To Record Or Not To Record

Last Updated on Thursday, 3 August 2017 01:59 Written by Chris Griswold Thursday, 3 August 2017 01:59

Listen up landlords and tenants.  There is a rhyme and a reason to recording (and not recording) leases in the land records of whatever relevant county.  This should be helpful for everyone… (and don’t forget to click on my Facebook or YouTube links below to also see my short video on this material).

To Record Or Not To Record

A question that comes up over and over again in my practice (from clients and opposing attorneys alike) is whether a lease document should be recorded in the relevant county’s real property records office (usually, the County Clerk’s Office).  Specifically, people ask “what difference does it make whether the lease document is recorded?”  Well, to answer this question, we must ask a couple more questions.

First, does the lease document contain sensitive information that you’d rather not be within the public domain?  Remember, if the lease document is recorded in the public records, the lease document and all the information within it will become public information.  So, for example, if the amount of rent you’re paying is set forth within the lease (and it usually always is stated within the four corners of the lease document) and you don’t want other industry competitors knowing how much you’re currently paying, or, more importantly, how much you will be paying in the future, then you might not want to record that lease.  Other factors to consider in arriving at whether you should or shouldn’t record would, among other things, be: i) any exclusive use provisions, ii) any required co-tenancy provisions, iii) any required minimum insurance policy limits, etc… which are expressly set forth within the lease.  Remember, if you don’t want someone else to know about all the terms of the deal that you’ve struck, then you probably don’t want to record the lease.

Second, is there another way (besides recording the actual lease document itself) to put the general public on notice as regarding the existence of the lease document?  Yes.  Parties to a lease usually agree to record what is called a “Memorandum of Lease” instead of the actual lease itself.  Why?  The Memorandum of Lease is a much shorter abstract of the lease document (usually only 1 or 2 pages) which still acts to put the public on notice as regarding the existence of the lease but doesn’t contain all of the sensitive information as set forth hereinabove.  So, with a Memorandum of Lease, you can still get the benefits that come with recording the lease document while retaining custody of the sensitive information contained within the lease document that you spent so much time negotiating over.

Accordingly, prior to recording any lease document, be sure to think through the questions set forth above.  More often than not, you’re better off not recording.

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Chris Griswold has always been proactive and professional.  He takes the time to work with us and tailors his approach to our situational needs.  My favorite thing about Chris is that he will let me know if there is an easier, less-expensive approach.  We look forward to working with him well into the future.”
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