No Recording, No Keys: How North Carolina Closings Really Work

Why North Carolina Does Not Allow the Release of Keys Until the Deed Is
Recorded
By William P. Norrell, North Carolina Closing Attorney at Caplan Law Group

Recording Protects Everyone
Recording the deed provides public notice that ownership has officially changed hands. If
something unexpected happens before recording — a judgment attaches, a tax lien is filed, a
bankruptcy is opened, or even another deed is recorded — the buyer’s rights could be
jeopardized. Recording ensures clear, priority title and protects the transaction from
disruption. In practice, recording is the point at which the buyer’s rights become fully
protected.

Insurance and Liability Concerns
Before recording, the seller is still legally responsible for the property. If the buyer receives
keys early or starts moving in, liability becomes uncertain. Any injuries, damages, or early-
access issues can spark insurance coverage disputes. Insurers frequently deny claims when
possession shifts before legal ownership. Recording ensures the correct party holds
responsibility and minimizes risk for both sides.

Lender, Settlement, and Contract Requirements
For financed purchases, lenders strictly prohibit the buyer from taking possession before
the transaction has officially closed and the deed has been recorded. Early possession
changes the risk profile of the collateral before the lender has a secured, recorded interest.
North Carolina attorneys must also comply with the Good Funds Settlement Act, which
requires all closing funds to be received and verified before disbursement. Therefore,
attorneys treat the transaction as closed only once recording occurs. The standard North
Carolina Offer to Purchase and Contract (Form 2-T) reinforces this: in the Possession
section, the contract states that possession—including keys and access devices—is
delivered “at Closing,” defined as the process culminating in recordation of the deed (and
deed of trust, if any). If parties want early or post-closing possession, they must sign the
separate Buyer Possession Before Closing Agreement (Form 2A7-T) or Seller Possession
After Closing Agreement (Form 2A8-T). No recording, no Closing; no Closing, no possession.

Statewide Ethical and Legal Standards
North Carolina attorneys follow strict professional and ethical guidelines. The NC State Bar
has consistently warned against changing possession before recording because doing so
disrupts the legal closing sequence and can create risk for all parties involved. This
consistent statewide practice ensures safe, uniform closings from Dare County to Wake
County and beyond.

Protecting the Buyer Most of All
While waiting on recording can feel inconvenient, this rule ultimately safeguards the buyer.
Once the deed is recorded, their ownership is secure, title insurance attaches, and their legal
rights fully vest. Until then, the buyer is not yet the owner, and releasing keys early
undermines the legal structure designed to protect them.
The bottom line: In North Carolina residential transactions using the standard Form 2‑T
contract, keys are released only after Closing — and Closing occurs when the deed is
recorded. This sequence protects buyers, sellers, lenders, agents, and the integrity of the
entire transaction.



Will Norrell is an Elizabeth City native and a 2017 graduate of the University of North Carolina School of Law. Since graduating, he has been practicing law in Northeastern North Carolina. In 2022, Caplan Law Group gave Attorney Norrell the opportunity to open an office in North Carolina and expand the firm’s practice into his home state. Since then, Caplan Law Group has become one of the top go-to law firms for real estate closings in Northeast North Carolina.

Prior to entering law school, Mr. Norrell graduated from College of the Albemarle. While at COA he was a member of the baseball team and was able to obtain a North Carolina Real Estate License. Mr. Norrell completed his undergraduate education at the University of North Carolina at Chapel Hill, graduating with a bachelor’s degree in 2014. He was a member of the UNC baseball program, serving as a bullpen catcher and student manager.

During law school, Mr. Norrell received the William R. Kenan, Jr. Merit Scholarship and the J. Russell Kirby Public Service Scholarship. He was also named 1L Pro Bono Student of the Year following his first year of law school.

Attorney Norrell looks forward to continuing to assist Northeastern North Carolina with their real estate legal needs.