MCL 565.29 Interpretation

While MCL 565.29; MSA 26.547 is part of Michigan's race notice recording scheme, we note that the scheme involves two aspects: constructive notice of prior recorded interests and the priority of those interests recorded first in time over unrecorded interests. In First of America Bank v. Alt, 848 F Supp 1343, 1347 (DC Mich 1993), the federal court summarized the recording scheme: In Michigan, interests in real property are recorded with the register of deeds in the county where the property is located. All recorded liens, rights, and interests in property take priority over subsequent owners and encumbrancers. MCL 565.25; MSA 26.543. Where an individual fails to record a lien or interest in the property, that interest is void as against any subsequent interest holder who purchased the interest in good faith for valuable consideration. MCL 565.29; MSA 26.547. A person takes in "good faith" if he or she takes without notice of the prior unrecorded interest. . . . Thus, Michigan has adopted what is frequently known as a "race notice" statute: the first interest holder to record takes priority, unless that individual has notice of a prior unrecorded interest. The court's analysis in First of America is consistent with the opinion expressed in Edwards v. McKernan, 55 Mich 520, 526; 22 NW 20 (1885), in which our Supreme Court stated that "the effect of the recording laws was that the record of a conveyance, which is entitled to be recorded under such laws, operates as constructive notice to subsequent purchasers claiming under the same grantor." The Court in Edwards also stated that the predecessor to MCL 565.29; MSA 26.547 did not declare that the record shall be notice to subsequent purchasers, "but only that unrecorded conveyances shall be void as to subsequent purchasers in good faith whose conveyances shall be first recorded." Id. at 525-526.