Recording Acts Flashcards
3 types of recording acts?
BONUS- before the recording acts what was the common law rule?
1) Race
2) Notice
3) Race-Notice
Bonus- “first in time” person whose interest was created first prevails
what type of jurisdiction are you in when the purchaser who properly records first has priority
Race Jurisdiction
what type of jurisdiction are you in when the subsequent bona fide purchaser has priority
Notice Jurisdiction
what type of jurisdiction are you in when the subsequent bona fide purchaser who records first has priority
Race-Notice Jurisdiction
What is a bona fide purchaser?
someone who purchases property for valuable consideration without notice of prior claims in the property or defects in the seller’s title
What is a wild deed?
a deed unable to be found by a normal title search because a prior purchaser has failed to record his interest (missing link in the chain of title)
What case provided us the rule that where a deed is recorded outside the chain of title (i.e. wild deed) it does not give notice?
Board of Minneapolis v. Hughes
This rule, allows a bona fide purchaser to transfer his protection as a bona fide purchaser to a later grantee (allows you to transfer all protections both status of a bona fide purchaser AND recording date)
Shelter rule
Suppose S conveys Greenacre to B for $200,000 on May 1, but B fails to record her deed at the time of conveyance. Then on June 1, a forgetful S conveys Greenacre to C, who pays $250,000; C has no notice of the earlier deed between S and B. B records her deed on July 1st, and C records his deed on July 2nd.
Who owns Greenacre:
Race Jurisdiction?
Notice Juridiction?
Race-Notice?
Bonus- common law?
Race: B owns because B recorded first (July 1st vs July 2nd)
Notice: C owns because C is a subsequent bona fide purchaser (facts state C had no notice of S-B deed)
Race-Notice: B owns because C failed to record before B
Common Law- B owns because B’s interest in the property was created first
S conveys to B, who does not record
S conveys to C
C records
B records
Common Law: B
Race: C
Notice: C
Race-Notice: C
S conveys to B, who does not record
S conveys to C as a gift
C records
B records
Common Law: B
Race: B because C is not a purchaser, race jurisdiction–purchaser who records first has priority
Notice: B because again C not a subsequent bona fide purchaser
Race-Notice: B
Recording Acts-developed to protect subsequent bona fide purchaser (people who are exchanging value for property, marketability, instilling confidence in buyers, etc)
S conveys to B, who does not record
S conveys to C, who does not record
S conveys to D, who does not record
C records
Common Law: B
Race: C
Notice: D (most subsequent bona fide purchaser)
Race-Notice: C
S conveys to B, who does not record S conveys to C, who does not record C conveys to D, who knows about the S--B deed C records B records D records
Common Law: B
Race: D Shelter Rule allows you to transfer all protections (including recording date) (i.e. D essentially becomes C
Notice: D Shelter Rule
Race-Notice: D
Note: identify what parties are involved in the land dispute first–D and B (C conveyed his interest to D thus not involved in dispute)
Why have the shelter rule?
Marketability; we have the shelter rule to further protect bona fide purchasers who are willing and able to transfer property, do not want to stand in the way of transferability merely because they are conveying to a party who has notice of prior conveyances.
S conveys to B, who does not record B conveys to C C records S conveys to D D records
In a normal title search D will trace title all the way back to S. D will not be able to discover C’s interest because B (C’s predecessor) failed to record the S–B deed. The B–C deed is a wild deed (missing link in the chain of title) thus, unable to be capture in D’s title search. Because the B–C deed is not properly recorded it does not provide notice to D.
Common Law: B
Race: D (although C recorded first, it must be PROPERLY recorded first to win; i.e. can not be recorded outside chain of title)
Notice: D
Race-Notice: D
