Selling One of Two Parcels Described in a Single Deed

The question: one recorded deed describes two separate parcels and conveyed both into the owner’s revocable trust. The owner now wants to sell one parcel and keep the other. Does the trustee first record an intermediate deed running from the trustee, as grantor, to the trustee, as grantee, describing only the parcel to be sold, and does that deed need language stating that the retained parcel is not being conveyed?

Scope: This question was posted publicly to the Missouri Real Estate Practice and Procedure email discussion group. This note addresses whether an intermediate deed is necessary under Missouri law and what practical items the separation raises.

The short answer

1. An intermediate deed is not required, and it introduces potential risk.

Title vested in the trustee as to each parcel independently when the original deed was recorded. Two descriptions in one instrument do not combine two parcels into a single legal unit, and nothing about the recorded deed has to be undone before one parcel is sold. So the intermediate deed accomplishes nothing and introduces one more step in a simple process that can be messed up.

2. A deed from the trustee, as seller, to the buyer describing Parcel 1 does the job (KISS Principle - Keep It Simple Stupid).

The trustee conveys Parcel 1 to the buyer by a deed describing Parcel 1, recorded in the county where the land sits. § 442.380. Parcel 2 stays with the trust because it is simply not described.

3. Parcel 2 does not need to be reserved or excepted, and saying anything about it invites potential problems.

A deed passes what its granting clause and legal description cover. Missouri courts determine the effect of an unambiguous deed from the instrument itself, and extrinsic evidence becomes available only if the language is unclear or ambiguous. Blackburn v. Habitat Dev. Co., 57 S.W.3d 378, 386 (Mo. App. S.D. 2001); Erwin v. City of Palmyra, 119 S.W.3d 582, 584-85 (Mo. App. E.D. 2003). Silence as to Parcel 2 is therefore complete. A recital saying Parcel 2 is not conveyed adds no legal effect while adding a term that must be construed.

The exposure is not confined to theory. “Excepting and reserving” is a term of art that operates on the estate granted, so using that phrasing as commentary on a parcel outside the description can create an ambiguity where the description alone created none. A recital that misdescribes Parcel 2, or that describes it by a stale book and page, puts an inaccurate statement about Parcel 2 into the chain of title for Parcel 1, where it will be picked up on the next search of the retained parcel. Where something useful can be said for the record, the conventional form identifies the source deed rather than negating the retained parcel: “This conveyance is of Parcel 1 only, being part of the property described in that deed recorded in Book __, Page __, of the _____ County Records.”

Considerations that may not be obvious

1. Whether Parcel 1 is a lawful separate parcel.

Whether one parcel can be conveyed out turns on local subdivision regulation, not on how the original deed was drafted. Municipalities adopt subdivision regulations by ordinance under § 89.410, and counties may regulate land outside municipal limits under Chapter 64. The applicable regulations control, because a division that requires a boundary adjustment or minor subdivision approval and does not have it can leave the buyer holding a parcel on which the municipality will not issue a building permit. If the answer is not clear before the contract is signed, the approval belongs in the contract as a condition rather than in the closing file as an assumption.

2. Title work on both parcels rather than only the one being sold.

A commitment on Parcel 1 is needed for the transaction regardless, so the marginal cost of running Parcel 2 at the same time is small. What it produces is early visibility into the encumbrances that join the two parcels, which is where two-parcel splits go wrong:

• A deed of trust, judgment lien, or tax lien encumbering both parcels, which requires a partial release. Lender release processes are slow, and the request is far easier to make ninety days out than ten days out.
• Cross-easements, shared driveway, utility, septic, or drainage arrangements, and use or maintenance agreements that assume common ownership. If Parcel 2 takes access or utility service across Parcel 1, the reservation has to appear in the sale deed, and that is the item most commonly missed in a split.
• A shared tax identification or locator number, which has to be split with the assessor. That is an administrative process independent of the deed, and it does not happen because a deed was recorded.
• Restrictive covenants or plat conditions that treat the two parcels as a single lot.

Running the commitment on Parcel 2 also confirms the condition in which the retained parcel is left, which is the half of the transaction nobody is otherwise examining.

The bottom line

The separation is accomplished by the sale deed itself. The questions that decide whether the transaction closes are whether Parcel 1 is lawfully divisible under local subdivision regulation and what the title work on both parcels shows about the encumbrances that join them.

Citations

Cases

• Blackburn v. Habitat Dev. Co., 57 S.W.3d 378, 386 (Mo. App. S.D. 2001) (absent ambiguity, the intent of the maker of a legal instrument is ascertained from the four corners of the instrument without resort to extrinsic evidence).
• Erwin v. City of Palmyra, 119 S.W.3d 582, 584-85 (Mo. App. E.D. 2003) (only if the language of a deed is unclear and ambiguous may a court resort to rules of construction and extrinsic evidence).

Statutes

• Mo. Rev. Stat. §§ 64.510, 89.410, 442.025, 442.380 (county planning authority; municipal subdivision regulations; conveyance to self and others; instruments to be recorded).