Legal Definitions - recording acts

Recording acts are state laws that establish a system for documenting and making public various legal instruments, primarily those affecting ownership or interests in real estate, such as deeds, mortgages, and liens. The main purpose of these acts is to provide public notice of property transactions and to determine the priority of claims when there are conflicting interests in the same property. By recording a document in the designated public office (usually a county recorder's office), a person gives notice to the world of their interest in the property, which can protect their claim against subsequent purchasers or creditors.

Here are some examples illustrating how recording acts apply:

• Conflicting Property Sales: Imagine Sarah sells her vacation home to Mark, but before Mark records the deed at the county recorder's office, Sarah fraudulently sells the same home to Lisa. Lisa, unaware of the prior sale to Mark, immediately records her deed. Recording acts would determine who legally owns the house. In a "race" jurisdiction, Lisa would own it because she recorded her deed first. In a "notice" jurisdiction, if Lisa bought the property without any knowledge of Mark's prior purchase, she might own it. In a "race-notice" jurisdiction, Lisa would need to have bought without notice *and* recorded first. This example demonstrates how recording acts resolve conflicting claims to property by prioritizing interests based on recording or notice.

• Mortgage Priority: A small business owner, David, takes out a first mortgage from Bank A to purchase a commercial property. Bank A promptly records its mortgage. A year later, David needs more capital and takes out a second mortgage from Bank B, using the same property as collateral. Bank B also records its mortgage. Because Bank A recorded its mortgage first, recording acts ensure that Bank A's mortgage has priority over Bank B's mortgage. If David defaults on his loans, Bank A would be paid back from the sale of the property before Bank B, due to the established order of recording. This illustrates how recording acts establish the order of financial claims or liens against a property.

• Unrecorded Easement: Emily purchases a rural property. Unbeknownst to her, the previous owner had granted a neighbor, Robert, an unrecorded easement allowing him to cross a specific portion of the property to access a fishing pond. Robert never recorded this easement. Emily purchases the property without any knowledge of Robert's right, having relied on a title search that showed no such encumbrance. Under most recording acts, if Emily purchased the property for value and without notice of Robert's unrecorded easement, her ownership would likely be free of that easement. Robert's failure to record his interest means it might not be enforceable against a subsequent *bona fide* purchaser like Emily. This highlights how recording acts protect subsequent purchasers who rely on the public record to determine the status of a property's title.