The Recording System

Question 1

Bona Fide Purchasers

Answer 1

To be a BFP, a grantee must

1) be a purchaser or mortgage lender (must give value), not one who received the property by gift, will, or inheritance

2) pay valuable consideration

3) take without notice (actual, record, inquiry) of the prior conveyance

Question 2

Types of Notice

Answer 2

Actual Notice - Means the grantee’s actual knowledge

Inquiry Notice - A buyer is on inquiry notice of all facts they would have obtained through a reasonable inspection of the property. Additionally, they are on inquiry notice of any facts contained in an unrecorded instrument if a recorded instrument makes a reference to them.

Record Notice - A buyer is on notice of all facts contained in the chain of title

Question 3

What are the types of recording statutes

Answer 3

Race
Notice
Race Notice

Question 4

Race Statute

Answer 4

Under a race statute, the first party to record wins. Notice of a prior conveyance by the grantor is irrelevant.

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

Question 5

Notice Statute

Answer 5

Under a notice statute, a subsequent BFP will prevail over prior grants

LANGUAGE - A conveyance of an interest in land, other than a lease for less then one year, shall not be valid against any subsequent purchaser for value, without NOTICE thereof, unless the conveyance is recorded.

NOTE - the BFP will prevail even if they don’t record

Question 6

Race Notice Statute

Answer 6

to be protected under a race notice statute, a subsequent purchaser must not have any notice of a prior grant (BFP) and must record first

LANGUAGE - 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.

IMPORTANT - GA is a race notice jurisdiction

Question 7

How to give notice through chain of title

Answer 7

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 through a title search through the grantor-grantee index

Question 8

The Shelter Rule

Answer 8

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

The transferee takes shelter in the status of the transferor, even though the transferee fails to meet the requirements for a BFP.

NOTE - this is true even if the grantee had actual notice of a prior unrecorded conveyance

Question 9

Wild Deeds

Answer 9

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

If a deed, entered on the records, has a grantor unconnected to any chain of title, the deed is a wild deed and is incapable of giving record notice of its existence (as if it was never recorded)

Question 10

Estoppel By Deed

Answer 10

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.