National Real Estate Practice Exam

Why is a deed typically recorded?

1. For aesthetic purposes

2. To transfer title immediately

3. For protection against a third party

4. To notify local authorities of ownership

The correct answer is: For protection against a third party

Recording a deed serves primarily to protect the interests of the property owner and provide notice to third parties regarding the property’s title. When a deed is recorded, it creates a public record that establishes legal ownership. This public record can help prevent disputes over property ownership and establish a clear chain of title, which is essential for future sales or financing. By recording the deed, the homeowner safeguards their rights to the property against potential claims made by others. If someone attempts to claim an interest in the property later, the recorded deed provides documented proof of ownership that can be defended in court. While notifying local authorities of ownership is a bit of a function of recording, the primary reason revolves around creating a public notice system that protects against competing claims. The other choices focus on aspects that do not capture the fundamental purpose of recording a deed in real estate law.