National Lumber amendment

I have long been amazed by the nonchalance the Bar displays with regard to the “National Lumber” decision by the Massachusetts Appeals Court. To refresh your recollection, that case held that a document’s priority relative to other documents is established when it is physically received by the registry of deeds; not by when it is actually recorded. Let’s say you represent the buyer of a parcel of real estate at a closing scheduled at the registry at 10 a.m. tomorrow. The closing goes smoothly, you do your rundown, record and disburse the funds by 10:15 a.m. At 11:00 a.m., a full 45 minutes after you have finished at the registry, we record a new mortgage on that same property, granted by the person who just sold to your client. “Not a problem,” you conclude, since this new mortgage went on record after the deed into your client. But what if that new mortgage arrived by Fedex and we had signed for that package at 9:55 a.m. Fedex being an efficient company, it has precise records establishing when their delivery person relinquished custody of the package containing that document to the registry. When you apply the holding of National Lumber to these facts, you’re out of luck – you’ve missed a mortgage that has priority over your deed. Call your carrier.

The state’s registers of deeds recognize the havoc that could result from the holding of this case so we’ve proposed legislation that would rectify this problem. A bill was recently filed but has not yet received a number (when it does, I’ll make another post). Here’s the language:

“No deed or instrument shall be considered to have been received by the register of left for record until said deed or instrument has been approved for recording by the register and an instrument number or document number of book and page has been assigned to said deed or instrument.”