The Recording System

Question 1

What are the two bright line rules to the recording system?

Answer 1

1. If B is a BONA FIDE PURCHASER, and we are in a NOTICE jurisdiction, B wins, regardless of whether or not she records before A does.
2. If B is a BONA FIDE PURCHASER and we are in a race-notice jurisdiction, B wins if she records properly before A does.

Question 2

Why do recording acts exist?

Answer 2

To protect 1. bona fide purchasers; and 2. mortgagees (creditors)

Question 3

Under a recording laws, who is a bona fide purchaser? 2 elements

Answer 3

1. The purchaser who purchases black acre for value; and 2. Without notice that someone else got there first (if that is the case)

Question 4

The bargain basement sale: B paid $50,000 cash for Blackacre, when its fair market value is estimated at $100,000. Is B a purchaser for value?

Answer 4

Yes, as long as B remits substantial pecuniary consideration

Question 5

Do Recording statutes protect donees, heirs or devisees?

Answer 5

Recording statutes do not protect donees, heirs or devisees unless the shelter rule applies B loses unless the shelter rule applies

Question 6

What are the 3 types of Notice the buyer may be charged with? AIR

Answer 6

1. A: Actual
2. I: Inquiry
3. R: Record

Question 7

What is actual notice?

Answer 7

Prior to B’s closing B learns of A

Question 8

What is inquiry notice?

Answer 8

1. Whether he looks or not, B is on inquiry notice of whatever an exam of blackacre would show, whether he checks it out or not, buyer has the duty to inspect see if there is another in possession, if another is in possession than B has inquiry notice, so if A has possession and B finds out, B is no longer a bona fide purchaser
2. If a recorded instrument makes reference to an unrecorded transaction, grantee is on inquiry notice of whatever a reaonable follow up would show

Question 9

What is Record Notice?

Answer 9

B is on record notice of A’s deed if at the time B takes, A’s deed was recorded properly, B will be charged whether he bothered to check or not so long as A recorded properly at the time she takes

Question 10

What is The Notice Statute?

Answer 10

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. (O–>A)

Question 11

What is The Race Notice Statute?

Answer 11

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.

Question 12

On March 1, O conveys to A, a bona fide purchaser who does not record. On April 1, O conveys the same parcel to B, a bona fide purchaser, who does not record. On May 1, A records.
Who takes Blackacre in a notice jurisdiction?

Answer 12

B- When B took he was as BFP, he was the last BFP to take

Question 13

On March 1, O conveys to A, a bona fide purchaser who does not record. On April 1, O conveys the same parcel to B, a bona fide purchaser, who does not record. On May 1, A records. Who takes in a race-notice jurisdiction?

Answer 13

A - Because she wins the race to record

Question 14

What are the three discrete chain of title problems?

Answer 14

1. The Shelter Notice Rule
2. The Problem of the Wild Deed
3. Estoppel by Deed

Question 15

What is the Shelter Notice Rule?

Answer 15

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 16

Shelter Rule: 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 vs. C, who prevails?

Answer 16

C wins, in both a notice and race-notice state, because of the Shelter Rule, C steps into the shoes of B was a BFP who recorded first (it is like saying C is B) - THe shelter rule aims to protect B the BFP - By making it easier for B to transfer successfully

Question 17

What is the Problem of the Wild Deed?

Answer 17

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 a wild deed. It is incapable of giving record notice of its existence.

Question 18

Problem of the Wild Deed: O sells Blackacre to A, who does not record. Then, A sells to B. B records the A-to-B deed.

Answer 18

The A to B deed, although recorded, is NOT connected to the chain of title, because the O to A link is missing from the records The A to B deed, therefore, is a wild deed

Question 19

Problem of the Wild Deed: O, our initial grantor and dirty double dealer, then sells Blackacre to C. Assume that C has no actual or inquiry knowledge of the O-to-A or A-to-B conveyance. C records.
O has skipped town. In the contest of B vs. C, who prevails?

Answer 19

C wins, in both a notice and race-notice state. C wins in a notice state because at the time C takes she is a BFP; C wins in a race-notice state because she is a BFP who wins the race to record - The rule of the wild deed B’s recording is a nulity, its as if B never recorded at all

Question 20

What is Estoppel by Deed? In 1950, O owns Blackacre. He is thinking about selling it to X, but for now decides against it. In 1950, X, who does not own
Blackacre, sells it anyway, to A. A records. In 1960, O finally sells Blackacre to X. X records.
In 1970, X, a double dealer, sells Blackacre to B. B records. As between X and A, who owned Blackacre from 1960-1969? Who owns Blackacre in 1970?

Answer 20

1. 1960-1969: 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 that previously transferred interest
2. 1970: B, as long as he is a BFP, B wins in a notice system because he is a BFP who wins the race to record. How so? A’s 1950 recording is a nullity. A recorded too early. B’s title searcher would not find A’s deed. Why not? Because one is entitled to assume that no one sells land until they first own it. Thus, B’s title searcher would not discover X’s 1950 pre-ownership transfer to A.