Title Assurance Flashcards
Describe the two types of indexes currently used in the US for title searches
-Public tract index: indexes documents by a parcel identification number assigned to the particular tract (does not exist in most states).
*States that require this include Nebraska, North Dakota,Oklahoma, South Dakota, Utah, and Wyoming.
–The grantor-grantee index: separate indexes are kept for grantors and grantees (most common method of indexing)
For title assurance problems, what is the basic situation?
The case of the double dealer
Under the common law, who won?
The common law answers this question with the principle of “first in time, first in right.”
-Under the common law, the person whose interest was created first prevails.
-So A would win against B
Under the modern rules, what do all states recognize have as an exception to first in time, first in right?
All states now recognize an exception to “first in time, first in right” through recording acts (aka recording statutes)
Under the recording acts, a _____________________ is protected in different ways against prior _______________________
Under the recording acts, a subsequent bona fide purchaser (BFP) is protected in different ways against prior unrecorded interests
There are three different types of recording acts:
*The notice statute
*The race-notice statute
*The race statute
There are three different types of recording acts
There are three different types of recording acts:
*The notice statute
*The race-notice statute
*The race statute
What are the criteria to qualify as a bona fide purchaser (BFP)?
-B had to purchase for value.
-At the time of his purchase, B had to be without notice that another (in our hypo, A) got there first
First Criteria for BFP
B had to purchase for value
-Value means substantial pecuniary consideration.
-Not by devise (will), descent (intestacy), or gift.
**The common law rule of “first in time, first in right” applies to these situations.
Second Criteria for BFP
At the time of his purchase, B had to be without notice that another (in our hypo, A) got there first.
-Remember AIR: Actual, Inquiry, and Record Notice
–Actual Notice: B actually and literally learned that O is a double dealer, having already conveyed the same parcel to A.
-Inquiry Notice: Whether B looks or not, he is on notice of whatever a routine inspection of Blackacre would reveal.
–Record Notice: B is on notice of A’s deed if, at the time B takes, A’s deed was properly recorded within the chain of title
What are three types of notice?
The Recording Statutes
-The notice statute
–The race-notice statute
–The race statute
The Notice Statute
*In a notice state, B wins, as long as he is the last bonafide purchaser to take.
–It does not matter that A ultimately records first(i.e., sometime after B takes).
–It does not matter that B never records.
–B wins, so long as he is the last bona fide purchaser to take
The Race-Notice Statute
- In a race-notice state, B wins if she accomplishes two things:
–B must be a BFP; and
–B must win the race to record.
The Race Statute
*In a race system (almost obsolete), the first to record wins, regardless of the recorder’s BFP status.
*This is also called a “pure race statute.”
What does chain of title refer to?
Chain of title refers to the series of recorded documents that give constructive notice to a subsequent purchaser.
-Proving that you are in the chain of title secures your property interests against future competing claims.
*But note that a deed is valid and good against the grantor if it is lawfully executed and delivered (LEAD)without recordation
There are three important chain of title problems:
-The Wild Deed;
–Estoppel by Deed; and
–The Shelter Rule.
