Recording System 2011©Cengage Learning. All Rights Reserved.

Recording System

2011©Cengage Learning. All Rights Reserved.

NATURE AND EFFECT OF RECORDING Recording Optional Effect of Recording Constructive Notice


Recording Requirements

Acknowledgment Preliminary Change of Ownership Report Transfer Tax Stamps Bona Fide Purchaser


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.


Priorities

Determining Priority Document Must Be Indexed


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.


GENERAL PRIORITIES

Unrecorded Documents Effect of Recording Race–Notice Recording Statute Effect of Improper Recording Curative Statute


Effect of Notice

Actual Notice Constructive Notice


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.


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.


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


Future Advances under DT

Obligatory Advances Optional Advances


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


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.


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.


Recording System 2011©Cengage Learning. All Rights Reserved.

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