North Carolina Lien Priority: A Pure Race State…With Exceptions

To secure your property, you must first understand the property rights laws in that state. North Carolina is a pure race state, which means that the first person to record a deed or lien against a property has priority over all subsequent guarantees or lien holders. Here, we’ll explore the pure race jurisdiction and explain why a title examination is still vital even in pure race states.

Don’t Rely on the Pure Race Legislation

The goal of the pure race legislation within the state of North Carolina is to encourage the prompt recording of all deeds. This means the state has the information in the shortest possible time frame. However, many now assume that because they were the first person to record their rights to a property, they gain access to the property above all other parties. 

While North Carolina is a pure race state, and the law protects the first person to record an interest in a parcel of property, there are examples of legislators ruling against those with pure race property rights. For example, regardless of which party recorded the deed with the state first, North Carolina legislators will provide “super-priority” status to local tax liens. So, if the local government has a tax lien on the property, it owns the deed to the property.

According to the following piece of legislation, local tax liens have superior priority:

“(a) On Real Property. –The lien of taxes imposed on real and personal property shall attach to real property at the time prescribed in G.S. 105-355(a). The priority of that lien shall be determined in accordance with the following rules:

• Subject to the provisions of the Revenue Act prescribing the priority of the lien for State taxes, the lien of taxes imposed under the provisions of this Subchapter shall be superior to all other liens, assessments, charges, rights, and claims of any and every kind in and to the real property to which the lien for taxes attaches regardless of the claimant and regardless of whether acquired prior or subsequent to the attachment of the lien for taxes.”

Lenders and legal professionals should know pure race does not supersede the rules of lien priority that have been established under state and federal law. These rules will be upheld by the courts, regardless of who won the race to record the deed in the courthouse. 

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