Opinion ID: 1974823
Heading Depth: 1
Heading Rank: 1

Heading: the riccu mortgage

Text: Our analysis now turns to whether an error in the description of property in a mortgage affects the rights of a bona fide purchaser. The RICCU accepted a mortgage on condominium unit No. 100 at 264 Atwells Avenue in Providence. The mortgage, as recorded, describes the entire condominium project in a metes-and-bounds description but does not identify the specific unit. On August 3, 1988, at 10:35 a.m., the mortgage was recorded in the Providence land evidence records in book No. 1858 at page 262. On the same date that the mortgage was executed, RICCU also obtained a Collateral Assignment of Leases and Rents (assignment), which was duly recorded in the Providence land evidence records in book No. 1858 at page 262A at 10:37 a.m. The assignment states that the property is secured by a mortgage with respect to the real property and improvements    known as Unit # 100, 265 Atwells Avenue,    more particularly described in Exhibit A attached    and incorporated by reference   . Exhibit A contains the same general metes-and-bounds description contained in the mortgage. The AIDC seeks refuge in the Rhode Island Condominium Act and its related statutes. Relying on G.L. 1956 (1984 Reenactment) § 34-36-14, AIDC first contends that a transfer of title to a condominium must describe the particular unit to be transferred. Section 34-36-14 provides in part: Descriptions of unit.  Every deed, lease, mortgage or other instrument may legally describe a unit by its identifying number    and every such description shall be deemed good and sufficient for all purposes   . (Emphasis added.) It is `the function and duty of this court to construe statutes'    [And] it is our task `to establish and effectuate the intent of the Legislature.' Town of East Greenwich v. O'Neil, 617 A.2d 104, 108 (R.I. 1992). If the language of the statute is `clear on its face, then the plain meaning of the statute must be given effect.' Caithness RICA Limited Partnership v. Malachowski, 619 A.2d 833, 836 (R.I. 1993). The use of the word may in a statute generally connotes a degree of discretion. Pacheco v. Raytheon Co., 777 F. Supp. 1089 (D.R.I. 1991). Section 34-36-14 does not prohibit description of the entire premises; therefore, AIDC's reliance on the statute is misplaced. Likewise it is clear that the statute does not mandatorily require identification by the unit number but, as the word may connotes, permits such identification. Consequently the metes-and-bounds description, absent identification of the unit number, is not prohibited by the statute. The AIDC next avers that the mortgage was not recorded in the proper index and thus a reasonable examination of title would not reveal the document. Because this is a condominium mortgage, AIDC argues, the Legislature has mandated that it must be recorded in a condominium index. Next AIDC contends that because of the general metes-and-bounds description, the recorder would record the document in the general index, and AIDC concludes that conducting a search in the condominium index would not result in the document's discovery and consequently could not afford notice to a subsequent purchaser. We do not agree with AIDC's argument that the mortgage was required to be recorded in a condominium index. Section 34-36-12, as amended by P.L. 1987, ch. 431, § 1 provides in part: (b) In addition to the records and indexes now required to be maintained by the recorder, the recorder may maintain an index whereby the record of each condominium project contains a reference to the declaration, each conveyance of, lien against, and all other instruments referring to a unit affected by such declaration, and the record of each conveyance of, lien against, and all other instruments referring to a unit shall contain a reference to the declaration of the property of which the unit is a part. (Emphasis added.) We do not view § 34-36-12 as controlling. [1] First and foremost the language of the applicable section of the statute begins with the phrase in addition to the records and indexes now required to be maintained. The statute does not abrogate the duty of maintaining a general index or the duty of recording an interest in the general index. Furthermore the statute merely suggests a possible addition to the general index. The statute specifically, and rather clearly, states that the recorder may maintain a condominium index. As such, the statute does not mandate a separate recording index or system. Rather it states that an additional condominium index may be maintained by the particular city or town. A purchaser who recorded his or her interest only in the separate condominium index may not be fully protecting his or her interest in the property. In this instance we deem the mortgage to be properly recorded. Our emphasis now turns to the description in the mortgage. `[A] mortgage will not be held void for uncertainty, even as to third persons, where by any reasonable construction it can be sustained; and where the description used furnishes a key whereby a person, aided by extrinsic evidence, can ascertain what property is covered, such description is sufficient.' (Emphasis added.) Caraway Bank v. United States, 258 Ark. 858, 859, 529 S.W.2d 351, 351-52 (1975). In following the reasoning of the Caraway court, we find that a recorded mortgage would not be ineffective in imparting notice to third parties whereby the description contained in the mortgage furnishes adequate information to aid a third party in identifying the land. Likewise, a properly recorded Massachusetts mortgage describing the premises as all of our (the debtor's) land situated within Hampshire County was valid to impart notice to a subsequent purchaser. Hampshire National Bank of South Hadley v. Calkins, 3 Mass. App. 697, 339 N.E.2d 244 (1975). The Calkins court held that the generality in the description of the property was not grounds for treating the mortgage as ineffective. The court concluded that there was sufficient information in the general description of the property to put a subsequent purchaser on notice. An obligation is imposed on a purchaser of real property to make a reasonable and diligent search of the records. In this instance the mortgage was properly recorded, and a prospective purchaser undertaking a reasonable title search would have discovered the mortgage. The purchaser would then be on notice of an interest in the land, albeit with a general metes-and-bounds description of the entire condominium project, but a description nonetheless. We are analyzing a much more specific description than all my land that the Calkins court deemed sufficient to put a purchaser on notice. The purchaser who adequately searched title would be on notice of the information represented in the mortgage. That information could be the key in more adequately defining the land or, in this case, the specific unit number of the condominium. Because this instrument was properly recorded, the purchaser would be bound by the notice it imparts. Although the general metes-and-bounds description in the mortgage may have been sufficient to aid a purchaser in identifying the specific unit number covered by the mortgage, our analysis need not reach that supposition. One searching the records would literally have the key to the specific identity of the condominium unit at his or her fingertips and could unlock the resulting information simply by turning one page in the land evidence records. The mortgage that contained the general metes-and-bounds description of the entire condominium project was recorded on page 262. The assignment was recorded on page 262A. The association of the mortgage and the assignment can be further evidenced by the fact that they were recorded two minutes apart. We believe that a reasonable and diligent title search would have uncovered the assignment. The purchaser with notice of the mortgage and the assignment would then have the identity of the specific unit number because both the general metes-and-bounds description and the specific unit number appear in the assignment. Therefore, we hold that the purchaser would have constructive notice of the single condominium unit that the mortgage covered. Consequently we answer the second certified question in the affirmative. We have reviewed other contentions put forth by AIDC and find that they do not fall within the purview of the certified question. For this reason we do not address those contentions.