The Recording System

Question 1

Race Statute Jurisdiction

Answer 1

In a race jurisdiction, notice of a prior conveyance by the grantor doesn’t matter. The first party to record wins. Only a few states have a pure race statute.

I.e., grantee who records first prevails.

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

Question 2

Notice Statute Jurisdiction

Answer 2

Under a notice statute, a subsequent purchaser who had no notice of a prior conveyance by the grantor will prevail over a prior grantee who failed to record.

I.e., Subsequent bona purchaser (for value without notice) prevails.

“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.

NOTE: the subsequent purchaser under a notice statue prevails even if they don’t record.

Question 3

Race-Notice Statute Jurisdiction

Answer 3

To be protected under a race-notice statute, the subsequent purchaser must not have any notice of the prior grant and must record first.

I.e., subsequent bona fide purchaser (for value without notice) who records first prevails.

“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 4

Chain of Title

Answer 4

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.

Question 5

The Shelter Rule

Answer 5

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 6

Problem of the Wild Deed

Answer 6

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

Rule of the wild deed: if a deed, entered on the records, has a grantor unconnected to the chain of title, the deed is a wild deed and is incapable of giving record notice of its existence.

Question 7

Deeds Recorded Late

Answer 7

A deed recorded after the grantor parts with title through a subsequent deed is not constructive notice in most states.

Question 8

Deed in Chain Referring to Instrument Outside Chain

Answer 8

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.

Question 9

Judgement Creditors

Answer 9

A Plaintiff who obtains a money judgment can place a judgment lien on the defendant’s real property by filing the judgment in the appropriate county office.

Whether judgment creditors are protected by the recording statute against a prior unrecorded conveyance by the defendant depends on teh state statute, but most states do not grant them protection.

Unlike mortgage lenders, who are the same as any other BFP, judgment creditors and lienors aren’t usually protected by the recording acts. Because they aren’t covered by the recording act, their notice or lack of notice of prior claims is irrelevant.

Question 10

Bona Fide Purchasers

Answer 10

To be a BFP, a grantee must:

1. be a purchaser (or 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

If a subsequent grantee does not qualify as a BFP, they are not protected by the recording act and the common law rule of first in time applies.

Question 11

Purchaser for Value

Answer 11

Bargain Basement Sale
The case of the doomed donee: recording statues do not protect donees, heirs, or devisees unless the shelter rule applies.

Question 12

Notice

Answer 12

Actual Notice

Inquiry Notice - B is on inquiry notice of whatever an examination of Blackacre would have revealed

Record Notice - Chain of Title