The Recording System Flashcards
Main issue with recording system questions
The case of the double dealer
Three types of jurisdictions and who wins
1) Race: First party to record wins
2) Notice: B wins if he was a BFP when he took. (Last BFP to take (enters the fact pattern) wins)
3) Race Notice: B wins if BFP AND records properly before A
Bonafide Purchaser
Grantee must:
1) Be a buyer for value (no gift, will, inheritance)
2) Take without notice (at the time they paid consideration and received the interest) ?
Types of Notice (BFP)
1) Actual
2) Inquiry
3) Record
Inquiry and record are both forms of CONSTRUCTIVE notice.
Actual Notice
Prior to B’s closing, B learns of A
Inquiry NOtice
Based on duty to inspect during escrow. Basically if you did escrow due dillegence, you would’ve known.
Two scenarios:
1) A is in possession before B’s closing
2) If a recorded instrument makes reference to an unrecorded transaction, grantee is on IN of whatever a reasonable follow up would have revealed.
Record Notice
At time B enters, A’s deed had been PROPERLY recorded within the chain of title.
*most common
Chain of Title
Sequence of recorded documents capable of giving record notice to later takers
When is a deed recorded PROPERLY?
When it is recorded in chain of title.
How is chain of title established in most states?
Title search of hte grantor grantee index.
Shelter Rule (Chain of Title Problem)
Anyone who takes from a BFP will prevail against any interest the BFP would’ve prevailed against.
**relevant when B conveys to C. C steps into Bs shoes, regardless of C’s notice/BFP status
Tries to protect B. Let’s them transfer succesfully without being weighed down by dirty double dealer.
Problem of the Wild Deed (Chain of title problem)
Recorded deed that isn’t connected to chain of title (and thus incapable of giving constructive notice.
TO RECORD A WILD DEED IS THE SAME AS NEVER RECORDING AT ALL.
So O->A (no record); A->B (recorded). THEN O->C (who is a BFP and records). C wins b/c B’s record is wild.
Wild Deed Scenario
O - > A. No record. A->B. Recorded, but not in chain of title b/c O->A link is missing.
Estoppel by Deed (chain of title problem)
One who conveys realty in which he has no interest is estopped from denying the validity of that conveyance if he subsequently acquires title that he had previously purported to transfer.
O sells to two parties, A and B. B gets fucked based on circumstances. Can B sue owe fro breach of implied promise to marketable title?
No because K is dead. The deal closed.
Sueing for breach of implied promise of marketable title has to be done during escrow.
