACTS: Eighty-five year old client wishes to gift land to children, but feelsuncomfortable giving up rental income stream entirely. Proposal is to transferland in exchange for a private annuity from children of $20,000.00 per year forten years. Land has a low basis, but is worth approximately $2 million. Childrenintend to keep land until they die.QUESTION: 1. What amount of consideration/sales price do you put down on theDeclaration of Value? Present value of the future payments ? $200,000.00?2. How does client report annuity payments on tax return? All ordinary income?Capital gain to the extent annuity payment exceeds basis (basis being costdivided by 10 for each year's match with the annuity payment)? Must child file aForm 1 099-R for parent? Must any part of the annuity payment be treated asinterest?RESPONSE(S): Your client's suggested course of action has been tried before.(Annuities not necessarily free of post hoc problems.)See: In re Holdorf's Estate, 227 Iowa 977, 289 N.W. 756 (1940); Council Bluffslnv. Co. v. Kay, 2181owa 515,255 N.W. 721 (1934); Fergeson v. Ferguson, 181Iowa 1076, 165 N.W. 349 (1917); Hill v. Victora, 180 Iowa 417, 161 N.W. 72(1917); Lacey v. State Treasurer, 152 Iowa 477, 132 N.W. 843 (1911 ); Herman v.Herman, 102 N.W. 1132 (Iowa 1905); Johnson v. Johnson, 52 Iowa 586,3 N.W.661 (1879).Some of the cases listed above treat the annuities as "prior liens" upon the landsin question. Note that all of them are old, suggesting that an "annuity aspurchase price" isn't a common course of action these days.Unfortunately none of the cases involving "sales" of land by parents to children inexchange for annuities discuss income tax implications of such deals.Why cram together what are essentially two separate transactions? . Client wants1) her children to have the farm for little or nothing and 2) a guaranteedcontinued income for herself.Possible courses of action to accomplish 1 and 2 together:A. Do a $200,000 sale and keep the cash in savings. At that price the gift is stilla gift! I just argued a case before the Court of Appeals, on a different sort ofconveyance, but at that very price! Essentially arguing "gift" (amounting to cloudon title). Certainly any reasonable ag lender will fund the children's purchase ofa free-and-clear farm for a price far below open-market levels. Children can fund168

the mortgage payments from annual rent, and their basis increase from Client'sbasically-nothing up to $200,000. OrB. Do the sale, and then have Client buy an annuity to give her the income shewants, paid on death on any remaining annuity cash to children to pay off themortgage. OrC. Deed the land to the children, subject to a reserved mortgage lien andaccompanying contract/note, requiring children to pay (any amount Mom wantsper year); Mom to divide payment between return of basis and capital gains infuture years. Or, if the fair market value of the farm is less than $1 million (estatetax exemption as of January 1, 2013).D. DON'T sell, just keep renting and waiting for death and the stepup in basis forthe children.1. From your fact recitation I deduce that your client's income basically is currentrent. If so, then she ought to qualify for the still-current low long-term capital gaintax rate, PROVIDED THAT she sells during December, 2012! Taxes on all of usrise sharply as of January 1, 2013.Since your client likely will owe some capital gain, probably best to declare thewhole $200,000 sale price and pay capital gain tax now, just as if the sale was acash sale.Client can invest the remaining amount of the cash and draw it down slowly. Butif client really wants to "purchase an annuity" then I suppose the annuity's netpresent value must be listed as the purchase price. Then in coming years theclient will owe ordinary income tax on whatever amount exceeds the "principal".Which might be zero.2. Probably the Internal Revenue Service won't audit or complain about areporting of ordinary income. Doubtless Client can work the payments so as toowe no tax even with ordinary income.I think ordinary income is the correct appellation, not capital gain.Probably, another needless complexity element that militates against doing thetransfer this way.169

80. Gifting of Real Estate.FACTS: I have a client who wants to gift about $4 million of low basis farm realestate to children before the end of the year. She is convinced that Congress willlet the exemption amount return to and stay at $1 million. I just can't convincemyself that this is a good idea. I can barely stand the thought of giving up thestep up in basis and I tend to think Congress will fix this problem. That is just myinstinct however. We are talking about $10,000 +per acre ground with a $400basis.QUESTION: Is anyone feeling compelled to gift farm real estate beforeDecember 31, 2012?RESPONSE(S): I'd urge the client to hold off on making this gift. But only tokeep the step-up in basis at death. I happen to think that Mom quite correctlyforecasts Congressional inaction and a jackup of estate and gift tax rates. A wisewoman. And her gift may prove a good idea if the children keep the land untiltheir own deaths.Does Mom look for the psychic benefit of "seeing the children get the farm"before she dies? Or does she just fear the coming squinch of the unified creditback down to 1980 equivalent? (1980 $2,000/acre: $200,000 UC v. 2013$10,000/acre: $1,000,000 UC). Assuming that Mom is elderly, and absent someabsolutely compelling non-tax threat of reduced value to the property if it stayedin Mom's hands, I'd say the basis step-up makes Mom's retention of the titlemuch more beneficial to the family than passing title now. Even with theexemption. Of course, such threats might in fact exist.-- pending judgments/liens in current or future lawsuits?--threat of government eminent domain action taking without just compensation?-- Mom going into nursing home on Medicaid sixty one months from now?-- Implosion of the current real estate bubble?****Today my clients Husband and Wife, each owning 160 acres valued at least at$12,000 per acre were in wanting to sell Husband's real estate to farming son for$1,600 per acre. Son has an option in Husband's will to purchase the same for$1,600 after Wife's life estate. Stepped up basis is a huge issue and in fact it maybe better for son to wait for parent's passing. If they do sell, then Husband andWife will also pay capital gains with basis of $520 per acre. Husband and Wifehave other assets but well under $5 million together and there are six otherchildren. Husband is 78 and in bad health.* * * *170

What if at time of death the value is $20,000 an acre? The value of a gift alsoincludes removing future appreciation out of the estate. Example: $4,000,000becomes $8,000,000 and there is a 35% estate tax on $3,000,000; is this abetter result?171

JUDGMENTSAND LIENS

81. Abstracters Searching for Mechanic's Liens.FACTS: Saw this language for the first time in an abstract today."NOTE: In accordance with the implementation of the Centralized Mechanic LienIndex effective January 1, 2013, Mechanics lien search of recordings located atthe Iowa Secretary of State will be provided upon request for an additional fee."QUESTION: Anyone else seen this? If so, how did you handle it?RESPONSE(S): I saw the same thing in my County this month, except there wasnot even any offer to search the Secretary of State's website from our abstracter.****I received an abstract today. They conducted the search and put it in an entrywith a disclaimer of liability for errors of the registry. No extra charge.****Our abstracter advised he will search and report mechanic's liens, but not preliennotices.****Iowa Code Chapter 572 changed January 1, 2013 to implement a centralmechanic's lien registry and notification of commencement of work through theIowa Secretary of State's Office. Iowa Title Guaranty requires that a search of theregistry be made so most abstracters are offering the service at an additional fee.****Abstracters will continue to certify for mechanic's liens. Some will also search forCommencements of Work and Preliminary Notices.I revised my title opinion form to include the following language:C. OTHER LIENS AND OTHER ENCUMBRANCES. (WHICH MUST BERELEASED, UNLESS YOU ARE TAKING YOUR INTEREST SUBJECT TOTHESE ITEMS).1. A standard search against the following name(s):172

2. Notice on Lien Search. Since a Report can never be continued to theprecise time of closing, there is always a time gap between the date ofcontinuation and the date of closing. During this time gap, matters may be filedwith the Iowa Secretary of State Mechanic's Notice and Lien Registry website(https://sos.iowa.gov/mnlr/search/search.aspx) which affect title but which do notappear on the Report. You are advised to have the abstracter perform a liensearch prior to filing your deed or mortgage and advise me of any mattersappearing since the last continuation before recording.3. I performed a search on the Iowa Secretary of State Mechanic's Noticeand Lien Registry website against the legal description, address, currenttitleholder(s), and parcel number of the real estate. The MNLR website should besearched at the time of closing and filing the mortgage.****I do not believe it is necessary for an examining attorney to perform a search onthe MNLR and so you could exclude the first sentence of paragraph 3. At thispoint, in transactions where we will be the settlement agent, it is very valuable tosearch the MNLR at the time of examining the abstract to have advanced noticeof the contractors we will need to contact for a lien waiver. We are also searchingthe MNLR on the day of closing and the filing of a refinance mortgage. AlthoughI normally bristle at having to look beyond the four corners of an abstract, we aregaining very valuable information that will create far more certainty aboutpotential mechanic's liens than we have now. Until the end of March, we will stillask the parties to confirm whether material or labor have been provided in thelast 90 days.If you have not performed a search on the MNLR yet, it is very simple. Here isthe web address: https://sos.iowa.gov/mnlr/search/search.aspx.****I had the same language yesterday in an abstract and added the followingparagraph to my opinion:"Entry __ reflects that no search of the Centralized Mechanics Lien Index wasconducted. The Entry states that such a search may be performed for anadditional fee. The undersigned advises further inquiries be made on this matter."* * * *I've been reading the emails concerning the mechanics lien searching withinterest. I think you have to have awareness of what your client wants andneeds, and go the extra mile to make sure it is provided. I don't think you can just173

put a paragraph in your opinion with disclaimer, if your client needs themechanic's lien search whether because of Title Guaranty or other requirement.A disclaimer will not be noticed.I think the individuals ordering the abstract continuation have a professionalobligation to get educated, and order what is necessary. But, if they are not, andyou get the abstract with no mechanic's lien search, you have an obligation todetermine if it is needed, and if so you need to tell the abstract company toprovide it.You could argue with your abstract company, that they should automatically do it.Or, you can send it back to them with instructions that any abstract provided toyour office needs to have the mechanic's lien search from the get go. Or howeveryou want to do it. But, a disclaimer in your opinion will go unnoticed unless youmake it an absolute requirement. And, then you are back to my previouscomment, go the extra mile and order it if it is in your opinion needed. (This Ithink goes to the ethical consideration of knowing who your client is and knowingwhat they need, and providing what is needed.)Personally, I would prefer not to have to tell the abstracter how to do their job.They have a Blue Book on their standards. We don't send an order to them witha laundry list of possible searches we want, and check or not check. They knowwhat is required. If a mechanic's lien search has been their Blue Book practicebefore, it should be now, without our needing to order it separately. Whether ornot the abstract company adds an additional charge is beside the point. And ifthey need to charge more, that's their business. But they expended effort tosearch the court records for mechanic's liens, which now they don't have to do.There has to be a cost savings offset to the effort to search the Secretary ofState Mechanic's Liens records.174

82. Alimony Judgment.FACTS: Judgment for alimony entered in 1999 against husband in favor of wife.Husband has property in his separate name. Wife dies sometime later.QUESTION: What type of showing is sufficient to remove the alimony judgment?RESPONSE(S): See Iowa Code Section 624.23.175

83. Institutional Lien for Mental Health.FACTS: I just examined an abstract that lists an institution lien by the Countydated October 30, 1972. I searched Iowa Code Chapter 614 and Title Standards10 and 11 for a way to clear this lien, but did not find anything appearing to be onpoint. The relevant entries from the abstract are as follows:1) Root of title is a Warranty Deed to Husband and Wife recorded March 4,1961.2) Abstract entry shows an Institutional Lien listed as County vs. Husband aspatient and Wife as spouse in the amount of $770.09 as of October 30, 1972"State lnst. Ledger'' for Mental Health Institute, Cherokee.3) Husband dies on September 11, 1993.4) Affidavit of Surviving Spouse recorded by Wife on November 1, 2011.QUESTION: Is there a title standard or code section that will clear this lien ordoes the seller need to obtain a release from the County?RESPONSE(S): You've stumbled across what appears to be an old Iowa CodeChapter 230 lien. These liens used to arise when a County pays "Support ofPersons with Mental Illness". After December 31, 1976 they are now dead asstones. See Iowa Code Section 230.25(2).Your recitation of the entries in the abstract contains no reference to any CountyAttorney action to enforce the 1972 lien against Husband.Nothing in subsection 1 provides any. So I conclude that the Legislature's blanketabolition of the support liens applies to Husband's lien. You have clear titlecourtesy of the first sentence of Iowa Code Section 230.25(2).If you'd like to be certain of clarity of title then you could get a release from theCounty Supervisors, which release they possess authority to give under IowaCode Section 230.17. Interestingly, this section's title states that the "Board maycompromise *lien*." But the post 1976 text refers only to compromise of"liabilities". The Legislature appears to have overlooked the Iowa Code Section230.17 heading.Apparently, when Husband died 19 years ago no one thought to continue the titleabstract. And no one at that time thought clearance from the Supervisors wouldbe necessary. I bet everyone forgot the then-20-year-old claim.176

84. IRS Levv.FACTS: I have a farmer client who was served with a Notice of Levy by theInternal Revenue Service 30 to 60 days ago. The levy was against one of myclient's landlords. My client pays cash rent to this guy every March 1. Wedisclosed that to the IRS in response to the levy but my client did not oweanything on the date of the levy. Rent is due again on March 1 and the landlordshows up and wants to get his rent early.QUESTION: Is this levy effective for any specific period of time?RESPONSE(S):177

85. Judgment After Death.FACTS: Husband and Wife own house as Joint Tenants. Judgment enteredagainst Husband from a credit card company in 2009. Husband dies in 2011.Abstract just shows his death from the vital statistics records of the Recorder'sOffice. His estate was not probated.QUESTION: What is the status of the judgment as a lien against the real estate?I am assuming it survives his death, but I am not sure.RESPONSE(S): Homestead property is exempt.* * * *See: Rembe v. Stewart, 387 N.W. 2d 313 (Iowa 1986), surviving joint tenanttakes free of judgment lien of joint tenant.* * * *The Rem be case holds the deceased joint tenant's interest disappears at hisdeath along with any lien against that interest. Keep in mind, too, that the houseis likely the surviving spouse's homestead which gives it double protection.* * * *Is it best to have an affidavit recorded to confirm that the property was thehomestead at death, or is it presumed?178

86. Judgment Lien.FACTS: Abstract shows weekly continuing judgment for a worker'scompensation claim against fairly large, publicly traded company. Company hasrefinanced since judgment entered and immediately prior to the new mortgages,there is always an affidavit from the CEO stating under oath that he personallyknows that there are no sums owing under the judgment that haven't been paid.Then the mortgage goes on.I represent the to-be present purchaser of a part of the real estate.QUESTION: Would you take such an affidavit as part of the purchase or requirea specific release or receipt from the judgment holder?RESPONSE(S): I'd insist on a Release of Judgment.****Or release of judgment lien to real estate being sold, thus judgment remains onrest of the real estate.179

87. Judgment Lien Against Homestead.FACTS: Homeowners buy home March, 2004. Former landlord not happy andsues them in small claims for unpaid rent and extreme damages. Judgmentreceived May, 2004 for $2,000ish obtained by default because Homeownersdidn't appear. (They were 24 and couldn't get out of work and did not seek legaladvice.) Had they appeared, it probably could have been defended. Regardless,judgment entered.Homeowners file bankruptcy in February, 2005 and name landlord.Homeowners receive discharge in May, 2005 and landlord is served notice.Homeowners did not request the lien by landlord's judgment to be avoided, andtell me that they didn't know anything about the right to request it.In 2009, landlord finds out where Homeowner Wife works and startsgarnishment.Homeowners file a Motion to Quash in Muscatine County Small Claims. Landlordnever shows to hearing. Magistrate quashes and orders funds refunded. Alsotells Homeowners that the landlord could get fined because he's not supposed tobe attempting to collect and they could file an action. They don't do anything.Homeowners sign a listing agreement to sell home purchased in 2004. Stillhomestead. Don't anticipate having to payoff landlord judgment to close.Landlord judgment is showing up as a lien. Homeowners do not have enoughmoney to pay it.We don't have time to plat the homestead and send demand before the closing isscheduled. At most, the Offer says close on or before October 12.Homeowners do not have enough money to post a bond in order to close either.QUESTION: I know this is not a lien on the property because it's homestead, butwhat else can I do without platting?RESPONSE(S): Read Baratta vs. Polk County Health Services, Inc., 588 N.W.2d 107 (Iowa 1999). Baratta holds, among other things, you do not need to dothe 30 day notice to levy to remove a judgment as a lien from homestead if itdidn't attach as a lien in the first place.I know some other attorneys have not been thrilled with the solution of anaffidavit because of it perhaps being self serving, or lacking sufficient proof of the180

facts asserted. But you could craft an affidavit setting forth your facts that are onpoint with Baratta, and see if the examining attorney will accept that as sufficient.I would suggest attaching copies of any document or other writing which supportsthe asserted facts. You would want to establish satisfactorily the judgment wasnot for a debt which was an exception to homestead protection.****Is this the problem of an obligation that arises prior to the acquisition of thehomestead which then does attach? (The "non-exempt homestead" notion.) Eventhough the judgment was not rendered until after the homestead was purchased,the obligation arose prior.It sounds like the landlord violated the injunction of the discharge by trying tocollect a discharged debt post discharge. However, I think the lien of thejudgment survived. So, the landlord had (again, I think) a valid lien, but hisremedy is limited to enforcing the lien. I don't think the debtor could have avoidedthe lien since it preceded acquisition of the homestead.So, is there an offset for the damages arising from violation of the injunction(which you would have to go into bankruptcy court to establish) and the lien ofthe judgment?It sounds like a lot of procedure and you don't have time or resources to pursue(although maybe the bankruptcy court judge would be annoyed enough to awardattorney fees).In the end, I think you may need to negotiate it out with the landlord.* * * *I tend to agree that the homestead is not exempt per Iowa Code Section 561.21.If they have the option of staying, they could forego the current sale and wait fortwo years until the lien expires. Otherwise, I think negotiation with the landlordwith the threat of action for violating the bankruptcy discharge may be yoursolution for completing this particular sale.****See Iowa Code Section 615.1 (1 )(b). The part of the judgment that was for pastdue rent, if the judgment was broken down and itemized as such, may be alreadygone.[Attachment.]181

Page 2 of 12i· Westlaw.588 N_W.2d 107(Cite as: 588 N. W.2d 107)HSupreme Court of Iowa.Sandra Joyce BARATIA, Appellee,v.POLK COUNTY HEALTH SERVICES, INC., AppellantPolk County Health Services, Inc., Appellant,v.Sandra Joyce Baratta, her unknown spouses, heirs,devisees, grantees, assigns, successors in interestand unknown claimants of the following describedreal estate situated in Polk County, Iowa: Lot 87Wakonda Manor, Plat 5, included in and forming apart of Des Moines, Polk County, Iowa, Appellees.No. 97-95.Jan. 21, 1999.Ex-wife filed petition to foreclose her judgment lienfor child support arrearages against propertywhich ex-husband and his second wife sold to purchaser,and pUrchaser cross-claimed to quiet title.On ex-wife's and purchaser's cross-motions forsummary judgm.ent, the District Court, PolkCounty, Donna L Paulsen, J., granted ex-wife'smotion for summary judgment, foreclosed her judgmentlien, entered judgment for $63,632.69, andordered special execution to issue for sale of property.Purchaser appealed. The Supreme Court, Snell, J., held that second wife's interest in homesteadproperty prevented ex-wife's judgment lien from attachingto property sold to purchaser.Reversed and remanded.Carter, J., filed an opinion concurring in part andissenting in part, in which Larson, Neuman, andCady, JJ., joined.West Headnotes[l] Quieting Title 318 €=>27318 Quieting TitlePage 13!8Il Proceedings and Relief318k27 k. Form of Remedy. Most CitedActions to quiet title lie in equity. LC.A. § 649.6.[2] Appeal and Error 30 €=>893(1)30 Appeal and Error30XVI Review30XV1(F) Trial De Novo30k892 Trial De Novo30k893 Cases Triable in AppellateCourt30k893(l) k. In General. MostCited CasesMortgages 266 €=>578266 Mortgages266X Foreclosure by Action266X(P) Review266k578 k. Scope and Mode of Review.Most Cited CasesSupreme Court's review of a foreclosure action andan action to quiet title would typicaHy be de novo;however, the Court cannot find facts de novo in anappeal from summary judgment. Rules App.Proc.,Rule4.(3] Judgment 228 €=>185(6)228 Judgment228V On Motion or Summary Proceeding228kl82 Motion or Other Application228k185 Evidence in General228k185(6) k. Existence or Non­Existence of Fact Issue. Most Cited CasesSummary judgment is appropriate only when theentire record including pleadings, discovery and affidavitson file shows that there is no genuine issueof material fact and the moving party is entitled tojudgment as a matter of law. Rules Civ.Proc., Rule237(c).[4] Judgment 228 €=>185(6)© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.https://web2. westlaw.cornlprint/printstrearn.aspx?sv=Split&prft= HTML&ifin=NotSet&mt... 4/23/20 10

Page 3 of 12588 N. W .2d 107(Cite as: 588 N.W.2d 107)Page2228 Judgment228V On Motion or Summary Proceeding228kl82 Motion or Other Application228kl85 Evidence in General228kl85(6) k. Existence or Non­Existence of Fact Issue. Most Cited Cases"Genuine" issue of material fact, for purposes ofsurrunary judgment motion, exists if the evidence issuch that a reasonable jury couLd return a verdictfor the nonmoving party. Rules Civ.Proc., Rule237(c).[5] Judgment 228 181(2)228 Judgment228V On Motion or Summary Proceeding228kl81 Grounds for Summary Judgment228k181(2) k. Absence of Issue of Fact.Most Cited CasesFact is '"material," for purposes of summary judgmentmotion, only when its determination might affectthe outcome of the suit. Rules Civ.Proc., Rule237(c).[6] Appeal and Error 30 934(1)30 Appeal and Error30XVI Review30XVI(G) Presumptions30k934 Judgment30k934(1) k. In GeneraL Most CitedCasesIn reviewing the grant or denial of a motion forsummary judgment, Supreme Court examines theevidence in a light most favorable to the nonmovingparty.[7] Homestead 202 103202 Homestead202! Nature, Acquisition, and Extent2021(E) Liabilities Enforceable AgainstHomestead202kl02 Judgments202kl03 k. In General. Most CitedCasesJudgment lien generally cannot attach to land usedand occupied as a homestead and land designated asa homestead generally cannot be executed upon toenforce a judgment lien. I.C.A. §§ 561.16, 624.23,subd. !.[8] Homestead 202 103202 Homestead202I Nature, Acquisition, and Extent202l(E) Liabilities Enforceable AgainstHomestead202kl02 Judgments202kl03 k. In General. Most CitedCasesHomestead exemption prevented both ex-wife's executionof her judgment Hen for child support arrearagesagainst homestead property sold by exhusbandand his second wife, as joint tenants, andthe attachment of judgment lien to homestead property,where second wife was not a judgment debtorfor outstanding child support. I.C.A. §§ 561.16,561.21, 624.23, subd.!.[9] Execution 161 5.1161 Execution161! Nature and Essentials in General16lk5 Judgment, Decree, or Order16lk5.1 k. In General. Most Cited CasesJudgment lien must properly attach to property beforethat property can be used to satisfy the judgment.LC.A. §§ 624.23, 624.24.[10] Homestead 202 103202 Homestead2021 Nature, Acquisition, and Extent2021(E) Liabilities Enforceable AgainstHomestead202kl02 Judgments202kl03 k. In General. Most CitedCasesHomestead exemption not only prevents executionagainst homestead property, but the attachment ofjudgment liens to homestead property, subject toi!II© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.https:/ /web2. westlaw.com/print/printstrearn.aspx?sv=Split&prft=HTML&ifrn=NotSet&mt. .. 4/23/2010

Page 4 of 12588 N.W.2d 107(Cite as: 588 N.W.2d 107)Page 3statutory exceptions. I.C.A. §§ 561.16, 561.21,624.23.[11] Homestead 202 ~84202 Homestead202I Nature, Acquisition, and Extent202I(D) Property Constituting Homestead202k84 k. Property of Tenants in Commonand Joint Tenants. Most Cited CasesHomestead 202 ~128202 Homestead202II Transfer or Incumbrance202k127 Rights of Purchasers and Mortgagees202kl28 k. In General. Most Cited CasesJoint tenancy interest held by ex-husband's secondwife in homestead property prevented ex-wife'sjudgment Lien for child support arrearages from attachingto entire homestead, such that purchaser acquiredproperty free of ex-wife's judgment lien.I.C.A. §§ 561.16, 624.23, subd. I.[12] Homestead 202 ~1()3202 Homestead202I Nature, Acquisition, and Extent202I(E) Liabilities Enforceable AgainstHomestead202kl02 Judgments202kl03 k. In General. Most CitedCasesHomestead 202 ~128202 Homestead202II Transfer or Incumbrance202k127 Rights of Purchasers and Mortgagees202kl28 k. In General. Most Cited CasesHomestead property which ex-husband and hissecond wife sold to purchaser passed free and clearof ex-husband's judgment debt for child support arrearagesto ex-wife.[13] Homestead 202 ~103202 Homestead202I Nature, Acquisition, and Extent202I(E) Liabilities Enforceable AgainstHomestead202kl02 Judgments202kl03 k. In General. Most Cited·CasesOnly those judgment liens that are enforceableagainst homestead property attach to such property,and only those liens remain on the property, forpurposes of statute establishing simplified procedurefor clearing title to homestead property. I.C.A.§ 624.23, subd. 2.*108 Mark V. Hanson and David L. Phipps ofWhitfield & Eddy, P.LC., Des Moines, for appellant.Clifford S. Swartz of Brick, Gentry, Bowers,Swartz, Stoltze. Schuling & Levis, P.C., DesMoines, for appellee.Considered en bane.SNELL, Justice.Defendant Polk County Health Services (PCHS)appeals from summary judgment granted toplaintiff Sandra Baratta in her action to foreclose ajudgment lien. We conclude the district courtshould have granted the motion of PCHS for summaryjudgment on its counterclaim to quiet title andtherefore erred in granting Sandra's motion forsummary judgment We therefore reverse and remandfor entry of judgment in favor ofPCHS.!. Backgrou~d Facts and ProceedingsA Nebraska court dissolved Sandra and Prank Baratta'smarriage by a decree issued June 10, 1970.The divorce decree granted Sandra custody of thecouple's daughter, and ordered Prank to pay $110per month in child support. Prank failed to pay sup-© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.https://web2.westlaw.com/print/printstream.aspx?sv=Split&prft=HTML&ifin=NotSet&mt... 4/23/2010iI '

Page 5 of !2588 N.W.2d 107(Cite as: 588 N.W.2d 107)Page4port and Sandra alleges he is $63,632.69 in arrears,including accrued interest.Frank subsequently moved to Polk County and marriedRose, his current wife. In 1989 they purchaseda home in Polk County as joint tenants, which theyclaimed as their homestead. This property is thesubject of *109 the current litigation. In 1992, in anattempt to collect the unpaid child support, Sandraregistered the Nebraska divorce decree in the PolkCounty District Court clerk's office pursuant toIowa Code section 626A.2 (1991) (providing forfiling and status of foreign judgments). The recorddoes not reveal anything further was done to collectthe outstanding support at that time.In December 1995, Frank and Rose Baratta soldtheir homestead property to PCHS. AlthoughSandra's judgment against Frank for the unpaidchild support had been recorded in Polk County atthe time it was filed in 1992, it was inadvertentlyomitted from the abstract and was not uncovered asa cloud on the title at the time of sale. On April 12, .1996, Sandra filed a foreclosure petition againstPCHS in an attempt to enforce the judgment lien.Along with its answer, PCHS filed a counterclaimseeking to quiet title in the property and requestingattorney fees. Both parties filed motions for summaryjudgment. The district court granted Sandra'smotion, concluding she had a valid Jien against theproperty which could be enforced against PCHS.The court denied PCHS's motion. The court foreclosedthe lien, rendered judgment in favor ofSandra for $63,632.69, and ordered special executionto issue for sale of the property. PCHS appeals.II. Issues on AppealPCHS contends the district court erred in grantingthe foreclosure. It argues that Sandra did not have ajudgment against Rose and that Rose's homesteadinterest in the real estate prevented Sandra's judg~ment lien against Frank from attaching to the property.In the alternative, it maintains the districtcourt should have denied Sandra's motion becausegenuine issues of material fact exist regardingwhich, if any, of the support payments are still validjudgments due to the passage of twenty-six yearssince entry of the decree, what interest Frank has inthe real estate, what priority other recorded lienshave on the real estate, and whether Sandra has exhaustedall other property subject to execution.IlL Scope and Standard of Review[1][2] Sandra Baratta filed a petition in equity forforeclosure of a judgment lien. As a counterclaim toSandra's foreclosure action, PCHS brought an actionto quiet title. Actions to quiet title also lie inequity. See Iowa Code § 649.6 (1995); accordMoser v. Thorp Sales Corp., 3!2 N.W.2d 88!, 886(Iowa 1981). Our review of a foreclosure action andan action to quiet title would typically be de novo.See Iowa R.App. P. 4 (providing for de novo reviewof equity actions). Despite the nature of thesecauses of action, however, "we cannot find facts denovo in an appeal from summary judgment."Moser, 312 N.W.2d at 886. Therefore, we reviewthe district court's grant of Sandra's motion forsummary judgment and the denial of PCHS's motionfor summary judgment for the correction of errorsat law. See Iowa R.App. P. 4.[3][4][5](6] Summary judgment is appropriate onlywhen the entire record including pleadings, discoveryand affidavits on file shows that there is nogenuine issue of material fact and the moving partyis entitled to judgment as a matter of law. Iowa R.Civ. P. 237(c). A "genuine" issue of material factexists if the evidence is such that a reasonable jurycould return a verdict for the nonmoving party.Fees v. Mutual Fire & Auto. Ins. Co., 490 N.W.2d55, 57 (Iowa 1992). A fact is "material" only whenits determination might affect the outcome of thesuit !d. In reviewing the grant or denial of a motionfor summary judgment, we examine the evidence ina light most favorable to the nonmoving party.Mewes v. State Farm Auto. Ins. Co., 530 N.W.2d718, 721 (Iowa 1995).© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.https ://web2. westlaw.com/print/printstream.aspx?sv=Split&prft= HTML&ifm=NotSet&mt... 4/23/201 0

