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How do title-registration systems differ from recording systems?

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Oil portrait of Hugo de Groot, also known as Hugo Grotius, by the workshop of Michiel Janszoon van Mierevelt, showing him with a ruffled white collar and dark clothing. — Property law Portrait of Hugo de Groot (Hugo Grotius), oil on panel by the workshop of Michiel Janszoon van Mierevelt, 1631; in the Rijksmuseum, Amsterdam.

In property law, the primary difference between title-registration systems and recording systems lies in when a transfer of ownership becomes legally effective and how third parties are protected.

Title-Registration Systems

In a registration of title system, such as the German Grundbuch or the U.S. system for automobile titles, the transfer of ownership is not legally complete until it has been officially registered in the system. The government maintains an authoritative record, and the act of registration is a prerequisite for the transfer of title to take effect.12

Recording Systems

In a recording system, which is common for land in most U.S. jurisdictions and France, a transfer of property is legally effective between the parties even if it is not recorded. However, the system is designed to protect good-faith purchasers. If a new owner fails to record their transaction, the previous owner—who still appears as the owner in the public record—retains the power to convey a valid title to an innocent third party who relies on that record. Consequently, recording is essential to secure one's interest against subsequent claims by third parties.1