Chapter 5-4 Priority of Interests and Florida's Recording Act

5-4 Priority of Interests and Florida's Recording Act

Three statutes generally govern the priority of interest in real property. Florida is classified as a "notice" jurisdiction, which is established by Fla. Stat. § 695.01(1): "No conveyance, transfer, or mortgage of real property, or of any interest therein . . . shall be good and effectual in law or equity against creditors or subsequent purchasers for a valuable consideration and without notice, unless the same be recorded according to law." Florida is, accordingly, a "notice" jurisdiction.²³ Florida Statute § 28.222(2) requires the clerk of court to record instruments in the county's official records, including the date, time and description of the type of instrument. Section 695.11 further provides that the date and time of recording by the clerk determines the priority of recordation, and that "an instrument bearing the lower number in the then-current series of numbers shall have priority over any instrument bearing a higher number in the same series."

The recording of the interest provides constructive notice to the world.²⁴ Practically, this means that priority is not just determined by reviewing which interest was recorded first, but rather by whether the mortgagee had actual or constructive notice of any other interests when taking its mortgage. The mortgagee's interest will be superior to any interest perfected subsequent to the recording of its own mortgage, but inferior to prior recorded mortgages and interests, as well as prior unrecorded mortgages and interests of which it had actual notice.

5-4:1 Recording Errors and Notice

If a properly recorded document provides constructive knowledge to the world of its existence and accordingly confers priority from the date of recording, what happens if the document is recorded improperly? Florida Statute § 695.03 provides that "[t]o entitle any instrument concerning real property to be recorded, the execution must be acknowledged by the party executing it, proved by a subscribing witness to it, or legalized or authenticated" as provided by the statute. The Statute further provides for notarial requirements for Florida Notaries, Notaries from other States, and authentications from foreign countries. Accordingly, a document that was recorded while not in compliance with the requirements of Fla. Stat. § 695.03 arguably does not confer constructive knowledge.²⁵

The Florida Supreme Court has clarified, however, that absent a significant and substantive departure from Fla. Stat. § 695.03, the document provides constructive knowledge.²⁶ Errors of a technical nature will not defeat constructive knowledge.²⁷ Courts have instead interpreted departures from the statute to revoke constructive knowledge instead in circumstances where...