Page 6 of 12588 N.W.2d 107(Cite as: 588 N. W.2d 107)PageSThe district court granted Sandra's motion for summaryjudgment on her petition for foreclosure. Thecourt denied PCHS's motion for summary judgmenton its quiet title action. The district court did notaddress the objections made by PCHS in its resistanceto Sandra's motion for summary judgment,particularly whether the judgment against Frankwas still valid after the passage of twenty-six years,whether Sandra had exhausted other property subjectto execution, and the priority of other liensagainst the subject property.*110 IV. DiscussionA. Action to Quiet TitleWe consider first the claim by PCHS that the districtcourt erred in denying its motion for summaryjudgment on its action to quiet title pursuant toIowa Code chapter 649 (1995). Section 649.1provides:An action to determine and quiet the title of realproperty may be brought by anyone, whether in orout of possession, having or claiming an interesttherein, against any person claiming title thereto.though not in possession.As part of its counterclaim, PCHS sought attorneyfees under Iowa Code section 649.5, which states asfollows:If a party, twenty days or more before bringing suitto quiet a title to real estate, requests of the personholding an apparent adverse interest or right thereinthe execution of a quitclaim deed thereto, and alsotenders to the person one dollar and twenty-fivecents to cover the expense of the execution and deliveryof the deed, and if the person refuses or neglectsto comply, the filing of a disclaimer of interestor right shall not avoid the costs in an action afterwardsbrought, and the court may, in its discretion,if the plaintiff succeeds, assess, in addition to theordinary costs of court, an attorney's fee forplaintiffs attorney, not exceeding twenty-five dollarsif there is but a single tract not exceeding fortyacres in extent, or a single lot in a city, involved ....To determine whether PCHS's motion for summaryjudgment on its action to quiet title should havebeen granted, we must determine whether Sandra'sjudgment lien can be enforced against the property.B. Iowa Law on Judgment Liens and theHomestead ExemptionPCHS contends the judgment lien never attached tothe property in question because Rose's homesteadinterest in the property prevented attachment. Webegin by reviewing relevant statutes and our priorcases involving the issue of judgment liens attach·ing to homestead property.Iowa Code section 624.23(1) addresses the attachmentof judgment liens to the debtor's real property.It provides as follows:Judgments in the appellate or district courts of thisstate, or in the circuit or district court of the UnitedStates within the state, are liens upon the real estateowned by the defendant at the time of such rendi~tion, and also upon all the defendant may sub·sequently acquire, for the period of ten years fromthe date of the judgment.[7] The homestead exemption is found in IowaCode section 561.16 and declares: "The homesteadof every person is exempt from judicial sale wherethere is no special declaration of statute to the con·trary." In one of our early cases, we construed thepredecessors to sections 624.23(1) and 561.16 andconcluded that the general terms of section624.23(1) regarding judgment liens are limited bythe exemption provided in section 561.16. SeeLamb v. Shays, .14 Iowa 567, 570 (1863)("Construing the two sections together, having beenpassed at the same time by the Legislature, wethink that it could not have been designed that thelien should ever attach upon property that was declaredexempt from judicial sale." ); see also Brownv. Vonnahme, 343 N.W.2d 445, 449-50 (Iowa 1984)(relying on Lamb in construing sections 624.23 and© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.https://web2.westlaw.cornlprintlprintstream.aspx?sv=Split&prft=HTML&ifm=NotSet&mt... 4/23/2010

Page 7 of 12588 N.W.2d 107(Cite as: 588 N. W.2d 107)Page6561.16). Therefore, a judgment lien generally cannotattach to land used and occupied as a homesteadand land designated as a homestead generally cannotbe executed upon to enforce a judgment lien.However, there are exceptions to the generalhomestead exemption. See Iowa Code § 56l.l6(1995) ("The homestead of every person is exemptfrom judicial sale where there is no special declarationof statute to the contrary. " ) (emphasis added).Section 561.21 sets forth several types ofdebts for which homestead property is liable. Thesection provides:finding that obligation to support child is created atchild's birth and acquisition of homestead after thattime renders the property liable for payment of pastdue child support). In both McMorrow and Armetta,however, the homestead property at issue wasowned solely by the delinquent spouse, not jointlyby the delinquent spouse and a current spouse, as inthe case at bar. This factual twist presents a scenariothat we have never explicitly addressed. Wemust consider the effect of the current wife'shomestead rights on a judgment for child supportagainst her husband, with whom she jointly ownsthe homestead.The homestead may be sold to satisfy debts of eachof the following classes:1. Those contracted prior to its acquisition, but thenonly to satisfy a deficiency remaining after exhaustingthe other property of the debtor, liable to execution.2. Those created by written contract by personshaving the power to convey, expressly*lll stipulatingthat it shall be liable, but then only for deficiencyremaining after exhausting all other propertypledged by the same contract for the payment of thedebt.3. Those incurred for work done or material furnishedexclusively for the improvement of thehomestead.4. If there is no survivor or issue, for the paymentof any debts to which it might at that time be subjectedif it had never been held as a homestead.We have previously held that a child support judgmententered prior to the acquisition of thehomestead is a debt within the meaning of section561.21(1), which enables a court to subject thehomestead to judicial sale to satisfy delinquent installments,absent other available property uponwhich to levy. In re Marriage of McMorrow, 342N.W.2d 73, 76 (Iowa 1983); see also In re Marriageof Armetta, 417 N.W.2d 223, 224 (IowaApp.l987) (extending holding in McMorrow by© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.The court of appeals considered a similar issue inAdamson v. Rice, 478 N.W.2d 414 (IowaApp.l991). In Adamson. the district court foundthat an ex-husband was delinquent in his child supportobligation to his ex-wife. In an attempt to satisfythe judgment for outstanding child support, theex-wife directed the sheriff to sell through generalexecution all of the ex-husband's right in a lotowned jointly by him and his current wife. Thesheriffs sale was held and the ex-wife purchasedthe property. The ex-husband and current wife thenfiled for a temporary and permanent injunction tostop the sale and levy. The district court found thatthe current wife's interest in the property was subordinateto the ex-wife's right to child support andthat the sale was proper. The current wife appealed.Adamson, 478 N.W.2d at 415.The court of appeals noted in its decision that "[t]hepublic policy underlying child support recoverylaws rises higher than our policy to guardhomestead rights." ld. (citing McMorrow, 342N.W.2d at 76; Armetta, 417 N.W.2d at 224).However, the court, applying "fundamental legalprinciples," concluded that because the current wifewas not made a party to the execution judgment andreceived no notice of the sale of the homesteadwhich she jointly owned, the execution was not validagainst her. !d. The court of appeals found thatthe district court erred in denying the injunction becauseno adjudication of the current wife's rights inIIhttps://web2. westlaw.com/print/printstream.aspx?sv=Split&prft=HTML&ifm=N otSet&mt... 4/23/20 10

Page 8 of 12(588 N.W.2d 107(Cite as: 588 N. W.2d 107)Page7the property had occurred and the ex-husband'shomestead rights, which were subject to executionpursuant to McMorrow, could not be split from therights of the current wife. Id. at 416. Essentially,the fact that the current wife's homestead interestwas not subject to execution prevented executionon the ex-husband's homestead interest. !d.C. Analysis[8] In the case at bar, Sandra contends the holdingin Adamson is -not applicable because she did notattempt to execute against property owned by RoseBaratta, the current wife, as did the ex-wife inAdamson. Sandra notes that at the time she filed herpetition for foreclosure, the property was owned byPCHS and the homestead rights of Frank and RoseBaratta were no longer an issue. Because the attemptedexecution is against a subsequent owner,Sandra is correct in her contention that the holdingin Adamson does not address the precise issuepresented in this case.PCHS counters that Sandra's judgment lien neverattached to the homestead property and, therefore,there is no valid lien which can be enforced againstthe property even though it is now owned by PCHS,which cannot claim a homestead exemption. Thus,the issue we must determine is whether a *112judgment lien for outstanding child support can attachto property owned and occupied as ahomestead by an ex-husband and his current wife asjoint tenants, when. the judgment is against only theex-husband. The holding in Adamson does not controlour decision because Sandra did not attempt toexecute against the property when it was owned byFrank and Rose. The Adamson court never consideredthe issue of attachment in reaching its decision.[9] Sandra concludes that because her attempt toexecute the judgment took place when the propertywas no longer owned by Frank and Rose Baratta,the homestead protections provided by our law nolonger apply. If examined in a vacuum, Sandra's ar·gument does have some appeaL However, we mustalso be concerned with attachment of the judgmentlien. A judgment lien must properly attach to prop·erty before that property can be used to satisfy thejudgment. See Iowa Code §§ 624.23, .24 (1995).For the child support judgment lien in the instantcase to be enforceable against PCHS it must haveattached when the property was owned by FrankBaratta, who is the judgment debtor. See id. §624.23. This is the point at which Sandra's argumentdisintegrates ..The child support judgment Sandra is trying to enforcenames only Frank Baratta as the defendant liablefor paying support. Sandra has no judgmentagainst Rose Baratta and admits as much in herbrief. Moreover, it is clear that at the time Sandraregistered the Nebraska decree in Polk County, theproperty at issue was owned jointly by Frank andRose Baratta. We cannot ignore Rose's homesteadinterest in determining whether the judgment lienattached to the property.[10] In several prior cases we have noted that judgmentliens generally cannot attach to property usedand occupied as a homestead. See Cox v. Waudhy,433 N.W.2d 716, 718 (Iowa 1988); Brown, 343N.W.2d at 449-50; Lamb, 14 Iowa at 570. Based onthese cases it is clear that the homestead exemptiondoes not only prevent execution against homesteadproperty, as Sandra argues, but the attachment ofjudgment liens to homestead property. There areexceptions to the general rule of exemption, as delineatedin section 561.21, and one of the exceptionsapplies to Frank. However, the prior existingdebt exception found in section 561.21(1) does notapply to Rose's interest in the homestead property.She is not a judgment debtor for the outstandingchild support. Thus, we are left to determine wheth·er Frank's liability for the child support debtrenders the entire property subject to attachmentand, ultimately, execution.[11] We find our holding in Merchants MutualBonding Co. v. Underberg, 291 N. W .2d 19 (Iowa1980), helpful in resolving the issue before us. In© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.https:/ /web2. westlaw.com/print/printstream.aspx?sv=Split&prft=HTML&ifin=N otSet&mt... 4/23/20 1 0

Page 9 of 12(588 N.W.2d 107(Cite as: 588 N.W.2~ 107)Page 8that case we noted that "[!]here can be no splittingof homestead rights." Merchnnts Mutual, 291N.W.2d at 21. We concluded that "[a] creditor whoseeks to satisfy his debt out of a homestead must becertain he has a right against the whole property,not just part of it." Id.; see also Decorah State Ba"nkv. Zid/icky, 426 N.W.2d 388, 391 (Iowa 1988) ("Ifthe interests of one [spouse] are not subject to execution,neither are the interests of the other." ). Althoughin Merchants Mutual we were discussingactual execution of a judgment lien, the logic behindour pronouncement is equally applicable here.PCHS does not dispute that the lien would have attachedto the property had it been owned solely byFrank. That conclusion is supported by our holdingin McMorrow, 342 N.W.2d at 76.The judicial proceeding which established the childsupport obligation named only Frank as the obligor.Rose was not liable for this debt. Therefore, Rose'sownership interest in the property prevented thejudgment lien from attaching. See Francksen v.Miller, 297 N.W.2d 375, 377 (Iowa 1980) (notingthat "one spouse cannot be divested of homesteadrights by judicial proceedings in which only theother spouse is a party" ); In re Streeper, 158 B.R.783, 788-89 (Bankr.N.D.lowa 1993) (applyingIowa law) (same); In re Tyree, 116 B.R. 682, 684(Bankr.S.D.lowa 1990) (applying Iowa law)(same); In re Car.

Page 10 of 12(588 N.W.2d 107(Cite as: 588 N. W.2d 107)Page9ment liens can attach to homestead property.We disagree with this interpretation of section624.23(2). The district court cites no authority forits conclusion that subsection two "establishes thatjudgment liens attach to homestead property."Sandra cites to a legislative explanation attached tothe bill in its final version as support for this conclusion.See S.F. 511, 69th G.A. (1982). The explanationstates in pertinent part:Under the amendment, judgment creditors with liensenforceable against homestead real estate undersection 561.21 are required to levy executionagainst the homestead real estate to establish theirrights, if the owner of the homestead serves noticeon the judgment creditor. This procedure protectsthe homestead real estate from judgment lienswhich are not subject to creditors' claims underchapter 561.(Emphasis added.)[ 13] First, the emphasized language above indicatesthat subsection two applies only to judgment creditors"with liens enforceable against homestead realestate under section 56I.2L" This interpretation isin accord with the holdings of our prior cases thatsection 624.23 is limited by the homestead exemptionfound in section 561.16, and the only exceptionsare those found in section 561.21. See Brown,343 N.W.2d at 449-50 (citing /..Q.mb, 14 Iowa at569-70). Therefore, only those judgment liens thatare enforceable against homestead property attachto such property, and only those liens "remain" onthe property. We have already concluded that thejudgment lien at issue is not enforceable againstthis property because of Rose's homestead interest.Second, the explanation *114 cited by Sandra saysnothing about attachment and does not support herconclusion that by the amendment the legislatureintended to change over one hundred years of Iowacase Jaw holding that, in general, judgment liens donot attach to homestead property. See Lo.mh, 14Iowa at 569-70.We find that the purpose of the enactment of subsectiontwo was not to change prior law on the effectof judgment liens upon homestead rights, but toprovide a simplified procedure for homestead ownersto clear the title of their homesteads from anyrecorded judgments against them which may cloudtitle to the property, as two sources cited by PCHSreinforce. See Committee on Title Standards, IowaState Bar Assn, Iowa Lo.nd Title Standards ch. 6.7,cmt, at 8 (7th ed.l993) [hereinafter Title Standards] (noting that prior to the amendment, 'judgmentdebtors were unable to convey marketable title tootherwise exempt homestead real estate without adeclaratory judgment or quiet title action to establishthat a judgment of record was not a lien" );George F. Madsen, Marshall's Iowa Title Opinionsand Standards § 1l.l(F), at 38 (2d ed. Supp.1982)(noting that section 624.23 was "amended toprovide that a judgment debtor may sell hishomestead without satisfaction of judgments whichare not in fact liens against homestead property" ).The comment to chapter 6. 7 in Iowa Land TitleStandards states:It should be noted that the 1982 amendments toIowa Code § 624.23 do not change existing caselaw as to what judgments may in fact be liens underIowa Code § 561.21. Unless a judgment arises outof a claim as described in Iowa Code § 561.21, thejudgment is not a lien on the homestead. Presumablyjudgment creditors whose interest is not describedin Iowa Code § 561.21 will not levy executionwhen notice is served under Iowa Code §624.23 because a wrongful levy would arguablysubject the creditor to a claim by the judgmentdebtor.Title Standards ch. 6.7, cmt., at 9.We agree with the conclusion stated in this commentand find that the district court's reliance onsection 624.23(2) in its holding that Sandra's judgmentlien did attach to the homestead property wasimproper.© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.https:/ /web2. westlaw.com/print/printstream.aspx?sv=Split&prft= HTML&ifm=N otSet&mt... 4/23/20 1 0

Page 11 of 12588 N.W.2d 107(Cite as: 588 N.W.2d 107)Page 10We sympathize with Sandra's plight in trying to enforcean egregiously overdue child support judgment.Frank's conduct in refusing to pay this supportsince the decree was entered in 1970, on itsface, is meritless and reprehensible. However, wemust follow Iowa law with regard to the enforceabilityof judgment liens against homestead propertyand cannot ignore Rose's homestead interest whichhas had the imprimatur of legislative and executiveapproval for many years. If the legislature, in itspolicy-making role, believes that obligations forchiJd support- should take precedence over a nonobligor'shomestead interest in property ownedjointly with the obligor parent, it can amend thestatute accordingly. Absent such legislative guidance,however, we are bound to apply the laws aswritten.We find it unnecessary to address the propriety ofSandra's motion for summary judgment, as our resolutionof the quiet title action leads to the conclusionthat Sandra has no enforceable judgment lienagainst the property owned by PCHS and describedin its petition to quiet title. The district court erredin denying PCHS's motion for summary judgmentand in granting Sandra's mOtion. Therefore, we reverseand remand for entry of judgment in favor ofPCHS. PCHS's title to the property at issue isquieted against all claims raised by Sandra Baratta.We also award $25 in attorney fees to PCHS pursuantto Iowa Code section 649.5. Costs are assessedto appellee.REVERSED AND REMANDED.All justices concur except CARTER, J., who concursin part and dissents in part, and is joined byLARSON, NEUMAN, and CADY, JJ.CARTER,Justice (concurring in part. dissenting in part).I concur in the conclusion reached in the opinion ofthe court that the district court erred in grantingsummary judgment for the plaintiff, Sandra Baratta.The court's opinion is wrong. however, in holdingthat Sandra's*l15 claim must fail as a matter of lawand that the appellant should prevail as a matter oflaw. There are issues of fact that, if resolved inSandra's favor, should allow her to foreclose herjudgment lien on the undivided one-ha1f interest inthe subject property that had been owned by FrankBaratta.As the majority correctly notes, if the owner of landis entitled to invoke a homestead exemption to preventsale of the property to satisfy a judgment, ourcases have declared that no judgment lien attachesto the property. Cox v. Waudby, 433 N.W.2d 716,718 (Iowa 1988); Brown v. Vonnahme, 343 N.W.2d445, 449-50 (Iowa 1984). Consistent with this principle,if the property owner conveys the homestead,the grantee takes free of any judgment lien. Brown,343 N.W.2d at 451. This is not so, however, if thejudgment arises out of a claim described in IowaCode section 561.21 (1995). A judgment for thosetypes of claims is a lien on homestead property.This is recognized in chapter 6.7 of the Iowa LandTitle Standards quoted in the majority opinion.Child support judgments antedating the acquisitionof the homestead are the type of claim for whichsection 561.21 withholds the protection of thehomestead exemption. In re Marriage of McMorrow,342 NW.2d 73, 76 (Iowa 1983). If Frank Barattahad been the sole owner of the property occupiedas his homestead, the homestead could be soldto satisfy Sandra's judgment. Moreover, if Frank, assole owner, conveyed the homestead, the granteewould take the property subject to the lien ofSandra's judgment.Our cases have declared that, if property is ownedand occupied as a homestead by both the judgmentdebtor and another person not subject to the judgment,the latter may invoke the homestead exemptionto prevent sale of the property to satisfy thejudgment against the other co-owner. E.g., MerchantsMut. Bonding Co. v. Underberg, 291N.W.2d 19, 21 (Iowa 1980). The majority mistakenlyconcludes that this occupancy right of theco-owner that is not subject to the judgment somehowprevents the judgment lien from attaching tothe interest of the other co-owner that is subject tothe judgment during the time that the innocent own-© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.https:/ /web2. westlaw. corn/print/printstream.aspx?sv=Sp 1it&prft=HTML&ifm=NotSet&mt... 4/23/201 0

Page 12 of 12588 N.W.2d 107(Cite as: 588 N.W.2d 107)Page IIer continues to reside in the homestead. There is nolanguage in the applicable statutes that suggeststhat this is so. Furthermore, this conclusion shouldbe rejected because it allows a judgment debtor toshelter that person's homestead from preexistingdebts contrary to the legislative policy underlyingsection 561.21.Giving the judgment debtor the type of protectionaccorded in the opinion of the court is not necessaryin order to provide the co-owner, not subject tothe judgment, with all of tl1e protection that personis entitled to receive. The interest of the co-ownerin such instances is adequately protected by assuring(!) that person's privilege to occupy thehomestead for as long as he or she chooses to do so,and (2) that, upon sale of the homestead, that person'sundivided interest passes to the grantee free ofany judgment lien. Co-ownership of the homesteadshould not preclude someone in Sandra's positionfrom acquiring a judgment lien on the interest ofthe co-owner subject to the judgment and enforcingthat lien after the property ceases to be thehomestead of the co-owner not Subject to the judgment.FN1FN l. The purchaser of the property wouldbe entitled to deciine merger of the interestsof the individual joint grantors(Frank Baratta and his present spouse) andrestrict enforcement of the lien to only anundivided one-half interest in the property.Freier v. Longnecker, 227 Iowa 366, 371,288 N.W. 444, 446 (1939). Based on thispremise. the district court exceeded its authorityin allowing foreclosure of the lienagainst the entire property.paying the prior lien to the place of the originalcreditor so as to enable that person to enforce thesecurity for purposes of reimbursement. 73Am.Jur.2d Subrogation § 90, at 654 (1974). Factualissues exist concerning this subrogation defense.These *116 issues preclude the granting of summaryjudgment at this time.FN2FN2. The appellant property owner alsoasserts, for the first time on appeal, thatSandra's lien would be barred by the tenyearperiod of limitation contained in sec~tion 624.23(1). This is an action in equityto foreclose the lien based upon specificallyaverred facts. In such a proceeding,the statute of limitations would be an af~firmative defense. No such defense hasbeen raised in the property owner's answer,counterclaim, or resistance to Sandra's motionfor summary judgment.I would reverse the judgment of the district courtgranting summary judgment for Sandra and remandthe case to that court for further proceedings to re~solve the factual issues that might stand as a bar toor reduction of her recovery.LARSON. NEUMA.t'l, and CADY, JJ., join thisconcurrence in part and dissent in part.Iowa,l999.Baratta v. Polk County Health Services588 N.W.2d 107END OF DOCUMENTNotwithstanding the foregoing conclusions, the districtcourt should not have granted summary judgmentfor Sandra. In resisting summary judgment,the appellant property owner asserted a subrogationinterest as a result of satisfying liens on the propertythat would be prior to Sandra's judgment lien.In such instances, equity, speaking from the standpointof good conscience, substitutes the person so© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.,.Ihttps://web2.westlaw.cornlprint/printstream.aspx?sv=Split&prft=HTML&ifm=NotSet&mt. .. 4/23/2010

88. Maximum Interest Rate on a Mechanic's Lien Claim.FACTS: I have a client who has just had a mechanic's lien filed against herproperty where the claimant is claiming 24% interest on the alleged past dueamount. My client is a homeowner.QUESTION: Does anyone know what the maximum allowable rate of interest is?RESPONSE(S): Review Iowa Code Sections 535.2, et. seq. to determinemaximum interest rates based on the size of the project and the possible effect ifthe rate is usurious.182

89. Mechanic's Lien.FACTS: A subcontractor does some work on a new construction house. The saleis closing in a couple of days from the general contractor to the new home owner.Subcontractor is worried about getting paid from general contractor once thehome closes.QUESTION: Does subcontractor need to file the mechanic's lien before theclosing? Within a short time period would it really make a difference concerningthe transfer of ownership of the property?RESPONSE(S): I would get the mechanic's lien on file as soon as possible andgive notice to both the builder and the buyer. Can't tell from the short synopsisyou gave whether the lien is valid, but it will put everyone on notice that money isowed and will cloud the title.****I agree. Though, another option would be to see if the owner/lender and generalcontractor would be agreeable to having the owner/lender write a check directlyto the subcontractor for the subcontractor's portion of the work, or a check forsuch work that is jointly payable to the general contractor and subcontractor.183

90. Mechanic's Lien Defect- Clearing Title.FACTS: Client and her husband bought and renovated a Main Street businessbuilding, in which my client would run a business she started. During renovationmy client hired a "mechanic" from out of town to refinish the brick front of thebuilding. We'll call him Tuck Pointer.Tuck commenced tuck-pointing around the first of August. He performed poorly,and often didn't show when expected. Wasted a lot of good weather, and somematerial misused. [Some argument as to whether or not Tuck providedsubstantial performance under his contract, but that must await any trial.] Finally,with Tuck Pointer not working for at least two weeks, and summer and herpatience gone, my client decided to replace Tuck. She got an estimate fromanother such mechanic. (And the work is now done, and paid for.)Tuck reappeared on or about September 22. My client discharged him.He subsequently sent her a bill for $7,000 work allegedly done, and unpaid.On my direction my client got another mechanic to evaluate Tuck's work, as an"expert" in anticipation of litigation. He produced a report showing costs ofseveral thousand dollars to fix Tuck's mess. To get rid of Tuck I suggested to myclient tell Tuck of the mitigation costs she faced, and dangle a $1,500 cashsettlement in front of him to make him go away.Tuck never replied at all.Today my client visited me. She supplied a copy of a mechanic's lien filed byTuck in County Clerk's office, which she received from the Clerk on Saturday the29th. Lien names my client and her husband as owners of the property.Lien is a bar form, identified as prepared by a local lawyer, and with very basicinformation inserted in computer-generated Times New Roman type (which Isuppose the lawyer did). This information includes the initial and final dates ofsupplying labor and material: August 1, 2012 to September 22, 2012.Legal description of the property is inserted separately, with a typeface of the sortcommonly used in the 70's/80's IBM Selectric typewriters.Finally, Tuck finished the form in what appears to be his own hand and signed it"under penalty of perjury".Tuck dated the lien December 11, 2012. But the Clerk's stamp shows filing ofDecember 28, 97 days after he said he last provided benefit. (I suspect that Tucktook the form from the lawyer's office incomplete, and then forgot about it--hurrahfor my client!)Tuck supplied no itemization of work done or materials provided. All he did waswrite in "$1 0,000" as amount claimed.184

Clerk sent me the only supporting document attached to the lien at the Clerk'soffice, which is Tuck's July 2012 bid form signed by my client. Client says shewas not served process as required by Iowa Code Section 572.10, to perfectliens filed after 90 days from last labor/material. I told her to wait a month or soand keep me updated as to any service she might receive--or none.Right now, assuming I read the statutes correctly,A. Tuck's lien is not (yet) perfected under Iowa Code Section 572.10. ThereforeI think it's not attached to the real estate.B. Only perfected liens may be enforced against the property, per Iowa CodeSection 572.11, and those "only to the extent of the balance due from the ownerto the contractor".QUESTION: 1. Am I correct in the assumption that the lien is not yet perfected?2. How is a "balance due" determined when the amount is disputed? Only after acourt hearing/lien foreclosure trial? Or is Tuck's claim accepted as true withouthearing?Client might have to sign a new mortgage if her bank won't or can't roll itsconstruction loans into a permanent mortgage loan coverable by the priormortgage lien.3. Can I prepare and file an affidavit, or have client and her husband do so,stating that:1) Clients have not been served process "in the same manner as original notice"as required by section 10.2) Clients dispute the entire $10,000 amount claimed, and assert that they oweTuck nothing due to his failure to perform and the mitigation costs he forced onthem.4. If I file such an affidavit, will it suffice to clear title for any subsequentmortgage, by showing that:a) the lien is not perfected, and therefore not attached, and/orb) amount due is in dispute and is up to mechanic to prove in court viaforeclosure.5. Do I need to send such an affidavit to Tuck?6. Should I have another lawyer do any title examination needed, so that I don'tlouse the client's situation with her bank by approving my own title clearancemethod?185

7. Any other issues I might have missed?Case law does not enlighten as to clearance/challenge measures against anunperfected lien claim.RESPONSE(S): I don't think the affidavit you describe clears the lien to thesatisfaction of a title examiner, who can't tell who's right and who's wrong fromthe record.You have a choice among:1. Serve the 30-day notice to file suit;2. File a declaratory judgment action; or3. Wait two years to see whether it goes away.If current suit is necessary, I favor #2 so I get the first bite at trial. If the lenderrequires the lien to be removed as a condition of refinancing, despite theexaminer's assurance that the late-filed lien does not relate back and itsmortgage is prior, you can bond it off.One of my partners just tried this case against a painter. He got a judgment forthe cost of the correction plus attorneys' fees, though collection is doubtful.* * * *I doubted the affidavit would work, but it seemed like the quickest way to "paperover" a crack in the title.186

91. Mechanic's Lien Regarding Subcontractor.FACTS: My client is a subcontractor who supplied labor and materials for acommercial job to a general contractor. He is not a person supplying materials toa subcontractor, but in fact is the subcontractor.He has finished the work and 90 days has not yet expired since the date of hiscompletion of his work. The general contractor is not paying him. He has givenno notice to the developer that he is a subcontractor.QUESTION: Can he still file a mechanic's lien for his unpaid work?RESPONSE(S): Yes. The notice is only required for a sub or material supplier toa subcontractor on commercial work. See Iowa Code Sections 572.33 and572.30.187

92. Release of Lien for Delinquent Utility Account/County Release of Wateror Sewer Lien.FACTS: Iowa Code Chapter 384 allows a rural water district to certify adelinquent water or sewer account to the County Treasurer in order to establish alien on the subject property. Such lien has had equal precedence with ordinarytaxes and are to be collected in the same manner as taxes. Iowa Code Section384.84(5).I have a rural water district client that for many years has certified delinquentaccounts to the County Treasurers and there has rarely been an issue withcollecting on those liens. From time to time, the district has been asked by aCounty to release a particular lien without collecting the amount owed on the lienand under certain circumstances, the district has agreed to such releaserequested by the County.Recently a city whose residents are served by my client purchased property froman individual where my client held several water and/or sewer liens. The citythen proceeded to sell the property to a third party and paid off all outstanding taxliens on the property with the proceeds of sale. The County, without notice to orconsent by my client, released in full all the water and sewer liens against theproperty.QUESTION: Does anyone know of any statutory authority that allows the Countyin this type of situation to unilaterally release a water or sewer lien without noticeto or consent of the water district that certified the lien to the County Treasurer?RESPONSE(S): From the facts given, I presume that no dollars paid to release"all outstanding tax liens" made their way to the water district, i.e., only thecounty got the money, but the county released ill! the liens in their records-­including liens for debts the county didn't own but merely recorded.I think that your county could not release your water district's lien. That lien stillexists and the Treasurer's purported "release" is void, because it lies beyond thepower of the county to issue. However, to establish whether or not mysupposition is true, you almost certainly will have to sue the county.For analogous situation see Madison County v. Kridler, 56 Iowa 32, 8 N.W. 682( 1881 ). In this case a county purported to partly release a third party surety'smortgage lien against landowners who'd borrowed money from the county schoolfund and deeded a portion of their land to the county in settlement. Naturally thesurety objected. The Supreme Court observed:"The board of supervisors hold and manage the securities given the school fund.Code, §§ 1860, 1861. The auditor is authorized to make loans, but he has noauthority to receive money paid or due such fund. If he does so, such act is void.188

