Detailed answer — how this works in West Virginia

At a typical real estate closing, the buyer (or buyer’s lender) deposits funds into an escrow account controlled by a closing agent, title company, attorney, or broker. Escrow funds are disbursed according to the escrow instructions and the purchase contract. The escrow agent’s duty is contractual and fiduciary: follow the instructions and protect parties from improper loss.

Key legal and practical points

• Contract and escrow instructions control. If the contract or escrow instructions say the closing agent should not disburse until the deed is recorded (or until title insurance is issued or until the recording number is provided), that instruction governs. Absent explicit written permission, the escrow agent risks liability for wrongful disbursement.
• Recording provides constructive notice. Recording a deed in the county land records publicly documents the transfer and gives constructive notice to third parties. Because recording protects buyers and lenders, closing agents and title insurers often require proof of recording before releasing sale proceeds.
• Title insurance and lender requirements. Lenders routinely require the lender to have a recorded deed of trust or mortgage and owner’s title insurance. Title insurers typically will not finalize an owner’s policy if the deed isn’t recorded. If recording is a condition for issuing coverage, insurers and lenders may instruct escrow to withhold funds until the record is clear.
• Equitable versus legal title. In many transactions, once the deed is delivered and accepted at closing, the buyer acquires equitable title even if the deed has not yet been recorded. But equitable title does not substitute for the protections of public recording; unrecorded interests can create risk from competing purchasers or creditors.
• Escrow agent’s exposure. An escrow agent who disburses funds contrary to the written instructions or contrary to commonly accepted closing practices can be liable to the wronged party for breach of contract, negligence, or breach of fiduciary duty. To protect themselves, agents often refuse disbursement until they have a recorded deed, a recording number, or an indemnity agreement.
• Remedies if funds are released improperly. If funds are released before the deed is recorded and that release causes loss, the harmed party may have contract claims against the escrow agent, claims against the seller, or claims under title insurance (if applicable). Courts can order return of funds, damages, or other equitable relief in some cases.

Typical scenarios and recommended practices

Here are common fact patterns and how they are usually handled in West Virginia transactions:

• Seller executes deed but it hasn’t been filed by closing: The closing agent will usually withhold funds until the deed is recorded. If parties expect a short delay, they may create a temporary holdback or require the seller to provide a signed, acknowledged deed with explicit recording authorization.
• Buyer deposits full purchase price and expects immediate release to seller: Ask for a recorded deed or a recording number as a condition of release. If the seller is a cooperative counterpart and there is a reputable closing agent or title company, funds sometimes are released on the day of closing only after the agent confirms recording.
• Title issues or liens surface before recording: Escrow agents normally keep funds until title is cleared and the new owner can be insured. Releasing funds prematurely exposes the buyer to risk from liens, judgments, or competing claims.

Statutory and institutional context

West Virginia records conveyances and related real property statutes under Title 36 of the West Virginia Code (Conveyances). Recording real estate instruments publicly documents ownership and priorities. For general reference to West Virginia conveyancing law, see the West Virginia Code, Title 36: https://code.wvlegislature.gov/title36/

Because the exact legal consequences in any situation depend on the contract language, escrow instructions, title insurance commitments, and facts (e.g., whether a deed was delivered), parties are often advised to insist on written prerequisites for disbursement in the escrow instructions.

When a closing agent may safely release funds before recording

A closing agent may release funds early only when it has a clear, written basis to do so. Examples include:

• Escrow instructions signed by all parties that expressly permit release before recording.
• Written direction from the lender and buyer authorizing disbursement despite a recording delay (often with indemnification).
• Receipt of a recorded instrument number or certified copy of the recorded deed and confirmation from the title company that the policy will be issued.

Practical checklist for buyers, sellers, and agents in West Virginia

• Insist that escrow instructions require either (a) confirmation of recording by instrument number or (b) issuance of final title insurance before disbursement.
• Require the seller to deliver a properly executed, acknowledged, and recordable deed at closing.
• Ask the closing agent to provide the recording instrument number or a certified copy of the recorded deed as proof.
• Use specific holdbacks or escrowed reserves if minor post-closing matters remain unresolved (e.g., prorations, repairs).
• If funds are disbursed in error, notify the closing agent immediately, preserve documents, and consult a West Virginia attorney to explore recovery options.

Bottom line: Recording is a critical protective step. While funds can be released before a deed is recorded if the parties expressly authorize it in writing, most safe practices and title insurers require recording (or insured equivalents) before disbursement. The closing instructions and the contractual obligations of the escrow agent are decisive under West Virginia practice.

Helpful Hints

1. Always get written escrow/closing instructions. Never rely on oral promises for disbursement conditions.
2. Require proof of recording (instrument number or certified recorded deed) before any disbursement unless your written instructions say otherwise.
3. Obtain an owner’s title insurance policy and confirm the insurer’s conditions for issuing the policy.
4. If you’re the buyer, make sure the deed is properly acknowledged and submitted for recording at closing; follow up until you receive a recording number or copy.
5. If you’re the seller and a small recording delay is likely, agree in writing to a short, limited holdback or an escrow indemnity to facilitate timely disbursement while protecting the buyer’s interest.
6. If a closing agent wants to disburse before recording without clear written authority, ask for written indemnity and confirm title insurer approval — and consider declining the release until you see recording proof.
7. If funds were released improperly, preserve all documents and communications, demand an accounting, and consult a West Virginia attorney about contract, fiduciary duty, or recovery actions.