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Understanding Real Estate Recording Systems and Their Mechanisms

This document explores the critical purpose of recording systems in resolving property ownership conflicts among competing interests. We examine examples of potential conflicts, such as dual grants of land or overlapping mortgages, and outline the recording mechanics: preparing deeds, filing with proper offices, and the role of clerical actions in indexing documents. Additionally, we dissect various recording systems—Race, Race-Notice, and Notice—clarifying how each system determines the priority of claims based on notice and recording efficiency.

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Understanding Real Estate Recording Systems and Their Mechanisms

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  1. Recording System

  2. Purpose • Resolve priorities between competitors for the same property. [party vs. non-party] • Does not impact the relationship between the original parties to the instrument.

  3. Example conflicts • Owner grants land to A today and to B tomorrow. Who owns the land? • Owner mortgages property to A today and to B tomorrow. Whose mortgage has priority? • Owner mortgages property to A today and sells land to B tomorrow? Is B subject to mortgage?

  4. Mechanics of recording • Prepare deed in proper form.

  5. Mechanics of recording • Prepare deed in proper form. • Take deed to proper office.

  6. Mechanics of recording • Prepare deed in proper form. • Take deed to proper office. • Pay fee.

  7. Mechanics of recording • Prepare deed in proper form. • Take deed to proper office. • Pay fee. • Clerk copies document into official records.

  8. Mechanics of recording • Prepare deed in proper form. • Take deed to proper office. • Pay fee. • Clerk copies document into official records. • Document given identification.

  9. Mechanics of recording • Prepare deed in proper form. • Take deed to proper office. • Pay fee. • Clerk copies document into official records. • Document given identification. • Clerk indexes document.

  10. Mechanics of recording • Prepare deed in proper form. • Take deed to proper office. • Pay fee. • Clerk copies document into official records. • Document given identification. • Clerk indexes document. • Original returned to filer.

  11. Searching a title

  12. Recording System[continued]

  13. Recording Systems • 1. Race • First grantee to record wins. • Irrelevant that first to record knows about a prior unrecorded interest. • Used in only a few states

  14. Recording Systems • 2. Race-Notice • Second grantee wins if: • No notice (actual or constructive) of prior interest at time of purchase, and • Records first. • In other words: • Empty head plus • Empty records plus • Records first

  15. Recording Systems • 3. Notice • Second grantee wins if: • No notice (actual or constructive) of prior interest. • No filing needed to protect against prior interest but would need to file to protect against subsequent interest. • In other words: • Empty head plus • Empty records.

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