Flashcards in Real property Deck (195)
BFP always wins, regardless whether he records first
(enough to be BFP)
BFP only wins if he records first
(Must be both BFP and to record first)
Purchases for value
Without notice someone purchased first
Purchaser "for value"
Discount OK. Any "substantial pecuniary consideration"
Do recording statutes protect: donees, heirs, devisees?
EXC under Shelter Rule
Three forms of notice
Inquiry - examination of land would reveal, or if recorded instrument references unrecorded transaction
Record - if prev purchaser properly recorded deed.
Text of notice statute
"A conveyance of an interest in land shall not be valid against any subsequent purchaser for value, without notice thereof,
unless the conveyance is recorded."
Text of race-notice statute
"Any conveyance of an interest in land shall not be valid against any subsequent purchaser for value, without notice thereof,
whose conveyance is first recorded."
Proper recording of title which always gives notice to subsequent buyers
within chain of title"
3 chain of title problems
Estoppel by deed
Someone who buys from BFP steps into BFP's shoes.
"Takes shelter in the status of his transferor"
Including donees etc
O-A transaction not recorded.
A-B transaction recorded - but not connected to title and a search wouldn't find it -- therefore a "nullity". Does not put anyone on notice.
O-C transaction prevails despite the wild deed.
Estoppel by deed
One who conveys realty in which he has no interest
is estopped from denying the validity of that conveyance.
(Even though it is a wild deed)
Voluntary transfer of a security interest in debtor's land to secure debt.
Mortgage - SoF
Must be in writing.
Giving a deed to the land.
Can use parol evidence to determine parties' intent.
If equitable mortgagee sells land to BFP?
Transfer of mortgagee interest?
Indorsing note and delivering to transferee --> "holder in due course"
By executing separate assignment doc
HIDC - conditions
Note must be negotiable.
Original note endorsed and signed by named mortgagee
Original note delivered.
Transferee takes note in good faith, no notice of illegality.
Transferee pays value for note - more than nominal.
Holder in due course - status
Free of any personal defenses that mortgagor could have raised against orig. mortgagee!
(eg. lack of consideration, fraud in inducement, unconscionability, waiver, estoppel)
(like an endorsed check)
HIDC still subject to real defenses:
Fraud in the factum (misrep re instrument)
When does lien remain on land through sale?
When mortgage instrument is properly recorded.
"All recording statutes apply to mortgages as well as deeds"
If mortgagee bank records after subsequent sale?
Notice jurisdiction: Buyer wins if BFP
Race-notice jurisdiction (NY): Bank wins since it won race to record.
Is buyer of mortgaged property liable for the debt?
If B "assumed mortgage" - Buyer primarily liable; debtor secondarily liable.
If B "takes subject to mortgage" - Only debtor liable, but bank can still foreclose on the land.
Foreclosure - order of priority for use of proceeds
1. Attorney fees and foreclosure expenses.
2. Interest on 1st bank's mortgage.
3. Pay off mortgages in order of priority.
Personal claim against debtor for balance not covered by foreclosure is called?
Those with interests subordinate to the foreclosing party are called ?
"Necessary parties to foreclosure action"
Foreclosure terminates interests junior to the mortgage being forclosed, but:
They must be joined to proceeding. If not, unjoined necessary party's mortgage remains on land after foreclosure sale!
If a junior mortgage forecloses?
The senior mortgage stays on the land through disclosure.
Foreclosure buyer should pay off 1st mortgage and deduct from purchase price
Priority among creditors determined by:
Recording. First in time (to record) first in right.