The Recording System

Question 1

O conveys Blackacre to A. Later, O conveys Blackacre, the same parcel, to B. O has skipped town. In the battle of A vs. B, who wins in a common law jurisdiction?

Answer 1

A wins, because the conveyance to A was first in time.

Question 2

O conveys Blackacre to A. Later, O conveys Blackacre, the same parcel, to B. O has skipped town. In the battle of A vs. B, who wins in a race jurisdiction?

Answer 2

B wins, if he records properly before A does.

Question 3

O conveys Blackacre to A. Later, O conveys Blackacre, the same parcel, to B. O has skipped town. In the battle of A vs. B, who wins in a notice jurisdiction?

Answer 3

B wins if he was a bona fide purchaser when he took, regardless of whether he records before A does.

In a notice state, the last bona fide purchaser to take wins.

Question 4

O conveys Blackacre to A. Later, O conveys Blackacre, the same parcel, to B. O has skipped town. In the battle of A vs. B, who wins in a race-notice jurisdiction?

Answer 4

B wins if B is a bona fide purchaser AND he records properly before A does.

Question 5

To be a bona fide purchaser, a grantee must: (3 requirements)

Answer 5

(1) Be a purchaser (or a mortgage lender), not one who received the property by gift, will, or inheritance
(2) Pay valuable consideration
(3) Take WITHOUT NOTICE (actual, constructive, or inquiry) of the prior conveyance

Question 6

O conveys Blackacre to A. Later, O conveys Blackacre, the same parcel, to B by will. O has skipped town. In the battle of A vs. B, who wins in a notice or race-notice jurisdiction?

Answer 6

A wins. Because B is not a bona fide purchaser, B is not protected by the recording acts, so the common law rule of first in time applies.

Question 7

B paid $50,000 cash for Blackacre, when its fair market value is estimated at $100,000. Is B a bona fide purchaser for value?

Answer 7

Yes. B has remitted substantial pecuniary consideration (i.e., he has paid value that is not insignificant). So long as substantial pecuniary consideration is remitted, B will be deemed a bona fide purchaser. It is irrelevant that B got a good deal.

Question 8

B is O’s heir, or devisee, or donee. In a recording statute question, what happens to B?

Answer 8

B takes if there are no prior conveyances by O.

B loses if O has made prior conveyances to anyone or subsequent conveyances to bona fide purchasers, unless the shelter rule applies.

Question 9

The three forms of notice that a buyer potentially may be charged with are:

Answer 9

(1) Actual
(2) Inquiry
(3) Record

NOTE: (2) and (3) are both forms of constructive notice.

Question 10

What is actual notice in the context of recording statutes?

Answer 10

Prior to B’s closing, B learns of A

Question 11

What is inquiry notice in the context of recording statutes?

Answer 11

B is on inquiry notice of whatever an examination of Blackacre would have revealed.

(1) The buyer of real estate has a duty to inspect the premises before transfer of title to see, e.g., whether anyone else is in possession (i.e., whether or not B actually inspects, B is presumed to have knowledge of whatever an inspection would have revealed).
(2) Inquiry notice also means that if a recorded instrument makes reference to an unrecorded transaction, B is on inquiry notice of whatever a reasonable follow-up would have revealed.

Question 12

What is record notice in the context of recording statutes?

Answer 12

B is on record notice of A’s deed if, at the time B takes, A’s deed was properly recorded within the chain of title.

Question 13

O conveys Blackacre to A. Later, O conveys Blackacre, the same parcel, to B. O has skipped town. A has not recorded, or has not recorded properly at the time B takes. B is a bona fide purchaser. What result?

Answer 13

In a race state, B wins if he records first.

In a notice state, B wins if he’s the last bona fide purchaser to take.

In a race-notice state, B wins if he records before A.

Question 14

What kind of recording statute is this?

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

Answer 14

race statute

Explanation:
“A conveyance of an estate in land” = O > A, who need not be a BFP

“a subsequent purchaser for value” = O > B, who must be a BFP

“unless the conveyance is first recorded” = first to record wins

Question 15

What kind of recording statute is this?

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.

Answer 15

notice statute

Explanation:
“A conveyance of an interest in land” = O > A, who need not be a BFP

“any subsequent purchaser for value” = O > B, who must be a BFP

“without notice thereof” = B must lack notice

“unless the conveyance is recorded” = A (redundant, since B would be on notice if A recorded)

Last BFP to enter the fact pattern wins if no notice.

Question 16

What kind of recording statute is this?

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.

