Recording Acts (Race, Notice, Race-Notice)
What is the Recording Acts (Race, Notice, Race-Notice)?
State statutes that determine priority among competing claimants to real property by establishing rules based on the order of recording, the buyer's notice status, or both.
Definition
Recording acts are state statutes that modify the common-law rule of 'first in time, first in right' for real property conveyances. Under the common law, the first grantee would prevail in a dispute between competing claimants regardless of recording. Recording acts change this result by providing that a subsequent purchaser can prevail over a prior unrecorded interest if certain conditions are met. These statutes serve the critical function of providing constructive notice to prospective purchasers and encouraging the public recording of property interests.
There are three types of recording acts. Under a race statute, the first party to record prevails regardless of notice. These are the simplest but least common. Under a notice statute, a subsequent bona fide purchaser (BFP) who takes without notice of a prior unrecorded interest prevails over the prior grantee, regardless of whether the subsequent purchaser records first. Under a race-notice statute -- the most common type -- a subsequent BFP prevails only if the purchaser both (a) takes without notice and (b) records before the prior grantee. Race-notice statutes combine the protections of both race and notice approaches.
Notice can be actual (direct knowledge), constructive (information available in the recording system), or inquiry (facts that would prompt a reasonable person to investigate). The recording system works through a chain of title maintained in the county recorder's office. Documents are indexed by grantor-grantee or by tract. A title search involves tracing the chain of title through these indices to discover any prior interests that may affect the property.
Key Elements
- 1Determine the type of recording act in the jurisdiction: race, notice, or race-notice
- 2Identify whether the subsequent purchaser is a bona fide purchaser (BFP) who paid value
- 3Determine whether the subsequent purchaser had notice: actual, constructive, or inquiry
- 4For race and race-notice statutes, determine the order of recording
- 5Apply the appropriate rule: race (first to record wins), notice (BFP without notice wins), or race-notice (BFP without notice who records first wins)
Landmark Cases
Luthi v. Evans
223 Kan. 622 (1978)
Addressed the requirements for proper recording, holding that a document must provide adequate description of the property to give constructive notice; a blanket conveyance of 'all interest' was insufficient.
Messersmith v. Smith
60 N.W.2d 276 (N.D. 1953)
Held that an improperly acknowledged deed, though recorded, was not entitled to be recorded and therefore did not provide constructive notice to subsequent purchasers.
Board of Education v. Hughes
118 Minn. 404 (1912)
Established that a deed from a grantor outside the chain of title (a 'wild deed') does not provide constructive notice even though it is recorded.
Exam Tips
- Always identify the type of recording statute first -- the analysis differs significantly depending on whether it is race, notice, or race-notice.
- Create a timeline of events: who conveyed to whom, when, who recorded when, and who had notice at each point.
- A 'wild deed' (recorded deed from a grantor who has no record title) does not provide constructive notice. Always check the chain of title.
- Remember that donees, heirs, and devisees are generally not BFPs because they did not pay value.
Common Mistakes to Avoid
- Confusing notice and race-notice statutes. Under a notice statute, recording is not required for the subsequent BFP to prevail. Under race-notice, the BFP must BOTH lack notice AND record first.
- Assuming that recording alone is sufficient to protect a purchaser -- under notice and race-notice statutes, the purchaser must also qualify as a BFP (without notice and for value).
Memory Aid
Race = who Records first. Notice = who had No notice. Race-Notice = must win BOTH races: Record first AND have No notice.