Recording Systems

Question 1

what is the basic fact pattern of “the dirty double dealer”?

Answer 1

O conveys Blackacre to A. Later, O conveys Blackacre (same parcel) to B. O, double dealer, skips town. In the battle between A v. B, who wins?

Question 2

in the case of the dirty double dealer, who wins in a RACE jurisdiction?

Answer 2

B wins if he records properly before A **NOTE = doesn’t have to be a BFP

Question 3

in the case of the dirty double dealer, who wins in a NOTICE jurisdiction?

Answer 3

B wins if he was a BFP when he took (regardless of whether he records first) – last BFP wins in a notice jurisdiction

Question 4

in the case of the dirty double dealer, who wins in a RACE-NOTICE jurisdiction?

Answer 4

B wins if B is BFP AND he records properly before A does

Question 5

what 3 things are required for a grantee to be a bona fide purchaser (BFP)?

Answer 5

grantee must…
1) be a purchaser or mortgage lender (can’t receive by gift, will, etc)
2) pay valuable consideration, and
3) take WITHOUT notice of the prior conveyance

Question 6

in notice and race-notice jurisdictions, if a grantee is NOT a BFP (not protected by recording statutes) what common law rule applies?

Answer 6

the first in time rule (whoever received interest first wins)

Question 7

will a grantee be a BFP if they paid substantially less for prop than what it’s valued at?

Answer 7

yes (so long as they pay substantial pecuniary consideration)
**EXAMPLE = B pays 50k for house whose FMV is 100k (still valid BFP)

Question 8

what is the only situation where a donee, devisee, or heir may be protected by recording statutes?

Answer 8

when the shelter rule applies

Question 9

what is the shelter rule?

Answer 9

one who takes from a BFP will prevail against any party that the BFP would have prevailed against (ie–takes shelter/steps into the shoes of the BFP)
**NOTE = true even if grantee had actual notice of prior unrecorded conveyance

Question 10

what does “without notice” require (for BFP purposes)?

Answer 10

purchaser must have had NO actual, inquiry, or record notice of a prior conveyance at the time they paid consideration and received the interest
**NOTE = remember AIR for types of notice

Question 11

what is actual notice?

Answer 11

B literally learns of A prior to closing

Question 12

when is a purchaser on inquiry notice?

Answer 12

whether they examine the property or not, buyer is on inquiry notice of whatever an examination of the property WOULD HAVE revealed

Question 13

does a buyer have a duty to inspect the premises before transfer of title?

Answer 13

yes (to see if anyone else is in possession, etc)

Question 14

if another is in possession of the property before closing, will the purchaser be on notice even if they didn’t inspect?

Answer 14

yes (inquiry notice)

Question 15

will a buyer be on notice if a recorded instrument makes reference to an unrecorded transaction?

Answer 15

yes, buyer is on notice of whatever a reasonable follow up would have revealed

Question 16

when is a buyer on record notice?

Answer 16

when, at the time the buyer takes, the prior grantee’s deed was properly recorded within the chain of title

Question 17

what is the language of a typical RACE statute?

Answer 17

a conveyance of an estate in land shall not be valid against a subsequent purchaser for value unless the conveyance is first recorded

Question 18

what is the language of a typical NOTICE statute?

Answer 18

a 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 thereof, UNLESS the conveyance is recorded (ie–record notice; redundant clause)

Question 19

what is the language of a typical RACE-NOTICE statute?

Answer 19

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 thereof, WHOSE conveyance is first recorded

Question 20

is there a BFP requirement in a race jurisdiction?

Answer 20

NO

Question 21

how will a buyer win in a race jurisdiction?

Answer 21

by recording first

Question 22

how will a buyer win in a notice jurisdiction?

Answer 22

by being the last BFP to enter

Question 23

how will a buyer win in a race-notice jurisdiction?

Answer 23

by being a BFP and winning the race to record

Question 24

what must be done with the deed in order to give valid record notice?

Answer 24

deed must be recorded properly within the chain of title

Question 25

what is the chain of title?

Answer 25

the sequence of recorded documents capable of giving record notice to subsequent takers

Question 26

how is the chain of title established in most states?

Answer 26

title search of grantor-grantee index

Question 27

what is a wild deed?

Answer 27

a recorded deed that is NOT connected to the chain of title (a link is missing)

Question 28

what is the effect of a wild deed on a BFP’s notice?

Answer 28

wild deed cannot impart constructive/record notice because a subsequent purchaser could not feasibly find it

Question 29

what is the effect of recording a wild deed?

Answer 29

treated the same as if it had never been recorded at all!

Question 30

what is the rule for estoppel by deed?

Answer 30

one who conveys realty in which he has no interest is estopped from denying the validity of that conveyance if he later acquires the title he had previously purported to transfer

Question 31

is a pre-ownership recording of a deed sufficient to put a buyer/title searcher on notice?

Answer 31

NO (won’t be connected to the chain of title; grantee is entitled to assume that no one sells/conveys land until they first own it)