Local governments have a vested interest in maintaining an accurate public record of ownership of real property. The document that conveys title to property, known as a deed, has its legal underpinnings in historical law, however. In centuries past, the deed was treated like a contract. The most important features were the intention of the parties to transact, and possession of the document. Filing, or recording, the deed with a government entity was never a requirement for a valid deed. That has not changed, though states have passed laws that give buyers who record their deeds special protection against subsequent claims against the property.
A deed transfers title to real property from the seller to the buyer. To be a valid as a transfer document, a deed must meet four basic requirements. First, it must be in the correct written format, with a legal description of the property and words of conveyance to properly identified parties. It must be signed by the seller. It must be delivered to the buyer with the intent that the transfer be effective immediately. Finally, the buyer must accept the deed. States typically also require notarized signatures in front of witnesses.
A deed does not need to be filed or recorded with a government agency to be valid. The option to record a deed is a service offered by a local government so the public has notice of the current ownership of property. Also, there is no law that prevents a valid deed from being recorded at any time, even years after the official transfer takes place. For example, a mother can transfer the deed to her house to her son. The son can keep the deed in a drawer and not record it until after his mother passes away.
Although the states do not require deeds to be recorded, they do have laws that encourage recording by protecting innocent parties who rely on the absence of an official record of the transfer to their detriment. If you do not record the deed and provide notice to the public of the transaction, an unscrupulous seller could sell the property again to another buyer. This second buyer would look at the public record and see the seller still listed as the owner. States have passed one of two types of laws to deal with this sort of scenario. The first is a notice law, which gives the property to the innocent second buyer if there was no notice of the first transaction. The second is a race law, which says that in the case of two otherwise valid deeds, the first one to record the deed is the legal owner.
Even though you are not required to record a deed, if there is a title dispute, the lack of recording could invalidate your claim to the property. Hence, you have an unlimited amount of time to record a valid deed, or up until the time an innocent party is subsequently defrauded as a result of your failure to record. If you have full faith in the seller's integrity, you can record your deed at any time that is convenient.
- EscrowHelp.com; Must I Record My Deed; Sandy Gadow; 2004
- The 'Lectric Law Library: Legal Definition of Deed
- Real Estate Center Letter of the Law; Deeds and the Texas Recording Statutes; Judon Fambrough; December 1998
- US Legal: New York Deed Law
- DRE Reference Book: Chapter 7 -- Principal Interests of Transfer