If a recorder didn’t index a document properly, who bears the risk?

In real estate transactions, proper indexing of recorded documents is crucial for establishing clear title and ensuring that interested parties can locate and verify the existence of legal interests. If a recorder fails to index a document properly, the risk typically falls on the initial purchaser who recorded first. This is because the first purchaser who records their interest generally gains priority over others. If a subsequent purchaser cannot locate the first recorded interest due to improper indexing, they may end up at a disadvantage, despite having potentially paid for that property in good faith.

Federal and state recording statutes often establish that the priority of interests is determined by the order of recording. Thus, if the initial purchaser recorded their interest correctly, they retain their priority regardless of how documents are indexed later. This principle upholds the integrity of property transactions and reinforces the importance of diligent record-keeping by the recorder's office.