Mahaska Co. v. Searl, 44 Iowa 492; Same v. Ruan, 45 Iowa 328. It follows, wethink, the auditor has no authority to release a portion of the mortgaged premisesupon the payment of a pro rata amount of the money secured thereby. Thisinvolves a discretion and power on the part of the auditor which the statuteclearly, in our opinion, does not confer."But note that this county was subject to the Dillon Rule (county can do only thoseacts specifically allowed by statute). The case predates County home rule.Caution: Perhaps somehow the water district constituted the county as thedistrict's agent for purposes of lien administration and release.In such a situation the county's release probably would stand. For ruling on ageneral agent's power to release a lien w/o principal's knowledge see:Fishbaugh v. Sounauqle, 118 Iowa 337, 92 N.W. 58 (1902).I doubt that agency exists, since the past practice you describe shows the countycontacting the water district and asking the district about lien releases in givensituations. Also, I find no statute suggesting that such agency relation arisesupon the water district's certification of a lien.For reference, some Code sections. (From which I conclude that the CountyTreasurer does not act as agent for the water district.)331.552 General duties.The treasurer shall: ...29. Send, before the fifteenth day of each month, the amount of tax revenue,special assessments, and other moneys collected for each tax-certifying or taxlevyingpublic agency in the county for direct deposit into the depository orfinancial institution and account designated by the governing body of the publicagency. The treasurer shall send notice to the chairperson or other designatedofficer of the public agency stating the amount deposited, the date, the amount tobe credited to each fund according to the budget, and the source of revenue.30. Carry out other duties as required by law and duties assigned pursuant tosection 331.323.331.553 General powers.The treasurer may: ...4. Charge five dollars, as an administrative expense, for every rate, charge,rental, or special assessment certified as a lien to the treasurer for collection.This amount shall be added to the amount of the lien, collected at the time ofpayment from the payor, and credited to the county general fund. If the amount ofthe lien is paid in annual installments, an administrative expense charge shall beadded to each annual installment.384.84 Rates and charges- billing and collection- contracts.189

4. a. (1) Except as provided in paragraph "d", all rates or charges for the servicesof sewer systems, storm water drainage systems, sewage treatment, solid wastecollection, water, solid waste disposal, or any of these services, if not paid asprovided by ordinance of the council or resolution of the trustees, are a lien uponthe property or premises served by any of these services upon certification to thecounty treasurer that the rates or charges are due. The governing body of a cityutility may, by resolution, delegate to a designee named in the resolution the cityutility's authority to certify unpaid rates or charges to the county treasurer. Thecity council of a city that is contracting with a city utility for joint billing or collectionor both pursuant to chapter 28E may, by ordinance, delegate to such city utility,or the city utility's designee, the city's authority to certify unpaid rates or chargesto the county treasurer ....5. A lien shall not be imposed pursuant to this section for a delinquent charge ofless than five dollars. The governing body of the city utility or enterprise maycharge up to five dollars, and the county treasurer may charge up to five dollars,as an administrative expense of certifying and filing this lien, which amounts shallbe added to the amount of the lien to be collected at the time of payment of theassessment from the payor. Administrative expenses collected by the countytreasurer on behalf of the city utility or enterprise shall be paid to the governingbody of the city utility or enterprise, and those collected by the county treasureron behalf of the county shall be credited to the county general fund. The lien hasequal precedence with ordinary taxes, may be certified to the county treasurerand collected in the same manner as taxes, and is not divested by a judicial sale.190

93. Sales Tax Lien.FACTS:QUESTION: Is the lien created by unpaid sales tax a lien on a homestead or isthe lien defeated by Iowa Code Section 561.21?RESPONSE(S): Normally homesteads are subject to liens imposed by theDepartment of Revenue and other taxing authorities (e.g., county).Note that all of Iowa Code Chapter 561 must be read together; we can't isolatejust Iowa Code Section 561.21 and read it alone.Pertinently, Iowa Code Section 561.16 reads:"The homestead of every person is exempt from ***judicial sale*** where there isno special statute to the contrary."Iowa Code Section 561.21 is a "special statute to the contrary" of Iowa CodeSection 561.16's general prohibition. So, Iowa Code Section 561.21 's referenceallowing that the "homestead may be sold" must be read as governing to judicialsales. A sale for tax debt is not a "judicial" sale. Nor is a tax lien a "judicial" lien(such as an execution lien or judgment lien).Case decisions support this conclusion. Yes, they're old, but still applicable Ibelieve.1) Hampe v. Philipp, County Treasurer, 210 Iowa 1243, 232 N.W. 648(1930)(Tax on bank stock, entered upon delinquent tax list, held lien uponstockholder's homestead.) "There was a time in our legislative history when ahomestead was liable only for its own taxes. But such is not the present state ofour legislation. We had the identical question before us in Tate v. MadisonCounty, 1631owa 170, 143 N. W. 492 (1913). In that case we said: "Thecontention of the appellant in brief is that his homestead is not and was not liablefor any other taxes than for those levied against the homestead itself. Underprevious statutes it was true that a homestead, if separately listed and platted,was only liable for the taxes thereon. Under our present statute (section 1400) itis expressly provided that 'taxes due from any person upon personal propertyshall be a lien upon any and all real estate owned by such person.' It is notclaimed that the taxes involved in the suit were not due from the plaintiff. Thestatute quoted is therefore applicable to him. It provides for no exemption in favorof the homestead." See, also, Collins Oil Co. v. LaRue Perrine, 1881owa 295,176 N. W. 303; Andrew v. Munn, 2051owa 723,218 N. W. 526.191

"The foregoing citations are decisive of the question presented. The factsappearing in the record present a case of apparent hardship, which might bedeemed to challenge strongly the expediency of the statute. But the countytreasurer had no power of mercy. Nor have we. Whether the plaintiff could havesought appropriate relief in other directions, at the appropriate time, is a questionwhich we may not consider."The judgment below must be, and is, accordingly affirmed."2) American Sav. Bank of Marengo v. Willenbrock, 209 Iowa 250, 228 N.W. 295(1929)(Tax lien said to reduce homestead's "full value as exempt".) "It is anecessary conclusion that the homesteader, after his right of exemption accrues,may pay for the property, may pay off liens upon it, and the fact that he does sodoes not bring forward the date from which his right of exemption to the tract asan entirety accrues, nor would such fact confer on the creditor the right to imposeupon the homestead liability to the amount of such expenditures made after theincurring of the debt to him. And, if he cannot follow the property becauseincumbrances have been paid, he cannot use the incumbrances to reduce thevalue of the homestead. If the homesteader and his wife agree to pay out of theproceeds of the sale of the homestead a debt which they owe, or if they agree topay commission for its sale, or if there is a tax lien upon it or a valid mechanics'lien or a judgment for a debt antedating the homestead and these have to bepaid from the proceeds, it would not be said that the value of the homesteadwould be reduced thereby. The homesteader thereby would forego enjoyment ofthe full value as exempt but the value itself would not be diminished .... "3) Tate v. Madison County. 1631owa 170, 143 N.W. 492 (1913)(Statuteestablishing lien for unpaid taxes did not carve out exception for homestead.)"The contention of the appellant in brief is that his homestead is not and was notliable for any other taxes than for those levied against the homestead itself.Under previous statutes it was true that a homestead, if separately listed andplatted, was only liable for the taxes thereon. Under our present statute (section1400) it is expressly provided that "taxes due from any person upon personalproperty shall be a lien upon any and all real estate owned by such person." It isnot claimed that the taxes involved in the suit were not due from the plaintiff. Thestatute quoted is therefore applicable to him. It provides for no exemption in favorof the homestead. It is true that the treasurer could have proceeded against thestock of goods in the hands of the purchaser; but he was not bound to do so.""The cases relied on by the appellant all arose under the previous statutes, whichhave been supplanted by the section above quoted."4) Babcock v. Hoey, 11 Iowa 375 (1860)(0riginal interpretation of predecessorsto 561.16 and .21 specifically allowed sale of homestead for "taxes".) "Under ourstatute, the homestead of every head of a family is exempt from judicial sale,when there is no special declaration of the statute to the contrary. There areexceptions, however, to this general exemption. It is liable to be sold for taxes,192

under a mechanic's lien, for debts contracted prior to the passage of thehomestead act, or to the purchase thereof, or for debts created by writtencontract by persons having the power to convey and expressly stipulating thatthe homestead shall be liable therefor. ... "My question is this: What statute do you believe imposes a lien upon real estate(a Ia Babcock) for unpaid sales taxes?Sales taxes get levied under Iowa Code Chapter 423, to the best of myknowledge.My search through Iowa Code Chapter 423 (the "Streamlined Sales and Use TaxAct" of 2003) yields no general statute imposing a lien upon all property of theliable person (such as that approved in the Babcock case).The Code Index for LIENS, under subhead "Tax Liens", shows no entry orcitation for any lien for general sales taxes.(Specific types of excise taxes do appear, for such things as mobile homes,cigarettes and the like.)193

94. Satisfaction of Lien.FACTS: I have an abstract showing two judgments in favor of the State of Iowa.One is several thousand dollars.I noted them in the title opinion and required a satisfaction by the State be shownon the basis that without the satisfaction the lien still exists even if payment isshown.I'm told by the abstracter that the State never files a satisfaction. I can't find anystatutory justification for this. Iowa Code Sections 624.20 and 624.37 don't haveany exemption for judgments in favor of the State.QUESTION: Any one had this issue? How was it resolved?RESPONSE(S):194

95. Service of Demand for Bringing Suit on a Mechanic's Lien.FACTS: I have a client who has had a mechanic's lien placed on her secondhome. I want to serve a demand for bringing suit pursuant to Iowa Code Section572.18. The mechanic's lien claimant is not represented by counsel.QUESTION: Do I need to serve him in person in the manner you would a petitionor is certified mail sufficient?RESPONSE(S): I would recommend personal service.I have seen two District Court Judges decide the issue and reach the oppositeresult. In one case in which I was involved, the Judge ruled that service bycertified mail was not sufficient. In a later case, another Judge ruled that serviceby certified mail was sufficient.I don't think there is any definitive case law, and the statute provides littleguidance.Why chance even having to litigate the issue?* * * *I recommend personal service even if the party is represented. I had a DistrictCourt Judge rule that service on a represented party's attorney was not sufficient.195

96. Small Claims Judgments.FACTS: Wright County just went EDMS. I had my first small claims hearing lastweek and entered judgment against the defendant. The form basically says 'TheCourt finds judgment against the Defendant in the amount of$ withinterest at %from and the costs." I could see badconsequences of that when it comes to abstract examinations.When I asked the Deputy Clerk how much the costs were she said that is for thePlaintiff to determine. That no payments go through the Clerk's Office and ifsomeone had a question they will have to call the Plaintiff.QUESTION: Has this caused a problem in counties that have been on EDMS fora while?RESPONSE(S): I don't think this is unique to counties with EDMS. I'veencountered the same issue here in Des Moines County and we do not haveEDMS. I was told that this was a shift in practice mandated by CourtAdministration some time ago for all cases because "it was too much work" forthe clerk to keep track of costs. Instead, we are supposed to contact plaintiff andfind out how much is owed in costs and get a satisfaction upon payment. I askedwhat would happen if there was a dispute about how much costs were owed andI was met with shrugged shoulders. I also questioned whether the award forcosts was in fact a judgment lien because the award was not reduced to aliquidated amount. In the past it was easy to tell how much costs were ownedbecause the clerk had an official record of the costs and who owed what towhom, but now I'm not sure you can tell even by looking through the court file.I agree that this may be a problem for abstract examinations.* * * *The Johnson County Clerk of Court indexes costs judgments in favor of the partywho paid them. I was named as a Defendant in a mortgage foreclosure becauseour firm advanced the filing fee in a District Court action, and I was counsel ofrecord. The Clerk indexed the costs judgment in my favor, although it was myclient who was the prevailing party and entitled to those costs. Apparently that istheir routine practice.One effect of this is that the party in whose favor the judgment was truly renderedwas not named as a party to the foreclosure. Is their judgment lien for costsextinguished by naming me as a party? I don't think so.****196

Not only does our Clerk not track or calculate costs, they will not accept paymentof costs, judgments or attorney fees. I have even had a case where the costswere assessed to the Defendant, and the costs were noted by the Clerk inhandwriting to be $85.00. When my client paid $85, we were told that they werereally $130!It is too much work for me and my staff to track court costs also, and we are notbeing paid to do it I have argued this with our Clerk, our Court Administrator andthe Chief Judge, to no avail on this end of the State. I cannot support increasedbudget requests for the Clerk's office when this task cannot be performed. TheClerks need to run their offices in an efficient manner, as do we private attorneys.And, going electronic is only going to make the cost situation worse in myopinion.* * * *Oddly, nothing in Iowa Code Section 602.81 02's long laundry list of Clerk's dutiesspecifically mandates that the Clerk act as a settlement agent for generallysatisfying monetary judgments. Some specific duties appear, but nothing relatedto keeping accurate records of judgments and costs due--neither in small claimsnor in district court.If you get a wild hair and desire to teach your Clerk a lesson he'll never forget--asto why he ought to keep track of costs due--then:1) wait for a case where the plaintiff overestimates the court costs to defendant'sdetriment, and 2) pounce. Apply Iowa Code Sections 625.16 and .17.(Might be best if you try this maneuver when you're about to pack it in & retire,'cause otherwise paybacks surely will come ... );-)625.16 Relaxation.Any person aggrieved by the taxation of a bill of costs may, upon application,have the same relaxed by the court, or by a referee appointed by the court inwhich the application or proceeding was had, and in such relaxation all errorsshall be corrected.625.17 Liability of clerk.If the party aggrieved shall have paid any unlawful charge by reason of the firsttaxation, the clerk shall pay the costs of relaxation, and also to the partyaggrieved the amount which the party may have paid by reason of the allowing ofsuch unlawful charges.Warping your example slightly, to illustrate:--Clerk has publicly recorded costs as $85.00.--Defendant tenders $85.00 to Clerk of Court to fully satisfy record as to courtcosts.197

--Clerk refuses to accept defendant's tender and sends him to plaintiff.--Defendant tenders $85.00 to plaintiff and demands satisfaction.--Plaintiff claims costs due as $130.00, refuses tender, refuses satisfaction, andrefuses to provide evidence of his actual out-of-pocket costs.--Defendant "applies" to magistrate (or district) court for hearing on retaxation.--Hearing produces some evidence of some malfeasance somewhere (mostlikely: Clerk goofed the cost record; possible: Defendant lied about cost total).--Defendant wins "retaxation"--i.e., a new cost judgment of record.--He also wins mandatory relief against the Clerk: Clerk must pay the differencebetween $85.00 and $130.00.Perhaps our Bar lobbyists should seek addition to Iowa Code Section 602.8102of formal cost-recording duties.* * * *If this is the way it is, okay, so I would not ask the clerk to collect anything. Butthe facts are the plaintiff obtains a judgment and costs, which when paid he hasto satisfy. The attorney doing a real estate closing contacts the plaintiff andoffers full payment and asks the plaintiff how much the costs are. And how manythings a pro se plaintiff has any idea. At least the clerk could keep track of thefiling fee, service fees and other costs which are available to them and not to thepublic.198

97. Tax Sale and Condo Liens.FACTS: Iowa Code Section 4998.17 seems to make it clear that a governmenttax lien is superior to a condo lien, and my assumption is that the sale of the taxlien certificate to a third party wouldn't change that.QUESTION: Does anyone know of any case law that says that a tax sale deedis superior to a condo association lien?RESPONSE(S): Be careful what your client asks for.A Declaration of Horizontal Property Regime is a two way contract. Thehomeowner pays the required dues, and obtains the benefits accruing to amember of the association. I don't believe you can claim that a homeowner canwipe out the obligations under the Declaration, while retaining the benefits ofmembership under that same Declaration.Can your client reach the condo without crossing the common areas under thecontrol of the association? Is your client's condo habitable without the use of theutility lines that cross the common areas under the control of the association?What would you do if you were representing the Homeowners Association?Might you advise the Association that a condo owner cannot disclaim anyobligation under the Declaration of Horizontal Property Regime and still retain thebenefits of a member under that same Declaration. Might you advise theAssociation that a non-member need not be allowed to trespass on Associationowned common areas, or to utilize Association owned utility connections, untilthat non-member has reaffirmed his or her obligations under the Declaration ofHorizontal Property Regime and returned to the status of a member in goodstanding?* * * *I believe that if the Association had been served with notice of expiration of rightof redemption and failed to redeem from the tax sale, the subsequently issuedtax deed would be free and clear of any lien for unpaid prior associationdues/assessments. If the Association had not been served, then I believe that theproperty would remain encumbered by the lien of the unpaid dues/assessments,subject to the limitations provisions of Iowa Code Sections 448.15 and .16. SeeIowa Code Section 448.3.199

98. U.S. Department of Justice Lien.FACTS: I have reviewed the Title Standards and Iowa Code Sections 561.21,624.23, 614.17 and 614.17 A. I cannot find exactly what I need to know that title ismarketable.Husband and Wife divorce. Lot 2 has the home, Lot 1 contains a garage only. Indivorce, Wife gets possession of Lot 2 and Husband gets possession of Lot 1(subject to provisions on later sale and distribution of proceeds). There is nolanguage on whether joint tenancy is retained or not.In a case by the U.S. Department of Justice United States Attorney NorthernDistrict of Iowa v. Husband, a judgment lien was entered for $25,000 on March30, 1987. On March 31, 1987, Husband deeds Lot 2 only to Wife.Wife deeds via warranty deed to sellers Lot 2 only to buyers on June 1, 1988. OnOctober 12, 2005, Husband and Wife give a warranty deed to sellers for Lot 1.On April16, 1990, there was filed in the Transcript of Judgment from CedarRapids, Iowa in District Court for Dubuque County, Iowa, where the property islocated, regarding the judgment from March 30, 1987.QUESTION: As to Lot 2, since the transcript was not filed in Dubuque Countyuntil after Husband deeded to Wife (likely to avoid the judgment) and then Wife tobuyers as their homestead, did the judgment attach? If it did, does the 10 yearsgive relief even though the U.S. is the lienholder?As to Lot 1, Husband continued an interest until 2005 (possibly by error). Iassume the lien attached as it was not homestead and Husband was title ownerwhen the transcript was filed in Dubuque County. Is the judgment lienunenforceable since 10 years have passed even though U.S. is the lienholder?RESPONSE(S): You state that a Federal prosecutor brought a civil actionagainst Husband. I gather this proceeding occurred in Federal court--never haveI known a U.S. attorney to go into state court.So I recommend that we look to federal law for guidance on judgment liensarising from federal rulings. Relevant statute appears to be 28 U.S.C. section3201, which adopts by reference 26 U.S.C. section 6323(f). I quote thesestatutes below.Now let's see what effect the federal statutes produce upon the facts you recite.I. Federal civil judgments take effect in the same manner as the filing of federaltax liens.200

II. Federal tax liens do not arise automatically upon rendering of an underlyingjudgment that indebtedness exists, but attach to defendants' real estate onlyupon filing of such liens with the Recorder.Ill. Federal defendant Husband conveyed his property to Wife one day after hegets a judgment rendered against him in federal court.IV. Lien of federal judgment did not attach to Husband's garage Lot.V. I have no idea why Husband, now long divorced from Wife, joined in her 1988and 2005 deeds to Lots 1 and 2.VI. Government filed transcript of the court judgment in Dubuque County on April16, 1990. If the lien attached, then it attached at that date.VII. The lien. if effective, on April16, 1990 continued in effect for twenty (20)years from that date: see 28 U.S.C. section 3201 (c)(1 ). Possibly the original lientranscript related back to the March 30, 1987 judgment date, but I think the"relation back" language of 3201(c)(2) relates only to renewals, intended topreserve the priority fixed by 3201 (b). But to be safe, as an examiner, let's saythat the un-renewed federal lien expired on March 31, 2010.Title ought to be clear, now: any federal lien, if it ever was effective, should haveexpired in 2010 after 20 (not 1 0!) years.28 USC § 3201 -Judgment liens(a) Creation.- A judgment in a civil action shall create a lien on all real propertyof a judgment debtor on filing a certified copy of the abstract of the judgment inthe manner in which a notice of tax lien would be filed under paragraphs ( 1) and(2) of section 6323(f) of the Internal Revenue Code of 1986. A lien created underthis paragraph is for the amount necessary to satisfy the judgment, includingcosts and interest.(b) Priority of Lien.- A lien created under subsection (a) shall have priority overany other lien or encumbrance which is perfected later in time.(c) Duration of Lien; Renewal.-(1) Except as provided in paragraph (2), a lien created under subsection (a) iseffective, unless satisfied, for a period of 20 years.201

(2) Such lien may be renewed for one additional period of 20 years upon filing anotice of renewal in the same manner as the judgment is filed and shall relateback to the date the judgment is filed if- (A)the notice of renewal is filed beforethe expiration of the 20-year period to prevent the expiration of the lien; and(B) the court approves the renewal of such lien under this paragraph.(d) Release of Judgment Lien.- A judgment lien shall be released on the filing ofa satisfaction of judgment or release of lien in the same manner as the judgmentis filed to obtain the lien.(e) Effect of Lien on Eligibility for Federal Grants, Loans or Programs.- A debtorwho has a judgment lien against the debtor's property for a debt to the UnitedStates shall not be eligible to receive any grant or loan which is made, insured,guaranteed, or financed directly or indirectly by the United States or to receivefunds directly from the Federal Government in any program, except funds towhich the debtor is entitled as beneficiary, until the judgment is paid in full orotherwise satisfied. The agency of the United States that is responsible for suchgrants and loans may promulgate regulations to allow for waiver of this restrictionon eligibility for such grants, loans, and funds.(f) Sale of Property Subject to Judgment Lien.- (1) On proper application to acourt, the court may order the United States to sell, in accordance with sections2001 and 2002, any real property subject to a judgment lien in effect under thissection.(2) This subsection shall not preclude the United States from using an executionsale pursuant to section 3203(g) to sell real property subject to a judgment lien.As cross-referenced in 28 U.S.C. section 3201, 26 U.S.C. section 6323(f) [taxliens] reads as follows:(f) Place for filing notice; form( 1) Place for filingThe notice referred to in subsection (a) shall be filed-(A) Under State laws(i) Real property in the case of real property, in one office within the State (or thecounty, or other governmental subdivision), as designated by the laws of suchState, in which the property subject to the lien is situated; and(ii) Personal property In the case of personal property, whether tangible orintangible, in one office within the State (or the county, or other governmentalsubdivision), as designated by the laws of such State, in which the property202

subject to the lien is situated, except that State law merely conforming to orreenacting Federal law establishing a national filing system does not constitute asecond office for filing as designated by the laws of such State; or(B) With clerk of district courtIn the office of the clerk of the United States district court for the judicial district inwhich the property subject to the lien is situated, whenever the State has not bylaw designated one office which meets the requirements of subparagraph (A); or(C) With Recorder of Deeds of the District of Columbia In the office of theRecorder of Deeds of the District of Columbia, if the property subject to the lien issituated in the District of Columbia.(2) Situs of property subject to lienFor purposes of paragraphs ( 1) and ( 4 ), property shall be deemed to besituated-(A) Real propertyIn the case of real property, at its physical location; or(B) Personal propertyIn the case of personal property, whether tangible or intangible, at the residenceof the taxpayer at the time the notice of lien is filed.For purposes of paragraph (2)(B), the residence of a corporation or partnershipshall be deemed to be the place at which the principal executive office of thebusiness is located, and the residence of a taxpayer whose residence is withoutthe United States shall be deemed to be in the District of Columbia.(3) FormThe form and content of the notice referred to in subsection (a) shall beprescribed by the Secretary. Such notice shall be valid notwithstanding any otherprovision of law regarding the form or content of a notice of lien.(4) Indexing required with respect to certain real property In the case of realproperty, if-(A) under the laws of the State in which the real property is located, a deed is notvalid as against a purchaser of the property who (at the time of purchase) doesnot have actual notice or knowledge of the existence of such deed unless the factof filing of such deed has been entered and recorded in a public index at theplace of filing in such a manner that a reasonable inspection of the index willreveal the existence of the deed, and203

(B) there is maintained (at the applicable office under paragraph (1 )) an adequatesystem for the public indexing of Federal tax liens, then the notice of lien referredto in subsection (a) shall not be treated as meeting the filing requirements underparagraph ( 1) unless the fact of filing is entered and recorded in the indexreferred to in subparagraph (B) in such a manner that a reasonable inspection ofthe index will reveal the existence of the lien.(5) National filing systemsThe filing of a notice of lien shall be governed solely by this title and shall not besubject to any other Federal law establishing a place or places for the filing ofliens or encumbrances under a national filing system.* * * *Watch new title standard for duration of liens when U.S. government is lienholder. Federal case law provides in certain instances inpersonum liabilityexpires but in rem lien does not. I came upon the cited case when working onreview of situation where U.S. Attorney's Office transcribed judgment starting 10year lien under state law. But didn't file with the Recorder for 11 years. Raising a10 year lien under state law, a one year gap of no lien, followed by start of 20year lien under federal law.* * * *Be careful! Federal judgments do not have the 10 year statute of limitation weare all used to.They have a 20 year statute of limitation.USC > Title 28 > Part VI > Chapter 176 > Subchapter C > § 320128 USC § 3201 -Judgment LiensThis preliminary release may be subject to further revision before it is releasedagain as a final version. As with other online versions of the Code, the U.S. CodeClassification Tables should be consulted for the latest laws affecting the Code.Those using the USCPrelim should verify the text against the printed slip lawsavailable from GPO (Government Printing Office), the laws as shown onTHOMAS (a legislative service of the Library of Congress), and the final versionof the Code when it becomes available.Current through Pub. L. 112-283. (See Public Laws for the current Congress.)204

(a) Creation.- A judgment in a civil action shall create a lien on all real propertyof a judgment debtor on filing a certified copy of the abstract of the judgment inthe manner in which a notice of tax lien would be filed under paragraphs ( 1) and(2) of section 6323(f) of the Internal Revenue Code of 1986. A lien created underthis paragraph is for the amount necessary to satisfy the judgment, includingcosts and interest.(b) Priority of Lien.- A lien created under subsection (a) shall have priority overany other lien or encumbrance which is perfected later in time.(c) Duration of Lien; Renewal.-(1) Except as provided in paragraph (2), a lien created under subsection (a) iseffective, unless satisfied, for a period of 20 years.(2) Such lien may be renewed for one additional period of 20 years upon filing anotice of renewal in the same manner as the judgment is filed and shall relateback to the date the judgment is filed if-(A) the notice of renewal is filed before the expiration of the 20-year period toprevent the expiration of the lien; and(B) the court approves the renewal of such lien under this paragraph.(d) Release of Judgment Lien.- A judgment lien shall be released on the filingof a satisfaction of judgment or release of lien in the same manner as thejudgment is filed to obtain the lien.(e) Effect of Lien on Eligibility for Federal Grants, Loans or Programs.- Adebtor who has a judgment lien against the debtor's property for a debt to theUnited States shall not be eligible to receive any grant or loan which is made,insured, guaranteed, or financed directly or indirectly by the United States or toreceive funds directly from the Federal Government in any program, except fundsto which the debtor is entitled as beneficiary, until the judgment is paid in full orotherwise satisfied. The agency of the United States that is responsible for suchgrants and loans may promulgate regulations to allow for waiver of this restrictionon eligibility for such grants, loans, and funds.(f) Sale of Property Subject to Judgment Lien.-(1) On proper application to a court, the court may order the United States to sell,in accordance with sections 2001 and 2002, any real property subject to ajudgment lien in effect under this section.205

(2) This subsection shall not preclude the United States from using an executionsale pursuant to section 3203 .{g} to sell real property subject to a judgment lien.****My comment is addressed to ancient mortgages in favor of the federalgovernment, which do not expire in rem. See latest version of Title Standard 1.9,which cites to U.S. vs. Ward, 985 F. 2d 500 (10th Cir., 1993).206

LANDLORD/TENANT

99. ADA Issue with Apartment.FACTS: I have a client- apartment manager- who had a tenant who was in awheelchair. The wheelchair was a powered one and it tore up the carpet in thebedroom to the point the carpet had to be replaced. This would qualify forwithholding from the security deposit in general.The question is whether the "ADA" sections of the Iowa Code modify this. Inother words would the waiving of the damages be required as anaccommodation?Iowa Code Section 216.8A(c)(1) has this language:c. For the purposes of this subsection only, discrimination includes any of thefollowing circumstances:( 1) A refusal to permit, at the expense of the person with a disability, reasonablemodifications of existing premises occupied or to be occupied by the person if themodifications are necessary to afford the person full enjoyment of the premises.However, it is not discrimination for a landlord, in the case of a rental and wherereasonable to do so, to condition permission for a modification on the renter'sagreement to restore the interior of the premises to the condition that existedbefore the modification, reasonable wear and tear excepted.QUESTION: There are no cases under this section. Any suggestions?RESPONSE(S): Have you talked with the supplier of such powered wheelchairsto determine if the damage to the carpet would be ordinary wear and tear or isextraordinary damage?* * * *In my opinion, you're dealing with extraordinary wear and tear on carpets. Thedisabled person is entitled to a floor covering that will reasonably accommodatetheir circumstances at the expense of the disabled individual. So, for example, atthe expense of the disabled individual, the carpet could have been removed atthe outset and hard wood or similar flooring installed, and I believe that thedisabled person could have actually required such a modifying accommodation,but at the individual's expense. In the fact situation at issue, the wheelchairboundperson has elected not to choose that alternative and, rather, chose toinflict inordinate (i.e., out of the ordinary) wear and tear on carpeted floors.Carpet replacement costs should be borne by the tenant.* * * *207

Depending on the type of property, the Fair Housing Act may apply and you maywant to take a look at www.fairhousingfirst.org which is a website supported byHUD. On the home page there is a link to Information, Resources, FAQ, etc. andthere is some material relating to accommodations and various situations, somewhere the tenant is responsible and others where the landlord may beresponsible.****I concur with the prior assessment: extraordinary wear and tear.Answering the original question, I conclude that waiving actual damages is NOTrequired by ICRA as an "accommodation" for a handicapped tenant.Mitchell v. Iowa Protective Services, Inc., 325 F. 3d 1011 (8th Cir. 2003):Claims under the Iowa Civil Rights Act (ICRA) are dealt with by applying thestandards relevant to claims under the Americans with Disabilities Act (ADA).Vivian v. Madison, 601 N.W. 2d 872 (Iowa 1999):Federal law is not controlling when interpreting the ICRA.Bearshield v. John Morrell & Co., 570 N.W. 2d 915 (Iowa 1997):Given the common purpose of prohibiting disability discrimination by ADA andICRA, and given the similarity of the statutes, the Iowa Supreme Court looks tothe ADA and underlying federal regulations in developing standards under ICRAfor disability discrimination claims.Barnes v. Northwest Iowa Health Center, 238 F.Supp. 2d 1053 (N.D. Iowa 2002):Elements of liability for disability discrimination under ADA and ICRA are thesame.Fastcase cites to a dozen or so mostly federal cases dealing with wheelchairsand/or carpets. None of these involve damage to attached carpet caused bywheelchair. Only a few rulings refer to floor coverings at all.See: Riker v. Pebblebrook Hotel Trust (C.D. Cal. 2012) (flexing wooden tiles).Kallen v. J.R. Eight Inc. a Fla. Corp., 775 F.Supp.2d 1374 (S.D. Fla. 2011) (nonslipcarpet tiles).Hernandez v. Vallee lnt'l Shopping Ctr. LLC (N.D. Cal. 2011) (claim ofunattached carpet).Wilson v. Pier 1 Imports (Us), Inc., 439 F.Supp. 2d 1054 (E.D. Cal., 2006) (claimof unattached carpet).There is no indication that the wheelchair tenant ever requested any nondamageablecarpet as "accommodation" for his condition.208

