The Recording System Flashcards
O conveys Blackacre to A. Later, O conveys Blackacre, the same parcel, to B. O has skipped town. In the battle of A vs. B, who wins in a common law jurisdiction?
A wins, because the conveyance to A was first in time.
O conveys Blackacre to A. Later, O conveys Blackacre, the same parcel, to B. O has skipped town. In the battle of A vs. B, who wins in a race jurisdiction?
B wins, if he records properly before A does.
O conveys Blackacre to A. Later, O conveys Blackacre, the same parcel, to B. O has skipped town. In the battle of A vs. B, who wins in a notice jurisdiction?
B wins if he was a bona fide purchaser when he took, regardless of whether he records before A does.
In a notice state, the last bona fide purchaser to take wins.
O conveys Blackacre to A. Later, O conveys Blackacre, the same parcel, to B. O has skipped town. In the battle of A vs. B, who wins in a race-notice jurisdiction?
B wins if B is a bona fide purchaser AND he records properly before A does.
To be a bona fide purchaser, a grantee must: (3 requirements)
(1) Be a purchaser (or a mortgage lender), not one who received the property by gift, will, or inheritance
(2) Pay valuable consideration
(3) Take WITHOUT NOTICE (actual, constructive, or inquiry) of the prior conveyance
O conveys Blackacre to A. Later, O conveys Blackacre, the same parcel, to B by will. O has skipped town. In the battle of A vs. B, who wins in a notice or race-notice jurisdiction?
A wins. Because B is not a bona fide purchaser, B is not protected by the recording acts, so the common law rule of first in time applies.
B paid $50,000 cash for Blackacre, when its fair market value is estimated at $100,000. Is B a bona fide purchaser for value?
Yes. B has remitted substantial pecuniary consideration (i.e., he has paid value that is not insignificant). So long as substantial pecuniary consideration is remitted, B will be deemed a bona fide purchaser. It is irrelevant that B got a good deal.
B is O’s heir, or devisee, or donee. In a recording statute question, what happens to B?
B takes if there are no prior conveyances by O.
B loses if O has made prior conveyances to anyone or subsequent conveyances to bona fide purchasers, unless the shelter rule applies.
The three forms of notice that a buyer potentially may be charged with are:
(1) Actual
(2) Inquiry
(3) Record
NOTE: (2) and (3) are both forms of constructive notice.
What is actual notice in the context of recording statutes?
Prior to B’s closing, B learns of A
What is inquiry notice in the context of recording statutes?
B is on inquiry notice of whatever an examination of Blackacre would have revealed.
(1) The buyer of real estate has a duty to inspect the premises before transfer of title to see, e.g., whether anyone else is in possession (i.e., whether or not B actually inspects, B is presumed to have knowledge of whatever an inspection would have revealed).
(2) Inquiry notice also means that if a recorded instrument makes reference to an unrecorded transaction, B is on inquiry notice of whatever a reasonable follow-up would have revealed.
What is record notice in the context of recording statutes?
B is on record notice of A’s deed if, at the time B takes, A’s deed was properly recorded within the chain of title.
O conveys Blackacre to A. Later, O conveys Blackacre, the same parcel, to B. O has skipped town. A has not recorded, or has not recorded properly at the time B takes. B is a bona fide purchaser. What result?
In a race state, B wins if he records first.
In a notice state, B wins if he’s the last bona fide purchaser to take.
In a race-notice state, B wins if he records before A.
What kind of recording statute is this?
A conveyance of an estate in land shall not be valid against a subsequent purchaser for value unless the conveyance is first recorded.
race statute
Explanation:
“A conveyance of an estate in land” = O > A, who need not be a BFP
“a subsequent purchaser for value” = O > B, who must be a BFP
“unless the conveyance is first recorded” = first to record wins
What kind of recording statute is this?
A conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded.
notice statute
Explanation:
“A conveyance of an interest in land” = O > A, who need not be a BFP
“any subsequent purchaser for value” = O > B, who must be a BFP
“without notice thereof” = B must lack notice
“unless the conveyance is recorded” = A (redundant, since B would be on notice if A recorded)
Last BFP to enter the fact pattern wins if no notice.
What kind of recording statute is this?
Any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded.
race-notice statute
Explanation:
“Any conveyance of an interest in land” = O > A
“any subsequent purchaser for value” = O > B
“without notice” = B must lack notice
“whose conveyance is first recorded” = B must record first
B must be a BFP AND win the race to record.
On March 1, O conveys to A, a bona fide purchaser, who does not record. On April 1, O conveys the same parcel to B, a bona fide purchaser, who does not record. On May 1, A records.
(1) Who wins in a notice jurisdiction?
(2) Who wins in a race-notice jurisdiction?
(3) Who wins in a race jurisdiction?
(1) B wins. He was the last BFP to take.
(2) A wins. She was a BFP when she took, and she recorded first.
(3) A wins. She recorded first.
If these words appear, what kind of recording statute is it?
(1) “First” only
(2) “Notice” only
(3) “Notice” and “First”
(1) race statute
(2) notice statute
(3) race-notice statute
What is the chain of title?
The sequence of properly recorded documents capable of giving record notice to subsequent takers
How is the chain of title established in most states?
Through a title search of the grantor-grantee index
What is the shelter rule?
Anyone who takes from a BFP will prevail against any interest the BFP would have prevailed against.
In other words, the transferee “takes shelter” in the status of her transferor, and thereby “steps into the shoes” of the BFP even though she otherwise fails to meet the requirements of BFP status. This is true EVEN IF the grantee had actual notice of a prior unrecorded conveyance.
O conveys to A, who does not record. Later, O conveys the same parcel to B, a BFP, who records. B then conveys to C, who is a mere donee or who has actual knowledge of the O-to-A transfer. In the contest of A vs. C, who prevails?
C wins. C steps into B’s shoes as a BFP. B was a BFP who recorded first.
What is the shelter rule meant to do?
Protect a BFP, especially one who records, by making it easier for them to transfer title and “clean up” the chain of title
What is a “wild deed”?
A recorded deed that isn’t connected to the chain of title. It does not impart constructive notice because a subsequent purchaser could not feasibly find it.
