Determine Whether an Interest Is Recorded - dummies

Determine Whether an Interest Is Recorded

By Alan R. Romero

Property law provides that all recording acts protect later interests against prior interests only when the prior interest isn’t recorded. So if a prior interest is recorded before a later interest is created, the answer is always the same: The later interest is subject to the prior interest. The recording acts don’t change the usual principle of first in time, first in right.

However, a document may be filed with the county recorder but still be treated as unrecorded when the document

  • Doesn’t comply with the requirements for recording

  • Is hard or impossible to find using the indexes

Here is more insight into each of these situations when a document is filed with the county recorder but isn’t treated as recorded.

Recording a document improperly

A document is recorded only if it complies with the statute. If an instrument is recorded but actually isn’t entitled to be recorded, it’s legally unrecorded. So if a document isn’t the type of document that the statute allows to be recorded, it isn’t recorded even if the county recorder mistakenly accepts it. Likewise, if the document doesn’t comply with the prerequisites for recording, it isn’t recorded.

If an instrument is unrecorded, the recording act may protect a subsequent purchaser against it. But in some states, a subsequent purchaser who actually finds the document may still have constructive notice of the prior interest and therefore won’t be protected by the recording act.

Being unable to find a recorded document

Even a recorded document that’s entitled to be recorded and that satisfies the prerequisites for recording may still be treated as unrecorded if it can’t reasonably be found. If a document can’t reasonably be found, then it’s no better than if it weren’t recorded at all.

And because the person who files the document with the county can check after recording to make sure it can be found in the indexes, many courts hold that if the document can’t be found, the subsequent purchaser is innocent, the prior interest holder could’ve avoided the subsequent purchaser’s reliance, and therefore the document is unrecorded.

Here are some situations in which some courts hold that an actually recorded document is legally unrecorded because it’s hard or impossible for a subsequent purchaser to find:

  • Documents are improperly indexed. In a grantor-grantee index, if the county recorder indexes the instrument under a wrong or misspelled name, a subsequent purchaser who searches title may have no chance of finding it.

    For example, if the grantee’s name is Wilson but the recorder indexes and spells it as Vinson, a reasonable title search would never find the document. But if the first letters of the name are spelled and indexed correctly, a misspelling is less likely to prevent discovery of a document, such as if the grantee’s name is misspelled and indexed as Robertson instead of Robertsen.

    Similarly, in a tract index, if the recorder indexes an instrument in the wrong location, a title searcher has no reasonable way to discover the instrument.

  • Links are missing. In a grantor-grantee index, even if the prior interest is recorded, a searcher can’t find it if it isn’t properly connected in the same chain of title back to a common predecessor in title. Courts agree that such a deed, sometimes referred to as a wild deed, is unrecorded.

    For example, suppose A gave a deed to B that wasn’t recorded and then later gave a deed to C that was recorded. A subsequent purchaser through C wouldn’t be able to find any interest that B or B’s successors subsequently created, even if recorded, because the subsequent purchaser would search in the grantee index to C, then to A, and so on; the subsequent purchaser would never discover that A had previously conveyed the property to B.

    A person recording her instrument can avoid the missing-links problem simply by researching title to confirm that not only is her interest recorded but so are the previous instruments in her chain of title.

  • An earlier recorded document creates an interest in the property. A title searcher in a grantor-grantee index searches for successive owners backward in time in the grantee index and then checks each of those owners in the grantor index during their time of ownership. That means if one of those owners conveyed an interest before her ownership, even though it was recorded, a title searcher normally wouldn’t find that interest.

    That may sound crazy, because why would someone convey an interest in property before she owns it? But it can happen, maybe because of a mistake, maybe because of fraud. Whatever the reason, if A gives a warranty deed to B before she acquires the property and then later does acquire it, the property automatically transfers to B under a doctrine called estoppel by deed.

    If A later conveys the property to C, a subsequent purchaser through C normally wouldn’t find that earlier deed to B even though it was recorded. Some courts therefore say that the deed is legally unrecorded; others say it’s recorded and that title searchers simply have to check the grantor indexes further back in time if they want to check for earlier recorded deeds.

  • A later recorded document creates an interest in the property. This problem is similar to the problem of the earlier recorded document. Suppose that O sells property to A, and A doesn’t record her interest immediately. Instead, A records it after some other person, B, acquires the property and records, knowing of A’s prior interest.

    Except in the race states, B wouldn’t be protected by the recording statutes. But if B sold the property to C, C wouldn’t normally find A’s recorded interest. C would start with her seller’s name in the grantee index, finding the recorded conveyance to B. She would then find the conveyance from O to B and keep going back in time in the grantee index.

    Then she would search each of those names in the grantor index during the time each owned the property, ending with B. She wouldn’t find that O had previously sold the property to A, because the deed to A wasn’t recorded during the time that O appears to have actually owned the property; the deed to A was recorded only after O had given a recorded deed to B.

    Most states say that the later-recorded document prevails, which means that a prudent title searcher should search for each owner’s name in the grantor index not just for the time the grantor appears to have owned the property but afterward as well. Others treat such a later recorded document as unrecorded.

  • Deeds create interests in other property. Not only may a deed convey a particular parcel of land, it may also create an interest in some other parcel of land. For example, a deed may give the grantee an easement over adjoining land the grantor still owns. A person who later acquires the grantor’s retained land may not discover from a title search that the land is subject to an easement.

    If a grantor-grantee index says the earlier deed creating the easement concerns a different parcel of land, the title searcher will pass by that entry in the index, looking for entries dealing with the parcel she is buying. Some courts say that skipping the other entries is reasonable and that the easement is unrecorded.

    Other courts say the easement is recorded and that a title searcher should search any documents involving the previous owners to see whether they create such an interest in the relevant property, even though the index doesn’t say that the deed relates to the relevant property.

    The problem is even worse in a tract index system: If the deed is indexed only as relating to the land conveyed and not the burdened land retained, the title searcher won’t find an index entry for that deed at all.