Recording Acts Flashcards
Recording acts-Common law rule
Without a recording act in place, the common law rule of “first in time, first in right” applies.
Three types of recording statutes
- Pure race
- Pure notice
- Race notice.
Pure race statutes
The first to record wins. This statute rewards the winner of the race to the recorder’s office. (Not commonly used either on the bar exam or in real life.)
Pure notice statutes
A subsequent bona fide purchaser (BFP) prevails over a grantee that didn’t record. Language example: “No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice unless the same be recorded according to law.”
Race- notice statutes
A subsequent BFP that records first prevails over a grantee that didn’t record first. 1. Language example: “No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice, who shall first record .”
Recording acts protect bona fide purchasers (BFPs) and mortgagors.
a. Bona fide purchaser (BFP): A BFP is one who takes for value and is without notice of the prior interest.
1. Recording acts don’t protect donees because a donee doesn’t take “for value.” However, the court won’t look into the adequacy of the consideration; so long as it is more than nominal, it will be deemed “for value.”
2. Notice can be provided three ways: Notice can occur by actual, record (constructive), or even inquiry notice. (See I.F.5 below.)
b. The recording acts only protect subsequent grantees , never the first grantee. This is because the common law rule of “first in time, first in right” will apply, unless a recording act functions to allow the second grantee to take over the first grantee.
Recording acts apply ?
Recording acts apply to every instrument by which an interest in land can be created or modified or can be recorded, including conveyances, mortgages, life estates, restrictive covenants, easements, etc.
Three types of notice
- Actual Notice
- Record notice (constructive)
- Inquiry notice
Actual notice
Actual notice occurs when, prior to the time of closing, the buyer has actual subjective knowledge of a prior, unrecorded interest.
Record (constructive) notice
Record (constructive) notice occurs when the prior interest was properly recorded within the chain of title . Where the prior interest is properly recorded in the grantor- grantee indexes, such that one searching the indexes would find it, notice is imputed.
Exception— “wild deeds”: A wild deed is one that is recorded, but not in such a way that a reasonable search of the grantor- grantee index would disclose it. Wild deeds do not provide constructive notice.
Inquiry notice
Inquiry notice occurs where the purchaser of a property is in possession of facts that would lead a reasonable person to make further inquiry (e.g., possession of the premises by one who is not the record owner, or visible evidence of the existence of an easement such as a well- worn path).
Estoppel by deed-Chain of title issues
If one purports to convey an interest in realty that he does not own, but he subsequently obtains an interest in that realty, he cannot deny the validity of that conveyance and the estate will automatically transfer to the grantee. Estoppel by deed does not apply to a transfer by quitclaim deed.
Shelter doctrine-Chain of title issues
One who takes from a BFP will “stand in the shoes” of the BFP and prevail against any entity against which the transferor- BFP would have prevailed in his own action.
Recording acts generally
Recording acts function to provide a purchaser of land with a mechanism to determine whether there is an earlier transaction regarding the property that is inconsistent with his own transaction. The recording acts provide a buyer with a way to ensure he is getting good title.
