Patricia is purchasing a home in Albemarle County from David. At closing, the settlement agent records the general warranty deed but does not record the deed of trust in favor of Atlantic Savings Bank due to an administrative error. Six months later, a contractor who had performed work on the property before closing records a mechanic's lien against the property. Atlantic Savings Bank then discovers its deed of trust was never recorded and immediately records it. Under Virginia's recording act, which party likely has priority over the others?
Correct Answer
B) The contractor, because the mechanic's lien was recorded before Atlantic Savings Bank's deed of trust was recorded
Under Virginia's race-notice recording statute (Va. Code § 55.1-407) and mechanic's lien law (Va. Code § 43-1 et seq.), the priority of liens is generally determined by the order of recordation. Because Atlantic Savings Bank failed to record its deed of trust promptly, and the contractor recorded a valid mechanic's lien before the bank finally recorded its deed of trust, the contractor's recorded mechanic's lien would generally take priority over the subsequently recorded deed of trust. The bank's delay in recording left it exposed to intervening lien claimants.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A life estate is a freehold estate that grants ownership rights for the duration of someone's life.
Real property is immovable land and anything permanently attached to it, while personal property (also called chattels) is movable.
Tenancy by the entirety is a form of co-ownership available only to married couples that includes the right of survivorship and protection from individual creditors. Neither spouse can unilaterally sell or encumber the property.
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