The majority of states have laws known as recording acts. These recording acts establish individuals’ procedures when filing copies of real property documents, including deeds, mortgages, and liens.
Recording acts establish the priority of real property owners’ interests if there are individuals who have competing claims. Records that will affect the ownership or title of property are filed with the recording office.
These documents must be filed in the county where the property is located, not where the purchaser resides. The recorder’s office will collect a recording fee for filing the document and any duplicate copies that must be filed.
The recorder will then assign a number to the document and record the time and date it was filed. The recorder will enter this date-stamped document into the public record.
The recording statutes by state may vary, so it is important to consult a real estate lawyer for any questions regarding recording documents involving real property.
What Is The Purpose Of Recording Real Estate Documents?
Recording a real estate document provides what is known as constructive notice to the public that the document was filed. This means that when a document is filed, the public is deemed aware of it and has notice of it, as an individual can easily look up the document filed in the public records.
Some states have real estate notice statutes for recording property ownership. These statutes may invalidate a buyer’s property ownership if the buyer receives notice that another individual purchased the property from the same seller before their purchase.
If the buyer does not have notice of the prior conveyance, they will be deemed the proper owner because they are the bona fide purchaser. There are three categories of notice including:
- Actual notice: The buyer obtained actual knowledge, either by word of mouth or by seeing that a previous transfer of ownership occurred;
- Constructive notice: The buyer has constructive knowledge that the prior conveyance was recorded because the buyer can easily look up this information with the county recorder; or
- Inquiry notice: The buyer is aware of a fact that would put any other reasonable person on notice and would prompt them to investigate the issue further.
Even if a document related to a property is defective or recorded defectively, it will still constitute constructive or inquiry notice. This is because buyers must make a good faith effort to make a reasonable investigation if they suspect any issues.
In states with recording acts that do not require notice, buyers who purchase property can still be considered the true owner despite knowing about another buyer. This is because race statutes in recording acts grant ownership to the first individual who records their conveyance, regardless of who first purchased the property, which will be discussed further below.
What Are the Recording Acts?
The recording acts are state statutes establishing how official county records are kept to track public land ownership. These acts help settle real property ownership conflicts by prioritizing documents affecting ownership.
The order of priority will depend on the type of statute that each state has adopted, which may include:
- Race;
- Notice; or
- Race-notice.
Race Statute
The race statute is also referred to as the race to the courthouse. This rule provides that the recorded document wins and will have priority over any later recordings.
The states that follow the race statute include:
- Delaware;
- Louisiana; and
- North Carolina.
Notice Statute
Under a notice statute, if a later buyer pays fair value for a property and does not have notice that there were any other earlier conflicting interests, they will win and will have priority over any later recordings. The states that follow the notice statute include:
- Alabama;
- Arizona;
- Connecticut;
- Florida;
- Illinois;
- Iowa;
- Kansas;
- Kentucky;
- Maine;
- Massachusetts;
- Missouri;
- New Hampshire;
- New Mexico;
- Oklahoma;
- Rhode Island;
- South Carolina;
- Tennessee;
- Vermont; and
- West Virginia.
Race-Notice Statute
Under a race-notice statute, if a later buyer pays fair value, does not have notice of any other earlier conflicting interests, and records their document first, they will win and have priority over any later recordings. States that follow race-notice statutes include:
- Alaska;
- Arkansas;
- California;
- Colorado;
- District of Columbia;
- Georgia;
- Hawaii;
- Idaho;
- Indiana;
- Maryland;
- Michigan;
- Minnesota;
- Mississippi;
- Montana;
- Nebraska;
- Nevada;
- New Jersey;
- New York;
- North Dakota;
- Ohio (for mortgages, OH follows the race statute);
- Oregon;
- Pennsylvania (regarding mortgages, PA follows the race statute);
- South Dakota;
- Texas;
- Utah;
- Washington;
- Wisconsin; and
- Wyoming.
What Is a Registry of Deeds?
The registry of deeds is the location where documents establishing property ownership are recorded in the official books, which may include:
- Deeds to properties;
- Mortgages;
- Real estate contracts; and
- Other property documents.
The registry of deeds may also be called the register of deeds or recorder of deeds. Public officers or county officials usually maintain them.
The documents contained in the registry of deeds will be made available to members of the public if a deed or property ownership issue arises.
How Does Recording Real Estate Documents Settle Ownership Disputes?
Recording laws establish rules for who prevails when there are multiple claims of ownership on a property or claims of a lien on the property. This means that the laws prioritize owners of deeds and mortgages and the priority of liens on a property.
Under state recording laws, the date a document is recorded may be significant. This is because certain state recording laws provide that the first individual to record the deed, lien, or mortgage concerning a piece of real property will have priority.
As discussed above, there are three categories of recording acts: race, notice, and race notice. The type of recording act used in the state will determine how the ownership dispute is settled.
In a race state, the first individual to record their document is said to have “won the race” and will have priority. In a notice state, if a second individual purchases a property after a first buyer did not record their ownership interest, the second buyer will be deemed not to have had notice and will take priority.
Race-notice acts combine these two types of recording acts. Examining an example of this type of recording act may be helpful. Suppose an owner conveys property to Person X, but they do not record their interest.
Then, the same owner conveys the same property to Person Y, who pays the fair value. When Person Y deeded the property, they had no actual or constructive knowledge of Person X because their deed was not recorded.
After Person Y has deeded the property, Person X records the deed. Then, Person Y records their deed.
In this type of state, the winner has to take the title without notice of the other party’s deed and record their deed first. Person X would prioritize ownership in this case because Person Y took the title without notice but recorded their deed second.
Do I Need to Consult a Property Attorney?
If you have any issues, questions, or concerns related to recording real property documents in your state, consulting with a property lawyer is essential. Your lawyer can help you record your interest in a property in compliance with your state’s requirements and ensure that there are no other conflicting interests.
Your attorney can provide title insurance, review the chain of title, and advise you if there are any other ways you can protect your interests in the property. If any disputes arise related to your property, your attorney can represent you in court.