So I find nothing much on point to contradict the other writer's position. Tenant'sbeing treated the same as any other damage-causing tenant would be treated.The whole point of the ICRA/ADA is to get people to treat handicapped people as"normal" in pretty much every way.Muller v. Hotsy Corp., 917 F.Supp. 1389 (N.D. Iowa, 1996):"In the final form of the ADA, Congress concluded that "individuals withdisabilities continually encounter various forms of discrimination .... " 42 U.S.C.§ 12101 (a)(5). Helen L., 46 F. 3d at 332. In furtherance of the objective ofeliminating discrimination against the disabled, Congress stated that "theNation's proper goals regarding individuals with disabilities are to assure equalityof opportunity, full participation, independent living, and economic self-sufficiencyfor such individuals ... "209

LEASES

100. Commercial Lease.FACTS: Client of our firm is interested in purchasing a shopping center. Inreviewing the leases current Landlord/Owner has with the tenants, which rangefrom 3- 5 years with 3-5 year options to renew, there is a provision in each leasethat dictates what happens if there is a sale of the underlying lease. It states thatin the event all of the shopping center is sold, the Landlord/Owner is entirelyrelieved of all obligations to be performed by Landlord/Owner under each leaseexcept for those occurring prior to the sale.QUESTION: If our client purchases the shopping center, what happens if it doesnot want to continue the lease arrangements with the current tenants? Would itbe able to terminate the leases upon closing of the transaction with some sort ofnotice (i.e., 30 days, 6 months, 1 year, etc.)? Or is it stuck with the currenttenants until each of their leases/options runs out (assuming they are not indefault under any other provisions of each lease)? The foregoing clause appearsto only deal with the current Landlord/Owner and not the soon-to-beLandlord/Owner and the soon-to-be Landlord/Owner does not want to be boundby these leases if at all possible.RESPONSE(S): Without knowing more, the new owner is bound to the terms ofthe leases in place at the time of purchase, including the options unless they aresubject to Landowner approval.* * * *This language is typically in the lease to provide a release to the original landlordin the event the subsequent landlord fails to fulfill the duties of the landlord and itis not intended to state that in the event of the sale the entire lease obligationterminates. Therefore, the new landlord is bound by the lease for the remainderof the lease term. My comment is subject to any unique wording of your leaseclause that might support a different interpretation.* * * *I agree that the leases will continue in force after the sale, subject to the actuallanguage. The provision that you cite is fairly common and is intended to free theseller from landlord defaults and liabilities occurring before the sale.210

101. Enforceable Lease?FACTS: I have a situation where there was a commercial real estate sale wherethe grantor stated in the purchase agreement that he gets to stay in a portion ofthe building for as long as he wants (however, it is un-assignable so ends on hisdeath). He pays well below market value for rent. However, there are no otherterms and the deed is silent on concerning this arrangement altogether.QUESTION: Is this enough for a commercial lease? Would it even beenforceable? I have done some research on the merger doctrine but am unsure.RESPONSE(S): Based on what you have provided, this appears to be a prettystraight forward contract issue which also appears to satisfy the Statute ofFrauds (by lasting more than a year, being valued at more than $500 and beingsigned (in the Purchase and Sale Agreement) by the parties being charged).There also appears to be consideration, money for property and in exchange(bargained for of course) a revocable lease (voluntarily or on death ofbeneficiary).****If the deed doesn't explicitly reserve property interests to the grantor as stated inthe contract the merger doctrine would operate to extinguish that portion of thecontract.However, if grantor has been making regular payments for his portion of thebuilding and grantee/subsequent owners haven't moved to evict him, Iowa CodeSection 562.4 would operate to give grantor a tenancy at will, subject to the rightof either party to give 30 days' written notice of termination.Basically, I don't think grantor has successfully retained any ownership interest inthe property, but he has a lease by virtue of statutory presumption, albeit onethat's fairly easy for the current owner to terminate.* * * *Point taken, though would this not qualify under Iowa Code Section 562.9(4) as a"Specific Commitment"."4. If the tenancy is for a year or more, one year after the end of the month inwhich the life estate terminated. However, if the lease is binding upon the holderof the successor interest by the provision of a trust or by specific commitment ofthe holder of the successor interest, the lease shall terminate as provided by thatprovision or commitment."211

****Possibly, if the grantor had successfully retained a life estate.However, because the deed conveyed the property without referencing theprovision in the purchase agreement reserving grantor the right to stay in theproperty indefinitely, the grantor failed to reserve a life interest and I don't thinkIowa Code Section 562.9 applies.****I don't think the merger doctrine would be applicable in this situation. The lifeestate would be collateral to the conveyance of title, and thus would not besubject to the merger doctrine.I think the only issue is whether there is an enforceable contract between theparties, which there appears to be.* * * *The merger doctrine wipes out the promises made in the contract. Thereprobably is a tenancy at will which should easily be dealt with.212

LIFE ESTATE

102. Fixing the Fertile Octogenarian.FACTS: Life estate to son, remainder to "his children". All of his children aremajority age.QUESTION: Can they deed their remainder to him or to a buyer? Ignore otherissues, just whether that would give good title. Anyone have any ideas on how tomake this work? Somehow make judicial application under that allows for thedefeat of a possibly expectant estate, Iowa Code Section 557.9?RESPONSE(S): Try an Affidavit Explanatory of Title. Seller prepares and issuesand buyer files with the deed. In the Affidavit, recite the names of all children,state that they are all of majority age, and no other children exist than thesenamed.Note: If the granting document (a will?) named the children as "my children" andindicated no others, then most likely you won't need an affidavit saying so. See:Elkader Production Credit Ass'n v. Eulberg, 251 N.W. 2d 234 (Iowa 1977) (codicilnamed five children and then disinherited "them" and also "any child or childrenof mine who may hereafter be born ... "); In re Lepley's Estate, 235 Iowa 664, 17N.W. 2d 526 (1945) (children named in will, title not questioned); Anderson v.Conklin, 229 Iowa 232, 294 N.W. 339 (1940) (children not named in will butnamed in later will contest case).* * * *But son is still alive. Law presumes that he is fertile until he dies. What if son hasanother child after this anticipated transfer?* * * *This scenario seems to be that issue that if all of his children predecease him,then the remainder may revert to the grantor or the grantor's heirs.****So? Is son (plus his children) conveying the property in question? If yes, thenno problem. An affidavit should work to clarify who is conveying the interest, andthat such conveyance is 1 00% of all owners.If no, then will son for some reason not convey but keep his interest in theproperty? (And, why would you be examining title at this point?) In that case Ishare your concern about son's fertility as an issue for whoever is acquiringpartial interest (presumably some interests of the living children).213

Resolution of the uncertainty as to who are the "children" necessarily requiresthat you "cut" the fertile octogenarian out of the title chain.****It appears to me that you have a life estate in Son with a contingent remainder ina class of individuals, namely the Children of Son. Son could adopt, a child couldpredecease, other events could occur which could alter the identification of theremainder class (the exact wording in the instrument creating the remainderclass could also impact the full scope of the impact, e.g., "his children, thenliving" or language providing that if any child predeceases that their children, ifany, obtain their share of the remainder). The class is not vested, and itsmembers cannot be identified with certainty, until the death of the Son.This is where Iowa Code Section 557.9 allows the life tenant and knownremaindermen and known holder(s) of the reversionary interest {if created underParent's will, it would be those listed in the residue clause of Parent's will, oralternatively his/her heirs at law, i.e., who takes if the Son dies without leaving atleast one person who falls within the definition of the contingent class). The courtcan appoint a guardian ad litem to protect the interests of the unknown potentialmembers of the class, and the court can provide for the sale of the property, andestablish whatever trust or other protections the court deems necessary toprotect the yet unknown class members. The Son would likely be entitled to allincome generated from the corpus from the sale, but the corpus may very well betied up in trust until the death of the Son.Remember the infamous rule against perpetuities (to prevent the fee tail)? Thisstructure complies with the rule, and is clearly intended to tie up ownership to theproperty in the family. The family may not like it, but Parent's attorney was likelydoing exactly what Parent wanted in preventing Son from conveying the land.Parent wanted his/her grandchildren to get the land.214

103. Life Estate- Required Showings.FACTS: A 1936 conveyance states: To "M" for the term of her natural life, andthen to the children of "C" and "M" living at date of death of "M". Life estateterminated in 2009.QUESTION: What instrument would cure this title?RESPONSE{S): Iowa Bar Form 179 (Affidavit of Death) with a modification ortwo.[Attachment.]215

AFFIDAVIT OF DEATHTERMINATING LIFE ESTATETHE IOWA STATE BAR ASSOCIATIONOfficial Form No. 179Recorder's Cover SheetPreparer Information: (Name, address and phone number)Taxpayer Information: (Name and complete address)Return Document To: (Name and complete address)Grantors:Grantees:Legal description: See Page 2Document or instrument number of previously recorded documents:©The Iowa State Bar Association 2005IOWADOCS®

THE IOWA STATE BAR ASSOCIATIONOfficial Form No.179Il FOR THE LEGAL EFFECT OF THE USE OFI THIS FORM, CONSULT YOUR LAWYERAFFIDAVIT OF DEATHTERMINATING LIFE ESTATESTATE OF IOWA, COUNTY OF _______________ , ss:I,-----------------'' being first duly sworn on oath, depose and state as follows:1. That I was well and personally acquainted with and that the said'"'"""-,.--.,---=-:-:---;-;--:--;-==-::===;:-,c=- died on or about the =:--.,.,-:---:;-,--:;-----;--:--:-;-==-----'thereby terminating the LIFE ESTATE held by such decedent in the following described real estate:2. Title to the above real estate has passed to:----------------by virtue of:3. I hereby request that the auditor enter this information on the transfer books.SUBSCRIBED AND SWORN TO before me this---------------------Notary Public in and for the State of Iowa©The Iowa State Bar Association 2005IOWADOCS®AFFIDAVIT OF DEATH TERMINATING LIFE ESTATERevised June 2005

104. Who is the Seller When There is a Life Estate?FACTS: I am representing Buyer with the following scenario:1959 Warranty Deed to Husband and Wife, as joint tenants with right ofsurvivorship.1989 Warranty Deed from Husband and Wife to Wife- exempt from transfer tax.1997- Warranty Deed from Wife, as a single person, to Daughter and Son, astenants in common. Reciting "This conveyance is subject to Grantor's right toretain all benefits and possessory rights to the real estate for and during hernatural life. It is the Grantor's intent to retain a life estate in this real estate."Real estate is now for sale. Offer is signed by just Mom (fka Wife) by Son asAttorney in Fact. Neither Daughter nor Son's names are on the Offer, but theyare on the tax rolls.Sellers' attorney has sent me the transfer documents to review in advance. Theyhave sent:• The Warranty Deed is from Mom, as a single person, Son and Wife andDaughter and Husband, to my client. (no issues).• Declaration of Value listing Seller as Mom by Son as Attorney in Fact withMom's social security number. (no mention of Daughter or Son in their owncapacity).Groundwater Hazard Statement listing Seller as Mom by Son as Attorneyin Fact (no mention of Daughter or Son in their own capacity).• Certification for No Information Reporting on the Sale of a PrincipalResidence in Mom's name and social security number alone, indicating no1 099-S is required.I think I need to prepare a 1099 for half of the purchase price in each Daughterand Son's names. I think the 1997 Deed created a gift to Daughter and Son, thatmay or may not have been completed until the sale of this property. However, ifthe gift was not completed until Mom gives up her life estate, at a minimum thegift will be completed the second before title transfers to my client.QUESTION: Am I correct that a 1099 needs to be prepared for Son andDaughter or is this sale exempt in Mom?216

RESPONSE(S): You are quite right. Sellers = both life tenant and theremaindermen. Yes, you should issue a 1099 for purchase of theremaindermen's interest. Percentage split between life tenant and remaindermenis fixed by Iowa Department of Revenue CSO-D mortality table. Seewww.state.ia.us/tax****Actually the Internal Revenue Service has its own formula for determining thesplit between life tenant and remaindermen in this situation using Table S andthe IRS Section 7520 interest rates. The 2009 tax school workbook hasexamples in Chapter 5, pages 177-179.* * * *Do you have enough facts to issue a 1 099? How are Sellers splitting theproceeds? If it is different than the IRS presumptions, what controls, the actualparties treatment or the tax presumption? If there is a difference between theactual treatment and the IRS presumed allocations will that amount be a gift? Didthe Sellers already treat the 1997 transaction as a completed gift for taxpurposes? Would the Sellers be willing to sign a tax affidavit reciting sufficientfacts to enable you to report how much of the gross sales price is allocated toeach of the Sellers? If so, I recommend attaching that affidavit to any 1 099sissued.217

MISCELLANEOUS

106. Bank of America.FACTS: I need a contact person at Bank of America who can sign an affidavitsaying that Bank of America is successor by merger to Countrywide Bank, FSB.QUESTION: Can anyone provide contact information for Bank of America?RESPONSE(S): A useful genealogical search engine on banks can be found athttp://www.ffiec.gov/nicoubweb/nicweb/SearchForm.aspx. If it shows, as iscommon knowledge, that Bank of America took over Countrywide, I suspect thata printout in your files is all you need to support a recital of identity, "[Bank ofAmerica or subsidiary], fka Countrywide Bank, FSB" in your conveyance.221

I107. Checking Tax Debts for FHA Insurance.FACTS: I received this upcoming lender requirement information and amsharing it with the group.QUESTION:RESPONSE(S):I[Attachment.]222

www.Collectlowa.com WE COVER IOWAIt is our purpose to provide our clients with the best legal services available, to excel in our practice areas,to "do what we do and do it well", for the mutual benefit of our clients and our employees.NOTICE: This communication is from a debt collector arid is an attempt to collect a debt and anyinformation obtained will be used for that purpose.In this Issue:Equifax Compliance Bulletin - October 2012FHA Insurance torequire check for taxdebtsFHA appears set torequire lenders toidentify delinquent taxdebtors beforeendorsing a loan forFHA mortgageinsurance.Coming soon: FHA insurance to require check for IRS tax debtsThe Federal Housing Administration (FHA) appears ready to institute apolicy that would require lenders to identify delinquent tax debtors beforeendorsing a loan for FHA mortgage insurance.The change is in the works after theU.S. Government AccountabilityOffice (GAO) found that many firsttime home buyers with delinquenttax debts had been granted FHAinsurance in violation of FHA policy.Federal policy makes delinquent taxdebtors ineligible for FHA mortgageinsurance unless they repay theirdebt or are in a valid repaymentagreement with the IRS.The report was focused only onborrowers who benefited from the2009 American Recovery andReinvestment Act. The report foundthat 6,327 borrowers who benefitedfrom the act got FHA insurancedespite having a disqualifying''All three lenders we spoke withunknowlnglyvlolotedFHApolicies on requfrementsto.---------------~investigate tox liens.''IJ.S. GovernmentAca.unlablllty OfficereportGA0-12-592federal tax debt. But GAO noted that the issues it Identified extend to allFHA-insured borrowers.As part of the study, GAO spoke with three lenders who, GAO said,together endorsed about 15 percent of all FHA mortgages for homespurchased in 2009. GAO said the lenders were confused about theirobligations under FHA policy to investigate borrower's federal tax debt."All three lenders we spoke' with unknowingly violated FHA policies onrequirements to investigate tax liens,' GAO said.GAO also noted that two of three lenders mistakenly believed they cancheck for federal tax debts by using the FHA's Credit Alert InteractiveVoice Response System (CAIVRS), a database of delinquent federaldebtors. CAIVRS covers debts from six federal agencies, but does notInclude IRS debts.•

.-:Lll:-am='·"'h-::-ow=to~reeewe=::;.:-::_ :-ln=sta;::nt:::o;I;:;R:

!108. Electronic Signatures for a Paperless System.FACTS: We receive Form 900 and 901 reports from one abstracter via email withhis electronic signature. No hard copy.In an effort to be better stewards, we are trying to make our office as paperlessas possible. We would like to know how to use an electronic signature for ourtitle opinions and many other documents, if possible. So far, we have not figuredout how to do that.QUESTION: Does anyone have any wisdom on this subject?RESPONSE(S): We just type our signature using a different font and italics onour 900s. We have been doing it for several years. Haven't had any objectionsfrom lenders or Title Guaranty.223

109. New Legislation re Tax on Real Estate Sales.FACTS: I got a call from the local MLS office asking me if I wanted to give apresentation on the "new 3.8% tax on real estate sales to go into effect January1, 2013." The caller said it would not affect many transactions. I know nothingabout this.QUESTION: Can anyone fill me in on this?RESPONSE(S):http://www.realtor.org/small_business_health_coverage.nsf/pages/health_ref_faq_med _tax?opendocument****There is evidently a provision in the new healthcare bill. If you google it there hasbeen discussion about it on the web.* * * *I would suggest they are referring to the 3.8% medicare surtax on investment(passive) income over $200,000.00 AGI for a single person and over$250,000.00 AGI for a married filing jointly couple that goes into effect onJanuary 1, 2013.* * * * *Here is an email I have sent out to my real estate agents a couple of times overthe past two years. I also have handouts for this.* * *Many of you have received the e-mail below about a 3.8% Sales Tax on RealEstate coming. There are some additional taxes coming with the Health CareReform, and will take place in 2013, but we wanted to give you the facts.There is both a 3.8% and a 0.9% tax, both of which will come into play in2013 but not everyone will be subject to these taxes.The 0.9% will affect agents that the government now considers "High Income"meaning they have income over $200,000 (if married $250,000 filing jointly, or$125,000 filing separately}. If you don't meet this threshold you will not besubject to this tax. The tax is on "Earned Income" such as wages andcommissions, and will be taxed on the earned income over and above the$200,000/$250,000 thresholds.224

IlAs for the 3.8% this is a tax on investments for those same "High Income"people ($200,000/$250,000). It is a tax on "Unearned Income": Unearnedincome is the income that an individual derives from investing his/her capital. Itincludes capital gains, rents, dividends and interest income, etc. It also comesfrom some investments in active businesses if the investor is not an activeparticipant in the business.The portion of unearned income that is subject both to income tax and the newMedicare tax is the amount of income derived from these sources, reduced byany expenses associated with earning that income. (Hence the term "net"investment income.) Thus, in the case of rents, the taxable amount would begross rents minus all expenses (including depreciation) incurred in operating therental property. So if gross rents were $100,000 with associated expenses of$40,000, net rents of $60,000 ($1 00,000 minus $40,000) would be included inAdjusted Gross Income (AGI).Also note that there continues to be the exclusion of $250,000 (individual)/$500,000 (joint) on the sale of a principal residence. Basically you would onlyhave to pay the 3.8% on your personal residence if you were considered "HighIncome", you had gain of over $250,000 (individual)/$500,000 (joint) when yousold it, and then it would only be a tax on the amount over and above thosethresholds.http://www.realtor.org/small_business_health_coverage.nsf/Pages/health_ref_faq_med_tax_earned_income?OpenDocument225

110. Notarization in France.FACTS:QUESTION: Any ideas on getting a Power of Attorney notarized in France?RESPONSE(S): Back in the day, I had a relocation transferee and it wasrequired that he and his spouse go to the U.S. Embassy/Consulate in Lyon; forthem, it was a three hour drive each way. It was a funky form of notarization perCode for out of country acknowledgements. I haven't checked that section outrecently so maybe it is easier, especially if the country actually has notaries thatwould be recognized here. Then, I had to actually contact the consulate myselfbecause they weren't used to notarizing things and read everything superliterally. Maybe it is easier these days.* * * *I have not done so, but have heard American consulates have an officer who cando so. Also, American Express' larger offices. Also any American military/navalinstallation.****The answer appears in Iowa Code Section 9E.13.* * * *I think Iowa Code Section 9E.13( 1 )(c) makes this much easier now. See theattached form which follows that code section. You are welcome to use this form.* * * *U.S. Consulates charge an arm and a leg to do this. I suggest you consider alocal notary. Our statute allows it.* * * *The use of foreign notarial acts is addressed in Iowa Code Section 9E13. Youneed not go to a U.S. Embassy or consulate to have a signature notarized in aforeign country.[Attachment.]226

JURISDICTION: COUNTRY OF _____ _On this day of , 20 __ , personally appeared~--------------~--~~--~------~--~----~----tomeknowntobethe person (or proved by sufficient evidence to be said person) named in and whoexecuted the foregoing instrument, and acknowledged that said individual executed thesame as said individual's voluntary act and deed.Signature of acknowledging officer: -------------------------------------(Must be person authorized by the law of the jurisdiction to perform Notarial acts.)Title of acknowledging officer:------------------------------Stamp or seal of officer:-----------------------

111. Proposed Vital Records Administrative Rules.FACTS: Our County Recorder just inquired if the Bar was aware of the finalreading on November 14, 2012 of a proposed administrative rule from the VitalRecords Department that would prohibit attaching a death certificate to anaffidavit or any recorded documents. Apparently, this is often done for titleclearing and of course the social security numbers are redacted. I suspect ourlegislative committee has considered it, but she requested I pass the informationalong.QUESTION:RESPONSE(S): Our County Recorder told me she was at a hearing on this issueand objected strenuously. She pointed out that we attorneys often will attach adeath certificate to an affidavit when we need to show the death in anotherCounty where jointly owned property was owned by the decedent Herimpression was that her objection fell on deaf ears.Can we get the Bar lobbyist to weigh in on this?* * * *Is there some reason to attach the death certificate? I don't, on an Affidavit ofSurviving Spouse or of a Surviving Joint Owner, etc. and have had no complaintsso far.If it's a property distribution affidavit, attaching a death certificate is required, butthose are not recorded.* * * *As an abstracter, I can tell you that Affidavits of Surviving Joint Tenants andAffidavits Terminating Life Estates do not have death certificates attached in thisarea of the State.* * * *Sometimes there's no surviving spouse or the surviving spouse is not able.Plus, I guess I have always been suspicious of Affidavits of Surviving Spouse.227

112. Social Security Numbers and Dates of Birth.FACTS:QUESTION: What are my restrictions as an abstracter on noting dates of birth orsocial security numbers on abstract entries and from where do these restrictionscome?And as an attorney what are my restrictions on using those aspects of identity inpreparing affidavits of identity (and again from where do these restrictionscome)?RESPONSE(S): As to the preparer, see Iowa Code Section 331.606Aprohibiting the inclusion of "personally identifiable information."228

MORTGAGES'

113. Ancient Mortgage.FACTS: I am examining an abstract that shows a Mortgage from a previousowner for $7,000.00 recorded September of 1975. No maturity date is set forth inthe Mortgage. In reviewing Title Standard 1.9 and Iowa Code Section 614.21, Iam not real clear if I am fine without a Release of record. The abstracter said heshowed it because no maturity date was shown. For Iowa Code Section 614.21to apply to make the Mortgage not an objection, does a maturity date have to beshown? I read it to say that if 20 years have passed, it does not matter unless itis shown on the recorded document that less than 1 0 years have lapsed sincematurity. From a practical standpoint, if it was a million dollar mortgage, I wouldbe more concerned, as it was $7,000.00 and 36 years have passed, I am not tooworried. However, I will get a Release if required to do so.QUESTION: Is a Release required?RESPONSE(S): You are correct. The mortgage is an "ancient mortgage" underIowa Code Section 614.21. No curative action is required. It is no longer a lien.* * * *From an abstracter's perspective, I would not have shown it after 36 years ormade any further reference to it if it was originally in the abstract. When doingthe abstracting of a mortgage which is more than 20 years old with no maturitydate stated therein, I don't include that either, only if there is a maturity date lessthan 10 years. If abstracter misses it, well, I guess that's what E & 0 is for- forabstracter for examining attorney entitled to rely upon the abstract withoutnecessity of checking the original document.229

114. Assignee Mortgage Release.FACTS: Original mortgage holder has assigned mortgage to entity that assignedmortgage to another entity. Original mortgagee has gone out of business.Second assignee has released original mortgage. Attorney who prepared thetitle opinion is requiring that original mortgage holder and both assignees releasethe original mortgage in order to provide marketable title. My understanding isthat the assignee's release is effective to release the original mortgage. Also, seeIowa Code Section 655.1. Attorney indicates that I may need to do a quiet titleaction but would like to avoid that scenario.QUESTION: Is the assignee's release is effective to release the originalmortgage?RESPONSE(S): The release to be valid has to come from the final assignee ifthe assignment is of record.* * * *I would agree. Assuming that "second assignee" here means the entity whogranted the release at issue, they're the only entity who retains an interest in themortgage and the only party who would have authority to release the mortgage.Even assuming that you could get a release from the other entities, it would haveno effect as to marketability of title. The true owner of the mortgage granted arelease and you should be covered under Iowa Code Section 655.1.230

115. Deceased Mortgagors - No Estate Pending.FACTS: I have had a run of deceased mortgagors where there is no estatepending, and wanted to get a clear understanding of whether or not appointmentof a guardian ad litem is required. The obituary shows no surviving spouse, andlists adult children and I intend to seek only an in rem judgment in my foreclosurepetition, but have heard from some people that a guardian ad litem should still beappointed. I intend to also include all heirs, devisees, and legatees of deceased,all known and unknown creditors of deceased, State of Iowa and the UnitedStates as party defendants, but am unclear on whether to request appointment ofa guardian ad litem.QUESTION: Could someone please point me to any recent case law or authoritywhich would require the appointment of a guardian ad litem?RESPONSE(S): No guardian ad litem needed where the only relief is in rem. Seethe attached case.* * * *Would this case apply to unknown defendants who may be protected by theServicemembers Civil Relief Act?* * * *I don't think so. §303 of the Servicemembers Civil Relief Act limits its relief tomortgages where the service member is currently obligated. In most cases wherethe service member is served by publication as a person interested in the estate,the service member is not the obligee, but has either received his or her interestby inheritance (subject to the mortgage) from, or is a creditor of, the non-servicemember mortgagor's estate. However, if it appears that a service member hasinherited a substantial interest in the property, I would bend over backwards andgive the service member the benefit of any doubt.[Attachment.]231

Property Seized from Hickman, Matter of. 533 N.W.2d 567 (Iowa, i 995)Page 567533 N.W.2d 567In the Matter of the PROPERTY SEIZED FROM Brenda K. IDCKMAN and Brian J. Pritchard.Brian J. Pritchard, Appellant.No. 94-979.Supreme Court oflowa.June 21, 1995.Brian J. Pritchard, Rockwell City, pro se,and Douglas E. Kurtz, Rockwell City, forappellant.Page 568Thomas J. Miller, Atty. Gen., Robert P.Ewald, Asst. Atty. Gen., Kevin Parker, CountyAtty., and John W. Criswell, Asst. County Atty.,for appellee.Considered by McGIVERIN, C.J., andHARRIS, LARSON, LAVORATO, andNEUMAN,JJ.HARRIS, Justice.Does Iowa rule of civil procedure 13require appointment of a guardian ad litem foran incarcerated owner of property that is thesubject of a statutory forfeiture proceeding? Thetrial court thought not and we agree.Brian J. Pritchard was prosecuted in twounrelated drug charges. He was sentenced on thefirst charge in I 989. His appeal on thatconviction was affirmed by the court of appeals;procedendo was issued January I I, I 991.In September I 990, while released on bailpending his appeal, Pritchard was arrested on asecond drug charge. This time he was unable topost bail and remained incarcerated in a countyjail. While he was so confined, the State seizedPritchard's automobile and $2774 of his cash.Pritchard thereafter demanded that this propertybe returned.Following Pritchard's sentence on thesecond charge, there was a forfeiture hearing.ICfast casePritchard was allowed to appear pro se. He didso and testified. I The property was orderedforfeited. 2Pritchard later challenged the forfeitureorder, arguing it was void because under Iowarule of civil procedure 13 3 he was entitled toappointment of a guardian ad litem and none hadbeen appointed. The matter is before us onPritchard's appeal from a trial court orderrejecting his challenge. Our review is on error.Iowa R.App.P. 4; In re Wagner, 482 N.W.2d160, 162 (Iowa 1992).We agree with the State's contention thatPritchard does not fall under the protection ofrule 13 because the in rem forfeiture judgmentwas not entered against him. 4 Our cases reflectthe view that the defendant in a forfeitureproceeding is the property sought to be forfeited,not its owner. State v. One Certain Conveyance,316 N.W.2d 675, 678 (Iowa 1982); see alsoFederal Land Bank of Omaha v. Jefferson, 229Iowa 1054, 1058, 295 N.W. 855, 857 (1941)(proceeding in rem is taken directly againstproperty; judgment in rem operates uponproperty itself). Rule 13, by its clear terms, islimited to judgments "against a party." Pritchardwas not a party and is thus not entitled to claimthe benefits of rule 13. The trial court wascorrect in so holding.AFFIRMED.I In In re Marriage of McGonigle, 533 N.W.2d524 (Iowa 1995), an opinion we also file today,we held that the requirements of Iowa rule ofcivil procedure 13 are satisfied for a prisonerwho appears pro se and testifies at trial.Although the State urges the same point in. 1 .

