Recording Statute

In depth

Recording statutes determine who wins when multiple parties claim conflicting interests in the same property. The three main types are race, notice, and race-notice. They reward recording, knowledge, or both. Misconception: recording is not automatic and not retroactive; until you record, you risk being cut off by a later, recorded purchaser. Practically, in seller-financed deals, recording the deed, mortgage, contract for deed memorandum, or assignment immediately after closing is essential. Buyers under a contract for deed who fail to record a memorandum risk losing priority to a later mortgage or judgment lien. Sellers under purchase money mortgages must record promptly to preserve lien priority. Always confirm the local recording office's hours, fees, and document standards before closing.