Know the Law Record That Deed!
Recording a deed isn’t a prerequisite to the transfer of legal title (proper execution and delivery of the deed are), but failure to do so can have grave implications. The Facts
The case of Rice v. Greene (941 So. 2d 1230), and others like it, demonstrate the importance and effect the act of recording a deed has on one’s claim to real property.
On June 25, 2004, the Seller of real property located in Marion County entered into a contract for sale/purchase with Buyer No. 1, who paid the purchase price to the Seller in accordance with the contract. On Aug. 4, 2004, the Seller executed and delivered a warranty deed conveying the property to Buyer No. 1.
The Seller then entered into another contract to sell the same property to Buyer No. 2. On Oct. 28, 2004, Buyer No. 2 paid his agreed-upon purchase price to the Seller and also received a warranty deed, which he recorded on Nov. 8, 2004. Buyer No. 1, who hadn’t immediately recorded his deed after the conveyance, did so a few weeks later.
Upon learning of the sale and transfer of the property to Buyer No. 2, Buyer No. 1 filed a lawsuit to determine who was the rightful owner of the property. He argued that his claim to the property was superior to Buyer No. 2’s claim.
The trial court disagreed. It determined that Buyer No. 2’s claim to the property was superior to Buyer No. 1’s because he recorded his deed first. Florida’s Recording Statute
On appeal, the 5th District Court of Appeal affirmed the trial court’s ruling and concluded that it had properly determined Buyer No. 2’s claim to the property to be superior to Buyer No. 1’s based on the application of Florida’s recording statute, Section 695.01(1), Florida Statutes, which provides in part: “No conveyance…of real property, or of any interest therein…shall be good and effectual in law or equity against…subsequent purchasers for a valuable consideration and without notice, unless the same be recorded according to law. …”
Applying the statute to the facts evident in this case, the DCA indicated (1) that Buyer No. 2 had paid valuable consideration to the Seller; and (2) that Buyer No. 2 had no notice of the earlier transfer of the property to Buyer No. 1. Therefore, the DCA concluded that Buyer No. 2’s recording of his deed before Buyer No. 1’s gave him priority to the property. Moral of the Story
According to Florida law, an unrecorded deed is not “good and effectual” against subsequent buyers for valuable consideration who are without notice of the earlier transaction. Here, Buyer No. 1 bought the property from the Seller but failed to record his deed immediately after the sale. Doing so would’ve put Buyer No. 2 on “notice” of the sale to Buyer No. 1. Buyer No. 2 was a “purchaser for valuable consideration” (i.e., he gave money to the Seller) and was “without notice” of the prior sale since Buyer No. 1 had not yet recorded his deed. So, although Buyer No. 1 obtained the deed to the property before the seller sold the same property to Buyer No. 2, the court determined that Buyer No. 2 was entitled to the property based on this rule of law and based on the fact that Buyer No. 2 recorded his deed first.
Had Buyer No. 1 recorded his deed immediately after the Seller had executed and delivered it to him, an obviously more favorable outcome for Buyer No. 1 could’ve occurred.