Answer 16

race-notice statute

Explanation:
“Any conveyance of an interest in land” = O > A

“any subsequent purchaser for value” = O > B

“without notice” = B must lack notice

“whose conveyance is first recorded” = B must record first

B must be a BFP AND win the race to record.

Question 17

On March 1, O conveys to A, a bona fide purchaser, who does not record. On April 1, O conveys the same parcel to B, a bona fide purchaser, who does not record. On May 1, A records.

(1) Who wins in a notice jurisdiction?
(2) Who wins in a race-notice jurisdiction?
(3) Who wins in a race jurisdiction?

Answer 17

(1) B wins. He was the last BFP to take.
(2) A wins. She was a BFP when she took, and she recorded first.
(3) A wins. She recorded first.

Question 18

If these words appear, what kind of recording statute is it?

(1) “First” only
(2) “Notice” only
(3) “Notice” and “First”

Answer 18

(1) race statute
(2) notice statute
(3) race-notice statute

Question 19

What is the chain of title?

Answer 19

The sequence of properly recorded documents capable of giving record notice to subsequent takers

Question 20

How is the chain of title established in most states?

Answer 20

Through a title search of the grantor-grantee index

Question 21

What is the shelter rule?

Answer 21

Anyone who takes from a BFP will prevail against any interest the BFP would have prevailed against.

In other words, the transferee “takes shelter” in the status of her transferor, and thereby “steps into the shoes” of the BFP even though she otherwise fails to meet the requirements of BFP status. This is true EVEN IF the grantee had actual notice of a prior unrecorded conveyance.

Question 22

O conveys to A, who does not record. Later, O conveys the same parcel to B, a BFP, who records. B then conveys to C, who is a mere donee or who has actual knowledge of the O-to-A transfer. In the contest of A vs. C, who prevails?

Answer 22

C wins. C steps into B’s shoes as a BFP. B was a BFP who recorded first.

Question 23

What is the shelter rule meant to do?

Answer 23

Protect a BFP, especially one who records, by making it easier for them to transfer title and “clean up” the chain of title

Question 24

What is a “wild deed”?

Answer 24

A recorded deed that isn’t connected to the chain of title. It does not impart constructive notice because a subsequent purchaser could not feasibly find it.

Question 25

O sells Blackacre to A, who does not record. Then, A sells to B. B records the A-to-B deed.

(1) Is the A-B deed connected to the chain of title?
(2) What is the A-B deed?

Answer 25

(1) no, because the O-A link is missing
(2) a wild deed

The rule of the wild deed: If a deed, entered on the records (A to B), has a grantor unconnected to the chain of title (O to A), the deed is a wild deed and is incapable of giving record notice of its existence.

Question 26

O sells Blackacre to A, who does not record. Then, A sells to B. B records the A-to-B deed. O then sells Blackacre to C. Assume that C has no actual or inquiry notice of the O-to-A or A-to-B conveyances. C records. O has skipped town.

(1) In the contest of B vs. C, who prevails?
(2) Does it matter whether this is a notice or race-notice jurisdiction?

Answer 26

(1) C wins. Even though B recorded the A-B deed, it was a wild deed because it was missing the O-A link.
(2) No. C wins in a notice state because he was the last BFP to take. C wins in a race-notice state because C is a BFP who won the race to record. The A-B deed was a wild deed, so it could not provide notice (effectively, it is as if B never recorded).

Question 27

What is estoppel by deed?

Answer 27

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

In English, anyone who sells property that they have no real interest in may not later deny that he sold it if they somehow acquire title later.

Question 28

In 1950, O owns Blackacre. He is thinking about selling it to X, but for now decides against it. In 1950, X, who does not own Blackacre, sells it anyway, to A. A records.

In 1960, O finally sells Blackacre to X. X records.

In 1970, X, sells Blackacre to B. B records.

(1) As between X and A, who owned Blackacre from 1960-1969?
(2) Who owns Blackacre in 1970?
(3) Why does B win in a notice state?
(4) Why does B win in a race-notice state?

Answer 28

(1) A, because of estoppel by deed
(2) B, as long as he is a BFP, because the X-A deed is a nullity. The X-A deed was recorded when neither X nor A had any claim to Blackacre. A could not properly record until 1960 when O conveyed to X.
(3) B is the last BFP to take
(4) B is a BFP who records properly first

Question 29

Reference to another instrument in a recorded document that is in the chain of title may impart _______ of the instrument referred to, even if it is unrecorded or not itself in the chain of title.

Answer 29

constructive notice