Opinion ID: 2547975
Heading Depth: 1
Heading Rank: 5

Heading: Kentucky's Recording Statutes

Text: No mortgage, deed or deed of trust conveying real property is valid against a purchaser for a valuable consideration, without notice thereof, or creditors until it is properly filed. KRS 382.270. A mortgage, deed or deed of trust shall take effect at the time it is filed. KRS 382.280. The combined effect of these statutes is known as the race-notice rule. In other words, one must not only be the first to file the mortgage, deed or deed of trust, but the filer must also lack actual or constructive knowledge of any other mortgages, deeds or deeds of trust related to the property. The common law as it relates to lien creditors is slightly different. This Court has long held that that the first creditor to file its lien enjoys the first right to the debtor's property. This general rule of lien preference has become known as first in time, first in right. Truck Corp. of Ky. v. Hurry Up Broadway Co., 222 Ky. 521, 1 S.W.2d 990 (1928). It is without question, however, that the Kentucky General Assembly is empowered to create statutory liens and establish their priorities; but, absent a statute giving precedence to a statutory lien, its rank is determined under the principle of first in time, first in right. Midland-Guardian Co. v. McElroy, 563 S.W.2d 752 (Ky.App. 1978).