Recording, Mortgages, and Zoning Flashcards
What is a BFP?
A bona fide purchaser is one who gives valuable consideration for property and who takes without notice (actual, inquiry, or record).
Who wins in a notice jurisdiction?
The last BFP who takes.
Who wins in a race notice jurisdiction?
The first BFP who records, placing deed in chain of title.
What is the shelter rule?
A donee or one who otherwise does not pay valuable consideration who takes from a BFP will prevail against any previous grantee that the BFP would have prevailed against.
What is inquiry notice?
Notice that would be obtained from a reasonable inquiry of the property
What is record notice?
Notice that would be obtained from a search of publicly available documents, such as a title search
What is a wild deed? Is it capable of giving record notice?
A recorded deed that is not in the chain of title, because a previous grantee failed to record it. A wild deed is incapable of giving record notice.
If a grantor who does not have title conveys to A, and subsequently acquires title, and then conveys to B, who prevails assuming that both A and B promptly recorded? (majority view and minority view)
Majority view: B prevails because when A recorded, grantor did not have title. Thus, A’s deed was a wild deed and could not give record notice. A’s recording also not part of chain of title, so A would also lose in race notice jurisdiction.
Minority view: A would prevail because of estoppel by deed.
True or false: as long as a BFP recorded his deed promptly, a BFP prevails over a party claiming title through adverse possession.
False. Recording statutes do not protect against interests arising by operation of law such as adverse possession. If the adverse possessor satisfied the requirements before BFP took, adverse possessor prevails.
When is a mortgage transferable? (list 4 factors
1) when the note accompanying the mortgage is negotiable in form
2) when the note is indorsed and signed by named payee (party to be paid)
3) note is delivered to the transferee
4) transferee must pay value for the note and take in good faith
What does a “negotiable in form” mortgage note mean?
The mortgage note is payable “to bearer” or “to the order of” the named payee.
After a negotiable in form mortgage note has been transferred, will payments from the mortgagor to the original mortgagee be valid?
No. The mortgagor must pay the transferee, even if the mortgagor has no notice of the transfer.
After a non-negotiable mortgage note has been transferred, will payments from the mortgagor to the original mortgagee be valid?
It depends. The mortgagor’s payments to the original mortgagee are effective until the mortgagor receives notice of the transfer.
What is redemption in equity?
Any time before the foreclosure sale, the mortgagor may redeem the property by paying the amount due. If the note or mortgage contained an acceleration clause, the entire mortgage must be paid off.
What is statutory redemption?
Some states allow the mortgagor to redeem the property for some fixed period (usually 6 months) after foreclosure.
How are mortgage priorities determined at a foreclosure sale? (first in…?)
First in time, first in right
What is a purchase money mortgage?
A PPM is a security interest in the property given in exchange for funds to purchase that property.
When does a purchase money mortgage have priority over other mortgages?
A PPM has priority over all other mortgages that arise prior to the mortgagor’s acquisition of title. However, if the PPM is not recorded, then subsequent mortgage’s might have priority over the PPM under the recording acts.
True or false: at foreclosure, all mortgage interests are extinguished.
False. Only junior interests are extinguished. That is why junior mortgagees must be named as party’s. Senior mortgages remain on the property.
What is marshaling?
When a mortgagee’s interest covers multiple parcels and that mortgagee forecloses, the court may order the mortgagee to foreclose on the parcels that do not have any subordinate interests and to only foreclose on parcels with subordinate interests if the debt is not satisfied.
True or false: a landowner is strictly liable for damage to adjacent land and buildings caused by his excavation of his land.
False. A landowner is strictly liable only if his excavation caused damage to adjacent land without any buildings on it. For a landowner to be liable for damage to land with buildings on it, the claimant must show that the land would have subsided in its natural state (without buildings) OR if the excavation was done negligently
What is cumulative zoning?
Cumulative zoning is zoning where the land may be used for the stated purpose or for any higher use.
What is noncumulative zoning?
Noncumulative zoning is zoning where the land may be used only for the stated purpose.
True or false: nonconforming uses of land are eliminated immediately after a zoning change.
False. Owners can make reasonable changes and adjustments to their property. Owners often also have to receive just compensation under the doctrine of regulatory taking in constitutional law.
True or false: When a mortgage is transferred, the note (IOU) and the mortgage (security interest) are automatically transferred together.
True. Unless the transferor expressly reserves the right to either the note or the mortgage, the note and the mortgage are transferred together.
