Affiliate Broker Tennessee (TN PSI) National Practice Exam `

What effect does recording a deed have on property ownership?

1. It increases property value

2. It provides public notice of ownership

3. It nullifies previous deeds

4. It requires re-assessment of the property

The correct answer is: It provides public notice of ownership

Recording a deed is a crucial step in the process of property ownership as it serves several important functions. When a deed is recorded, it creates a public record that notifies the world about the property's ownership. This public notice is essential for establishing legal title, as it helps to protect the owner's rights by ensuring that subsequent buyers or creditors are aware of who holds the legal interest in the property. This public notice is significant in preventing disputes over property ownership and helps to maintain the integrity of property records. It also plays a critical role in the event of a property transaction, as future buyers can verify ownership history through these public records, thereby promoting transparency in real estate dealings. While recording a deed does not directly influence the property's value or require reassessment, nor does it nullify previous deeds—those aspects are governed by different legal principles and practices—the primary effect of recording is to provide that essential public notice of ownership. This transparency is foundational to real estate law and ensures that property rights are recognized and upheld.