Recording

Question 1

Recordation

Answer 1

1. O to A; then O to B
2. Common law: A is the winner due to first in time; O conveyed to A first, and therefore had nothing left to convey to B
3. In every American jurisdiction, instruments affecting title are recorded in county recorder office
4. Goal of creating a system for recording systems affecting title to real property is to force A to record his deed, thus putting the world on notice of the prior transfer, and promoting certainty

Question 2

Grantor/Grantee Indexes

Answer 2

1. Grantee/grantor: book compiled in final form annually and supplemented daily by the clerk of the office. Lists every person who has been a grantee of an interest in real property by recorded instrument in the jurisdiction, alphabetically by last name. Index then provides:
   
   1. Name of the grantor of the interest
   2. Deed book and page number in the deed book in which a copy of the instrument is located
   3. Date on which the instrument was recorded
   4. Type of instrument recorded (a deed, a mortgage, etc.)
   5. Often a short description
2. Grantor/grantee: almost identical except that it lists all grantors of interest in property by recorded instrument alphabetically by the last name of the grantor. Index provides:
   
   1. Name of the grantee taking interest
   2. Deed book and page in which instrument can be found
   3. Date on which the instrument was recorded
   4. Type of instrument
   5. Description of the property

Question 3

Searching Grantor/Grantee Indexes

Answer 3

• You must first look backward in time to determine if seller purchased the property from a lawful owner, and continue this process over and over- theoretically all the way to the root of title
• Begin search with the current owner and current year
• When you find the owner, it will say who conveyed the property to him
• Then you must check the actual deed book, which will contain he deed- READ deed to see if it contains restrictions, easements, etc; also check the date of the deed
• Title standards: allows for a sane title search; limits a lawyer or title searcher’s requirement on how far to look back
• Having gone back the requisite time period for a standard title search, you would switch to the grantor/grantee index to bring the search forward
  
  • At this point you may discover unanticipated conveyances and defects
  • The question is whether Bogart (who conveyed to who is selling to you) conveyed an interest in the property before selling to who is selling to you
  • Mortgages are discovered in this stage
    
    • To determine if the bank/lending co is still the owner of the mortgage, you will have to examine said bank/lending co. as grantor in the grantor/grantee index, from the moment it was conveyed to them until the present moment
• Abstract of title: all instruments affecting title to the property found in the index and written down
• Chain of title: title can be seen as a series of connected links

Question 4

Tract Index

Answer 4

1. A tract index identifies a specific parcel of property (the tract) by an identification number. These numbers correspond to a single file in which the country recording office places all instruments affecting that tract
2. Everything that affects that property is tossed in the same folder with the property.
3. Problem is that its hard to find tracts this way as property gets divided, separated, so its hard to use this kind of index.
4. This form simplifies the search process
5. This index identifies a specific parcel of property by an identification number
6. A searcher would only need to pull out the folder for a specific piece of land in order to find all deeds….etc.
7. These should be searched in addition to grantor/grantee indexes.

Question 5

Recording Statutes

Answer 5

Goal of recording statutes is to force parties who receive conveyance of an interest in real property to record the interest publicly

Question 6

Recording Statute:

Race

Answer 6

1. A race statute gives title to the party who wins the race to record the instrument conveying the interest
2. O to A, and A does not record. O to B, and B does not record. Whoever records the deed before the other records the deed wins; first in time to record trumps over first in time to conveyance
3. Only Delaware, Louisiana and North Carolina employ pure race statutes
4. Race statutes value certainty over fairness

Question 7

Recording Statute:

Notice

Answer 7

1. In this statute jurisdiction, a subsequent purchaser’s interest is superior to an earlier conveyance from the same grantor, if the subsequent purchaser took the property without notice at the time of the purchase. What did you (B) know when you bought and paid for property. If you knew about A you lose, if you didn’t know about A you win.
2. O to A, then O to B. In a notice jurisdiction, B wins in an action between A and B if at the time of her purchase of Blackacre, B did not have notice of the earlier conveyance to A
3. Notice may be actual, constructive, or inquiry
4. “bona fide” “good faith purchasers”
5. Examples:
   
