THE RECORDING SYSTEM

Question 1

O conveys Blackacre to A. Later, O conveys Blackacre, the same
parcel, to B. O, our double dealer, has skipped town. In the battle of A vs. B, who wins if B is a bona fide purchaser?
In a notice jurisdiction?
In a Race-Notice jurisdiction?

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

Recording acts exist to protect what two sets of individuals?

Answer 2

Bona fide purchasers and mortgagees.

Question 3

What is a bona fide purchaser?

Answer 3

A bona fide purchaser is one who buys blackacre for value and without notice that someone else got their first (at time of sale)

Question 4

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 he qualifies as a buyer for value.

Question 5

When do recording statutes protect donees, heirs, or devises?

Answer 5

When the shelter rule applies.

Question 6

The three forms of notice that a buyer may potentially be charged with?
What does a buyer have a duty to do before transfer of title?

Answer 6

AIR
Actual- Prior to closing B learns of A
Inquiry- Whether he looks or not, B is on inquiry notice of whatever an examination of blackacre would show. (B has a duty to inspect)
Record- B is on record notice of A’s deed if at the time B takes A’s deed was recorded properly.

Question 7

“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.” What kind of statute is this?

Answer 7

Notice Statute

Question 8

If there is a notice statue, who wins A or B when B buys after A buys but before A records, but A records before B?

Answer 8

B wins if he is a bona fide purchaser, it does not matter if B never records.

Question 9

Who wins in a notice statute state if there has been no recording by prior purchasers?

Answer 9

The last bona fide purchaser to enter wins.

Question 10

“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.”

What kind of recording statute is this?

Answer 10

Race Notice Statute

Question 11

In a race notice statute what must B do to win?

Answer 11

To prevail, B must

1) Be a bona fide purchaser
2) Win the race to record

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.

1) Who takes Blackacre in a notice jurisdiction?
2) Who takes in a race-notice jurisdiction?

Answer 12

1) B, the last BFP to enter wins

2) A, the BFP who wins the race to record.

Question 13

if A promptly and properly recorded before B takes..
1) what is the result in a notice jurisdiction?
2) in a race-notice jurisdiction?
why?

Answer 13

A wins in both.

A’s proper recordation puts B on record notice thereby defeating his status as a bona fide purchaser.

Question 14

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

Answer 14

the chain of tittle

Question 15

What does the chain of title refer to?

Answer 15

chain of title refers to hat sequence of recorded documents capable of giving record notice to later takers.

Question 16

In most states, the chain of title is established through a title search of what?

Answer 16

the grantor grantee index

Question 17

What is the Shelter Rule?

Answer 17

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 18

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?
In a notice state?
In a race-notice state
why?

Answer 18

C wins in both a notice and race-notice state, because of the shelter rule. C steps into the shoes of B who was a BFP who recorded first.

Question 19

Who does the shelter rule protect and for what purpose?

Answer 19

a bona fide purchaser to make it easier for B to transfer successfully.

Question 20

O sells Blackacre to A, who does not record. Then, A sells to B. B records the A-to-B deed.
What kind of deed is this?

Answer 20

A wild deed.

Although recorded, is NOT connected to the chain of title, because the O to A link is missing from the records.

Question 21

What is the rule of the wild deed?

Answer 21

If a deed, entered on the records, has a grantor unconnected to the chain of title, the deed is a wild deed. It is incapable of giving record notice of its existence.

Question 22

What makes a deed wild?

Answer 22

although recorded, is NOT connected to the chain of title.

Question 23

What is the consequence of a wild deed?

Answer 23

It is not connected to the record chain of title, it would be as if you never recorded yourself.

Question 24

O sells Blackacre to A, who does not record. Then, A sells to B. B records the A-to-B deed. O, our initial grantor, 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?
in a notice state
in a race-notice state?
Why?

Answer 24

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 bona fide purchaser.

C wins in a race-notice state because she is a BFP who wins a race to record. B’s recording is a nullity because although recorded it is improperly recorded, B should have insisted that O–>A be recorded.

Question 25

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.

1) As between X and A, who owned Blackacre from 1960-1969? Why?

Answer 25

1) 1960-1969 A owned blackacre because of the rule of estoppel by deed

Question 26

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

Who owns Blackacre in 1970 in a notice state? Why?.

Answer 26

B, as long as he is a bonafide purchaser

B wins in a notice system because he is a BFP.

Question 27

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

Who owns Blackacre in 1970 in a race-notice state? Why?

Answer 27

B, as long as he is a bonafide purchaser

B wins in a race-notice system because he is a BFP who wins the race to record.

Question 28

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.

What is the effect of A’s 1950 recording? Why?

Answer 28

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.

Question 29

What is the rule of estoppel by deed?

Answer 29

One who conveys realty in which he has no interest, is estopped from denying the validity of that conveyance if he later acquires the previously transferred interest