Distinguishing the Three Types of Recording Statutes
Although recording acts differ among the states, all recording acts make an unrecorded prior interest unenforceable against a later interest in some situations. So even though you don’t have to record an instrument in order for it to be valid, you generally should record it.
Otherwise, someone else may later acquire a conflicting interest that will prevail against your interest. In all states, if you do record your valid interest, your interest is enforceable against any interests that arise after your interest was recorded.
Following are the three types of recording statutes and the circumstances in which they protect a later interest from a prior interest:
Notice acts: About half the states have recording statutes called notice acts, which protect a later purchaser of an interest if she didn’t have notice of the prior interest, whether through actual notice, by means of the public records, or otherwise.
A notice statute may say something like this: “No interest in real property shall be good against subsequent purchasers for a valuable consideration and without notice, until the same be recorded according to law.”
Race acts: Only a few states have the kind of recording statute known as a race act. These statutes make a prior interest void against a later interest if the later interest is recorded first.
A race statute may say something like this: “No conveyance of an interest in real property shall be valid against third parties until it is recorded according to law.”
Race-notice acts: The most common type of recording act is the race-notice act, which combines the requirements of the notice and race acts. That is, a prior interest is void against a later interest if the later interest holder paid value without notice of the prior interest and recorded her interest first.
A race-notice statute may say something like this: “Every conveyance of real property is void as against any subsequent purchaser or mortgagee of the same property, in good faith and for a valuable consideration, whose conveyance is first duly recorded.”