Wiley 2014 CPAExcel Exam Review Study Guide, Page 148

What are the Recording Acts?

The Recording Acts are state statutes that establish the keeping of official county records to
track public land ownership.  The Acts help settle conflicts of ownership in real property by
prioritizing documents of ownership.  However, the order of priority depends on the type of
statute that the state has adopted: race, notice, or race-notice.

Race statute

Also known as the "Race to the courthouse."  The rule that the document recorded first wins and
will have priority over any later recordings.
o States that follow the Race statute:
o Delaware,

o Louisiana, and

o North Carolina. 

Notice statute

A later buyer who pays fair value for the property and does not have notice that there were any
other earlier conflicting interests, wins and will have priority over any later recordings.

o States that follow the Notice statute:

o Alabama,

o Arizona,

o Connecticut,

o Florida,

o Illinois,

o Iowa,

o Kansas,

o Kentucky,

o Maine,

o Massachusetts,

o Missouri,
 o New Hampshire,

o New Mexico,

o Oklahoma,

o Rhode Island,

o South Carolina,

o Tennessee,

o Vermont, and

o West Virginia.

Race-Notice statute

 A later buyer who pays fair value, does not have notice of any other earlier conflicting interests,
and records first, wins and will have priority over any later recordings.

o States that follow the Race-Notice statute:

o Alaska,

o Arkansas,

o California,

o Colorado,

o District of Columbia,

o Georgia,

o Hawaii,

o Idaho,

o Indiana,

o Maryland,

o Michigan,

o Minnesota,

o Mississippi,

o Montana,

o Nebraska,
o Nevada,

o New Jersey,

o New York,

o North Dakota,

o Ohio (regarding mortgages, OH follows the Race statute),

o Oregon,

o Pennsylvania (regarding mortgages, PN follows Race),

o South Dakota,

o Texas,

o Utah,

o Washington,

o Wisconsin, and

o Wyoming.
Recording Documents

Documents are not required to be recorded, but they should be recorded to preserve one’s legal
rights in the property.

Deeds, mortgages, and easements are the primary documents that should be recorded.

Each state has a recording statute that determines priority if there are multiple recordings of the
same interest.

• Race Statute: First party to record has the best priority.

• Notice Statute: If a subsequent recorder (later buyer) of an interest did not have notice of
a prior unrecorded interest, then the subsequent party (later buyer) has priority regardless
of who records first.
• Notice-Race Statute: If a subsequent recorder (later buyer) of an interest did not have
notice of a prior unrecorded interest, then whichever party records first has the superior
interest.

Note: For any of the notice statues, the subsequent party (later buyer) cannot have a superior
interest if the earlier interest was recorded or if the subsequent party (later buyer) was
aware of the earlier interest.

What is the Purpose for the Recording Acts?

The purpose of the Recording Acts is to protect people who have acted in good faith and paid
value for property. (The concept of "good faith" entitles one to act promptly and reasonably and
is usually implied in every contract). The Acts do not create a criminal penalty for not recording,
just a strong incentive to record documents for public record. By recording a document, you’re
giving the general public constructive notice of your ownership rights. Until a document is
recorded properly, title to property could be at risk from later good-faith purchasers.

Do I Need to Consult a Real Estate Attorney?

The Recording Acts are difficult to understand and may not protect a purchaser from all pitfalls.
The best way to protect your interest is to contact a real estate lawyer in your area who can
provide more guarantees, review title insurance and advise you of the various ways you can
protect your interest.