n the United States, every be the same even if Party B
state has enacted one of didn’t record his purchase
three different types of either.
recording statutes to govern the
official recording of a transfer If Party A wants his money back
or real estate from one party to he’s gonna have to fly to Tahiti
another: and sue you there. In practice,
this usually plays out when
(1) Notice Statutes somebody buys a piece of real
estate without knowing that the
Suppose you sell your house to bank has a mortgage on it,
Party A, Party A fails to record because the bank neglected to
the sale, you turn around and record the mortgage.
sell the same house to Party B
who doesn’t have “notice” that Keep in mind that if Party B knew
you previously sold the house to (or should have known) about the
Party A (that is, Party B not previous sale to Party A, Party B
only didn’t know about the would lose even if he recorded
previous sale, he also had no first.
reason to know about it). Now
Party A and Party B wind up in (2) Race Statutes
court fighting over who owns the
property because you skipped off It’s a “race to the courthouse”,
to Tahiti with all your money and and the first one to record his
property, whose house does it purchase wins. In states with
belong to? In states with a race statutes, Party B would win
notice statute, the house belongs even if he knew about the
to Party B, because Party A had a previous sale as long as he
chance to record the previous recorded his interest first. Only
sale but didn’t. The result would a few states have race statutes –
they are considered by most first purchaser did. The
judges to be outdated and unfair. difference with the notice
statute is that if Party B lived
(3) Race-Notice Statutes in a state with a race-notice
statute, Party A could still win
Under this system, in order for a as long as he beat Party B to the
subsequent purchaser to win courthouse to record his
against a prior purchaser of the purchase.
same property who didn’t record
his prior purchase, the second DISCLAIMER: The following is
purchaser will have to prove that intended for reference only and
he (i) didn’t have notice of the not as legal advice.
first purchase, and (ii) he
recorded his purchase before the
About the Author:
Real Estate Law in Plain English explains real estate law without the legalese.
Read more articles by:
Bobby Carnes
Article Source: www.iSnare.com 
