Recording System Flashcards
Common law rule:
First in time, first in right. Now changed by statute
Bona fide purchasers - generally
To be a bona fide purchaser, a grantee must:
Be a purchaser or a mortgage lender, not one who received the property by gift, will, or inheritance
Valuable consideration
Take without notice of the prior conveyance. Remember notice can be actual, constructive, or inquiry.
Bona fide purchasers prevail over prior transferees and noticed jurisdictions. They also prevail and race notice jurisdictions if they win the race to record. If the subsequent granted does not qualify as a bona fide purchaser, they are not protected by the recording act and the common law rule of first in time applies.
Bona fide purchasers - purchaser for value
The recording statutes protect purchasers. Donees, heirs, and devisees are not protected because they did not give value (unless the shelter rule applies)
Even if the purchaser only gave 50% of the fair market value, that is still substantial pecuniary consideration, and they will be a bona fide purchaser.
Bona fide purchasers - notice
Without notice means the purchaser had no actual, constructive, or inquiry notice of a prior conveyance at the time they paid consideration and received the interest.
Bona fide purchasers - notice - actual notice
Literal knowledge before they received the interest
Bona fide purchasers - notice - inquiry notice
Whether the buyer examines the property prior to closing or not, the buyer is on inquiry, notice of whatever an examination of the property would have revealed. The buyer of real estate has a duty to inspect the premises before transfer of title, to see, for example, whether anyone else is in possession. If another is in possession, the buyer is charged with inquiry notice of that fact, regardless of whether the buyer actually bothered to inspect or not.
Inquiry notice also means that if a recorded instrument makes reference to an unrecorded transaction, the grantee is on inquiry notice of whatever a reasonable follow up would have revealed.
Bona fide purchasers - notice - record notice: chain of title
The buyer is on record notice if the deed was properly recorded within the chain of title. Although no one has a legal duty to perform a title search, a subsequent purchase or will be charged with the notice that such a search would provide, whether or not they actually search.
Types of recording acts - race statute
Not statutes are important when the subsequent buyer is a bona fide purchaser, and the previous buyer has not recorded or has not recorded properly at the time the subsequent buyer takes. (must not have notice ** at the time of the conveyance**)
Under a pure statute, notice of a prior conveyance by the grand tour does not matter. The first party to record wins. There is no bona fide purchaser requirement. Only a few states have a pure race statute.
The language of a typical race statute looks like: a conveyance of an estate in land shall not be valid against a subject and purchaser for value, unless the conveyance is first recorded. 
Types of recording acts - notice statute
Under a notice, statute, a subsequent purchaser, who had no notice of a prior conveyance by the grand tour will prevail over a prior grantee who failed to record. The last bona fide purchaser in the fact, pattern will win.
Typically noticed statute languages looks like: a convenience of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without notice there of unless the conveyance is recorded.
This means that the subsequent purchaser under a notice, statute prevails, even if they do not record. As long as they had no notice of the prior conveyance, they win. But if they don’t want the same thing to happen to them, they will have to record to put other subsequent purchases on notice of their interest.
Types of recording acts - race notice statute
To be protected under a race notice, statute, the subsequent purchaser must not have had any notice of the prior grant and must record first. So they must be a bona fide purchaser, and when the race to record.
Typical race notice language looks like: any conveyance of an interest in land, other than a lease for less than one year, shall not be valid against any subsequent purchaser for value, without notice of who convenience is recorded first.
Types of recording acts - chain of title
To give record notice to subsequent takers, the deed must be recorded properly within the chain of title. The chain of title is the sequence of recorded documents, capable of giving record notice to subsequent takers. The chain of title is established by title of the grantor grantee index in most states.
Types of recording acts - chain of title - transferees from BFP
Anyone who takes from a bona fide purchaser will prevail against any interest. The bona fide purchaser would have prevailed against. Thus, the transfer is said to take shelter in the status of the transferor, and thereby steps into the shoes of the bona fide purchaser, even though she otherwise fails to meet the requirements of the BFP. This is true even if the grantee has actual notice of a prior unrecorded conveyance. 
Types of recording acts - chain of title - wild deeds
A wild deed is a recorded deed that isn’t connected to the chain of title. It doesn’t impart constructive notice because the subsequent purchaser could not feasibly find it. If a deed, entered on the records, has a grantor unconnected to the chain of title, the deed is wild, and is incapable of giving record notice of its existence. Thus, any deed recorded that is said to be in connection to the wild deed is a nullity
Example: O to A who does not record and then sells to B. O then sells the property again but to C. C records. Does not matter whether it is a notice or race notice jurisdiction, C wins, no matter what because they are a bona fide purchaser and be only recorded a wild deed. 
Types of recording acts - chain of title - estoppel by deed
One who conveys realty in which she has no interest is a stopped from denying the validity of the conveyance if he subsequently acquires the title that he had previously reported to transfer.
Types of recording acts - chain of title - deeds recorded late
They deed recorded after the grantor part with title through a subsequent date is not constructive notice in most states. 
Types of recording acts - chain of title - deed in chain referring to instrument outside of chain
Reference to another instrument in a recorded document that is in the chain of title may impart constructive notice of the instrument referred to, even if it is unrecorded or not itself in the chain of title
Types of recording acts - chain of title - restrictive covenants
Courts are split on whether deeds to adjacent lots or lots in a subdivision, X executed by the same grantor and containing restrictions and easements involving the subject law, are within the chain of title of the subsequent law. The better view is that they are not. 
Judgement creditors
A plaintiff who obtains a money judgment, can place a judgment lien on the defendants real property by filing the judgment in the appropriate county office. Whether judgment creditors are protected by the recording statute against the prior and recorded conveyance by the defendant, depends on the state statute, but most states do not grant them protection. Unlike mortgage lenders, who are the same as any other bona fide purchaser, judgment creditors and lienors aren’t usually protected by the recording act. Because they aren’t covered by the recording act, the notice or lack of notice of a prior claim is a relevant.
