In my previous blog, I discussed the different types of deeds recognized in Michigan. If you recall, a deed is a vehicle for transferring an interest in real estate. So, if you purchase real property and receive a deed, as long as the deed is properly drafted and signed, you’re golden, right? Wrong. It’s not enough to simply have an executed deed, it is important that you record that deed with the register of deeds as soon as possible. Recording a deed establishes your ownership interest over another’s claim of ownership should there be conflicting claims against the property.
Each state has its own recording statute that gives priority to those who record their interest in real property over those who don’t. Michigan has what is referred to as a race-notice recording statute. This means that in order for your interest in real property to prevail over any prior interests in the property, you must not only be the first to record your interest, but you must also have lacked notice of the prior unrecorded interest in the property.
Let’s break that down. Say you purchased a property from A. You hold on to your deed for a few days before heading down to the register of deeds to record it. Unbeknownst to you, A also sold the property to B a few days after A had sold it to you. B immediately took his deed down to the register of deeds and recorded it. B had no knowledge of A selling you the property just a few days prior to his purchase, nor did B have any way to have known of your interest in the property. Pursuant to Michigan’s race-notice recording statute, B would prevail over your interest in the property because he was the first to record his deed and he had no knowledge of your prior unrecorded interest in the property.
This is why it is so important to record your deed as soon as possible. If you don’t, you won’t be able to protect your interest in the property in the event that there are any competing interest claims on the property.
Chelsea Lenard is an attorney at Grewal Law PLLC, a full-service law firm in Michigan. She has experience with a wide range of legal practice areas, from state environmental policies to labor and employment law, and more. Learn more about Attorney Lenard here. Or to book a free consultation, contact Grewal Law PLLC online today.