   1. O to A, A does not record. O to B, B does not have notice and B does not record. B wins because B purchased without notice. Whether B records his deed is irrelevant to B’s title; however, if B fails to record, then B runs the same risk that O will strike again
   2. O to A, A does not record. O to B, B does not have notice and does not record. O to C, C does not have notice and does not record. C wins in a dispute among the parties- notice statute encourages each grantee to record the deed or face the possibility of losing title to a subsequent bona fide purchaser

Question 8

Notice:

Shelter Rule

Answer 8

1. A bona fide purchaser (a subsequent purchaser without notice) has the ability to extend his privileged position to a 3rd person who has notice or would be deemed to have notice
   
   1. O to A, A does not record. O to B, B does not have notice. B to C, C has actual notice of the O to A conveyance.
   2. C steps into the shoes of B and is said to be “sheltered” by the fact that B took without notice
2. Rationale: We want individuals who rely on the recording statute to be in a position to sell the property that they have paid good money to purchase. This happens only if B can shelter his purchaser

Question 9

At what moment does a subsequent purchaser acquire notice?

Answer 9

1. Majority rule in notice jdx: We care about the moment that the subsequent purchaser pays consideration; at this moment in time did he have notice?
2. Minority rule in notice jdx: We care about the moment of conveyance of title by deed to the subsequent purchaser

Question 10

Recording Statute:

Race-Notice

Answer 10

1. Combine the critical elements of both race and notice recording statutes
2. To take priority over prior conveyances, a subsequent purchaser must show
   
   1. That he recorded his interest first, AND
   2. He took without notice of the prior conveyance at the time of his purchase
3. “Good faith”- notice element, “first duly recorded”- timing element
4. This is the CA jx.

Question 11

Recording Statutes Protect Purchasers (and sometimes Lien Creditors)

Answer 11

1. Act as a safe harbor from the default common law rule of first in time
2. If the statute is going to dispossess the prior grantee, then at least we should demand that the subsequent grantee purchase the property interest
3. Statutes typically require purchaser give “valuable consideration”- doesn’t necessarily have to be fair market value, but should not be meager

Question 12

Installment contracts

Answer 12

1. purchaser and seller execute a contract for the sale of property. The closing date is set for a number of years following the execution of the contract. In the interim, the purchaser occupies the property and makes periodic installment payments to the seller. At the end of the executory period, the seller delivers the deed to the purchaser (sometimes referred to as executory contracts)

Question 13

3 possible approaches to resolving title disputes involving land installment contracts

Answer 13

1. A court might award title to the 1st in time installment contract purchaser and require them to reimburse in cash the 2nd in time an amount equal to the installment payments the 2nd in time had made to date with the original owner
2. A court might award the 2nd in time title, but require them to make their final installment payments to the first in time title
3. Finally court might award fractional shares to both the 1st and 2nd in time, representative to their payments to original owner

Courts are split between the first two options

Question 14

Are persons who obtained interests in property, because civil statutes awarded them a lien, treated as “purchasers” in the same sense as persons who bought property in the traditional manner?

Answer 14

1. Common law rule: only purchasers and mortgagees in the traditional sense (people who pay consideration) are “purchasers” for the purpose of recording statutes
2. However, some recording statutes specifically raise lien creditors to the status of “purchasers”

Question 15

Actual Notice

Answer 15

Notice arises when B is personally aware of the prior transfer.

Actual notice occurs if B was told of the prior purchase, or even if he sees the deed, even though it was not properly recorded. You cannot be a bona fide purchaser if you know about the prior transaction

Question 16

Constructive Notice

Answer 16

1. B is deemed to have notice if the title flaw would have been revealed by a competent title search, whether or not B actually performs the search. The law assumes that individuals can search title records properly and discover title flaws
2. Constructive notice ruins your ability for protection from the recording statute if you are second in time.

Question 17

Inquiry notice

Answer 17

1. B has notice of any fact that would have been revealed had B made a reasonable inquiry, if facts suggest the possibility there is a flaw in the title.
   
