Short version: a recorded document cannot be edited. Once the county stamps it, the only remedies are to record a second document that corrects the first or, in narrow cases, to re-record the original with the correction made and a stated reason. Which remedy applies depends on how serious the error is, and the difference between a misspelled middle initial and a wrong legal description is the difference between a fifty dollar fix and a title claim.
Investors run into this more than owner occupants do, for an obvious reason: they buy more, they buy through entities, they buy out of estates and tax sales, and they deed properties around between their own companies. Every one of those moves is another chance for a legal description to get mistyped.
Why you cannot just fix it
The county recorder maintains a chronological public record. The whole legal value of that record is that nothing in it changes after the fact. A recorded instrument is a snapshot of what was presented on a given day at a given minute, and lien priority is established by that sequence.
So the record is corrected by addition, never by edit. You record something new that speaks to the old document. Any lender or title examiner reading the chain later sees both instruments and understands the relationship between them. That is the design, and it is why the recording step after your closing is worth paying attention to rather than treating as paperwork.
The three remedies
1. The scrivener’s affidavit
Also called an affidavit of correction or a corrective affidavit. It is a sworn statement, usually by the closing agent or attorney who prepared the original document, saying: I prepared this instrument, it contains this clerical error, and the correct information is this. It gets recorded and it references the original by book and page or instrument number.
This is the cheapest and fastest remedy and it covers the large majority of real world errors:
- A misspelled name, a missing middle initial, a transposed suffix.
- A wrong or missing date.
- A typographical error in a street address where the legal description is correct.
- A missing derivation clause or a wrong reference to a prior deed.
- An incomplete notary block where the notary is available to correct it.
The key limit: a scrivener’s affidavit fixes what the scrivener got wrong. It cannot change what the parties agreed to. If the deed conveyed the wrong parcel because the seller intended to convey a different parcel, that is not a clerical error and an affidavit will not cure it.
2. The corrective deed
A corrective deed is a new deed, executed by the original grantor to the original grantee, that restates the conveyance correctly. It is titled as a corrective instrument and recites that it is being given to correct a specific defect in a prior recorded deed, identified by instrument number.
You need one when the error goes to the substance of the conveyance:
- The legal description is wrong, incomplete, or describes a different parcel.
- The grantee is named incorrectly in a way that matters, for example the deed names you personally when title was supposed to vest in your LLC.
- A required signature is missing, most often a spouse in a state with marital property or homestead rights.
- The wrong deed form was used, for example a quitclaim was recorded where the contract called for a warranty deed. The form of the deed is not interchangeable.
The obvious problem with a corrective deed is that it requires the original grantor to sign again. If the seller has moved, died, dissolved the entity, or simply decided they are done with you, that signature can be very hard to get. This is one of several reasons to catch errors quickly.
3. Re-recording the original
Some counties allow the original instrument, with the correction made on its face and initialed, to be re-recorded with a cover statement explaining the change. Practice varies widely by county, and several recorders refuse it outright. Ask before you assume.
What happens to your mortgage when the deed is wrong
This is the part investors underestimate. Your lender’s lien attaches to the property described in the mortgage. If the legal description in the mortgage is wrong, the lien may attach to nothing, or worse, to a neighbor’s parcel.
Your lender will find out, usually when the title company issues the final policy and the examiner compares the recorded instruments to the commitment. At that point you will get a call, and what happens next depends on a document you already signed.
That document is the compliance agreement, the one closing document whose entire purpose is to let the lender come back and have you correct or re-execute a defective instrument. Investors skim past it at the table and then discover that it is the reason a correction is a phone call rather than a lawsuit. If you have ever wondered why that page is in the stack, this is why.
Note that the mortgage and the deed are separate instruments and can be wrong independently. The note, which is not recorded, and the mortgage, which is, can also disagree, and a mismatch between them is its own category of problem.
How the errors actually get caught
In rough order of frequency:
- The title policy review, four to eight weeks after closing. Most common. The examiner compares recorded documents to the commitment.
- The county rejects the recording outright. Missing notary stamp, missing parcel number, wrong fee. This is actually the good outcome, because nothing is in the record yet.
