The Recording System

Question 1

Two Rules of Recording

Answer 1

1. **Notice Jdx: **If subsequent purchaser (B) is a bona fide purchaser (BFP), B wins, regardless of whether she records before previous purchaser (A) does.
2. **Race-Notice Jdx: **If B is a BFP, B wins IF she records properly before A does.

Question 2

Bona Fide Purchaser Definition

Answer 2

One who:

1. Purchases blackacre **for value **and
2. without notice that there was a previous purchaser

Question 3

Purchaser for Value

Answer 3

• As long as B remits substantial, pecuniary consideration, he qualifies as a buyer for value, even if he gets a good deal
• Recording statutes DO NOT PROTECT donees, heirs, devisees, UNLESS the shelter rule applies.

Question 4

Shelter Rule

Answer 4

One who takes from a BFP will prevail against anyone that the transferor-BFP would have prevailed against. Transferee “takes shelter” in status of transferor, even though would otherwise fail to meet requirements of BFP status.

Question 5

Three Forms of Notice

Answer 5

A buyer who has any of the following three kinds of notice is NOT a BFP:

1. Actual (prior to B’s closing, B learns of A)
2. Inquiry (B is on inquiry notice of whatever an examination of the premises would show)
3. Record (B is on record notice of A’s deed if at the time B takes, A’s deed was already properly recorded).

Question 6

Notice Statute Example

Answer 6

“A conveyance on an interest in land shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded.”

If at the time B takes, he is a BFP, he wins. Doesn’t matter if A records first (but after B takes).

Question 7

Race Notice Statute Example

Answer 7

“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.”

To prevail, B must be a BFP AND record first.

Question 8

“Properly” Recorded

Chain of Title and 3 Problems

Answer 8

• To give notice to subsequent takers, must be recorded properly within chain of title.
• Chain of title = sequence of recorded documetns capable fo giving record notice to takers. (Usually grantor-grantee index).
• Three chain or title problems

1. The Shelter Rule
2. The Wild Deed
3. Estoppel by Deed

Question 9

The Wild Deed

Answer 9

If a deed entered on the records has a grantor unconnected to the chain of title, the deed is a wild deed, and is incapable of giving record notice of its existence.

(a title searcher wouldn’t find it, because following grantor-grantee trail, never appears as grantee).

(e.g. O sells blackacre to A. A does not record. A sells to B, B records A-to-B deed (WILD). O then sells to C. Between B and C, C WINS in both a notice and race-notice jdx. B’s recording is a nullity. Both A and B are unconnected to the chain of title.)

Question 10

Estoppel By Deed

Answer 10

One who conveys realty in which he has no interest is estopped from denying the validity of that canveyance if he later acquires that previously transferred interest.