The Recording System

Question 1

Describe a notice recording statute.

Answer 1

If B is a bona fide purchaser, B wins, regardless of whether or not she records before A.

Question 2

Describe a race-notice statute.

Answer 2

If B is a bona fide purchaser, B wins if she records properly before A does.

Question 3

Which two groups of people are protected by recording statutes?

Answer 3

BFPs and mortgagees

Question 4

A BFP is one is . . . (2)

Answer 4

Buys Blackacre for value;

w/o notice that another got there first

Question 5

B paid $50k cash for BA, when its FMV is estimated at $100k. Is B a purchaser for value? Explain.

Answer 5

Yes,B remitted substantial pecuniary consideration

Question 6

What is the rule regarding “bargain sales” and BFP?

Answer 6

A bargain sale buyer is still a BFP as long as he remits “substantial pecuniary consideration”

Question 7

O sold to A, then bequeathed to B. In a recording statute question, B . . .

Answer 7

Loses

UNLESS the Shelter Rule applies.

Question 8

What are the three forms of notice with which a buyer may potentially be charged? Pneumonic?

Answer 8

AIR

Actual

Inquiry

Record

Question 9

Whether he looks or not, B is on inquiry notice of . . .

Answer 9

Whatever an examination of the land would show.

Question 10

If a recorded instrument makes reference to an unrecorded transaction, grant is on inquiry notice of . . .

Answer 10

Whatever a reasonable follow up would have revealed.

Question 11

B is on record notice of A’s deed IF at the time B takes . . . .

Answer 11

A’s deed has been recorded properly.

Question 12

Which sort of statute? “A conveyance of an interest in land shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded.”

Answer 12

Notice

Question 13

Under a Notice statute, what is the only thing B must do in order to take?

Answer 13

Be a BFP before A records.

Question 14

Under a notice statute, what result if O conveys to A, then conveys to B (BFP), then A records. B fails to record. Explain.

Answer 14

Land to B.

If at the time B takes, he is a BFP, he wins. It won’t matter that A ultimately recorded first. Nor does it matter that B never recorded.

Question 15

Which sort of statute? “Any conveyance of an interest in land shall not be valid against any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded.”

Answer 15

Race-notice.

Question 16

Two requirements to win under a Race-Notice statue?

Answer 16

BFP

Record first.

Question 17

On March 1, O conveys to A (BFP). A does not record. On April 1, O conveys the same parcel to B (BFP) who does not record. On May 1, A records.

Who takes in N jurisdiction?

Who takes in RN jurisdiction?

Answer 17

B in N

A in RN

Question 18

How can A always defeat a subsequent purchaser? Explain

Answer 18

Simply record before B takes.

If A records, B is put on record notice and is thus precluded from BFP status.

Question 19

To give record notice to subsequent takers, the deed must be recorded properly within . . .

Answer 19

The Chain of Title

Question 20

The chain of title refers to what?

Answer 20

The sequence of recorded documents capable of giving record notice.

Question 21

In most states, how is the chain of title established?

Answer 21

Grantor-grantee index.

Question 22

What are the three primary chain of title problems?

Answer 22

The Shelter Rule

The Wild Deed

Estoppel by Deed

Question 23

What does the Shelter Rule say?

Answer 23

One who takes from a BFP will prevail against any entity that the transferor-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.

Question 24

O conveys to A, who does not record. Later, O conveys 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 v. C, who wins in a Notice Juris.? In a Race-Notice Juris.?

Explain

Answer 24

C wins in both.

Under the Shelter Rule, C steps into the shoes of B, who was a BFP who recorded first.

Question 25

O sells BA to A, who does not record. A then sells to B. B records the A-to-B deed. What is this called? Why is it problematic?

Answer 25

Wild Deed.

Problematic because the deed is NOT connected to the chain of title, as the O-to-A link is missing from the records.

Question 26

What is the rule of the Wild Deed?

Answer 26

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 wild and is incapable of giving record notice of its existence.

Question 27

O sells BA to A, who does not record. A then sells to B. B records the A-to-B deed.

O then sells BA to C. Assume C has no actual or inquiry notice of to the O-to-A or A-to-B transactions. C records.

O skips town. In the contest of B vs. C, who wins in a NJ? In a RNJ? Explain each.

Answer 27

C wins in both.

C wins in a NJ b/c at the time C takes, she is a BFP.

C wins in a RNJ because she is a BFP who wins the race to record.

NOTE: B’s recording is a nullity due to the Wild Deed.

Question 28

O sells BA to A, who does not record. A then sells to B. B records the A-to-B deed.

We say that B’s recording is a ______.

Answer 28

Nullity.

Question 29

In 1950, O owns BA. He is thinking about selling it to X, but for now decides against it.

In 1950, X, who does not own BA, sells it anyway, to A. A records.

In 1960, O finally decides to sell BA. He sells to X. X records.

In 1970, X, sells BA again, this time to B. B records.

AS BETWEEN X and A, who owned BA from 1960-1969? Explain.

Answer 29

A did, because of the rule of Estoppel by Deed. One who conveys realty in which he has no interest (here, X) is estopped from denying the validity of that conveyance IF he later acquires the previously transferred interest.

Question 30

In 1950, O owns BA. He is thinking about selling it to X, but for now decides against it.

In 1950, X, who does not own BA, sells it anyway, to A. A records.

In 1960, O finally decides to sell BA. He sells to X. X records.

In 1970, X, sells BA again, this time to B, a BFP. B records.

Who owns BA in 1970 in a NJ? In an RNJ?

Answer 30

B in both.

In NJ because he is BFP.

In RNJ because is a BFP who records first.

Question 31

In 1950, O owns BA. He is thinking about selling it to X, but for now decides against it.

In 1950, X, who does not own BA, sells it anyway, to A. A records.

In 1960, O finally decides to sell BA. He sells to X. X records.

In 1970, X, sells BA again, this time to B, a BFP. B records.

As of 1970, B owns BA in both an NJ and and RNJ. Why not A? Include an explanation of how B is affected.

Answer 31

A’s 1950 recording is a nullity. It occurred too early.

B’s title searcher would not find A’s deed. This is because one is entitled to assume that no one sells land until they first own it. Thus, B’s title searched would not discover X’s 1950 pre-ownership transfer to A.