WHAT IF A DOCUMENT IS NOT RECORDED?

Is an unrecorded real estate document enforceable? This is a tricky question.

According to statute, certain types of real property documents are not enforceable unless recorded. The following documents are ineffective unless recorded (this is not a complete list):

- a homestead declaration, Code of Civil Procedure Section 704.920;
- a power of attorney to execute a mortgage, Civil Code Section 2933;
- a mechanic’s lien claim, Civil Code Sections 3115-3116;
- an attachment lien, Code of Civil Procedure Section 488.315 and 488.500;
- a judgment lien, Code of Civil Procedure Section 697.310;
- a notice of default and a notice of sale for a non-judicial foreclosure. Civil Code Section 2924.

These and similar documents are required by statute to be recorded, or they are not effective. They are, however, exceptions to the general rule that a document is enforceable between the parties to the document, even if it is not recorded. Civil Code Section 994 and 1217. If, for example, buyer and seller mutually sign a purchase and sale contract for real property, that agreement is enforceable, between the buyer and the seller, even if they never record it. Kimbro v. Kimbro (1926) 199 Cal. 344, 349.

Is an unrecorded document enforceable against a third party (someone who was not a party to the unrecorded agreement)? Yes, if the third party has actual notice of the unrecorded document, Civil Code Sections 1217 and 3395, or if the third party has not paid a valuable consideration to buy his or her interest in the property. Civil Code Section 1214. No, if the third party is a good faith purchaser of the property, or someone who in good faith places a lien against the property, without actual knowledge of the unrecorded document. Shurtleff v. Backern (1912) 163 Cal. 24, 28.

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