24. Recording Flashcards
What is the rule under Notice Statute?
‘No conveyance or mortgage of an interest in land is valid against any subsequent purchaser for value, without notice thereof, unless it is recorded’
If first buyer records BEFORE second buyer purchases => First buyer takes priority
If first buyer fails to record FIRST + second buyer is BFP (NO actual/constructive notice of FIRST buyer’s deed (NOT first buyer’s predecessors’ deeds)) => Second buyer takes priority
If second buyer is NOT BFP (notice) + records first => First buyer takes priority (common law - first in time prevails)
What is the rule under Race-Notice Statute?
‘No conveyance or mortgage of an interest in land is valid against any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded’
If first buyer records first => First buyer takes priority
If second buyer is BFP (NO actual/constructive notice) + records first => Second buyer takes priority
If second buyer is NOT BFP (notice) + records first => First buyer takes priority (common law - first in time prevails)
What is the rule under Race Statute?
‘No conveyance or mortgage of an interest in land is valid against any subsequent purchaser whose conveyance is first recorded’
If first buyer records first => First buyer takes priority
If second buyer records first => Second buyer takes priority
What is required for a bona fide purchaser to be protected under the Recording Acts?
1) Purchaser
2) NO Notice at time of conveyance
- Paid consideration + received interest in land
3) Valuable consideration
What remedies are available to the parties?
First buyer takes priority
1) First buyer must pay rest of contract price to Second buyer
2) Second buyer must deliver deed to First buyer
Second buyer takes priority
1) First buyer can sue Seller for breach of contract
2) First buyer must deliver deed to Second buyer (NO claim for specific performance)
What is required for a Purchaser?
Mortgagee for value
- First buyer has title subject to mortgage
Seller’s heir/donee/devisee (for value)
NOT judgment creditors
What is the Shelter Rule?
1) First Buyer fails to record
2) Second Buyer is BFP
3) Second Buyer sells to Successor
4) Successor has actual notice of First Buyer’s deed
5) Successor takes priority
- With value
- With NO value (heir/devisee/donee)
- Regardless of recording act (to allow BFP to sell to others + not take liability for successor)
What is required for notice?
Actual notice
- Direct knowledge from ANY source that WILL reveal previous conveyance (word of mouth, newspaper)
Inquiry notice
- Indirect knowledge that WOULD reveal previous conveyance
- Inquiry from references in recorded instruments (e.g. subject to easement)
- Inquiry from unrecorded instruments in chain of title (grantee expected to demand viewing of grantor’s title documents if grantor’s deed was NOT recorded)
- Inquiry from another grantee’s physical appearance/possession of land (despite not recorded)
- NOT quitclaim deeds (most states)
Record notice
- Acknowledged by Grantor before notary public
- Presumed to be validly delivered (rebuttable => NOT conclusive)
- Searcher could reasonably find record (NO legal duty) => Tract index/Grantor-Grantee index
Does a previous quitclaim deed put subsequent buyers on inquiry notice?
No (Most states)
- Subsequent purchasers are NOT charged with inquiry notice from mere fact that quitclaim deed was used
Yes (Few states)
- Subsequent purchasers are charged with inquiry notice
Who takes priority if there is a wild deed?
Second purchaser (BFP)
1) First purchaser fails to record
2) First purchaser sells to subsequent purchaser who records
- NOT connected to chain of title
3) Original seller sells to Second purchaser (BFP)
4) BFP has NO record notice
- NOT able to locate First purchaser-subsequent purchaser deed (not connected to chain of title)
Who takes priority if the First Purchaser sold to his First Successor with no title, but then First Purchaser sold to his Second Successor with title from Original Seller?
Second Successor (majority view)
- First Purchaser-First Successor deed NOT part of chain of title
- Second Successor should NOT be burdened to discover Original Seller-First Purchaser deed (before First Purchaser-First Successor deed)
First Successor (minority view) - First Successor is entitled to title after First Purchaser obtained title from Original Seller (Estoppel by deed)
What is valuable consideration?
1) Pecuniary value
- Adequate/NOT adequate
- NOT deed/mortgage as security for Seller’s debt
2) Given to Buyer
=> Buyer is protected vs other buyers
