Flashcards in The recording system Deck (18):
Recording statutes exist to protect...
1. Bona fide purchasers
Bright-line rules for cases of double-dealing
1. B is bona fide purchaser + notice jurisdiction = B wins, (regardless of whether B records before A).
2. B is bona fide purchaser + race-notice jurisdiction = B wins if she properly records before A.
What is a bona fide purchaser
1. Purchases Blackacre for value
2. Without notice that someone else got there first.
What is a buyer for value?
Buyer remits substantial pecuniary consideration (BUT can still be a fraction of the fair market value).
Recording statutes do not protect donees, heirs, or devisees (UNLESS the Shelter Rule applies).
Forms of notice
Prior to B's closing, B actually learns that A already bought Blackacre.
1. B is on inquiry notice of whatever an exam of Blackacre would show (whether B actually inspected or not).
– B has duty to inspect before transfer of title.
– If another is in possession, B has automatic inquiry notice.
2. If a recorded instrument makes reference to an unrecorded transaction, B is on inquiry notice of whatever a reasonable follow up would show.
B is on record notice of A's deed if, at the time B takes, A's deed was properly recorded (whether B actually checked the record or not).
Identify: "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."
The last bona fide purchaser to enter wins.
Identify: "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 in a race-notice jurisdiction...
1. Be a bona fide purchaser, and
2. Win the race to record.
What is proper recordation of a deed?
The deed must be recorded properly within the CHAIN OF TITLE (i.e., within the sequence of documents capable of giving record notice to later takers).
* (In most states, the chain of title is established through a title search of the grantor-grantee index.)
Types of discreet chain of title problems
1. The Shelter Rule
2. The Wild Deed
3. Estoppel by Deed
One who takes from a bona fide purchaser will prevail against any entity that the transferor-BFP would have prevailed against.
I.e., the transferee septs into the shoes of the BFP and "takes shelter" in the BFP (even if the transferee would not otherwise be a BFP).
E.g., O sells to A, who does not record. A sells to B. B records the A>B deed.
The A>B deed is a wild deed because it is not connected to the chain of title from O (because the O>A deed is not recorded).
The recording of a wild deed is a nullity—it is incapable of giving record notice of its existence.
* So B is not protected by recording—it was negligent because B did not make A record the O>A deed.