Recording your deed puts the public on notice that you own property. Just because the public doesn’t know, however, makes you no less of a property owner once you have received a properly executed deed. The act of recording a deed does not convey property, although some state laws may favor a recorded deed over an unrecorded one when property ownership is in dispute.
A crucial element of property conveyance is delivery of the deed. If someone signs a deed into your name but never gives the deed to you or to another person on your behalf, the deed may not be considered delivered or the property conveyed. A recorded deed is generally evidence that the deed was delivered or given to you. A deed does not have to be recorded, though, to be considered delivered.
The danger of not recording your deed is that it may get lost or destroyed. If the person who deeded to you is not around to re-deed the property to you or has had second thoughts, you may have no evidence that the deed ever existed or that you ever owned the property.
Race to the Courthouse
Some states are considered “race to the courthouse” states under their recording statutes. This means if a seller deeds the same property twice and you record your deed first, you become the property owner. Other states are considered “race-notice” states. This means that if you pay fair value for the property and record your deed first without knowing about the other unrecorded deed, you become the property owner. If you have knowledge of the other deed, however, a court may look at the evidence before deciding ownership. Therefore, where conflicting deeds exist, recording your deed first can actually determine property ownership.
Mortgages and Liens
State laws also apply to mortgages or liens. If you neglect to record your deed, the prior owner may make a mortgage or encumber the property after she deeds to you. The bank or lien holder, having no knowledge of your unrecorded deed, will require payment to remove the lien. And if not paid, the lien holder may initiate foreclosure.
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