Property Seized from Hickman, Matter of, 533 N.W.2d 567 (Iowa, 1995)arguments for affirmance here, we rest ourdecision on another ground.2 Iowa Code§ 809.11 (1993) provides:1. Forfeiture is a civil proceeding. At the hearingthe burden is on the state to prove by apreponderance of the evidence that the propertyis forfeitable. However, forfeiture is notdependent upon a prosecution for, or convictionof, a criminal offense and forfeiture proceedingsare separate and distinct from any relatedcriminal action.2. Court appointed counsel, at the state'sexpense, is not available in forfeitureproceedings. The attorney general or countyattorney may represent the state in all forfeitureproceedings.3 Iowa rule of civil procedure 13 provides:No judgment without a defense shall be enteredagainst a party then a minor, or confined in apenitentiary, reformatory, or any state hospitalfor the mentally ill, or one judicially adjudgedincompetent, or whose physician certifies to thecourt that he appears to be mentally incapable ofconducting his defense. Such defense shall be byguardian ad litem; but the regular guardian orthe attorney appearing for a competent partymay defend unless the court supersedes him by aguardian ad litem appointed in the ward'sinterest.4 We need not and do not consider a number ofother contentions. We express no opinion onwhether one incarcerated in a county jail--asdistinguished from a penitentiary orreformatory--is protected under rule 13. Neitherdo we decide whether Pritchard's challenge IStime barred.fastcase -2-

116. Disclosure of Mortgage Required?FACTS: March 2009- Property owner takes out mortgage on single-familyresidential property.November 2009 - Property owner, as Seller, executes a real estate installmentcontract with Buyer at price of about $150,000.00.Note: the installment contract was written by Seller on his own without anattorney and Buyer executed without seeking legal counsel.Property owner/Seller never discloses to Buyer the existence of outstandingmortgage debt of about $75,000.00.QUESTION: Is there any law, or was there in 2009, that mandates this one-timecontract Seller to disclose the mortgage debt to the Buyer?RESPONSE(S): I see Iowa Code Section 558.70 first shows up in 2002. But itapplies to Seller being engaged in multiple contract sales. Then requiresdisclosure of the mortgage.But for the multiple contract seller application, I am not aware of disclosure ofmortgage requirements for casual or one-time contract seller.Absent a fraudulent statement by Seller, if the Buyer buys blind, Buyer is at risk.There may be language in the contract dealing with mortgage debt, and Buyer'srights if Seller is underwater on the mortgage versus the contract, or if Sellerdefaults on the mortgage.* * * *See Iowa Code Section 558. 70( 1 )(c).* * * *I agree that Iowa Code Section 558.70 applies to a seller engaged in multiplecontracts as defined in the section. As a practice matter if I am representingeither buyer or seller who are parties to a real estate contract, I require theupdating of the abstract to avoid surprises.* * * *True horror (almost) story:232

Client made an offer to buy on contract an acreage carved out of a quartersection. Realtor said "On a contract sale we don't ever bring the abstract up todate until the final payment is about to be made and the deed delivered."My answer: not with my client we don't. We examine the abstract now!Examination revealed the seller was in turn buying the quarter section oncontract AND had assigned his interest to a bank as collateral for a loan AND thebank had exercised its rights under the assignment because the seller didn'tmake the loan payments. So the Bank was now the intermediate equitable titleholder.My client could have been paying a non-titleholder for several months beforelearning that he was paying the wrong party.A word to the wise: always examine the abstract and always provide in thecontract for two monthly payments: one to the underlying mortgagee/seller andthe other for the difference to the contract seller.* * * *I was aware of disclosure required in multiple sales situations. It is too bad IowaCode Section 558.70 does not require disclosure on all single family residentialinstallment sales.As with the scenario I presented, most contract buyers don't retain legal counselbefore the contract is negotiated and/or executed.233

117. Erroneous Page Number on Mortgage Release.FACTS: Mortgage with a December 2005 due date appears at Book xxx, Page375. Release filed October 2005 recites that it releases the mortgage at Bookxxx, Page 376. Release is otherwise correct.Page 376 is a page within the mortgage but is not the first page of the mortgage.Title Standard 7.5 seems to suggest that there should be an objection since thedocument reference number is a "most important" part of the release but thissure feels like a situation where I should cite Title Standard 1.1 and move on.QUESTION: Should there be an objection made regarding this error?RESPONSE(S): Have the release re-recorded to correct the document and page.****I think it should be fixed.* * * *Correcting and rerecording the release should suffice.On a related topic, I encountered an objection to title on a similar basis, wherethe number of the instrument in the Recorder's Office was of the form "2000-0XXXX", but the release itself omitted the leading zero after the hyphen and read"2000-XXXX". Valid objection? I thought not, but didn't think worth the battle atthe time.* * * *I would be inclined to pass on this under Title Standard 1.1, particularly if theRelease includes other information, as they often do, such as the name(s) of theMortgagor(s), legal description, date of Mortgage, date of recording of theMortgage.The real issue is whether the Mortgagee, or anyone claiming under them, is likelyto assert a claim based upon the lien of the Mortgage.As a practical matter what do you do? If the lender is a local institution maybeyou can get a corrective Release, if you want to go to the trouble. If the loan wassold on the secondary market, good luck. The Mortgagee may or may not exist,likely won't care, and may have shredded the loan file.* * * *234

I agree and would be inclined to pass on the matter in this situation. Especially inlight of the amount of time that has now elapsed since the recording of therelease and likely since any payments last had been made under the debtsecured by the mortgage.****Assuming the name of the mortgagee is correct, as well as other information, Iwould pass. You can't always count on getting a corrective release or affidavitexplanatory.****I too would pass. To avoid conflict with objectors in the past, I have given myAffidavit Explanatory of Title, reviewed records, page recited is part of themortgage which actually commences with prior page and ends with pagenumber, etc. so must necessarily refer to the correct mortgage. If recorded bydocument numbers only, it needs to be a little more detailed to make theconnection.235

118. Marital Status- Deed- Too Many Husbands.FACTS: Property deeded to Jane Smith. A subsequent mortgage shows Jane ismarried to Timothy Smith but has waived homestead rights. Property laterdeeded to Joe Blow, single person, from Jane Weber and Russ Weber, husbandand wife. There is a showing that Jane had married Russ and had changed hername. No showing that Timothy ever released his interest in the property.QUESTION: Do I pass on this given that her husband at the time of transfersigned the deed?RESPONSE(S): No, unless I'm mistaken, Timothy would have to have waivedspousal share rights for title to be clear in this case. I believe you would have tohave either a separate release or his signature on the present conveyance inorder for title to be passable.I once ran into a similar situation while clerking. W, a single person, purchasedproperty and then gifted it to her son. W subsequently remarried, and shortlyafterward the son reconveyed the property to W in her name only. Divorceproceedings were initiated by H (in Illinois, no less), and while they were pendingW tried to sell the property.We represented W and warned her of the likely objection, to no avail. Buyersobjected, as predicted, and H refused to sign a release without a share of theproceeds in exchange. The deal ultimately fell through after six months ofnegotiating and pressing the Illinois attorney to move forward with the divorceproceedings, and last I heard the property still had not been sold.****Title is marketable. The spousal rights terminated upon the end of the marriage,so Timothy has no ongoing interest in the property.236

119. MERS Release by Servicer.FACTS: Mortgage given to Mortgage Electronic Registration Systems, Inc.(acting solely as nominee for Lender- University of Iowa Credit Union).Release given by Bank of America, N.A. as servicer for Mortgage ElectronicRegistration Systems, Inc.There is no showing of any servicer arrangement between Bank of America andMERS.QUESTION: Is the release sufficient?RESPONSE(S): Agency always flows from acts of the principal , not of thepurported agent. I would require some credible evidence that MERS grantedBank of America authority to release its mortgages.****I agree. However, I have found in the past that it is difficult, if not impossible, tofind someone who can give the required credible evidence, especially where agreat deal of time has elapsed. In such cases, I round up as much informationas I can find and request a "proper" release from Title Guaranty. Often, I can'tget the cancelled check, but I can get a copy of the payoff statement and HUD.Then, when Iowa Title Guaranty gives its notice and has an address for servicer,notice is sent to the servicer.237

120. Mortgage Release.FACTS: There are two Mortgage and Security Agreements from the samefinancier to the same borrower. There is a release of the second mortgage but itdoes not explicitly release the first although it does state "the indebtednessevidenced by the Note has been paid in full and there is no further indebtednessfrom the Borrower to [lender] outstanding as of the date hereof, and no furtherobligation owing from the Borrower to Lender pursuant to the Guaranty". Thefirst mortgage is not quite 20 years old, even though it has been ten years since itwas to be paid off so I don't believe Iowa Code Section 614.21 can be used.Unfortunately, it appears nothing in the second mortgage specificallyincorporates the first mortgage.QUESTION: Should this still be an objection?RESPONSE(S): I always want to see book and page in mortgage releases. Ifthe lender is still around it should be easy to get. If not, the Title GuarantyMortgage Release Program would be a fairly easy way to take care of it.****If more than ten years have passed since the due date stated in the mortgage,you are home free, regardless of whether twenty years have passed. I think youare okay.238

121. Mortgage Release Missing from First Nationwide Mortgage.FACTS: I paid off a mortgage for a client as part of a closing in 2001 to FirstNationwide Mortgage. Apparently no release has even been filed. There was aTitle Guaranty Certificate issued for the new lender.The 2001 Buyer is now trying to sell the house but my client's mortgage is stillshowing up. We have a copy of the payoff statement and the front of the check,but no back of the check and the closing agent is now deceased. Title Guarantysays they can't help without the back of the check. No one took over for theclosing agent's practice and we can't get a copy of the back of the check. FirstNationwide is now defunct.QUESTION: Any ideas for tracking down a release?RESPONSE(S): Is First Nationwide defunct, or was it purchased by anothercompany? A quick Google search indicates that there's a First Nationwide that isnow a subsidiary of Citimortgage.If it was acquired by a new bank, I would think the simplest solution would be toreach out to that bank and ask them for a release and documentation of theirpurchase of the original mortgagee.****I knew that Citimortgage is the successor. However, Citimortgage ReleaseDepartment is not being helpful and has given me an 800-fax number to send myrequest to with an anticipated 72-hour turn around on contact from their researchgroup. While I have sent them my request, I was hoping that someone else mayhave a quicker route since the particular property was to be sold this week andthis is holding us up.* * * *I represent Citimortgage in REO transactions and can't get them to release theirown old unreleased mortgages, let alone one acquired from First Nationwide.However, I would think Iowa Title Guaranty could give notice to Citimortgage assuccessor in interest under its release program. Trying to track an 11 year oldtrust check even from an attorney who is not deceased would probably provefutile. When I have asked Iowa Title Guaranty to process in the past, I requestedand received Iowa Title Guaranty email indicating that it would process therequest through its release program, and given that, most attorneys have goneahead and closed even though it would be at least 30-45 days before an IowaTitle Guaranty release could be filed. I can't speak for Iowa Title GuarantyMortgage Release program, but with a lapse of time such as this, I have never239

had a problem getting this type of thing processed through that program withfacts almost identical to yours.****I wish you good luck with obtaining a release for a mortgage that was paid off 11years ago. I have tried to obtain such releases in the past during my 18 years ofreal estate practice, only to be told the file does not exist anymore and the lenderwill not give a release of a mortgage they cannot verify they no longer hold.Is Title Guaranty unable to help without the back of the payoff check, due to thelack of satisfactory evidence of the payoff being made pursuant to Iowa CodeSection 16.92(2)(a)(2)(a)? Are you able to provide a bank statement showing thecheck cleared? That would seem to satisfy Iowa Code Section 16.92(2)(a)(2)(b).In the alternative, is there someone with knowledge of the events that couldprovide an affidavit that the Joan was paid off and the check did clear the closingaccount? That might also be enough for Title Guaranty under Iowa Code Section16.92(2)(a)(2)(b).* * * *Given this kind of situation, where no one will issue the release that is legallydue, about the only effective way to ultimately clear from the record the lien of apaid mortgage is this:Prepare and file for record an Affidavit Explanatory of Title under Iowa CodeSection 558.8. Recite the full payoff of the mortgage Joan and date of payoff.You should also attach to the affidavit the copies of documents you possess.They then become part of the record. Recite applicability to your situation ofIowa Code Section 614.21, on unenforceability of ancient mortgages. Also,recite the fact that First Nationwide failed in its duty to release as required by law.First Nationwide's legal failure should not be allowed to injure an innocent thirdparty (the 2001 buyer).By Iowa Code Section 558.8 the Affidavit immediately becomes presumptiveevidence of the facts it recites. After three years that presumption becomes"conclusive", i.e. legally unchallengeable.Drawback- this clearance method takes three years to be fully effective. But onthe basis of Title Standard 1.1 I think title would be passable. Iowa TitleGuaranty should be amenable to this use of a uniquely "Iowa" clearance method.* * * *240

I don't know whether they will give you great solace, but there are some arrowsin the Iowa Code. You may want to look at:Iowa Code Section 655.1 (release required).Iowa Code Section 655.3 (damages and attorney fees for failure to discharge).Iowa Code Section 5358.11 (5) (mortgagee to deliver release, notification to andby superintendent of banking, $50/day penalties).Perhaps a demand letter to the recalcitrant lender and a letter to thesuperintendent of banking will help.241

122. One Land Three Owners.FACTS: I have a client who owns a farm with her two siblings. They each own aone-third interest in the farm. Unbeknownst to my client and one of her siblings,the remaining sibling borrowed money from a local bank and secured it with amortgage on his one-third interest. This owner is now in financial turmoil and thebank may be seeking to foreclose. My client is fit to be tied. She thinks what thebank did is illegal and that the bank should be sued. There was no agreement ofthe siblings that no money would be borrowed or that an owner could notmortgage his or her interest.QUESTION: Has anyone ever had any experience with this kind of scenario?RESPONSE(S): He has every right to mortgage his undivided interest in thefarm. I would look at this as an opportunity. Your client will possibly have achance to purchase the other undivided one-third at far below one-third of fairmarket value of the whole. Foreclosing on this undivided one-third is not a goodoption for the bank. I am guessing they took this mortgage because they wereconcerned about the debtor's status anyway. The foreclosure action, if the bankfiles it, won't impact your client's title. If they don't protect themselves, they mayhave a new co-owner.* * * *And, they may have a partition action. Resulting in division in kind, or sale anddivision of proceeds. So client may end up involuntarily no longer being a landowner.Question for you tax experts out there. Can a 1031 exchange be shoe-hornedinto this?* * * *Yes, one tenant in common ordinarily can mortgage his interest without theknowledge or consent of his fellow co-tenants. See, e.g.: In re Heckmann'sEstate, 228 Iowa 967,291 N.W. 465 (1940); Grapes v. Grapes, 106 Iowa 316,76N.W. 796 (1898); Moy v. Moy, 89 Iowa 511, 56 N.W. 668 (1893) but see contra:In re Secondary Road Dist. No. 11, 2131owa 988,238 N.W. 66 (1931)("Ordinarily, one tenant in common cannot, by his acts alone, constitute a lienupon the joint property." No authority cited.)Note that the "opportunity" to purchase the mortgagor/co-tenant's shareapparently must be shared by both non-mortgagee co-tenants.242

Sullivan v. Mclenans, 2 Iowa 437, 65 Am. Dec. 780 (1856) ("[W]here one cotenantpurchases in an incumbrance or adverse title, he is ordinarily held to do sofor all the co-tenants".) Fleming v. Casady, 202 Iowa 1094, 211 N.W. 488 (1926)(''The disability of co-tenant in respect to his dealing with the common property isbased on the community of interest and common title which creates such arelationship of trust and confidence as would make it inequitable for one to doanything to the prejudice of the other in reference to the property. [Citations].")243

123. Prepayment Penalty on Mortgage.FACTS: I have a client who borrowed money from local bank five years ago.Farmer Mac now holds the loan. Client wants to refinance now, but theprepayment fee will be in the $200,000 range, so unless he can somehowpersuade Farmer Mac that the prepayment fee agreement isn't enforceable hecan't take advantage of today's lower interest rates. Prepayment fees areprovided for in a Loan Addendum document that, among other things, has aformula for computation of the fee and states that the governing law is "federallaw applicable to Lender and, to the extent not preempted by federal law, thelaws of the State of Iowa without regard to its conflicts of law provisions." Itfurther states that "Borrower agrees upon Lender's request to submit to thejurisdiction of the courts of Clayton County in the State of Iowa."QUESTION: Has anybody successfully attacked the enforceability of a loanprovision such as this?RESPONSE(S): I can't give you the citation, but to get you started, I believethere is a federal regulation that permits prepayment penalties with certainadjustable rate mortgages. Is this an ARM?The difficulty with attacking the "penalty" is that the borrower presumablyreceived a benefit (usually in the form of a lower interest rate) as an incentive toaccept the loan with the prepayment penalty. The lender accepts the lowerinterest in exchange for the certainty of the stream of payments. If your borrowerwas unaware of the prepayment penalty, perhaps this could be argued, but Iwould guess the loan package would have included a disclosure which reinforcedthe terms of the prepayment penalty. There would likely have also been anaddendum to the note (the loan addendum document you mentioned?) andperhaps a rider to the mortgage as well. Was the borrower aware of the penalty?* * * *I have a commercial building sold on contract. The contract is silent as to abilityto prepay. The payments are referred to as minimum monthly payments. Thecontract is for fifteen years. I assume that the seller "anticipated" a good cashflow of a regular basis at 6% contract interest and now faces a cash out with 2%or so on another investment. Buyer can find 3.25% on the market-sizeablecontract balance.* * * *It has always been my position in law practice and here at the bank that if acontract is silent on the issue, prepayment is not prohibited. I don't have a cite,but have never been challenged on the issue.244

****I believe there is an 8 1 h Circuit case that prohibits prepayment unless the contractspecifically provides otherwise.* * * *I think that's been the law for quite some time.* * * *I fear that your client cannot offer an argument that the prepayment agreementisn't enforceable.(Unless---can he raise some kind of equitable defense of unconscionability,duress by the bankers to make him enter the prepayment agreement--orsomething like that?)A handful of Iowa appellate cases discusses mortgage prepayment, but no lawformally sets a general rule either allowing or disallowing.The most relevant line in a Supreme Court case seems to assume that mortgageloans may not be prepaid without consent of the mortgagee. See:Newberry v. Barth, Inc., 252 N.W.2d 711 (Iowa 1977):"There was no proof the mortgagees would permit that, or accept prepayment ofthe mortgage."A federal statute seems to allow prepayment of some mortgage loans from creditunions. See:10 Am. Jur. 2d Banks and Financial Institutions§ 566 (2012):"A borrower may repay his or her loan, prior to maturity in whole or in part on anybusiness day without penalty, except that on a first or second mortgage loan afederal credit union may require that any partial prepayments be made on thedate monthly installments are due, and be in the amount of that part of one ormore monthly installments which would be applicable to principai.[FN6]FN6: 12 U.S.C.A. § 1757(5)(A)(viii).But likely "Farmer Mac" is not a credit union. (More like FmHA?) Some morehorn book law directly allows prepayment limits:11 Am. Jur. 2d Banks and Financial Institutions § 994 (2012):"Payment of additional moneys in consideration for the right to prepay a loan ispermitted, because the moneys are deemed part of a subsequent contractbetween the parties.[FN1] The exaction of a prepayment charge on receiving245

payment of a mortgage loan prior to its maturity does not violate a statute limitingthe rate of interest which may be taken by a bank, at least so long as allpayments on account of interest and the prepayment charge do not aggregate asum greater than the aggregate of interest that could lawfully have been earnedhad the debt continued to the earliest maturity date.[FN2] The term "premium" asused in the law of building and loan associations means a bonus or charge paidby one to whom a loan is made for the privilege of receiving such loan inpreference to other applicants.[FN3] The premium may be in the form of a lumpsum which is deducted from the loan and retained by the association,[FN4] or itmay be paid in such proportionate installments and at such times during theexistence of the shares of stock borrowed upon as may be designated by thebylaws of the association.[FN5]"34 Am. Jur. 2d Federal Taxation '1!18573 (2012):"Many loan agreements, including mortgages, provide that the borrower mustpay a "penalty" for paying off the loan before it's due-i.e., a "prepayment"penalty. This "penalty" is deductible interest.[FN38]"55 Am. Jur. 2d Mortgages§ 306 (2012):"At common law, in the absence of a statute or any waiver by a mortgagee of hisor her right to insist on strict compliance with the contract, the mortgagor may notexercise his or her right of redemption before maturity.[FN5]1ndeed, a mortgagorgenerally has no right to pay off his or her obligation prior to its stated maturitydate in the absence of a prepayment clause in the mortgage[FN6] or contrarystatutory authority.[FN7] Simply stated, a mortgagee is under no obligation toaccept payments toward the principal before the dates stipulated in the mortgagefor such payments.[FN8] However, this is not a universal view, with some courtsfinding a rebuttable presumption that silence as to prepayment in the mortgageinstruments means prepayment of the debt is allowed.[FN9]1f the mortgagecontains a prepayment clause, it will determine when, and under what conditions,the mortgagor may pay the mortgage prior to its maturity.[FN1 0] Also, apermissible prepayment generally will not excuse future required periodicpayments.[FN11] A mortgage clause giving the mortgagor the right to have partsof the mortgaged premises released from the lien of the mortgage upon paymentof proportionate parts of the mortgage debt may be so worded as to entitle themortgagor to pay the entire balance of the mortgage debt plus interest to the dateof payment prior to the maturity date of the mortgage, even though the mortgagedoes not contain a prepayment clause.[FN12]"Observation: Pursuant to the Alternative Mortgage Transaction Parity Act[FN13]and the regulations to which it explicitly refers, when a non-federally charteredhousing creditor elects to be governed by federal law and complies with that law,it may charge a contractually specified prepayment fee as authorized by federallaw, despite the fact that the state law provides otherwise.[FN14] "246

FN6: Great Plains Real Estate Development, L.L.C. v. Union Central Life Ins.Co., 536 F.3d 939 (8th Cir. 2008) (stating that under Iowa law, the "perfect tenderin time rule" holds that a borrower has no right to pay off a mortgage before thematurity date, absent a loan agreement provision allowing prepayment) ...55 Am. Jur. 2d Mortgages § 307 (2012):"Generally, a prepayment clause in the mortgage contract may validly provide forpenalty for prepayment.[FN1]1ndeed, long-term real-estate mortgagessometimes contain stipulations that payment of the principal debt may be madeprior to its due date, but that in order to entitle the mortgagor to make suchprepayment, he or she must pay the mortgagee an additional sum, whichadditional payment is variously spoken of as a "bonus," a "penalty," an"additional premium," or the like.[FN2] However, a mortgagee is not entitled tothe specified prepayment penalty where the mortgaged property is taken byeminent domain[FN3] or when the mortgage is paid off by an insurance companyas a result of a fire destroying the premises.[FN4] Moreover, there may bestatutory restrictions on imposing the prepayment penalty.[FN5] "Prepaymentpenalty clauses may also be enforced upon default and acceleration of the debt,according to their terms. Notes and deeds of trust may provide, for example, thatlienholders have the right to retain a prepayment penalty even where theborrowers have not exercised their right of prepayment.[FN6] However, wherethe exercise of a prepayment option by the mortgagor is required for there to bea prepayment penalty, acceleration by the mortgagee may not be viewed as theexercise of the prepayment option,[FN7] as acceleration by the mortgageeplaces the mortgagor under duress in making the prepayment.[FN8] Where thedefault by a mortgagor in a commercial setting is intentional, and the notecontains both a provision for acceleration of payments and a provision forprepayment penalties, the mortgagee's exercise of an option to acceleratepayments owing under the mortgage note following the mortgagor's intentionaldefault does not preclude the mortgagee from collecting a prepayment penaltyfee, at least where the mortgagor purposefully tries to avoid the prepaymentpenalty.[FN9] On the other hand, a subsequent repayment of the entire debt aftera default or acceleration may not be enough to prevent prepayment penalties,even where the holder cancels a notice of default and sale proceeding under anacceleration clause, and the debtor subsequently pays off the whole debt,[FN1 0]or where another creditor of the mortgagor arranges for payment of arrears, themortgage returns to good standing, and the mortgage is paid off in advance as aresult of the sale of property forced by the other creditor.[FN11]"Observation: The Alternative Mortgage Transactions Parity Act (AMTPA) did notpreempt all state law claims pertaining to alternative mortgage transactions, andthus, the fact that the Act might preempt a mortgagor's claims against themortgagee, in which the mortgagor alleged that the mortgage's prepaymentpenalty assessment provisions violated state consumer and unfair business247

practices laws, is insufficient to confer exclusive federal jurisdiction over theclaims, and the district court would lack jurisdiction over the claims, which wereremoved from the state court.[FN12]The other member doubtless refers to this case:Great Plains Real Estate Development. L.L.C. v. Union Central Life Ins. Co., 536F.3d 939 (8th Cir. 2008) (stating that under Iowa law, the "perfect tender in timerule" holds that a borrower has no right to pay off a mortgage before the maturitydate, absent a loan agreement provision allowing prepayment).248

124. Pre-recorded Mortgage.FACTS: I have been informed that after a recent closing the mortgage wasrecorded prior to the recording of the deed.Specifically, both documents were signed on December 28, 2012 and bothdocuments were recorded on January 2, 2013, however, the recordinginformation reflects that the mortgage was recorded earlier in the day than thedeed. Also, I have now been told that the mortgage was executed prior to theexecution and delivery of the deed.Title Standard 7.2 does not seem to address this situation directly.QUESTION: Any thoughts as to whether the mortgage is valid as to third parties?RESPONSE(S): I would refile the mortgage as soon as possible.249

125. Spousal Signature on Mortgage.FACTS: John and Rob, married but not to each other, are buying investmentproperty as joint tenants with full rights of survivorship and not as tenants incommon. I believe spousal signatures on the mortgage aren't required by IowaCode Section 561.13 because it isn't anyone's homestead. I don't think there isany other spousal interest because they are taking as joint tenants. The bankwants everyone's signature and John's wife is hesitant. For whatever reasonJohn and Rob don't want to form an entity in which to hold title.QUESTION: Are spousal signatures required?RESPONSE(S): If you can assuage the unease of the wife, here's a way to do it:Tell her that the Iowa Supreme Court lets her off."The presence of a spouse's name as grantor in a conveyance of property ownedsolely by the other spouse is presumed to merely release inchoate rights ofdower and nothing more. [Citations.]"Matter of Estate of Wulf, 471 N.W. 2"d 850 (1991 ).If the wife won't cooperate then find a friendly local banker who will loan to thejoint tenants without their wives signing the mortgage.250

126. Substitution of Liability on Note/Mortgage.FACTS: X mortgages property to B1. X, Y and B2 later sign and record anAssumption Agreement whereby Y assumes X's obligation under the loan.There is no assignment of mortgage/interest/anything in the chain of title from B 1to B2 and the companies are unrelated.QUESTION: Is title clear? If not, how would you cure it? What if the mortgage isbeing foreclosed? Would you name X and Y both as defendants?RESPONSE(S): Should I assume that you represent a potential buyer or currenttitleholder subject to this tangled title chain? Or do you represent a foreclosingmortgagee?Yes, I would go ahead and name both X and Y as defendants in a quiet titleaction. Y probably has no title or interest in the property. But if one files a quiettitle then one may as well "clear the decks" and sue everyone, all in one action,who might have any sliver of interest in the property.X started as property owner. X apparently still is owner, as you mention noconveyance from X toY to accompany the 'assumption of obligation'.Presumably the 'obligation' is the repayment of contracted mortgageindebtedness. So, Y now bears X's obligation to pay the mortgage. Why? As adelegation of duties, did the obligation somehow relieve X of the obligation? Orjust add Y as a co-debtor? Is Y a family member or close relation of X?B1 and B2, you say, "are unrelated". I take you to mean that B2 is not asuccessor corporation to B1, in terms of either shareholder identity or assetconveyance/ownership.Corporations purchase assets from other corporations all the time, withoutcreating long-term relations. See: Lumley v. Advanced Data-Comm, Inc., 773N.W. 562 (Table) (Iowa App. 2009). Interstate Elec. Supply Co. v. Blanchard,682 N.W. 2d 81 (Table) (Iowa App. 2004). Ordinarily the obligations of the firstcorporation will not fall to the second corporation.So far I see nothing that removes B1 as a mortgagee. However, 82 seems toconsider itself to hold some kind of interest in X's mortgage.If you can come up with some kind of evidence that 82 acquired at least themortgage contract asset from B1, then 82 ought to record the assignment ofmortgage lien to it from B1.****251

In this case I represent a foreclosing mortgagee but I am trying to decide how toclear title through the foreclosure without creating any title problems at the end.The obligation is the payment of the contractual mortgage debt. B2 is not relatedto B1 but has executed an "Agreement for Substitution of Liability" along with B1,X and Y. There actually was a conveyance of the property via warranty deedfrom X toY. The Agreement for Substitution of Liability is then re-recorded furthermaking title messier.A further twist on the matter is there is an assignment that would purport to, atleast on its face, cure the gap indexed in the Recorder's Office under X's namebut it does not show up in a search of the chain of title on the property, nor on areport of liens. There is also a notation written on the mortgage referring to themissing assignment of mortgage so it leads me to think something else is goingon. Would you still name X then?****I'd still name X in the foreclosure. Upon both of your posts I conclude that Yassumed X's liability, but X never transferred his rights in the land.Whose "liability" is being substituted? And for what? At first I thought X and Ywere doing this Agreement for Substitution of Liability. But now you say that B1,the original mortgagee, joined in. So, has B1 by its joining the Agreement forSubstitution of Liability thereby substituted its own duty to release a mortgagelien upon payment? Effectively delegating that duty to B2? I guess that thelanguage of the Agreement for Substitution of Liability ought to give some idea ofthe obligation. Under law, obligation to release should remain with whichever Bholds the right to receive payments.So, an assignment of the mortgage from B1 to B2 does exist. And was filed forrecord "under X's name". Based on old but good case law an assignment mustbe filed to give B2 the rights of B1 in place of B1. So I think B2 now has rights ofrecord.Was the Agreement for Substitution of Liability also filed for record, givingindication that the assignment was intended by B1? Anything in the Agreementfor Substitution of Liability indicating that X conveyed the property to Y?252

127. Who Releases the Mortgage?FACTS: Liberty Bank FSB is the mortgagee. Liberty Bank has sold its assets toanother bank. No assignment of this mortgage is shown of record.The Title Guaranty Form 900 shows that MERS is acting as nominee for thebank. The report also states that MERS is the mortgagee under the securityagreement.QUESTION: Does an assignment of the mortgage from Liberty Bank to anotherbank need to be shown of record or can MERS release the mortgage?RESPONSE(S): If MERS is shown to be the mortgagee and nominee for thebank, MERS can release the mortgage. Title Standard 7.6. See the lastcomment.253

