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Recording System
2011©Cengage Learning. All Rights Reserved.
NATURE AND EFFECT OF RECORDING Recording Optional Effect of Recording Constructive Notice
2011©Cengage Learning. All Rights Reserved.
Recording Requirements
Acknowledgment Preliminary Change of Ownership Report Transfer Tax Stamps Bona Fide Purchaser
2011©Cengage Learning. All Rights Reserved.
Actual or Constructive
Actual notice is simply notice or information about a fact derived from a person’s five senses.
Constructive notice may be the notice imparted by law from the recording of a document.
2011©Cengage Learning. All Rights Reserved.
Priorities
Determining Priority Document Must Be Indexed
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Title Insurance
Protects most of the purchasers and encumbrancers against conflicting claims.
Title companies research the recorded documents.
Protects the owner or encumbrancer for the period of ownership of the property or lien.
2011©Cengage Learning. All Rights Reserved.
GENERAL PRIORITIES
Unrecorded Documents Effect of Recording Race–Notice Recording Statute Effect of Improper Recording Curative Statute
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Effect of Notice
Actual Notice Constructive Notice
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Chain of Title
refers to a chronological history of all documents affecting title to a certain property.
instrument must be properly recorded to be part of chain.
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Transferee of a Bona Fide Purchaser Once a BFP has priority over other interests,
that BFP can transfer that interest to someone else, and that transferee would take the same priority held by the transferor.
2011©Cengage Learning. All Rights Reserved.
SPECIAL PRIORITIES
Mechanic’s Liens Contractor must record within 60 days all other mechanics have 30 days With notice of completion mechanics have 90
days Judgment Liens
Junior Superior
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Future Advances under DT
Obligatory Advances Optional Advances
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LIS PENDENS
“litigation pending” Anyone who acquired an interest in real
estate during the pendency of a lawsuit took the property subject to that judgment.
Use by Some Attorneys inhibiting the marketability of the property
Release by Bond
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RECORDING LIMITS
the law set up time limits for all existing and newly recorded liens.
After a specified period, the document will have no recording effect.
Period specified by statute can be extended by filing a notice of intent to preserve interest.
2011©Cengage Learning. All Rights Reserved.
Periods
A deed of trust or mortgage becomes unenforceable 10 years after the date of the last payment.
Option to purchase expires six months after its stated termination date.
Powers of termination expire 30 years from the date of recordation unless extended another 30 years by a notice.
2011©Cengage Learning. All Rights Reserved.
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