AEW Midterm - Property Flashcards
With a question on recording acts, you are approaching the problem of who owns the property. What does that problem turn on?
The question of ownership in this case turns largely on the effect of State X’s recording act. Recording acts are statutes used to ensure orderliness and predictability in the transfer and ownership of real property. Generally, recording acts provide other means of settling ownership disputes than the old, common law first-in-line rule. There are three basic types of recording acts, distinguished by how they protect bona fide purchasers against claims from previous grantees.
In assessing ownership, it is important to determine whether X is a BFP. So, what is a bona fide purchaser?
A bona fide purchaser is defined as (1) a purchaser (2) who gives valuable consideration for the property, and (3) at the time of purchase lacks notice of a preexisting interest in the property.
Explain the third element “lack notice.”
There are several types of notice: actual, record, inquiry, and imputed notice.
What is actual notice?
Actual notice occurs when a prior interest is brought to the purchaser’s attention in some manner (i.e., word of mouth, publication, etc.), or, in other words, actual notice means that the purchaser has become subjectively aware of the prior interest.
What is record notice?
Record notice is that which was obtained, or could reasonably have been obtained, by a title search in public records.
What is inquiry notice?
Inquiry notice arises when circumstances exist that would prompt a reasonable purchaser to investigate further (duty to inquire), to determine whether there are any pre existing interests in the property.
What is imputed notice?
Imputed notice can arise when one person’s knowledge is attributed by law to another, as in a principal/agent relationship.
How many types of recording acts are there?
There are three types of recording acts and jurisdictions: race, notice, and race-notice.
What is race jurisdiction?
In a race jurisdiction, BFP’s receive no special protection against preexisting interests. The first party to record its interest will prevail in any ownership dispute.
What is notice jurisdiction?
In a notice jurisdiction, a BFP is protected against the interests of a prior grantee who fails to record before the BFP purchases the land. This is true even if the prior grantee late records before the BFP does.
What is a race-notice jurisdiction?
In a race-notice jurisdiction, a BFP is protected from a prior grantee’s interest only if the BFP records before the prior grantee does. This distinguishes a race-notice jurisdiction from a notice jurisdiction, where the order of recordation does not matter.
What is the shelter rule?
The shelter rule applies in notice and race-notice jurisdictions. It provides that a grantee who takes land from a BFP will prevail against any prior interest as to which the BFP would have prevailed. Put differently, the grantee can take shelter under the grantor’s BFP status. This rule applies even where the BFP’s grantee is not a BFP, and it protects the BFP/grantor by ensuring that the property can be effectively conveyed.
What is a deed and how does it come up?
Transfer of title to an interest in real property occasionally occurs through operation of law; but in most circumstances, transfer can be accomplished only by a deed that satisfies various formalities required by statute.
When asked what interest X has in the property, that is to say, does X have title, what is the way that X can have title via adverse possession?
Adverse possession has several elements. First, the adverse possessor must actually possess the land by using it in the same way that a reasonable owner would. Second, the adverse possession must be exclusive, meaning that the adverse possessor must not share possession with the true owner or with the public. Third, the adverse possession must be open and notorious. This means that the possession must be sufficiently visible to put the real owner on notice if the owner were to inspect the property. Actual notice, however, is not required. Fourth, the possession must be adverse, that is, without the true owner’s permission. A minority of jurisdictions also require that the adverse possessor have a good faith belief that the adverse possessor is entitled to possession. Finally, the possession must be continuous from the time it begins until the statute of limitations expires. The test here is whether the adverse possessor uses or possesses the land with the same degree of continuity as a reasonable owner would.