. PROBATE

128. Assisted Living Refunds.FACTS: Although this really relates to probate or transfers at death, I am surethat real estate attorneys are knowledgeable as well.My clients have entered into a contract with an assisted living facility. Under thegeneral terms of the contract, they may be entitled to a refund if they die orvacate the place within a certain time period. The contract states that upon thedeath of the last of them, the refund will be paid to the estate of the last survivor.I have requested that the facility look at using a beneficiary designation forminstead of providing for payment to the estate. I am thinking that this asset, whichmay or may not be significant in dollar amount, could trigger a probateproceeding where the clients have worked diligently to plan their estate otherwisewith the use of Trusts and beneficiary designations and pay on death forms ofownership.The facility has asked if there are any prohibitions against this and if they areallowed to do this under the law. I think that the party can contract how they wishand should be able to designate where the funds go, just like a bank account.QUESTION: Is there something I am missing?RESPONSE(S): I just had to open a probate for this very reason. Over the yearswhen I asked the facility if we could assign client's rights to their revocable livingtrust, I was told it was not necessary, and in fact, never had a problem. Then thefacility was sold and now the rules have changed.I am unaware of any prohibitions against using a beneficiary designation or anassignment of rights. If I were representing the facility, I might want an indemnityclause with respect to creditors' claims.* * * *Why can't you use distribution by affidavit if the refund is tess than thelimitations? See Iowa Code Section 633.356.* * * *Significantly more than $25,000.254

129. Deferred Inheritance Tax.FACTS: I am reviewing an abstract in which the spouse was given a life estateand daughter a remainder interest in land. Decedent passed away in June of1970.The abstract shows that " ... the election of beneficiaries entitled to the estate ofXXX to defer the payment of inheritance taxes until the termination of the lifeestate ... that there is unpaid inheritance tax, the payment of which is secured bya lien upon real property is part of said life estate."It appears that spouse, life tenant, passed away on June 6, 1988. No release isshown in the abstract for the inheritance tax.QUESTION: Since it has been more than ten years since life tenant's death, isthere no longer a lien on the real estate for the inheritance tax?RESPONSE(S): No.From your quotation I see that the executors elected to defer taxation of theestate property. Presumably involving the sort of life estate/remainder deferralcontemplated by Iowa Code Section 450.20. By terms of Iowa Code Section450.7 in force on June 6, 1988, the lien expired after 20 years. I doubt that theState could successfully assert its lien after 2008, on the facts you give,especially now that (after 1997) the lien lasts for only ten years.What happened here: I guess that everyone forgot about whatever tax liabilityexisted in 1970 and was then (for some unstated reason) deferred.Eighteen years after Decedent's death the deferred liability becomes payable, onDecedent's wife's death. Whatever "record" the State had either was notsearched. Or, possibly, someone forgot to renew the estate's bond, and the bondgot cashed and the tax paid that way. Iowa Code Section 450.48.Twenty years after 1988 the lien for any and all unpaid tax liability becameunenforceable. Iowa Code Section 450.7(1 )(b). [Subsection a. did not exist priorto extensive 1997 revisions to Chapter 450.]****I would have to disagree.The Department of Revenue does take the position that the unpaid tax remains alien. Iowa Code Section 450.7 from at least 1962 to the present creates anexception to the rule for the expiration of liens for deferred taxes.255

****I concur. And, I just discovered recently the other lien that has no statute oflimitations is federal judgments (contrary to federal tax liens, which have 10 yearstatute of limitation).****A plain reading of Iowa Code Section 450.7 seems to say what the writer hasconcluded. Even subsequent mortgagees fall behind the deferred lien.****I called the Iowa Department of Revenue on the issue of deferred inheritance tax.The Iowa Department of Revenue believed the tax to still be a lien even after thepassage of so much time.The good news is we were able to find that the deferred inheritance tax wasactually paid and a Clearance sent out in December of 1989 approximately ayear and a half after the life tenant's death.So for what it is worth, the Department of Revenue felt that their lien was stillvalid.256

130. Executor's Power of Sale.FACTS: My client is buying a house from an estate. The decedent's Will containsthe following language regarding the authority of the executor: "In addition to anypowers, authority, and discretion granted by law, I grant such executor oralternate executor any and all powers to perform any acts, in his or her solediscretion and without court approval, for the management and distribution of myestate, including independent administration of my estate."QUESTION: Does this language constitute a power of sale as authorized underIowa Code Section 633.383? If this is not adequate to get over that statutoryhurdle, then the estate will need to obtain a court approval for the proposed sale.RESPONSE(S):[Attachment.]257

Iowa Code 633.383Page 1 of 1633.383 WHEN POWER GIVEN IN WILL.When power to sell, mortgage, lease, pledge or exchange propertyof the estate has been given to any personal representative under theterms of any will, the statutory requirements with reference toprocedure for such purposes shall not apply.Section History: Early Form[C51, § 1297; R60, § 2329; C73, § 2353; C97, § 3295, 3296; C24,27, 31, 35, 39, § 11879--11882; C46, 50, 54, 58, 62, §633.35--633.38; C66, 71, 73, 75, 77, 79, 81, § 633.383]Previous Section 633.378 Next Section 633.384IEJ ReturnToHomehttp://coolice.legis.iowa.gov/Cool-ICE/default.asp?category=billinfo&service=IowaCode... 2/17/2013

131. Family Settlement Agreement.FACTS: I am examining an abstract in which the titleholder is an estate. Irepresent the potential purchaser. Decedent dies testate leaving no survivingspouse but ten children. Will leaves the majority of the estate to two of the tenchildren, who are also named as co-executors. The remaining eight children fileda will contest against the two principal beneficiaries/co-executors alleging undueinfluence. The eight were initially represented by Attorney A, who filed thepetition naming all eight as plaintiffs. Three of the eight were subsequentlyrepresented in the matter by Attorney B, who entered an appearance on behalf ofthe three only.A family settlement agreement was agreed to and executed by the three and thetwo co-executors. Attorney B represented the three children in this process, andthe two co-executors were represented by Attorney C. Attorney A appears tohave had no involvement in the settlement agreement, and the five children hadno other representation, nor did they sign the agreement. The court file includesan affidavit that all ten were sent notices of the hearing on the settlementagreement by ordinary mail. There is no record of any of the five appearing at thehearing or consenting to the settlement agreement, which was approved by thecourt after hearing.QUESTION: 1. Are the signatures of the five additional children of the decedentrequired on the settlement agreement, or is the mailed notice combined with theirinitial identification as plaintiffs on the challenge to the will sufficient to bind themto the terms of the settlement agreement?2.a. If the point moot since the property is being purchased from the estate,rather than the beneficiaries? The petition challenging the will has not beendismissed.2.b. Would the dismissal of the petition by Attorney A change the answer toquestion 2.a.?RESPONSE(S): 1. The other five would have to sign the settlement agreementfor it to bind them. I don't think that the agreement would be binding on the fivesimply because they were provided notice of a pending agreement concerningAttorney B's three clients.2.a. You could make an argument that it would be moot if the property passesunder a residuary clause to all ten children equally, if it's specifically bequeathedto one or more of the children, however, the pending will challenge wouldbecome an issue.258

2.b. If Attorney A dismisses the will contest petition, I'd think you should be fineprovided you have a power of sale in the will or court approval, as the case maybe.****1. For the family settlement agreement to bind any person, that person musthave signed it. Mailed notice is insufficient. See:Gustafson v. Fogleman, 551 N.W. 2d 312 (Iowa 1996) (Family settlementagreement about homestead declared invalid, because not consented to by thenspouseof signing heir who occupied the homestead.)In re Clark's Estate, 181 N.W. 2d 138 (Iowa 1970) (Probate Court lacks power toextend a family settlement agreement beyond terms agreed to by partiesconcerned.)In re Estate of Gerdes, 245 Iowa 778, 62 N.W. 2d 777 (1954) (Family settlementagreement binds only those parties who are "signatories" to it; non-signingintervenors were excluded by the court from the FSA and obtained separate trial,which procedure the Supreme Court approved.)In re Swanson's Estate, 240 Iowa 1011, 38 N.W. 2d 652 (1949) (Even when allheirs have signed a family settlement agreement to supersede a will, non-signingexecutors named in the will have a duty to propound that will, which may requirecontinued litigation.)2.a. Point is live, not moot. The will contest remains outstanding. Title cannot becleared unless and until the case is either dismissed with prejudice or a finalCourt dispositive ruling stands unappealed.Gustafson v. Fogleman, again: 'The homestead property in Augusta Gustafson'sestate passed instantly under her condicil as she provided. Delong v. Scott, 217N.W. 2d 635, 637 (Iowa 1974). The written agreement was invalid and had noeffect on the codicil. No legal reason for a court-ordered sale was established.The trial court's decision was correct in all particulars."My partner just won Court of Appeals reversal of a district court ruling approvingsale of homestead property, where buyer's attorney approved title following acourt hearing and order approving sale of property. But the thirty days had notyet run! The challenging party (our client) appealed the approval order. Court ofAppeals reversed. Big ouch for the buyers, who'd spent over $60,000 forpurchase price and post-purchase improvements.2.b. I believe that dismissal would moot the issue, either with prejudice(immediately) or without prejudice (only if and when the statute of limitations onthe contest claim has run out).259

132. Joint Tenants.FACTS: I am probating an estate. When reviewing the deeds to prepare aninventory, I came across a deed that raised some questions on the type oftenancy. The deceased originally owned this property by himself. In 2003, a quitclaim deed was prepared by a non-Iowa, non-attorney for the husband and wifefor this particular piece of property. It was a deed from themselves as husbandand wife to themselves "as joint tenants, Grantee, whether one or more". Webelieve it was done when they were refinancing with Wells Fargo. My question iswhether to show this as property held in joint tenancy with surviving spouse orwhether this is just tenants in common. This is an intestate estate and deceasedhusband had children from a previous marriage. Because this does not have themagic language of joint tenants with full rights of survivorship and not as tenantsin common, I don't know if that makes them tenants in common. I tried toresearch what "whether one or more" means with no luck.QUESTION: Is this property held in joint tenancy with surviving spouse or justtenants in common? Any thoughts or case law to argue for joint tenancy?RESPONSE(S): Iowa is an "intent" jurisdiction when it comes to the creation of ajoint tenancy. This means that if this issue is litigated, the court will admitextrinsic evidence to help discover what the parties meant when they used theodd language you quote. I have researched a lot of joint tenancy law and nevercome across the phrase "whether one or more," so I am not sure how it relates towhether a survivorship right was intended in the other spouse. This is a husbandand wife situation, and in a huge majority of such husband and wife co-ownershipcases in Iowa survivorship rights are intended, so I like the odds of thisconcurrent ownership being ruled a classic husband and wife joint tenancy, but Iwould not bet the farm on that result.* * * *"Intent" is the rule, but tenants in common is the default. Iowa Code Section557.15 says a conveyance to two or more creates a tenancy in common unless acontrary intent is expressed. Taken together, I take this to mean that the onearguing joint tenants with full rights of survivorship would carry the burden.From G. F. Madsen, Marshall's Iowa Title Opinions and Standards, SecondEdition 3.1 (A-2):1. A conveyance to "grantees jointly" created a tenancy in common.Albright v. Winey, 284 N.W. 86 (1939).2. A conveyance to "A orB, or the survivor thereof' created a joint tenancywith rights of survivorship. In re Miller's Estate, 79 N.W. 2d 315 (1956).260

3. He opines that "joint tenants" alone would create a tenants in common.4. "Joint tenants and not tenants in common" would create a joint tenantswith full rights of survivorship.Not perfect, but the Miller case seems to be the best legal support for jointtenants with full rights of survivorship (arguing your situation is closer to 2 than3). Plus, you can offer extrinsic evidence to overcome the default.****These older cases could help, but I think the best authority might be the Johnsoncase decided two years ago, dealing with intent to sever. The Iowa SupremeCourt gave a lot of attention to the context of the husband and wife ownership inascertaining whether there was an intent to sever. In the present case these layparties chose to designate their co-owner relationship as "joint tenants", so thequestion is what did they mean by that designation? If there is any evidence toshow that they were thinking in terms of survivorship, that should be enough tomeet the modern intent standard.* * * *For whatever it's worth, Fastcase refers to a recent ruling involving languagesimilar to that which you cite.The qualifying phrase "whether one or more" in reference to a Grantor orGrantee may be a characteristic of home-brewed Deeds (now widely available onthe Web).Pullum v. Pullum, 58 So. 3d 752 (Ala. 2010) involved a private grant of someacreage. Footnote 1 in that case reveals deed language containing the "whetherone or more" qualifier, albeit applied to the two Grantors rather than Grantee(s)as in your situation."No one disputes that the original deed to Wesley and the corrective deed wereintended as a gift. The language in both deeds is as follows: 'That inconsideration of Ten Dollars and other valuable consideration to the undersignedgrantor (whether one or more), in hand paid by the grantee herein, the receiptwhereof is acknowledged, we, JOHN PAUL PULLUM and wife, PEGGY KENTPULLUM, (herein referred to as grantor, whether one or more), do hereby grant,bargain, sell and convey subject to the life estate reserved herein unto WESLEYKIRE PULLUM, II (herein referred to as grantee, whether one or more), thefollowing described real estate, situated in Geneva County, Alabama .... "'261

The Pullum case doesn't determine the "joint tenancy" situation. But it stronglysuggests that "whether one or more", when used in reference to either grantor(s)or grantee(s), means all of the party(ies) referred to in the deed form, both asindividuals and collectively as a body.As far as meaning of the granting clause to husband and wife "as joint tenants"goes:The traditional "four unities" required for creation of survivorship joint tenancieswas discarded by the Iowa Supreme Court many decades ago.In re Baker's Estate, 247 Iowa 1380,78 N.W. 2d 863 (Iowa 1956), citingConlee v. Conlee, 222 Iowa 561, 269 N.W. 259 (1936) and Switzer v. Pratt, 237Iowa 788, 23 N.W.2d 837 (1946)."[T]he intention of the parties might be determined by their statements andactions ... [to determine if] sufficient to create a joint tenancy."The Iowa Court of Appeals interpreted and applied the phrase "as jointtenants" [without the survivorship qualifier].Matter of Estate of Epstein, 561 N.W. 2d 82 (Iowa App. 1996).The Epstein opinion is worth reviewing at length, as the Epstein deedlanguage parallels your situation:"[W]e look to the language in the deed to determine the tenancy."Section 557.15, Code of Iowa, provides: Tenancy in common. Conveyancesto two or more in their own right create a tenancy in common, unless a contraryintent is expressed."The deed used a short recitation, 'husband and wife as jointtenants.' Edwardargues the simple use of the words, 'as joint tenants' is insufficient to create ajoint tenancy with right of survivorship. We disagree."The expanded language, 'husband and wife as joint tenants with full rights ofsurvivorship and not as tenants in common,' would have more clearly created ajoint tenancy. The longer recitation reinforces the nature of the tenancy withreference to survivorship rights. It also specifically sets out what is not intended,a tenancy in common. An expanded recitation is preferred to overcome thepresumption of a tenancy in common and to clear up any ambiguities. Switzer v.Pratt, 237 Iowa 788, 23 N.W. 2d 837 (1946). However, when such clarity is notpresent, we look to the language used and to the intent of the parties. I d.262

"Our supreme court in the case of Albright v. Winey, 226 Iowa 222, 284N.W. 86 (1939), construed a deed containing this language," ... real estate taken by said grantees jointly, .... to have and to hold theabove described real estate to the said grantees, their assigns, heirs, anddevisees forever."The court held such language did not create a joint tenancy in the granteesin part because the words, 'to said grantees, their assigns, heirs, and deviseesforever,' completely negated any intent to create a joint tenancy. In contrast, thedeed to Samuel and Rae contained no competing language to negate the jointtenancy. Any language clearly showing intent to make grantees in writteninstrument of conveyance or ownership as joint tenants is sufficient for suchpurpose. In re Miller's Estate, 248 Iowa 19,79 N.W. 2d 315 (1956)."The court in Albright also looked for any competent proof, includingextrinsic evidence, to determine the nature of the tenancy. Finding only selfservingstatements of intent from the one who would benefit from the jointtenancy, the court upheld the tenancy in common. ld. In Conlee v. Conlee, 222Iowa 561, 269 N.W. 259 (1936), extrinsic evidence, in the form of statements ofintent made by the decedent, were allowed in evidence to prove the existence ofa joint tenancy. Similarly, proof of Samuel and Rae's intentions was admittedthrough the testimony of a loan officer for Siouxland Credit Union. The loanofficer testified as to his conversations with both Samuel and Rae and theirinterest in having the condominium pass to the survivor when one of them died.While neither Samuel nor Rae sought legal advice on the way the deed shouldbe drafted, the evidence provided by the language of the deed and thecircumstances leading up to the conveyance does support the creation of a jointtenancy."Evidence to the contrary is noted from the provision in Rae's will, executedone-and-a-half years after the credit union gave the deed to Samuel and Rae.Rae's will gave Samuel a life estate in her interest in the real estate. When aconflict is apparent in a deed and a will, the document of conveyance controls.Conlee v. Conlee, 222 Iowa 561, 269 N.W. 259 (1936). The death of a jointtenant terminates his interest and leaves no part of the joint tenancy propertysubject to his will. ld. Attempted testamentary disposition does not defeat norsever joint tenancy. Hyland v. Standiford, 253 Iowa 294, 111 N.W. 2d 260 (1961 ).We therefore find the trial court was correct in ruling the title to the condominiumwas held in joint tenancy, passed immediately to Samuel as the surviving jointtenant, and was not to be included as an asset of Rae's estate."If, by their actions, you can show that Husband and Wife intended to create asurvivorship in their "joint tenancy", then I think the survivorship right will be foundto exist.263

I strongly suspect that most married couples "assume" that they hold "their"property as "theirs".(A fundamental unity of ownership, in the nature of the old common law tenancyby the entirety, which Iowa really ought to recognize. Why I strongly support theinitiative, launched in the Legislature a few years ago to no effect, to make "jointtenancy" the presumptive form of co-ownership at least for "joint maritalproperty". See Iowa Code Section 598.21, which does not comprehensivelydefine the concept.)Note that Iowa Code Section 557.15 speaks of conveyances to "two or more **intheir own right** create a tenancy in common ... "In this situation I would consider arguing that the grant to Husband and Wife "asjoint tenants , Grantee, whether one or more" plainly indicates a conveyance to"one or more" persons as a fundamental unity ("Grantee", singular); not "in their[individual grantees'] own right". So taken on its face Iowa Code Section 557.15should not block creation of a joint tenancy with survivorship rights.264

133. Probate - Life Estate - Marketable Title.FACTS: Dad dies in 1956 and leaves life estate in farm to Mom; remainderinterest to six children. Final order confirms life estate and remainder interest.Mom sells farm (not just life estate) on contract to son; dies and executor ofMom's estate gives Court Officer Deed to son recorded in 1986. The final orderin Mom's estate confirms delivery of Court Officer Deed to son. All of the childrenare shown as heirs in the estate.There is no showing in the abstract of any deeds from the other five children totheir brother.QUESTION: Does the son have marketable title in the farm on the basis of IowaCode Section 614.17A, barring claims after 1992?RESPONSE(S): Assuming the other siblings received notice of Mom's estate,and of the final report and order approving same, then not only under Iowa CodeSection 614.17A but also under Iowa Code Section 633.36 does the estatetransfer become final.In re Jarvis' Estate, 185 N.W. 2d 753 (Iowa 1971):"Our careful review of the record reveals John participated fully in theproceedings leading to the appointment of the special administrator. He knew thematters to be handled included determination of what amount, if any, Fred owedthe estate. John made oral statements and furnished documents to assist in theinvestigation. At no time did he raise any objection to the actions taken. Whenthe special administrator's report was filed John made no objection and took noexceptions. He took no action within the ten day period set by the court for furtheraction by the special administrator and thus permitted his final discharge. Therelief sought in John's application of November 19, 1968 was barred under thedoctrine of res judicata as the facts had been fully and fairly investigated anddecided. Hutchinson v. Maiwurm, 162 N.W. 2d 408,410 (Iowa ); King City,etc. v. Southern Surety Co., 212 Iowa 1230, 1240, 238 N.W. 93, 98; Jordan v.Stuart Creamery. Inc., 258 Iowa 1, 5, 137 N.W. 2d 259, 261, and citations."II. Also John's attempt to further litigate the issues decided by the court basedon the special administrator's report is barred under Code section 633.36, whichprovides: 'Orders in probate. All orders and decrees of the court sitting in probateare final decrees as to the parties having notice and those who have appearedwithout notice."'265

134. Trust and Iowa Inheritance Tax.FACTS: Husband and Wife own property as tenants in common. Husband andWife convey property to Husband and Wife as Trustees of X Family RevocableTrust. Husband dies survived by Wife, spouse. Now the Trust is selling to Y.QUESTION: What showing is required regarding Iowa inheritance tax? As anexaminer, I have no knowledge of the Trust provisions. I should be able toanswer this by reference to Title Standard 4.7, but I'm stuck.RESPONSE(S): Wife should record Affidavit that no inheritance tax is due. It is inIowa Docs.266

135. Typographical Error in Legal Description in Inventory and Final Report.FACTS: I am getting an abstract ready to go to the abstracter on a farm I amselling. I have noticed that when it was last continued, a report and inventory anda final report were included in the abstract. They are shown because atypographical error resulted in the description being of my client's farm, not thedecedent's. There is no connection whatsoever. The decedent owned the SW Y.and theW% of the NE Y. of 17-86-22. My client's farm is in 16-86-22. Thecorrect legal description does appear in the Certificate of Change of Title. Mythought is that an affidavit should be adequate as I don't see the error in theInventory or the Final Report tainting my client's title. The estate was probated in2004 in Dallas County and certain items were transcribed to Hardin County.QUESTION: Does anyone think that the estate would have to be re-opened andthe Inventory and Final Report be amended?RESPONSE(S): I would accept an affidavit explanatory of title in thesecircumstances.267

136. When is a Sale a Sale for Power of Sale Purposes?FACTS: D, a widow, owns real estate (her homestead) and dies testate. The Willstates that all the assets go to the spouse, if he survives, if not to their fivechildren in equal shares. The Will granted the Executor power of sale.The Executor did not sell the real estate, but instead directly transferred the realestate to a Family LLC whose sole members are the five children. The deedrecited that consideration for the conveyance was less than $500.00.Issue: Iowa Code Section 633.350 provides that "Except as otherwise provided inthis probate code, when a person dies, the title to the person's property, real andpersonal, passes to the person to whom it is devised by the person's last will, or,in the absence of such disposition, to the persons who succeed to the estate asprovided in this probate code, but all of the property shall be subject to thepossession of the personal representative as provided in section 633.351 and tothe control of the court for the purposes of administration, sale, or otherdisposition under the provisions of law, and such property, except homesteadand other exempt property, shall be chargeable with the payment of debts andcharges of the estate."QUESTION: 1. In this instance, is it necessary to show a transfer to the children,or is the Will the muniment of title and it is automatically in the name of thechildren?2. Is the real estate impacted by claims of judgment creditors and spouses of thedevisees, if any?3. Is it acceptable for the Executor to transfer the real estate directly to theFamily LLC in this way? Are there issues which arise from this sort of transferrelating to the claims of creditors, devisees, or their spouses?RESPONSE(S): My take is that the Will is a muniment of title transferring title tothe five children upon death subject to estate administration, the debts ofdecedent, claims filed and taxes owing in the estate. A Court Officer Deed is thatinter-courthouse document needed by the Assessor's office to change title on thebooks of the tax records. It is my opinion that any judgment creditors of the fivechildren do have liens that will attach and spouses have their inchoate rights aswith all real estate owned at any time during the marriage by the other spouse.Nothing is gained by the children having their interests transferred out of theestate directly into a Family LLC respecting spousal and judgment creditorclaims. If I were a title examiner for a buyer (or lender financing the purchase) ofthe property from the Family LLC, I would require quit claim deeds from all thechildren and their respective spouses.268

****Did the executor apply for and receive from the court a self dealing authorizationorder under Iowa Code Section 633.155? Strictly from the smell of things, Iwould be willing to bet that the answer is no. And if not, I would hope that theattorney for the Executor's malpractice premiums are paid up to date.***The Will, when admitted to probate, is the muniment of title. I agree there areproblems with creditors, spouses, etc.Although the devisees could assign their interest in the estate/specific devise toan LLC, that does not address the issue of creditors and spouses, etc.* * * *Regarding title validity in a Family LLC situation:1. The latter, but subject to power of sale and estate administrative liabilities.See: DeLong v. Scott, 217 N.W.2d 635 (Iowa 1974) 'The rule has long beenestablished in Iowa that title to a decedent's real property passes instantly todevisees under his will. .. , subject to possession by the decedent's personalrepresentative during probate proceedings for purposes of administration, sale,or other disposition under provisions of law. [Citations.]2. Yes, if the transfer to the LLC is not valid as a "sale" or otherwise legitimateestate-administration disposal. See DeLong, again:"[l]mmediate devolution of title upon death is subject to the contingency of lawfulsale by the personal representative during probate proceedings.""The rule has also long been recognized in Iowa that when power to sell hasbeen given in a will, statutory sale procedure need not be followed." [Citations,including Feasterv. Fagan, 1351owa 633, 113 N.W. 479 (1907)--codified in IowaCode Section 633.383.]Feaster contains some interesting and possibly relevant language. TheSupreme Court affirmed a lower court ruling for a plaintiff in a quiet title action.The plaintiff took title to real estate under a chain of conveyances rooted in an1865 warranty deed given by the widow of deceased Fagan. Fagan, in his will,directed his executors to sell his property. He thereby, the Court observed,conferred not only power of sale but duty to sell. Probate court appointed thewidow when the named executors failed to qualify. The widow elected to takeagainst the will--thereby receiving a life estate (only) in the property. Using awarranty deed she then conveyed the premises (apparently for269

"consideration ... the full value of the property"), which ultimately came to Feaster.Widow died in 1903. To clear his title Feaster sued Fagan's (now notional) estateand Fagan's heirs. The heirs objected on grounds that the widow 1) had nopower to convey; 2) her conveyance was not approved by the probate court; and3) all she owned was a life estate. Fagan's heirs claimed title as defendants toFeaster's suit. The Supreme Court ruled, "Where the power to sell is conferredupon the executor, approval of the conveyance by the court is not essential to itsvalidity. The executor acts under the power given by the will, and not under theauthority of the court. [Citations.)." [The second quoted sentence appearsparenthetically in the Feaster citation in DeJong.) As for determining what thewidow intended to convey, and by what power, the Court stated: "When anexecutor authorized by will to make a conveyance has also an individual interestin the property, the question of whether a conveyance by such person is anexercise of the power to convey given in the will, or the exercise only of the rightto pass such person's individual interest, is a question of intent to be determinedby consideration of the language used in the instrument and the circumstancesunder which it was executed and accepted. [Citations.] .. .The language of theinstrument plainly indicates an intention to exercise the power given to theexecutor by the will, for not otherwise could the grantor convey good title. Theconsideration, as appears from the evidence, was the full value of the property,and the grantor described herself by words affixed to her name as "executor ofthe estate of Lawrence Fagan."Since the executor in Mr. Bekel's case apparently didn't receive "full value ofthe property" in return for its conveyance, the Feaster language loses a bit ofapplicability, but remains relevant.3. Yes, PROVIDED THAT: 1) all the devisees would sign a family settlementagreement; and 2) enter the family settlement agreement in the estate records toshow that they all wished to take their shares in kind (under Iowa Code Section633.472) by distribution to the LLC, not as individual tenants in common. Wouldbe much more convincing if the LLC was in existence before the death, but that'sprobably not required. I formed and represented an LLC in a similar situation,where the family farm went into an LLC owned by the seven devisees under awill. My office didn't handle the estate. The devisees, all non-farmers, aftermom's death decided to form an LLC to rent and manage the land. They hiredme to form the LLC. I had all the devisees sign deeds conveying their fractionalundivided shares to the LLC. Had we handled the estate and they'd wanted toform the LLC, I'd have had the devisees all sign a family settlement agreementspecifying their wishes for the executor to dispose of the farm. Would also havehad them all sign their acceptance of the final report specifying the settleddisposition.270

Devisees' creditors issue. I am not sure that liens in favor of devisees' judgmentcreditors can be avoided by passing devisees' interests through the estate to aFamily LLC when no actual sale for value took place. Did I represent a creditor,I'd cite Iowa Code Section 633.350 and DeLong as granting the devisee debtor a(lienable!) interest immediately upon death of the decedent. But given the broadFeaster language about "conveyances" by executors under power of sale, for ajudgment debtor devisee I'd argue that the conveyance was valid under section633.350 and DeLong as "other disposition under provisions of law". See, e.g.,Gustafson v. Fogleman, 551 N.W. 2d 312 (Iowa 1996)("family settlementagreements are favored in law"); Douglas v. Albrecht, 130 Iowa 132 ( 1906)(if it isshown that all the heirs have united in making a settlement and distribution ofproperty of an estate with no creditors, then that agreement will not be annulledor ignored by the court).271

137. Will Without Present Administration.FACTS: Husband and Wife own property as tenants in common. Wife dies. Willadmitted to probate without administration in July, 1994. No notice published.Inventory incorrectly lists property as jointly owned. CIT filed. Report filed recitingdeath, heirs and beneficiaries, etc. Nothing more.QUESTION: Is this an effective transfer of title to Husband?RESPONSE(S): "The intent of §633.331 was to abrogate the holding of (Hausenv. Dahlquist, 5 NW 2d 321 (1942)) and to establish title to testator's property inhis heirs unless testator's will was probated within five years of his death." Kurtzon Iowa Estates, §4.1.While a Will is a Muniment of Title and title passes to the devisee at death of thetestator, I am not convinced that Wife's Will was properly admitted to probatesuch that it stands as a Muniment of Title within the five year limitation of IowaCode Section 633.331 if the Notice of Proof of Will Without Administrationrequired under Iowa Code Section 633.305 was not published. See TitleStandards 9.5 and 9.16(A)(3). Though unlikely, an unknown heir with standing toseek to set aside the Will may not have had proper notice. I don't think the fiveyear limitation on claims under Iowa Code Section 633.413 saves Wife's Will.Perhaps the §633.305 Notice was published (and mailed to spouse, known heirs,etc.) but the Executor simply failed to file the proof?The counter-argument to an intestate result is that Iowa Code Section 633.331 istolled upon filing the Petition for Probate Without Present Administration, notupon publication of the Notice. Neither Iowa Code Section 633.305 nor Section633.331 address timeliness of the Notice. Can Notice still be published? Also,there are cases under Iowa Code Section 633.304 that address actual notice.Maybe some argument can be made that after 17 plus years, a laches argumentcan be made or any unknown heirs would be held to be on actual or constructivenotice.Hopefully, Husband takes under Iowa Code Section 633.211 intestacy and thesame result can be reached without having to decide your sticky Notice issue.272