   1. In general courts say that inquiry notice exists if the purchaser is in possession of facts or information that would lead a reasonable person to ask whether there might be some interest outside the record chain of title that affects title to property
   2. Red flag that suggests the prospective purchaser of an interest should be worried about the state of the seller’s title, but there is no recorded document in the chain of title revealing the title flaw; facts exist that would cause a reasonable person to be concerned
2. Inquiry notice arises in 1 of 2 ways:
   
   1. A surrounding circumstance or fact on the ground leads a reasonable person to wonder about the seller’s title, or
   2. A reference in the public records may not definitively reveal the existence of a prior transfer, but hints at one
3. Examples: unrecorded mortgage, possibility that the property might be adversely possessed by someone other than the record owner, the existence of an easement by necessity. Courts also generally hold that possession provides inquiry notice of rights held by occupiers whose occupation is inconsistent with record ownership; example if you buy a house from someone and go unannounced and knock on the door and someone else answers- this would be inquiry notice

Question 18

Chain of Title

Answer 18

1. It is not sufficient to have a valid and recorded deed; the buyer must go further and search the ownership in an unbroken set of conveyancing documents back a requisite period of time; each link or period from one conveyance to the next must be discoverable via a search of public records
2. Chain of title suggests that documents are recorded if they are discoverable in the ordinary course of a search
3. Rationales:
   
   1. Efficiency: reduces time and money spent on title searches tot hat which is most likely to turn up defects in title
   2. Certainty: allows purchasers of title to proceed with their transactions, or refrain from closing, confident that they have made correct assumptions about the state of title

Question 19

Wild Deed

Answer 19

1. When a deed is recorded outside the chain of title. A wild deed is not considered recorded for purposes of the recording acts, even though the document exists physically in the records of the registry of deeds.
2. (definition from google) A wild deed is an improperly recorded deed. Because of the improper recording, the deed is not indexed or connected to the chain of title. Thus, the resulting wild deed is extremely difficult to discover during a title search, if at all.
3. Bogart: it is not part of any chain

Question 20

Problems with Recording

Answer 20

1. Transfer of Title W/O a Document
   
   1. this can happen in instances of adverse possession however the subsequent purchaser can be protected by title searches.
2. Incorrect Name of Description in the Document
   
   1. this can cause title not to be discoverable however many times there are other ways to search for the document.
3. Defective Acknowledgment Not Detectable in the Deed
   
   1. an acknowledgment is verification that a document has been signed by the person whose name appears in the signature.
   2. if it is invalid, many jx’s will consider the deed to be unrecorded. the subsequent purchaser is not considered to be on constructive notice, yet if htye actually search the records and find the document, they are on actual notice and cannot be a BFP.
4. Incorrect Name or Description Placed by the Recorder in the Index.
   
   1. even if it is not the subsequent purchaser’s error, they are deemed the responsible party for anything that affects the deed or chain of title.
5. Circular Lien Problem
   1. this is when a property owner gives a mortgage to A, who does not record, then to B who knows about the mortgage to A and records, then to C who does not know about the mortgage to A and records. Therefore, A has priority over B, who has priority over C, who has priority over A, who has priority over B, and so on, creating the circular lien.
      there is a way to solve this dilemma though a mortgage distribution process described on page 223 of the supplement.

Question 21

Early Recordings that Count

Answer 21

When A transfers to B an interest in land that A does not own or is larger than A owns, and A later acquires the interest, the doctrine of estoppel by deed holds that the interest holds that the interest passes from A to B at the moment of A;s acquisition of the property. The person who conveys land that he does not own is stopped from claiming that land as against his grantee is he should later gain ownership of that land. In other words, he is not allowed by he law to make a claim in derogation.

Question 22

Late Recordings that Count

Answer 22

Time 1: O to A (deed not recorded)

Time 2: O to B, w/ actual notice of O to A (deed recorded)

Time 3: A records Time 1 deed

Time 4: B to C (deed recorded

Who should in a disbute between C and A?

1. In this case, the deed to A was recorded before the conveyance to C, so arguably C should have constructive notice of that deed.

Question 23

Marketable Record Title Legislation

Answer 23

Many states have enacted a Marketable Record Title Acts (MRTAs) to ease the issue of how far back title searchers should look. Under MRTA, if a person has an unbroken chain of title from the present back to the root of title, then has the sort of title in favor if which this statute extinguishment feature will operate.