The Recording System

Question 1

What is the recording system?

Answer 1

Deeds, mortgages, leases, option agreements, liens, wills, easements, and all additional instruments affecting land titles can be recorded at the public records office. At the county level, this is the register of deeds.

Question 2

When do recording system issuescome up?

Answer 2

In the post-closing context of people selling property to multiple parties while preying on purchasers who do not know they need to record.

Question 3

What is the two step analysis for recording acts in an essay?

Answer 3

1. Who wins/loses under the recording acts?
2. Does the loser have a cause of action against the seller under the deed?

Question 4

Why record documents?

Answer 4

A deed is valid and good against the grantor without being recorded. However, recording the deed protects the purchasers and lien creditors against prior unrecorded interests. Recording provides (1) the best chance at winning the property in an ownership dispute, (2) proof of ownership, and (3) a backup copy of the deed in a safe place.

Question 5

Who is protected under the recording statutes?

Answer 5

Usually purchasers are protected, but donees and devisees are not protected.

Question 6

Where is a title search completed?

Answer 6

The index at the public records office

Question 7

What are the two types of indices for title search?

Answer 7

1. Tract search (search by property)
2. Grantor/Grantee index (search by name of parties) (most commonly used)

Question 8

What is the common law rule for winning an ownership dispute?

Answer 8

First in time, first in right

Question 9

How did the recording acts come about? What do they operate as?

Answer 9

The recording acts represent the exception to the general common law rule. Under the recording acts, a subsequent bona fide purchaser is protected against prior unrecorded interests?

Question 10

What is “bona fide” in reference to recording acts?

Answer 10

Made in good faith without fraud or deceit

Question 11

What are the three recording act statute types? What does each require?

Answer 11

1. Race (minority): Be the first to record.
2. Notice: (1) pay value and (2) take without notice of a prior interest
3. Race-Notice: (1) pay value, (2) take without notice of a prior interest, and (3) be the first to record.

Question 12

Even though notice states dont require recording to win . . .

Answer 12

The purchaser will remain vulnerable to subsequent purchasers who take without notice and then record.

Question 13

What does it mean to “pay value” for recording acts?

Answer 13

To be a purchaser, the amount paid by the grantee must be (1) usually more than a nominal amount; (2) substantial amount is adequate; and (3) amount msut not be grossly inadequate.

Question 14

If a deed says “for good and other consideration” . . .

Answer 14

Then the presumption arises that the grantee is a purchaser.

Question 15

What are the three types of notice?

Answer 15

1. Actual notice
2. record notice
3. inquiry notice

Question 16

What is actual notice?

Answer 16

The prior purchaser tells the subsequent purchaser that he/she purchased the land.

Question 17

What is record notice?

Answer 17

If a deed is recorded at the public records office, the law presumes record notice, regardless of whether the buyer looks up the deed.

Question 18

What is inquiry notice?

Answer 18

The law presumes inquiry notice, regardless of whether there is actual notice.

Question 19

Explain the two types of inquiry notice.

Answer 19

1. Circumstances surrounding the use of the property that would make a reasonable, prudent purchaser inquire further into what’s going on
2. Facts on the face of a document that would make a reasonable, prudent purchaser inquire further into what’s going on

Question 20

What is the effect of a mother hubbard clause?

Answer 20

A recording of an instrument which uses a Mother Hubbard Clause to describe the property conveyed, does not constitute constructive notice to a subsequent purchaser who has no actual notice/knowledge of the prior assignment.

Question 21

What is the shelter rule? What does it apply to?

Answer 21

If you buy from a winner, you are a winner. Only applies to notice and race-notice jurisdictions.

Question 22

What is an acknoelwedgment provision? What is its effect if invalid?

Answer 22

An acknowledgment provision is where a public notary signs and stamps the deed. The provision is to prevent forgery. If the acknowledgment provision is invalid, the deed is invalid and will no longer qualify for recording act purposes.

Question 23

What is chain of title?

Answer 23

Chain of title is the recorded sequence of transactions by which title passes.

Question 24

What is a wild deed?

Answer 24

A grantee has a wild deed when the grantor’s deed is not recorded in the chain of title and will likely lose their interest in the property.