Wednesday, August 11, 2010

National Lumber bill signed into law

A number of years ago the Massachusetts Appeals Court decided a case that involved the recording priority of a mechanic's lien filed by National Lumber Company. The facts were that National Lumber sent its notice of contract to the registry of deeds by Fedex well within the time required to perfect the lien. Because this was at the height of the recording boom, the registry was months behind in recording documents received by mail and so by the time the notice of contract was recorded, it was outside the allowable time for doing so. The Appeals Court held that the notice of contract was "recorded" at the moment it was received by the registry of deeds and not when it was eventually entered into the registry's computer system. National Lumber's lien was therefore perfected.

The troubling aspect of this case is that registries of deeds receive dozens if not hundreds of pieces of mail each day. While all mail is now recorded promptly, it's a process that runs throughout the day. To deem all of those mailed in documents on record the moment the postal carrier drops them on our counter would wreck havoc with our recording system and the idea of priority of recording.

A new law, signed by the governor just last night, remedies this situation. Called "An Act to clarify recording requirements at registries of deeds" specifically states that "No instrument received by the register shall be considered recorded until the register assigns to the instrument an instrument number, or book and page number, as the case may be." Now (or in 90 days, when this law takes effect) recording priority will be based solely on the sequence in which documents were entered into the registry's computer system.

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