Recorded real estate documents provide notice to subsequent purchasers, tenants and mortgagees. There are two types of notice- constructive and actual. Constructive notice is provided when a document is properly signed, notarized and recorded by the County Recorder where the real estate is located. If a document is not entitled to be recorded or is improperly recorded, the document does not provide constructive notice and may not be binding upon third parties.
Actual notice occurs when the notice has been directly and personally given to the person to be notified. The notice may also be implied or inferred when the person charged with notice had a means of obtaining knowledge which that person did not use. If a borrower or title company advises you of another mortgage which has been improperly recorded, you may be found to have actual notice of the competing mortgage.
Notice issues often arise when determining the priority of mortgages or competing claims to title to real estate. Your actions in questioning your borrower, the prior owner and review of your title insurance commitment are crucial in determining your knowledge of any competing interests.
Author: Jason P. Lueking (bio)
Phone: 317.464.1591
email: jlueking@bamberger.com
Tags: actual notices, constructive notices, Jason Lueking, recorded real estate documents