.PROPERTYTAX APPEAL

138. Tax Reduction Services.FACTS: Commercial client purchased a building that was on property tax appealboard review. Prior owner had hired an appeal company to fight the assessment.Transaction completed 12 months ago.Appeal company calls new owner this week and indicates they achieved areduction in the assessed value, which will show as a credit on taxes due andpayable October 1 and April 1. Appeal company indicates prior owner doesn'tclaim any of the benefit, but won't pay the appeal company their prior agreedupon fee. Appeal company is asking for compensation from the new owner.New owner's first thought is tough luck for the appeal company.QUESTION: Could the appeal company assert a valid claim against the newowner? No contract, no assignment of contract rights at sale.RESPONSE(S): I would think appeal company has to collect from the person itcontracted with. Prior owner did get a benefit of being able to tell a proposedbuyer that the taxes on the property might be lower due to the appeal, whichtheoretically could have worked to increase the sale price of the property.* * * *I suppose the theory to collect would be unjust enrichment. The example fromlaw school would be the homeowner watching a painter paint his house, when infact the painter was supposed to paint his neighbor's house. Homeowner can'tjust sit back and take in the benefit due to unjust enrichment. Question might beknowledge of the current owner of the tax appeal.****Inquiry- on closing and real estate tax adjustment on the closing statement,what tax rate was used for the computation of the adjustment of taxes.* * * *The parties agreed to use the current valuation from the looks of the real estateoffer and acceptance. I don't think the new buyer was aware of the appeal untilpost closing.* * * *273

I am in agreement that the contract was between the prior owner and the appealcompany. However, it looks to me like the new owner has a windfall. The newowner might see it in his heart to do what's right by the appeal company, or atleast part of the fee. Could the appeal company win a legal action against thebuyer? Probably not. Did they earn their fees? Yes. Did the seller breach?Probably. Did the buyer realize the benefit of the appeal company's efforts. Yes.Could the buyer pocket the windfall? Probably.****Your client faces one of those character-building moments where a gratispayment may win more respect (from one's neighbors, and oneself) than sharppractice will ever produce. Your client got a windfall, due to the efforts ofsomeone with whom your client's not formally in privity of contract.However--the former landowner did have privity of contract with the appealcompany. Arguably the existing tax rate protest might be considered a right inthe land, that went to your client along with the land he bought. Certainly a realestate seller would not care to pursue the reduction effort for land he conveyed toanother and no longer owns!On the evidence of the closing statement, your client expected a higher tax ratethan he now bears. A lower rate is due solely to the efforts of someone hired byhis predecessor in interest. In other words, your client got an unexpectedbenefit.Applying the relevant law, I think for sake of safety let's consider the appealcompany's request as if it was an "unjust enrichment" claim, or a "contractimplied in law". The company might be able to make something stick on thosegrounds. We may analogize the appeal company's role to that of an attorney atlaw.Regarding attorneys at law, arguing tax disputes, the Iowa Supreme Court hasthis to say:Hagge v. Iowa Dept. of Revenue and Finance, 539 N.W.2d 148 (Iowa 1995):"An attorney may generally recover fees only for services rendered pursuant toan express or implied contract. In reMarriage of Meadows, 492 N.W.2d 656, 658(Iowa 1992). In Meadows, we discussed exceptions to this general rule, one ofthose being the "common fund" exception. Under this exception, a lawyer may'assess a fee against a fund which his or her services have recovered orpreserved and in which a number of people are interested.' ld. FN5. Therationale entitling counsel to a percentage of a common fund derives from theequitable powers of the courts under the doctrines of quantum meruit, seeCentral R.R. & Banking Co. v. Pettus, 113 U.S. 116, 120,5 S.Ct. 387,389,28274

L.Ed. 915 (1885), and unjust enrichment, see Trustees v. Greenough, 105 U.S.527, 536, 26 L.Ed. 1157 (1881 ).""FN5. A common fund has been found to exist in several scenarios, but notspecifically in tax refund and other cases in which parties seek payment from agovernmental treasury. See Gregory C. Sisk, A Primer on Awards of Attorney'sFees Against the Federal Government, 25 Ariz.St.L.J. 733, 785 (1993). Forexample, a common fund has been found to exist in actions to: foreclose onrailroad or other mortgages, settle the distribution of a decedent's estate, obtaindamage awards for violations of antitrust or securities laws, secure pay increasesfor private or public employees, recover damages for tort injuries such as airlinedisasters, and recover through stockholder derivative suits funds which lawfullybelong to the company. See 1 Mary F. Derfner & Arthur D. Wolf, Court AwardedAttorney Fees 1f2.02[2][b], at 2-13-2-14 (1995)."Sounds rather like the sort of tax benefit gained by the (former) owner of yourclient's property.The appeal company's services gain some further backing from dicta in:. Chariton Feed and Grain, Inc. v. Harder, 369 N.W.2d 777 (Iowa 1985):"Trial court also found Harder liable to Chariton Feed on the ground of unjustenrichment or quantum meruit, relying on section 40 of the Restatement ofRestitution:'A person who has rendered services to another or services which have inuredto the benefit of another or who has affixed chattels to the land or chattels ofanother is entitled to restitution therefor if the services were rendered or thechattels were affixed: ... (c) in the mistaken belief, of which the other knew or hadreason to know, that the services would inure to the benefit of the one givingthem or of a third person or that the other promised to pay for them.' ..."In the circumstances of this case, the above section is inapplicable. It is couchedin terms of services, not goods sold and delivered. Second, Restatement ofRestitution, *791 section 40 comment d makes clear that section 40 was designedto provide for restitution by one who accepts services from another withknowledge that the other is under a mistaken belief that the recipient, or a thirdparty, has promised compensation."In re Estate of Douglas, 801 N.W.2d 628 (Table)(lowa App. 2011 ):"The doctrines of unjust enrichment, quantum meruit, or implied contract are notcontracts, but rather a legal fiction 'that require restitution to the plaintiff ofsomething that came into the defendant's hands but belongs to the plaintiff' and'arises from consideration of justice.' Hunter v. Union State Bank, 505 N.W .2d172, 177 (Iowa 1993); see also State ex rei. Palmer v. Unisys Corp., 637 N.W.2d275

142, 154 (Iowa 2001) ('The doctrine of unjust enrichment is based on theprinciple that a party should not be permitted to be unjustly enriched at theexpense of another or receive property or benefits without paying justcompensation.'); Buchanan Cnty., 617 N.W.2d at 28 (The antiquated termquantum meruit literally means 'as much as he deserved' ... .')."Simon v. Avenarius, 773 N.W.2d 562 (Table)(lowa App. 2009):"The theory of quantum meruit, when it is used to refer to a quasi-contractualtheory of recovery, is premised on the idea that it is unfair to allow a person tobenefit from another's services when the other expected compensation. StatePublic Defender v. Iowa Dist. Court, 731 N.W.2d 680, 684 (Iowa 2007)."Iowa Waste Systems, Inc. v. Buchanan County, 617 N.W.2d 23 (Iowa App.2000):"[W]ith the advent of modern contract law, the two terms diverged and no longerfell under the same general cause of action. Rather, quantum meruit becamegrounded in the realm of pure contract, whereas unjust enrichment was placed inthe equitable sphere of quasi contract."In modern contract law, there have traditionally been two types of contractsexpressand implied. Irons v. Community State Bank, 461 N.W.2d 849, 855 (IowaApp.1990). 'When the parties manifest their agreement by words, the contract issaid to be express.' ld. When there 'is merely a tacit promise, one that is inferredin whole or in part from expressions other than words on the part of the promisor'it is said to be implied in fact. Corbin on Contracts § 1.18, at 51. Thus, theantiquated term quantum meruit is actually used to denote a particular subclassof implied-in-fact contracts-an implied-in-fact contract to pay for servicesrendered. FN3 See Bloomgarden v. Coyer, 479 F.2d at 208. Recovery, therefore,on a claim of quantum meruit is guided by all present notions of contract law.FN4 United States ex rei. Modern Elec., Inc. v. Ideal Elec. Sec. Co., 81 F.3d 240,246 (D.C.Cir.1996); Carvel Co. v. Spencer Press. Inc., 708 A.2d 1033, 1036(Me.1998). True to its contractual roots, one may recover under a claim ofquantum meruit, or more accurately a breach of an implied-in-fact contract, forthe reasonable value of the services provided and the market value of thematerials furnished. See Paffhausen v. Balano, 708 A.2d at 271; DistinguishingQuantum Meruit, 71 Fla.B.J. at 88."Unjust enrichment on the other hand is not grounded in contract law but rather isa remedy of restitution. Irons v. Community State Bank, 461 N.W.2d at 855. As itis not grounded in pure contract law such remedies are often referred to as quasicontracts or implied-in-law contracts. ld.''276

For the sake of good conscience and to avoid contentions about unjustenrichment, I recommend that your client donate something reasonable to theappeal company for its efforts.As the Biblical proverb says: "Cast your bread upon the water, and it will comeback to you." Put another way: "What goes around comes around."* * * *We won't be able to determine the outcome of our various theories, as like mostthings, buyer and tax reduction company met somewhere in the middle andmade it go away.277

RESTRICTIVECOVENANTS

139. Restrictive Covenants.FACTS: We represent a homeowner's association, which is set up as an Iowanonprofit corporation. There are restrictive covenants in place for all propertieswithin a subdivision, which the homeowner's association has the right to enforce.There are about a dozen lots within the association, and most of the owners donot want to incur large legal expenses or spend the time to enforce everycovenant. The restrictive covenants in place do not provide the ability of theBoard to fine members for noncompliance (the covenants are fairly vague andnot very detailed with respect to most matters, and certainly don't containprovisions on attorney fees.) Therefore, it seems any legal expenses incurred bythe association would be borne equally by all lot owners through an assessment,which the lot owners would like to avoid.QUESTION: What is the obligation of the Board of Directors of the association toensure that the restrictive covenants are enforced? If a member complains to theBoard that a neighbor is in violation of the covenants, does the Board have aduty to ensure that covenants are complied with, or can the Board ignore certainminor violations and tell the member that he/she has the right to take legal actionon his or her own?RESPONSE(S): Do the Bylaws give the Board of Directors of the association theright to adopt reasonable rules and regulations to enforce the covenants?It seems to me that it may be appropriate to encourage the Board to flesh out itsenforcement procedure (notice of violation, opportunity to cure violation,hearing/meeting in front of the Board, fines, escalating penalties, attorney fees).Give everyone notice of the new rules and record them.If the Bylaws do not permit the Board to take this action, perhaps themembership can vote to adopt rules/regulations with an enforcement procedure,and/or amend the Bylaws to give the Board this flexibility.To directly answer your question, I think the Board has discretion to ignore deminimis violations.* * * *The restrictive covenants essentially provide that the developer was to enforcethe rules until the last lot was sold, at which point the lot owners were to gettogether and form an association to enforce the covenants and to "collect anddisburse assessments." The lot owners set up a nonprofit corporation at thatpoint. The Bylaws adopted provide that the Board of Directors has the right toimpose liens for nonpayment of dues, and take all other legal action to enforce278

the assessments and ensure membership compliance with the covenants. Thismirrors the language in the restrictive covenants.If the restrictive covenants don't provide for the ability to fine lot owners or assessattorney fees against lot owners for noncompliance, can those rules be placed inthe Bylaws without the approval of 100% of the lot owners? I was under theimpression that since the restrictive covenants are considered contractual,absent a statute saying otherwise, any additions to or amendments of thosecovenants would require the approval of 100% of the lot owners. I like the idea ofamending the restrictive covenants, but we could never get this approved by100% of the lot owners. I know there was a Uniform Common Ownership InterestAct previously in the legislature that would allow for the amendment by a lowerpercentage of lot owners, but to my knowledge that act has not passed yet.* * * *I'd be interested in hearing what others have to say, but my opinion is that thelanguage you recite from the Bylaws and restrictive covenants is broad enoughto empower the Board to fine lot owners and perhaps even to assess attorneyfees.I think these actions fall within the parameters of "other legal action to enforce theassessments and ensure membership compliance with the covenants."A narrow interpretation of the language is that "legal action" means court action.But this doesn't make sense to me.I take a broader view of the language.The way I see it, the purpose of the covenants is to define certain limitations onthe use of property and to provide a mechanism for formation of an association toenforce such limitations.The purpose of the Bylaws is to set forth the general governance framework ofthe association (including establishing and defining the scope of the Board'sauthority).The purpose of any rules and regulations adopted by the Board is to specificallydescribe how the Board (in exercise of the authority granted to it in the Bylaws)will enforce the covenants.I don't think you need to amend the covenants in order to permit the Board toadopt reasonable and lawful rules and regulations to enforce the covenants.279

If the Bylaws do not clearly give the Board the authority to adopt reasonable rulesand regulations, I think you could have the members of the association vote toapprove the rules and regulations.I would suggest placing the rules and regulations of record (and the Bylaws aswell, if you haven't yet done so.)280

RIPARIAN RIGHTS

140. Creek as Boundary in Legal Description.FACTS: I am looking at a legal description which has this lovely legal descriptionas the northern border of the property:"commencing at a point on the half section line on the east boundary of theNorthwest Quarter of Section 11, in the middle of the north branch of the creekthat runs generally in a westerly direction as the channel of said creek as it nowflows in a westerly direction to the east boundary of the highway, where saidcreek goes under a bridge."The rest of the legal description is okay.Fifty years ago, the neighbor to the north hired a surveyor, and a plat of surveywas recorded. In the survey, the border of the property, created by the creek,was described as follows:"Commencing at theSE corner of the NW Y., Sec. 11, thence Northerly along theeast line of said NW Y. Sec. 11; a distance of five hundred eighty five and fifteenhundredths (585.15) feet to the point of beginning; thence S 75°02' W onethousand two hundred forty-four and four tenths (1244.4) feet, to a point on theHighway rightaway line."The surveyor described the purpose of the survey in a surveyor's affidavit. Thesurveyor's affidavit indicates that survey was undertaken so that "the position ofthe creek, bridge, highway and other points involved in the description as set outheretofore might be located in relation to the rest of the land so that a definitemetes and bounds description of the property in question could be made."The surveyor's affidavit is recorded. The abstract does not show that theproperty owners took any other action with respect to the survey, such asexchanging quit claim deeds for the property to the extent that the creek was notan exact line as described by the surveyor. Aerial photography and GIS mappingsuggests what common experience would also dictate, that the creek is not astraight line. For the most part, the creek appears to be south of the line that thesurveyor described, so the surveyor's description creating the artificial creek lineis beneficial to the parcel that I am examining.None of the subsequent deeds used the survey legal description. All havecontinued to use the creek.I am examining the abstract for the purchaser of the property.QUESTION: Does this 50 year old survey create a boundary by acquiescence,so that the neighbor to the north whose predecessor in title hired the surveyor281

and recorded the plat is bound by it? I am reluctant to rely on that theory. Or doI need to require that the seller get a quit claim deed from the neighbor to thenorth? Or is there some other alternative (affidavit of possession using the surveylegal description)?RESPONSE(S): I believe you are wise to avoid the "boundary by acquiescence"theory. I doubt it would work. See: Eggers v. Mitchem, 239 Iowa 1211, 34 N.W.2d 603 (1948). Boundary on government survey line not followed by fence due tocreek criss-crossing; Court denies plaintiff's attempt to obtain ownership of thepart on his side of the fence.Traditionally, where a parcel of land has a riparian boundary the center line of thestream marks the boundary. See:Braden v. Board of Sup'rs of Pottawattamie County, 261 Iowa 973, 157 N.W. 2d123 (1968) "Ordinarily the boundary line between lands of separate ownersbordering on a nonnavigable waterway, is the middle thread of the channel. Butwhere, as in the case at hand, such a water course flows over the land of asingular owner, he generally has title to the whole of the stream bed within theboundaries of his property. [citations.]"Kerr v. Fee, 179 Iowa 1097, 161 N.W. 545 (1917) "The land immediately beyondthat in controversy was described as north of the main channel of the stream,and under such description, in the absence of language indicating otherwise,extended to the center of the creek, such center constituting the boundary.[citations.]"Parties may survey riparian boundaries. But unless such boundaries are eitherestablished by court decree quieting title or agreed to by the parties, the ripariancharacter remains. See:Harrington v. Foster, 220 Iowa 1066,264 N.W. 51 (1935) Survey by one litigantnot recognized as boundary; accretion rights in land remain.Berrv v. Hoogendoorn, 133 Iowa 437, 108 N.W. 923 (1906) "[l]f his land isbounded on a navigable stream, he is entitled to the accretions formed in front ofhis property. [citations]"I imagine that a quit claim deed from the neighbor across the creek wouldconfirm the boundary.Or, can you get him to agree to use the 1960 survey boundary, and exchangedeeds based upon that document? If a lot of his land ended up on your southside of the creek, then he might desire to not go there.282

141. 1940 River Sketch.FACTS: As a general rule, land which accretes at or above the ordinary highwater mark on a navigable stream becomes the property of the landowner towhose shore it attaches.In the sketch attached, a navigable stream, the river, formed the boundarybetween Lot 6 and Lot 7 at the time of the original government survey. Lot 6 islocated directly north of Lot 7 and the river runs east and west dividing the lots.By 1940 the river had changed course and moved north, as a result of which thesoutherly portion of Lot 6 eroded and accreted to Lot 7.By reason of accretion, the owner of Lot 7 was entitled to the accreted land whichhad been the southerly portion of Lot 6.In 1940, the owner of Lot 6 by warranty deed conveyed Lot 1 of Lot 6, that is, theportion of Lot 6 which had accreted to Lot 7, to the owner of Lot 7.By 2010, the river returned to its original course.QUESTION: 1. Does the owner of Lot 6 reacquire Lot 1 of Lot 6 by reason ofaccretion?2. Would the answer to No. 1 be different if, at the time of the 1940 conveyance,the owners of Lot 6 and Lot 7 agreed that the rules of accretion would not applyto their property and the river would no longer form the boundary between them?RESPONSE(S): Most states follow the Federal Rule (17). However, some statecourts hold that when the land is lost by erosion, the boundary lines and propertyownership are extinguished. The remote owner then becomes a riparian ownerand future accretion attaches to the once remote land (18).Lands that re-emerge by accretion to the opposite bank of the stream do notregain their identity even though they may OCCUPY the same geographicalposition they held before the stream moved (19).(17) Allard v. Curran, 168 N.W. 671 (1918); Baumhart v. McClure, 153 N.E. 211(1926); Hunzicker v. Kleeden, 17 P. 2d 384 (1932) .(18) Wells v. Bailey. 10 A. 565 (1887); Peukerv. Canter, 63 P. 617 (1901);Yearsleyv. Gipple, 175 N.W. 641 (1919).(19) Rex Baker, 58 1.0 242 (1942); Edwin J. Keyser, 61 1.0.327 (1954); Beaverv. United States, 350 F. 2d 4 (1965).[Attachment.]283

SUBDIVISIONAND PLATTING

142. Polk County Subdivision Ordinance.FACTS: I have a case and the parcel is 10 acres. There is a house on it andthey brought in a 16-foot mobile home for their children. Now 25 years later thechild is claiming adverse possession of three of the acres which I would hope theCourt could figure out that it is not adverse but one never knows. Anotherproblem is the ability to sell the other seven acres unless it is subdivided.QUESTION: If the Court orders three acres to be split off, does it then go to PolkCounty for approval as the trailer is non-conforming to any zoning except for amobile home park? The County has stated they will not allow it if it is submittedbut in this case is it submitted or does the Court trump the County?RESPONSE{S): If the child prevails on adverse possession, that only resolves atitle issue. Request the Court to appoint a master at the parties' expense tosurvey the subdivision into plats of survey, which ordinarily may require Countyapproval. Court should prevail over any adverse County approval of plat ofsurvey.The child will then have a non-conforming use, which is the child's problem. Thechild may have to remove the trailer and replace it with a house. The Courtcannot and should not decide the zoning issue, until the child has appealed azoning official's decision to the zoning Board of Adjustment and lost, and thenappealed that adverse problem to Court. If you represent the parents that is notyour or your client's problem, unless somehow, it makes your client's remainigland a non-conforming use.* * * *The child is seeking to obtain an outcome by a court action against the parent,that the family could not have lawfully obtained by cooperation, that is thesubdivision of real estate in violation of the county zoning and subdivisionregulations.I suggest that you talk with the County planning staff about the consequences ofthe entry of such a judgment. You might also have someone from the Countyplanning staff testify regarding the impact of a voluntary parcel split on theallowed usage of each of the new parcels, and what enforcement action theCounty might have taken if the parties had voluntarily split the parcel as nowproposed by the child. Since the County is not (yet) a party to the action, theCounty might assert it is not bound by anything in the judgment, and would treatthe new parcels as having been illegally created.284

143. Subdivisions and Wells.FACTS: I am examining an abstract to Lot 2 in a subdivision that shows thefollowing:1. Subdivision proceedings that include the filing of Protective Covenants. Saidcovenants at paragraph 6 state that the subdivision shall have four wells. Well 1shall be located on Lot 2 and serve Lots 1, 2 and 3. The owners of Lots 1, 2 and3 shall share in the cost and maintenance of said well. The other wells in thesubdivision are similarly shared. Lots 1, 2 and 3 are not responsible for any costor maintenance associated with any other well.2. Final Plat states the same information about the ownership of the wells.3. An Amendment to the Protective Covenants is filed within six months of theoriginal subdivision proceedings and final plat. Said Amendment states thatparagraph 9_ is amended to read as follows: "Ownership and title to the streets,wells, and common areas of the subdivision shall be conveyed to theHomeowners Association." It goes on to detail more information about the streetsand common areas. There is no further mention of the wells. It states that allother provisions contained in the original Protective Covenants remainunchanged.The Amendment causes the Protective Covenants to be internally inconsistent,as paragraph 6 of the original Protective Covenants concerns the wells, notparagraph 5.I have spoken to the sub-divider/owner of Lot 2. He said that the Amendmentwas supposed to only deal with the streets and common areas. That the wellswere not intended to be included. No transfer of the wells has occurred, nor isany transfer intended in the future.QUESTION: Would an affidavit from the subdivider stating that the inclusion ofthe wells in the Amendment was a scrivener's error to fix this problem or do theProtective Covenants need to be amended again?RESPONSE(S): Am I correct in presuming that the Protective CovenantsAmendment was issued by the plat promulgator/subdivider at such time as hestill owned all of the relevant lots?If yes, then the subdivider could unilaterally issue his amendment. If no, then allowners of lots concerned (containing wells) should have joined in the platAmendment in order to make it valid.285

If yes, then I also think the subdivider could issue a scrivener's error affidavit todelete the reference to "wells" with the streets and common areas.He's the scrivener, and could say what he meant.If no, then the purported Amendment may have been no good anyway. See,Hollingsworth v. Hamilton, _N.W. 2d __ , 2002 WL 1429661 (Iowa App.2002).Hay v. Brown, 162 N.W. 2nd 373 (Iowa App. 2003) (Table).286

144. Time of Transfer Inspections.FACTS:QUESTION: Can an exemption from transfer of title (father to son) be overcomeby a zoning ordinance requiring subdivisions (aka parceling off the acreage fromthe farm) to have transfer of title inspections? Anyone run into this situationalready?RESPONSE(S): You may want to contact Jon Tack at the DNR WastewaterManagement Bureau. I believe the legislation was amended the year after it wasenacted in 2009 to preempt all other local ordinances.287

145. Vacating Platted Lot.FACTS: Examining an abstract for a lot in a conventionally platted subdivisionwith many lots.I should say it WAS in the platted subdivision, because the abstract shows aPartial Vacation of the Plat for just this one lot.I think I can still use the lot number and subdivision name to convey the lot eventhough the plat has been vacated as to this lot because the plat map for thesubdivision shows its location/dimensions.QUESTION: Why vacate a single lot? Why would this have been done? Whatis the effect?RESPONSE(S): Why vacate a single lot? Curious and unknowable withoutrecourse to testimony of the plat de-proprietor.What effect? Probably lack of access to utility easements, or something like that.What name? Given that all land surrounding this now-vacated little non-platisland remains platted, I suspect that the "island" may continue to be describedas "the former Lot# of Blank Subdivision."The Iowa Supreme Court on occasions (long ago) would find cases whereproprietors of lots would vacate the lots. Perhaps some of these rulings wouldassist you.Whalen v. Smith, 183 Iowa 949, 167 N.W. 646 (Iowa 1918):"It may nevertheless be said that, admitting for the purposes of the argument onlyappellant's contention that generally speaking the mere vacation of the alleywithout vacating the abutting plat of lots will not change or affect the size orproportion of such lots, and that in such case the vacated *648 alley will remain adistinct and separate tract of land, yet there is no statute or rule or principle oflaw which prohibits the owners of the abutting lots to which the alley isappurtenant from consenting to its vacation upon condition that when so vacatedthe title to the land included within the alley shall accrue in equal proportions tothe several owners of such lots. In this case the petition upon which the vacationwas ordered states in express terms, not only the desire and purpose of thepetitioners to have the alley vacated, but also that 'the title to same be dulymerged into that of said abutting lots.' Now while it may be said that thelanguage here employed was inaptly chosen, and that the title to one tract of landcannot in a legal sense be 'merged' into the title of another tract, the intent andpurpose of the petitioners that upon the vacation of the alley the ownership ofeach lot as originally platted should draw to it the ownership of a proportionate288

part of the land relieved from public easement, thus in practical effect extendingeach lot to the middle line of the alley, is clearly evident. Whether as a technicalproposition the description of the deeds of the lots so affected by the numbersgiven them in the original plat, and nothing more is or is not sufficient to give iteffect as a conveyance of the enlarged lot, it cannot be doubted that it will beheld to have such effect if it fairly appears that such was the intent of the partiesto the instrument. That such was the intent in this instance is not open toreasonable question."Town of Kenwood Park v. Leonard, 1771owa 337, 158 N.W. 655 (Iowa 1916)(argument over streets):"On the 9th day of May, 1904, the defendant herein filed in the office of therecorder of deeds the following instrument, which was duly acknowledged andrecorded:"1, J.C. Leonard, being owner of lot seven block five and lots six and seven blocktwelve Kenwood Park addition to the city of Cedar Rapids, Iowa, and also of thewest twenty-four acres of the northwest quarter of the southeast quarter ofsection ten, township eighty-three, range seven, all of said lots and twenty-fouracres being in the northwest quarter of the southeast quarter of said section,township and range, do hereby vacate, cancel and annul plat of lot seven, blockfive, and lots six and seven block twelve of said Kenwood Park addition to thecity of Cedar Rapids ... ""We think the deed was effectual in vacating that portion of the plat now incontroversy; that, in the vacation, none of the inhibitions of the statute wereviolated ... "Hunter v. City of Des Moines, 144 Iowa 541, 123 N.W. 215 (Iowa 1909):"On the 2ih day of February, 1908, the owners of the several parcels of lot 15executed a deed vacating all of the plat made by the partition decree, exceptingonly so much thereof as is occupied by the extension of Cottage Groveavenue ... "Sarvis v. Caster, 116 Iowa 707, 89 N.W. 84 (Iowa 1902):"No objection whatever appears to the vacation of portion of the plat containinglots 15 to 21, inclusive, constituting one block, nor to that of Wells street. Plaintiffis owner of the entire block, and it is immaterial to others whether it remainssubdivided ... "289

TAX SALE

146. Error on Notice of Sheriff's Levy and Sale.FACTS: I am looking at a Notice of Sheriff's Levy and Sale (after the Sheriff'sSale has occurred). The Notice contains two legal descriptions (both correct).The Notice also puts a property address after each legal description. However,the addresses are not with the correct legal descriptions. There is no mention ofan address in the decree or on the Sheriff's Deed.QUESTION: Are the mismatched addresses in the Notice a problem, and if so,what corrective action would you suggest?RESPONSE(S): Iowa Code Section 626.79 sets a 90 day limit after Sheriff'sSale for attacking a sale without proper notice. Iowa Code Section 626.77 statesthat an aggrieved person can sue the person having the sale without notice foractual damages plus $100, but the validity of the sale is not affected.* * * *The sale occurred last week. Would you consider this improper notice? I amwondering who might be aggrieved.* * * *I don't think anyone could claim to be aggrieved by the de minimis error you havedescribed.* * * *However, if you did the foreclosure, you might want to have the court sign anorder acknowledging the mistake, and setting a bar date for filing objections tothe sale on the grounds of the improper notice, and providing for service onparties in interest of the application and bar date order by ordinary mail.290

TRANSFER TAX

147. Transfer Tax.FACTS: My client did a reverse 1031 exchange (bought first), had land titled tothe Qualified Intermediary and paid the transfer tax (deed stamps).Unfortunately, the sale of the designated property did not materialize. Now theQualified Intermediary will deed to my client, the real buyer.QUESTION: Is there a transfer tax payable now since there is really noconsideration?RESPONSE(S): No. In my experience you should be able to put on the deed anexemption: no consideration. If questioned, tell the Recorder the QualifiedIntermediary held the property "in trust" or as a "straw man" for the 1031transaction or for the real buyer. And the subsequent deed to the real buyerwhen the 1031 fell through is without additional consideration.291

TRUSTS

148. Conveyance from a Revocable Trust.FACTS:QUESTION: Does a spouse have to join in the conveyance of real estate by atrustee of a revocable trust when the trustor and trustee of the revocable trust ishis or her spouse in order to relinquish marital rights?RESPONSE(S): I think the answer is no.A trustee may hold legal title to particular real or personal property. But, he's notfree to possess, use, or dispose of such trust res as he wishes, for his own or hisspouse's benefit. Trustee must use, possess and (if allowed) dispose of trust resonly for benefit of specified beneficiaries. A spousal statutory share under IowaCode Sections 633.236 et seq. burdens the trustee's property for benefit of hisspouse. only. Such property burdened by the Iowa Code can only be personalproperty, otherwise the trustee's trust duties would be violated.If a trustee is appointed by a court then the property, though in trustee'spossession, is really in legal possession of the court (custodia legis). See, e.g.:Bates v. Evans, 226 Iowa 438, 284 N.W. 385 (1939):"When petitioner was appointed receiver for the insolvent trustee, all property inhis possession, including the property belonging to the Carson Trust, was incustodia legis, that is, was in the custody of the Scott County District Court. Thepetitioner was an officer, an arm of said court, holding possession of the propertyfor the benefit of whomsoever would ultimately become entitled to it asdetermined by said district court. The jurisdiction of the Johnson County DistrictCourt over the trust property temporarily yielded to the jurisdicion of the ScottCounty District Court which had the legal custody of the property as a court ofequity and whose duty it was, under proper application to said court, to order itsreceiver to surrender the property to the party rightfully entitled thereto. TheDavenport Bank and Trust Company is a qualified and acting trustee in theCarson trust, appointed by the Johnson County District Court, and is entitled toall said trust property. This successor trustee had, at a prior time, beenrecognized as such trustee by the Scott County District Court which onapplication of said trustee had ordered its receiver to deliver to the trustee allproperty claimed by it in its petition to said court. The possession of petitioner isthe possession of the Scott County District Court and said court has the right tothe custody of the trust property until released to the person found entitledthereto by said court. See generally on this issue, State Central Savings Bank v.Fanning Ball-Bearing Chain Co., 1181owa 698,92 N.W. 712; First National Bankv. White Ash C. Co., 188 Iowa 1227, 176 N.W. 287, 12 A.L.R. 286; Andrew v.292

