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SUPREME COURT, STATE OF COLORADO Court Address: 2 East Fourteenth Avenue Fourth Floor Colorado State ... - page 11 / 22

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operates to impute knowledge to a party, and that "so long as 'a prior instrument is properly

recorded, subsequent purchasers have an obligation to find it on the record and are considered to

have constructive notice of it, even if they do not locate it'." 74 P.3d at 313. The opinion states

further that "the scope of search of real property records should include the search of direct and

inverted indices of recorded documents maintained by the clerk and recorder." 74 P.3d 312. In

Guaranty Bank and Trust Company v. LaSalle National Bank, ___ P.3d ___, 03CA1309, 2004

Colo. App. LEXIS 1836 (Colo. App. Oct. 7, 2004), the Colorado Court of Appeals recited these

same rules, and noted that there were affidavits from two attorneys to the effect that when they

had gone to the clerk and recorder and searched the grantor/grantee indices, they found the deed

of trust that the title company had missed. If a document is of record, then subsequent

purchasers and encumbrancers are bound by it. The Court of Appeals says:

Furthermore, as long as an instrument is properly recorded, subsequent purchasers have an obligation to find it at the county clerk and recorder's office and are considered to have constructive notice of it even if they do not locate it. Franklin Bank v. Bowling, 74 P.3d 308 (Colo. 2003); see also 1 Willis A. Carpenter, Colorado Real Estate Practice § 6 (2003) (citing Attorneys Title Guar. Fund, Inc.,

Colorado Real examination of

Estate Title Standards § title will include a search

"examining

attorney's

and inverted

(grantor-

1.1.3 (1997): of the direct

grantee) indices of the county in which

recorded documents maintained the property is located").

by

the

clerk

and

recorder

of

Id. at ** 6-7.

This rule encourages careful title searches, and promotes the utility and reliability of the title

records.

Here the purchasers and their lender argue that they are not trying to eliminate the

judgment lien, they just want to reorder the priority so that it is junior to the purchase money

mortgage and to the Londres' down payment, and they say that no one is harmed by this. They

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