Recording of Land Titles
A process by which proof of ownership of real property is filed in the appropriate county office or court to allow purchasers, creditors, and other interested parties to determine the status of the property interests therein.
The process of recording begins when a duly executed, acknowledged, and delivered document is brought to the recorder's office for filing in the record books in the county where the property is located. The recorder's office also keeps a set of indexes containing information about each document so that the document can be discovered by a title search. A majority of states have a GRANTOR-GRANTEE INDEX, a set of volumes containing an alphabetical reference to the surname of the grantor followed by the name of the grantee, a brief description of the document and the property, and the location of the filed document in the official record books. The same information is contained in the "grantee-grantor index," which is organized alphabetically by surname of the grantee. A few states use a "tract index," which organizes all of the documents according to the location of the property.
An individual who plans to purchase land commissions a title search, which involves examining the list of successive conveyances, from original owner to the present holder, that affect a parcel of land. The person conducting the title examination, usually a lawyer or title insurance examiner, prepares an "abstract of title," summarizing the chain of title and listing any liens, charges, or liabilities to which the land may be subject. The ABSTRACT OF TITLE is evidence of the marketability of the record title; a purchaser of an interest in real property will take title subject to all interests constructively disclosed or implied by the record and subject to any interests of which the purchaser has actual notice.
In nearly every state the validity of a conveyance, as between grantor (seller) and grantee (purchaser), is not affected by whether the deed is filed in the public records or not; the question is not who has possession of the deed but who owns title to the land. Before the enactment of state recording acts, the question of priority of title was generally a question of time. For example, if O, owner in fee simple of land, sells to A, giving A a deed to the land, but O later decides to sell the same land to B, B takes nothing because A was first to purchase the land, leaving O nothing to convey to B. Under state recording acts, however, if A fails to record the deed before B buys and B meets certain criteria with respect to B's status and behavior, B still receives good title from O and A takes nothing. B is considered a "bona fide purchaser" or a "purchaser in good faith," if he or she gives "valuable consideration without actual, implied or constructive notice of inconsistent outstanding rights of others …" (Miller v. Hennen, 438 N.W. 2d 366, 369 [Minn. 1989]).
Three general categories of state recording acts are in use in the United States: "notice," "race," and "race-notice" recording statutes, the least common of which are the race recording acts. Under a race recording statute, if A fails to record title, B must record his or her title before A records. (It is therefore a "race" to the recorder's office such that the first person to file has title to the property.) To prevail against an unrecorded conveyance, B must have paid value, yet there is no requirement that B be without notice of A's conveyance at the time of B's recording in order to prevail.
Unlike the race recording statute, the notice and race-notice recording statutes prevent B from prevailing if B is first to record but does so with notice of the prior unrecorded conveyance. Under a notice recording statute, if B is a bona fide purchaser and is therefore without notice of A's prior unrecorded conveyance, B will prevail regardless of whether A records before B. On the other hand, under a race-notice recording statute, B will not prevail, despite her or his bona fide purchaser status, if B does not record before A.
The recording statutes only work to the detriment of the holders of unrecorded instruments. A properly recorded document will prevail over subsequent claims, regardless of whether those claimants actually search for or find the recorded instrument. Courts often use the term "constructive notice" to describe this imputation of knowledge if a proper and reasonable investigation would have revealed the recorded instrument. Because the recording system was designed to encourage and protect reliance on the public records, no legal protection is afforded those individuals who have not significantly relied upon such records.
A purchaser with actual notice of a prior unrecorded interest in the premises will take title subject to that interest even though it may be unrecorded. Rumor or gossip usually are insufficient to provide notice, but if a purchaser has heard more reliable information about a possible adverse claim to the land, he or she is expected to make a reasonable investigation. In such cases, an individual might be charged with "inquiry notice" in addition to actual or constructive notice of previous claims. Inquiry notice is not applied in the same manner as constructive notice, which is applied automatically; it must first be shown that a suspicious fact existed to originate the duty to conduct an inquiry.
One of the most litigated aspects of notice is the universally accepted rule that a purchaser of an interest in land is deemed to have actually viewed the land before buying. The purchaser is held to inquiry notice of the facts that an inspection or a conversation with those in possession of the land would disclose. The problem occurs in determining what is possession—for example, when the holder of the unrecorded interest only uses the property for a limited purpose, such as for camping or cutting timber.
Not every instrument that has been delivered to the recorder's office and copied into the records is held to be recorded or to have provided sufficient notice within the meaning of the recording acts. The recorder's office makes no representation that the instruments it preserves are authentic and reliable, and in many cases one cannot detect the defects by solely examining the document itself. For example, the instrument may contain a forged signature, have a defective ACKNOWLEDGMENT, never have been delivered to the buyer, have been issued by a seller who is without capacity, and so on. Some states have enacted curative statutes which provide that after the passage of a certain number of years, instruments that lack seals or acknowledgments or other technical requirements are deemed to have been properly recorded.
In some cases, documents can be located only with difficulty, such as with "wild deeds"—recorded deeds not appearing in the chain of title. Most of these difficulties do not occur in tract-index systems in which all conveyances affecting a given parcel will be indexed on a single page. There are situations, however, in which the tract index shows conveyances by parties who are not in the chain of the record title. Such conveyances do not impart constructive notice of an interest. However, they may not be disregarded, and they put the purchaser to the burden of an inquiry.
The more problematic and common error occurs when the instrument has been misindexed at the recorder's office. In this situation courts generally hold that the instrument was not recorded because it was not indexed in a manner sufficient to provide constructive notice to any individual searching the record. Some states, however, provide that an instrument is deemed recorded upon its deposit in the recorder's office. In either case, the careful purchaser or grantee should return to the recorder's office a few days after recording his or her deed to ensure that it has been properly recorded.
Not all written instruments affecting real property interests are recordable. Recording statutes may explicitly provide that certain documents need not be recorded to protect the individuals in whom a property interest is created, such as with short-term leases and executory sales contracts. On the other hand, not all interests in land derive from written instruments. These types of adverse claims to title fall entirely outside the coverage of the recording acts and include the following property interests: ADVERSE POSSESSION, prescriptive EASEMENTS, implied easements, easements by necessity, and oral boundary line agreements.