Citizens' State Bank, 203 Iowa 345, 212 N.W. 745, 51 A.L.R. 906; Hannon v.Mechanics Building & Loan Association, 177 S.C. 153, 180 S.E. 873, 100 A.L.R.928; Union National Bank v. Bank of Kansas City, 136 U.S. 223, 10 S.Ct. 1013,34 L.Ed. 341; 1 Clark on Receivers, 2nd Ed., 756. [see further extensivequotations from 1 Clark on Receivers]"No 'spousal' rights for any court.Where a trust is not specifically subject to a court, then the (statutory or common)law of trusts will guide the management of the property. The Iowa Trust Codegives no hint of any spousal rights in a trustee's trust res. Indeed, the Trust Codecommands that such property be segregated from "other property of the trustee."See Iowa Code Section633A.421 0 Separation and identification of trust propertyA trustee shall do all of the following:1. Keep the trust property separate from other property of the trustee unless thetrust provides otherwise.2. Cause the trust property to be designated in such a manner that the interest ofthe trust clearly appears.Common law suggests that trustees manage their trust estates "as though theywere sole and unmarried."See ****starred portions**** below:Sneerv. Stutz, 1021owa 462,71 N.W. 415 (1897):"The former opinion conclusively settles the question as to the title and estatethat the plaintiffs acquired under the will, and further holds that plaintiffs weretrustees holding the property in trust for their children. ****To determine theirpowers, we must look to the instrument creating this trust, and find out, if we can,from that, what they were authorized to do. If there is no direction in the will as tohow the trust shall be executed, we must then look to the law for their powers.****We said in the former opinion that: "George Sneer had no greater authority inexhausting the property than to make advances to Geo. S. and Minnie E. Sneerduring his life, but his right to do so from other than the increase from use andmanagement is at least doubtful. * **The same conditions are applicable toGeo. S. and Minnie after the trust devolved upon them. The language, both as toGeorge and his children, giving them power and authority to dispose of theproperty without any interference, is limited by the trust imposed, and is to betaken as fixing the manner of its discharge, and not as conferring property rights."As the powers of George S. and Minnie E. Sneer are the same as thoseconferred upon George Sneer we look to his powers. The will bequeaths theproperty in trust to George Sneer, to be held, used, and managed during his293

lifetime for the use and benefit of his two children, George S. Sneer and MinnieE. Sneer, should they survive him; and further provides that George Sneer shall,during his lifetime, have the full care, custody, control, and management of all theproperty, with full and ample right and authority to rent, lease, contract, bargain,sell, and convey, or otherwise control the same, in his own name as executor,and without joining with him as grantor either his wife or the residuary legateesmentioned in the will, having and exercising in this respect as full right andauthority to so manage the same, and the proceeds thereof, as though the saidGeorge Sneer was sole and unmarried, and had acquired the absolute title to allof said property by purchase. He was also exempted from the necessity ofobtaining the authority or consent of the court to the making of sales, and fromthe approval thereof after they were made. The will says: "All such questions arehereby left to his individual judgment and discretion, with full power to act as inhis judgment may seem best for the interests of the residuary legatees.""The fourth clause of the will is as follows: "Fourth. I hereby appoint my said sonGeorge Sneer sole executor of this will and testament, and having full faith in hisintegrity and ability to manage said property during his lifetime for the bestinterests of all concerned. I hereby exempt him from giving bonds, and also fromfiling any inventory list or appraisement list of the property coming into his handshereunder in any probate or other court, and none of the residuary legateeshereunder or mentioned herein shall be entitled to have or receive *417 from mysaid executor during his lifetime any of the property or proceeds or rents orprofits thereof which may come into his hands under this will unless the saidGeorge Sneer shall, in his judgment, deem it best and advisable to makeadvances to his said children George S. Sneer and Minnie E. Sneer, or either ofthem. The manner of the execution of the trust is thus clearly provided for, andwe think the decree of the lower court was correct in this respect, except that itshould have more plainly directed that the appellees should make suchdisposition, and such only, of the property, as to them, in the exercise of theutmost good faith, might seem best for the proper administration of their trust.Having no interest in the property other than the accumulations, except astrustees for their children, they can only sell in execution of their trust, and not ontheir own account. Whether they were to receive any part of the estate was left tothe judgment of George Sneer, and, as he is dead, they are entitled to nothing intheir own right save the accumulations of the property while in the managementof said Sneer. The court below declared that ****they had as full power tomanage the estate as trustees as though they were sole and unmarried,**** andhad acquired absolute title to all of said property by purchase .... The decree ofthe court below will be so modified as to require the appellees to give the bondsrequired by the statute, and with this exception, and in the light of theinterpretation placed upon it in the first paragraph of this opinion, it is approved.Modified and affirmed."294

I find no 'carve-out' in trust law for trusts within a family or between a marriedcouple, requiring deed joinder for passage of marital interests.Although, the spouse joining in the conveyance likely will not hurt the title.****My concern is with Iowa Code Section 633.238(1 )(d) which states that the shareof a surviving spouse electing against a revocable trust is one-third in value ofthe property held in trust not necessary for the payment of debts and chargesover which the decedent was a grantor and retained at the time of death thepower to alter, amend, or revoke the trust, or over which the decedent waived orrescinded any such power within one year of the date of death, and to which thesurviving spouse has not made any express written relinquishment.If there is a deed going into the trust signed by the trustor and the trustor'sspouse, is that a sufficient relinquishment for a later sale by the trustee?* * * *That explanation adds some light. You wonder about the effect of the statutoryphrase "express written relinquishment of right". Does the wife's joining inconveyance of the land to the (husband as?) trustee amount to suchrelinquishment?I will say that it does, just as with any other conveyance of real estate during life.Iowa Code Section 633.236 et seq. represents statutory establishment of (andsubstitution for) the old common law "dower" right.See Peddicord v. Peddicord, 242 Iowa 555,47 N.W. 2d 264 (1951).In re Dluhos' Estate, 246 Iowa 1043, 70 N.W. 2d 549 (1955).Matter of Estate of Wulf, 471 N.W. 2d 850 (Iowa 1991 ).Cases listed above deal with earlier versions of the distributive share statutes.But the law has not changed substantially so their holdings should remain valid."This distributive share differs from common-law dower, but is frequently calleddower. ***During the life of her husband***this interest of the wife is inchoate andis in the nature of a burden or encumbrance upon the real estate. She has thenno estate in the land which she can convey but***she can release or relinquishher contingent interest to a third person who owns the property.***[Citations.]Peddicord, 246 Iowa at 562. (see starred portions for applicability to your case.)295

"Courts will not presume a wife will refuse to release dower. On the contrary,there is a presumption of harmony and unity of will between spouses. Where theunwillingness of the wife to release her inchoate right of dower is relied upon as adefense to specific performance it should be pleaded and proved. [Citations.]"Peddicord, 246 Iowa at 563.Given the "presumption of harmony and unity between spouses", I'd say that thewife in your situation did expressly and validly relinquish her distributive shareright in the trustee's land.After the land is titled in the trustee, then my earlier assessment applies: Thetrustee acts as a single person.296

149. Gift of Real Estate in Revocable Trust.FACTS: I have a client who owns farm land in Iowa in a revocable trust. Theclient has resigned as trustee of the revocable trust. (In this case it is notbecause he is incompetent but rather because he is terrible at handling hisassets and has been for some time. The revocable trust does not addressgifting.) The successor trustee under the trust is client's son. Client wants totransfer his interest in a large amount of farm land in Iowa to his children,including son who is trustee, and retain a life estate in the farm land. (Thistransfer is not being done in view of any estate tax planning or the fiscal cliff, butrather because client is terrible at handling his assets, including letting individualsuse property with a big potential for accidents and liability, those same individualssteal from Client, and there is a potential that Client if induced correctly wouldchange all his documents and transfer assets to the seedy individuals and thenregret it later. Client lives in Arizona and the rest of his family is in Iowa. Wediscussed guardianship and conservatorship but neither the Client nor childrenwant to go that route at this time.)QUESTION: My question is what is the best way to transfer the property?Should trustee of revocable trust transfer the property back to client and thenclient make the transfer to children retaining the life estate? Or, can the trusteedo a deed from the revocable trust and the client either join in the deed from therevocable trust or sign a separate quit claim deed or special warranty deed andhave an affidavit explaining the transfer?RESPONSE(S): If client is competent consider making the trust irrevocable,retaining life income, and name a competent trustee. Saves all the hassles of lifeestate, remainder form of ownership. Another thought is to put the farm in asingle member LLC first and have the client transfer the LLC interest to theirrevocable trust. The LLC gives some liability protection.* * * *I have already discussed the LLC idea and I thought we were headed down thatpath but now the family does not want to do that. I am not sure they will go for theirrevocable trust idea, but I will suggest it. I still have the question about how todeed in either case.* * * *I would take one of two routes.1. Have grantor temporarily re-assume trustee position, sign the deed and anaffidavit saying he is the trustee, etc. and record all. Then resign and appointtrustee #2 again.297

OR2. Have new trustee sign deed and affidavit, have original grantor join in it asconsent to transfer and consent to gift. Also have original grantor sign quit claimdeed as part of same transaction, saying he consents to transfer, consents to giftand recording deed only to clear title and he claims no ownership interest.298

150. Sale by Trust.FACTS: Title Standard 4.7 refers to sale by an inter vivos trust. I am doing aclosing and see from a previous transaction a corporate trustee provided atrustee's affidavit but no purchaser's affidavit is of record.QUESTION: Do sales by a corporate trustee require trustee and purchaser'saffidavits?RESPONSE(S): I don't know why you wouldn't. Iowa Code Section 614.14actually contains a form for a corporate trustee.****I have always been of the opinion that a transfer by a corporate trustee inrelocation and REO closings is more of a business or agency relationship anddoes not fit within my concept of an inter vivos trust. I agree that there is a formfor a corporate trustee, but I read that to mean the corporate trustee of an intervivos trust.However, a number of attorneys in the State have wanted me to prepare aTrustee's Affidavit in such cases, so I have been doing that with regularity foryears whether I consider it necessary or not. Although the practice of who isresponsible for Purchaser's Affidavit appears to depend upon local practice in thevarious counties, I leave that to the attorney requesting the Trustee's Affidavit. Iam guessing most don't do the follow up. I'm not looking at the statute right now,but I believe there is a statute limiting the time period for objection to lack of theAffidavits.* * * *Remember after one year you don't need an affidavit. See Iowa Code Section614.14(5).****One year limitation.299

II.TITLE STANDARDS COMMITTEE OPINIONS.A. Doctrine of After-acquired Property- Quit Claim Deed.Title Standards Committee Opinion No. ___ .Date: February 23, 1998STATEMENT OF ISSUE:A sells real estate on contract to B. B quit claims and assigns his interest in the contractand the real estate to C. A delivers a deed in fulfillment of the contract to B. What showing isrequired before accepting a deed from C?CONSENSUS OPINION OF IOWA TITLE STANDARDS COMMITTEE:A deed from B to C must be obtained and filed for record. If the deed from B to Chadbeen a warranty deed, an after-acquired title will inure to the grantee C. However, this wouldnot be the case where the deed is a quit claim only. For a more complete discussion, seeSections 4.9 and 4.1 O(B) of Marshall's Iowa Title Opinions and Standards.DISCLAIMER. THE ABOVE OPINION REPRESENTS THE THINKING OF A CONSENSUSOF THE TITLE STANDARDS COMMITTEE OF THE IOWA STATE BAR ASSOCIATION ANDIS NOT, NOR IS IT INTENDED TO BE, A TITLE STANDARD.300

B. Power of Sale in the Will.Title Standards Committee Opinion No. 1996-57.Date: December 20, 1996STATEMENT OF ISSUE:May an executor of an estate, relying only upon the power of sale contained in a Willgranted to the executor with respect to real estate, pass good title on a real estate transactioninitiated after the date of death and before the period for challenging the admissibility of the Willhas expired?CONSENSUS OPINION OF IOWA TITLE STANDARDS COMMITTEE:Yes, an executor may convey real estate pursuant to a power of sale contained in theWill prior to the time any challenges to the admissibility of the Will have expired. This opinion isbased upon the theory of a good faith purchaser for value and we rely in part upon Section16.8(d) of Marshall's Iowa Title Opinions and Standards in which a question was addressed tothe author as to what would happen if after a sale the Will might be set aside in a successfulcontest. The author indicates that good faith purchasers would be protected. The bona fidepurchaser for value theory would protect the purchaser if the Will was later found to be invalidand the proceeds from the sale of the property would be the assets the challengers could lookto in the event the Will is set aside.DISCLAIMER. THE ABOVE OPINION REPRESENTS THE THINKING OF A CONSENSUSOF THE TITLE STANDARDS COMMITTEE OF THE IOWA STATE BAR ASSOCIATION ANDIS NOT, NOR IS IT INTENDED TO BE, A TITLE STANDARD.301

C. Contract- Joint Tenancy.Title Standards Committee Opinion No. ____ _Date: February 23, 1998STATEMENT OF ISSUE:A contract for the sale of real estate named the vendees as Husband and Wife, as jointtenants with full rights of survivorship and not as tenants in common. A warranty deed issubsequently delivered in fulfillment of the contract to Husband and Wife without the jointtenancy language. Thereafter, Wife died. Later, Husband died and the real estate is conveyedby the Executor of his estate. What showing must be made before accepting a deed from theExecutor of the Husband's estate?CONSENSUS OPINION OF IOWA TITLE STANDARDS COMMITTEE:A probate of the Wife's estate is necessary because the warranty deed created atenancy in common and, therefore, the Wife's undivided one-half interest will pass through herestate. If the Wife's date of death is more than five years prior, then see Iowa Title Standards9.8 and 9.15. For a more complete discussion, see Section 20.3(C) of Marshall's Iowa TitleOpinions and Standards.DISCLAIMER. THE ABOVE OPINION REPRESENTS THE THINKING OF A CONSENSUSOF THE TITLE STANDARDS COMMITTEE OF THE IOWA STATE BAR ASSOCIATION ANDIS NOT, NOR IS IT INTENDED TO BE, A TITLE STANDARD.302

D. Mortgage - Parties.Title Standards Committee Opinion No. 98-65.Date: February 17, 1999STATEMENT OF ISSUE:Does the signature on a mortgage by a non-titleholder (and one not married to thetitleholder) create a stray instrument pursuant to Iowa Title Standard 4.5?CONSENSUS OPINION OF IOWA TITLE STANDARDS COMMITTEE:Yes. However, if examining the abstract for the mortgagee under the mortgagecontaining the signature of the nonowner, and if no one other than the mortgagee canreasonably be expected to rely on the title opinion, in the opinion of the Committee this defectcan be waived.DISCLAIMER. THE ABOVE OPINION REPRESENTS THE THINKING OF A CONSENSUSOF THE TITLE STANDARDS COMMITTEE OF THE IOWA STATE BAR ASSOCIATION ANDIS NOT, NOR IS IT INTENDED TO BE, A TITLE STANDARD.303

E. Judgment Lien- Joint Tenancy Property.Title Standards Committee Opinion No. 1996-55.Date: September 24, 1996FACTS:On July 19, 1990, a joint tenancy deed between A and B is prepared and recorded. OnAugust 24, 1995, A dies. The property is being sold in A's estate and the abstract is continueddown to date for examination. The abstracter stopped his search as to A as of July 19, 1990,when the joint tenancy deed was recorded. A judgment lien was entered on July 20, 1990against A ("C" judgment creditor). There is no levy of execution.CONSENSUS OF IOWA TITLE STANDARDS COMMITTEE:The real estate can't be sold in A's estate because on the death of A, B is the soleowner. See 1 Patton on Land Titles, 630 (2d ed. 1957); II American Law of Property,10-11; Ill 637-638 (Casner ed. 1952); Sup pl.- American Law of Property, 159-161 (Casner ed.1977).No search is required against a deceased joint tenant and C has no lien against the realestate. See Iowa Land Title Standard 9.9, Iowa Abstracting Standards, VIII (1994). [Note- Werecognize abstracters often search up to the date of death of a deceased joint tenant but unlessthere has been a levy of execution and sale before the death of A, we do not think this isnecessary and the Land Title Abstracting Standard is correct.] Frederick v. Sharman, 259 Iowa1050, 147 N.W. 2d 478, 484 (1956); I Kurtz, Iowa Estates Sec. 11.2 (3'd ed. 1995).DISCLAIMER. THE ABOVE OPINION REPRESENTS THE THINKING OF A CONSENSUSOF THE TITLE STANDARDS COMMITTEE OF THE IOWA STATE BAR ASSOCIATION ANDIS NOT, NOR IS IT INTENDED TO BE, A TITLE STANDARD.304

F. Bankruptcy Documents.Title Standards Committee Opinion No. 1996-53.Date: September 24, 1996STATEMENT OF ISSUE:In a county where the bankruptcy court is not located, may bankruptcy documentsrequired by Title Standard 13.5 be filed with the Clerk of the Iowa District Court and must a titleexaminer require that bankruptcy documents be certified by the Clerk of the Bankruptcy Court?This case involves a foreclosure in a state district court where the mortgagors subsequently filedbankruptcy. An uncertified copy of the bankruptcy petition, motion to lift stay, resistance tomotion to lift stay, order granting relief from stay and report of abandonment of property wereplaced in the Iowa District Court's file but were not docketed in the foreclosure proceeding. Nofile stamp of either the Iowa District Court or the Bankruptcy Court was found on thesedocuments. The Iowa District Court, in its decree of foreclosure, found that the real estate wasabandoned by the Trustee in bankruptcy and that the Bankruptcy Court granted the foreclosingbank relief from the stay in Bankruptcy Court and that more than 30 days have passed since theentry of the order by the Bankruptcy Court granting relief from the stay although the abstractdoes not show the Iowa District Court findings.CONSENSUS OPINION OF IOWA TITLE STANDARDS COMMITTEE:Iowa Code Section 558.1 allows, but does not require, certain bankruptcy documents tobe recorded as provided for in Chapter 558. Title Standard 13.5 is silent as to where thevarious bankruptcy documents are to be filed.In this case, it is obvious from the Iowa District Court ruling that the Court relied on thebankruptcy papers and made findings concerning the bankruptcy action. Under these facts, aprospective purchaser or lender would not reasonably be expected to be subject to the hazardsof an adverse claim or litigation. Therefore, under Title Standard 1.1, no objection should bemade as to the title. However, the abstract should be expanded to show that the Iowa DistrictCourt judge made findings regarding the bankruptcy proceedings.DISCLAIMER. THE ABOVE OPINION REPRESENTS THE THINKING OF A CONSENSUSOF THE TITLE STANDARDS COMMITTEE OF THE IOWA STATE BAR ASSOCIATION ANDIS NOT, NOR IS IT INTENDED TO BE, A TITLE STANDARD.305

G. Power of Sale in Will - Notice of Sale.Title Standards Committee Opinion (November 1992).STATEMENT OF ISSUE:In the administration of an Iowa estate, where the Will gives the executor a power ofsale, the executor seeks Court approval to sell the real estate to one of the beneficiaries who isalso a brother of the executor. The executor wanted to give all beneficiaries an opportunity toobject or consent and all living beneficiaries did consent after receiving notice. Does lack ofnotice of sale to contingent beneficiaries whose identity would not be known until the death ofthe life tenant render such sale invalid?OPINION:Iowa Code Section 633.383 provides, "When power to sell, mortgage, lease, pledge orexchange property of the estate has been given to any personal representative under the termsof any will, the statutory requirements with reference to procedure for such purposes shall notapply." This rule was long recognized in Iowa case law prior to its codification in 1963. Delongv. Scott, 217 N.W. 2d 635, 637 (Iowa 1974}. Section 633.350 provides, in part, that title to aperson's property passes to the person to whom it is devised by the person's last Will but theproperty is subject to possession by the Personal Representative for purposes of administration,sale, or other disposition under the provisions of law.It is the opinion of the Committee that the executor retained and used the power of saleand that no notice was required to be given to contingent or unascertained beneficiaries. Thesale is not invalid.DISCLAIMER. THE ABOVE OPINION REPRESENTS THE THINKING OF A CONSENSUSOF THE TITLE STANDARDS COMMITTEE OF THE IOWA STATE BAR ASSOCIATION ANDIS NOT, NOR IS IT INTENDED TO BE, A TITLE STANDARD.306

H. Conveyance Language in a Will.Title Standards Committee Opinion (November 1992).STATEMENT OF ISSUE:Is a Will conveyance to "John Doe, or to his heirs" too ambiguous or undeterminable torender marketable title in John Doe?OPINION:To render title unmarketable by ambiguity, the objection must generate a reasonableprobability of litigation. Delong v. Scott, 217 NW. 2d 635 (Iowa 1974); Title Standard 1.1.The words "John Doe, or to his heirs" granted an absolute and fee estate in John Doe.The words "and his heirs" were superfluous and are not an alienation of the prior fee. The Willconveyance language, although not a model of clearness and precision, conveyed marketabletitle to John Doe. Hudnutt v. John Hancock Mt. Life Ins. Co., 224 Iowa 430, 437, 274 N.W. 581,585 (1937).DISCLAIMER. THE ABOVE OPINION REPRESENTS THE THINKING OF A CONSENSUSOF THE TITLE STANDARDS COMMITTEE OF THE IOWA STATE BAR ASSOCIATION ANDIS NOT, NOR IS IT INTENDED TO BE, A TITLE STANDARD.307

I. Probate- Tenants in Common- Will.Title Standards Committee Opinion (November 1992).STATEMENT OF ISSUE:Husband and wife own Blackacre as tenants in common. Each has a will leaving his orher interest in Blackacre to the surviving spouse. Upon the death of one spouse the will isadmitted to probate without present administration and the surviving spouse files an election totake under the will. What, if anything, in addition to a probate without administration, need bedone to establish that the property is not subject to lien of Iowa Inheritance Tax?OPINION:Under Iowa Code §450. 7, assuming the spouse died on or after January 1, 1988,Blackacre would not be subject to a lien of Iowa Inheritance Tax and no further showing needbe made. However, the question which has been addressed to the Committee does notindicate that all of the property of the spouse, who is now deceased, was given to the otherspouse. If one spouse bequeathed all of his or her property to the other spouse, then no IowaClearance of Inheritance Tax would be necessary. However, this is not clear from the question,and if only Blackacre was given to the spouse then, of course, a Clearance of Inheritance Taxwould have to be obtained as to the remainder of the estate given to other parties. Even thoughthe question did not ask whether or not title would be marketable in this situation, the Committeebelieves that the method of handling the above situation has not been done in such a manneras to render title marketable. There ·is no ability through a probate without presentadministration to clear all debts and claims of the estate, and therefore title would not bemarketable in accordance with Iowa law. Under Iowa Code §633.413, any claims and debtswould not be barred until five years after the death of the decedent. Therefore, under the factsituation as given above, it would not appear to the Committee that the title is marketable whena probate without present administration is utilized.DISCLAIMER THE ABOVE OPINION REPRESENTS THE THINKING OF A CONSENSUSOF THE TITLE STANDARDS COMMITTEE OF THE IOWA STATE BAR ASSOCIATION ANDIS NOT, NOR IS IT INTENDED TO BE, A TITLE STANDARD.308

J. Survey Plats.Title Standards Committee Opinion (November 1992).STATEMENT OF ISSUE:(1) Whether §409A.21, The Code, 1991, cures the omissions of survey and platdated June 4, 197 4, and recorded June 6, 197 4, in Book Kat page 434 in the office of theChickasaw County Recorder (copy attached).(2) Is "the bank of the Cedar River" and adequate boundary description?OPINION:§409A.21 provides that "an action shall not be maintained, at law or in equity, inany court, against a proprietor, based upon an omission of data shown on an official plator upon an omission, error, or inconsistency in any of the documents required by thischapter unless the action is commenced within 10 years after the date of recording ofthe official plat." "Official plat" is defined in §409.2( 11 ), The Code, 1991, as "either anauditor's plat or a subdivision plat that meets the requirements of this chapter and hasbeen filed for record in the offices of the recorder, auditor, and assessor." Chapter 409Abecame effective July 1, 1990. §4.5, The Code, 1991, provides that, "a statute ispresumed to be prospective in its operation unless expressly made retrospective."The survey and plat of Millrock Heights Subdivision, Nashua, Chickasaw County,Iowa, recorded June 6, 197 4, is not accompanied by the various attachments referred toin §409A.11. Entire documents required for recording the plat are not shown.There is no provision in §409A.21 expressly making it retrospective. Instead, thestatute makes reference to "official plat" which is defined as an auditor's plat or asubdivision plat "that meets the requirements of this chapter" (emphasis supplied).Since the application of the statute is limited to curing omissions, errors orinconsistencies in plats meeting the requirements of Chapter 409A, it is prospective inoperation only. The Committee's opinion is that §490A.21, The Code, 1991, does notapply to plats recorded prior to July 1, 1990 since they are not official plats as defined in§409A.2(11), The Code, 1991.You are referred to Marshall's Iowa Title Opinions and Standards Annotated§14.1 U)(2d ed. 1978), in which Jesse Marshall states, " ... I am of the opinion that aviolation of a provision of Iowa Code, Ch. 409 does not ipso facto produce a reasonableprobability of good faith litigation rendering title unmarketable." Thus, despite theomission of documents from the plat, title to the real estate abstracted is not necessarilyunmarketable.309

You also ask whether "the bank of the Cedar River" is an adequate boundarydescription. §409A.2(10), The Code, 1991, defines "metes and bounds description" as "adescription of land that uses distances and angles, uses distances and bearings, ordescribes the boundaries of the parcel by reference to physical features of the land."Certainly, the bank of the Cedar River is a reference to a physical feature of the land.§409A.4(1 ), The Code, 1991, provides that, "the grantor of land which has been dividedusing a metes and bounds description shall have a plat of survey made of the division."§409A.2{5), The Code, 1991, defines "division" as "dividing a tract or parcel of land intotwo parcels of land by conveyance or for tax purposes."Op. Atty. Gen. (Frisk), May 1, 1991, states that a plat of survey is not required fora conveyance of an existing parcel after June 30, 1990, if the parcel is described bymetes and bounds and had been conveyed prior to July 1, 1990 by the same descriptionwithout a plat of survey. From the facts furnished, it is not possible to determine whethera plat of survey would be required in this instance. If a plat of survey is required, it mustshow the meander of the bank of the Cedar River. §114A.1 ( 16), The Code, 1991 defines"meander line" as a "traverse approximately along the margin of a body of water. Ameander line provides data for computing areas and approximately locates the margin ofa body of water. A meander line does not ordinarily determine or fix boundaries."§114A. 7{13), The Code, 1991, provides that "if any part of the surveyed land is boundedby an irregular line, that part shall be enclosed by a meander line or an offset lineshowing complete data with distances along all lines extending beyond the enclosure tothe irregular boundary, and shown with as much certainty as can be determined, or as'more or less,' if variable. In all cases, the true boundaries shall be clearly indicated onthe plat." These provisions of Chapter 114A do not apply if a plat of survey is notrequired since title examiners have long accepted reference to physical boundaries asacceptable components of an adequate legal description.DISCLAIMER. THE ABOVE OPINION REPRESENTS THE THINKING OF A CONSENSUSOF THE TITLE STANDARDS COMMITTEE OF THE IOWA STATE BAR ASSOCIATION ANDIS NOT, NOR IS IT INTENDED TO BE, A TITLE STANDARD.310

K. Affidavit of Surviving Spouse.Title Standards Committee Opinion (November 1992).STATEMENT OF ISSUE:Whether the Affidavit of Surviving Spouse for Change of Title to Real Estate shouldcontain language that the deceased did not have a contractual Will? The Iowa State BarAssociation Official Form No. P249.OPINION:No. The Affidavit of Surviving Spouse for Change of Title to Real Estate is onlyapplicable to situations involving joint tenancy property. The survivor in a joint tenancy propertyacquires the interest of the deceased and the interest of the deceased in the property does notpass to his or her heirs. In re Miller's Estate, 2481owa 19, 79 N.W. 2d 315 (1956). A willcannot revoke joint tenancies. In the Matter of the Estate of May K. Boldt, 342 N.W. 2d 463(Iowa 1983). Contractual wills have no effect on the transfer of title to the surviving spouse byoperation of law.DISCLAIMER. THE ABOVE OPINION REPRESENTS THE THINKING OF A CONSENSUSOF THE TITLE STANDARDS COMMITTEE OF THE IOWA STATE BAR ASSOCIATION ANDIS NOT, NOR IS IT INTENDED TO BE, A TITLE STANDARD.311

L. Agricultural Land - Right of First Refusal.Title Standards Committee Opinion (November 1992).STATEMENT OF ISSUE:Section 654.16A, requires the granting of a right of first refusal following recording of aSheriff's Deed to agricultural land. The statute states that if "the grantee proposes to sell orotherwise dispose of the agriculturalland ... grantee shall first offer mortgagor the opportunity torepurchase the agricultural land based on the same terms and at the same price that thegrantee proposes to sell or dispose of the agricultural land." Suppose owner disposes of theproperty under his Will or gives it to his wife by deed. Does this mean mortgagor has the rightto receive this property at no cost?OPINION:It certainly was not the intention of the legislature to give the agricultural land at no costto the mortgagor if grantee of the Sheriff's Deed made a gift of the agricultural land or diedleaving it in his estate.We believe the statute would be construed to continue the obligation of the grantee ofthe Sheriff's Deed in the donee, personal representative, or devisee of said grantee.We feel there should be some termination time on this right of first refusal. We wouldrecommend the legislature amend the statute and set a termination period of not to exceed 5years after the date of the Sheriff's Deed.DISCLAIMER. THE ABOVE OPINION REPRESENTS THE THINKING OF A CONSENSUSOF THE TITLE STANDARDS COMMITTEE OF THE IOWA STATE BAR ASSOCIATION ANDIS NOT, NOR IS IT INTENDED TO BE, A TITLE STANDARD.312