- The tax assessor bills the wrong owner. You find out because a bill does not arrive, which is a bad way to find out. Municipal records feed off recorded documents, and unpaid municipal balances attach to the property rather than the person, so a recording error that leaves the county billing the prior owner can grow quietly into a lien against your asset.
- Your servicer’s post-closing audit. The file gets reviewed after boarding, and again if the loan is sold and the new servicer re-audits.
- You try to sell or refinance three years later. The worst case, because the parties who could easily have signed a correction are long gone.
The entity trap
The single most common substantive error on investor files: the deed names the individual when it should name the entity, or names the entity slightly wrong. “Riverbend Holdings LLC” and “Riverbend Holding, LLC” are two different legal persons as far as a title examiner is concerned.
This matters beyond tidiness. If title is in an entity and the deed vests in you personally, your insurance policy, your lease, your loan documents, and the public record are no longer describing the same owner. Your insurance carrier can deny a claim on that basis alone. If you have ever deeded a property you already own into an LLC, you have probably seen how carefully the vesting language has to match.
The seller also swears to a set of facts at closing that the title company relies on for the gap between the search and the recording. That affidavit of title is part of what makes a correction possible later, because it establishes what the parties actually intended.
What a correction costs
The recording itself is trivial, commonly somewhere between 20 and 100 dollars depending on the county and the page count, and a preparer’s fee of a few hundred dollars if an attorney drafts it. Those numbers vary by jurisdiction and change over time, so treat them as a magnitude rather than a quote.
The real cost is the delay, and it is only a cost if it lands during a transaction. Take a single family rental at 190,000 dollars with 25 percent down. The loan is 142,500 dollars. At 7.25 percent over 30 years, principal and interest are 972.10 dollars a month. Taxes run 240 dollars and insurance 115 dollars, so the total monthly obligation is 1,327.10 dollars. Market rent is 1,650 dollars.
| Line | Monthly |
|---|---|
| Principal and interest on 142,500 dollars at 7.25 percent | 972.10 dollars |
| Property taxes | 240.00 dollars |
| Insurance | 115.00 dollars |
| Total obligation | 1,327.10 dollars |
| Gross market rent | 1,650.00 dollars |
| DSCR | 1.24 |
That is 1,650 divided by 1,327.10. If you want to see how a ratio at 1.24 responds to a rate change or a tax reassessment, the mechanics of the calculation are worth knowing, and the DSCR deal calculator will do it on your own numbers.
Now suppose a corrective deed holds a refinance for three weeks while you chase a seller’s signature. Three weeks at 7.25 percent on 142,500 dollars is roughly 594 dollars of interest on the old loan you were trying to replace, plus a rate lock extension fee if your lock expires, plus the possibility of re-pricing entirely. The paperwork is cheap. The calendar is not.
What to do
- Read the recorded copies when they arrive. Check the grantee name character by character, check the legal description against the title commitment, check the parcel number. Fifteen minutes.
- Do it within the first month. Every party is still reachable and still motivated.
- Keep a clean copy of the title commitment. It is the reference document for what the description should say.
- If the error is substantive, call the closing agent, not the seller. They prepared the document, they carry insurance on their work, and they will usually handle it at no cost to you.
- Never record a correction yourself without advice. A badly drafted corrective instrument can create a second problem that looks like a transfer, with tax consequences.
This is boring, cheap maintenance that prevents an expensive problem three years out. The same is true of understanding the funding step. The end of a closing is not the end of the file.
Where we sit
FMC Capital is a Pittsburgh-based mortgage brokerage that works with real estate investors. We finance rentals and renovation projects for investors across Pennsylvania and additional states, and we have worked plenty of files where a corrective instrument had to clear before a refinance could fund. If a recorded document on one of your properties does not read the way it should, get in touch or call 412-990-2941 before it becomes a closing problem.
This is general information, not legal advice. Correction procedures vary by state and by county, and a real estate attorney should draft or review any corrective instrument. Fees and program parameters described here are illustrative and subject to change. FMC Capital, NMLS #1840537.