Real Property - Recording Systems

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Real Property - Recording Systems
2012-01-14 20:47:43
barbri VA

Real Property - Recording Systems
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  1. Model of Double dealer
    Model: O conveys Blackacre to A. Later, O conveys Blackacre , the same parcel, to B. O, the double dealer, has skipped town. In the battle of A vs. B, who wins?
  2. Two brightline rules
    • 1. If B is a BONA FIDE PURCHASER, and we are in a NOTICE (like VA) jurisdiction, B wins, regardless of whether 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.
  3. Principle
    recording acts exist to protect only bona fide purchasers and mortgagees (creditors)
  4. Bona Fide Purchaser
    • 1. purchases Blackacre for value
    • 2. w/out notice that someone else got there first
  5. Routine Value Questions
    • 1. The bargain basement sale: as long as B remits substantial pecuniary consideration, that's fine
    • 2. The case of the doomed donee: recording statutes do not portect donees, heirs, devisees unless the shelter rule applies
  6. Three Forms of Notice (AIR)
    • Actual
    • Inquiry (not recognized in VA)
    • Record
  7. Actual notice
    prior to B's closing, B learns of A
  8. Inquiry Notice
    • whether B looks, on notice of whatever an exam of the land would show
    • Buyer has a duty to inspect before transfer of title. If another is in possession B has inquiry notice regardless of whether buyer actually bothered to inspect or not
    • defeats B's status as a BFP
    • If a recorded instrument makes reference to an unrecorded transaction, grantee is on inquiry notice of whatever a reasonable followup would show
  9. Record Notice
    B is on record notice of A's deed if at the time B takes, A's deed was recorded
  10. Recording Statutes
    Notice Statute (like VA)
  11. "A conveyance of an interest (O to A) in land shall not be valid against any subsequent purchaser (B) for value, without notice (B) thereof, unless the conveyance is recorded (A)."
    • If at the time B takes, he is a BFP, he wins. It won't matter that A may ultimately record first, before B does. It won't matter, in the A vs. B contest, that B never records.
    • In a notice state, the last BFP to enter wins.
  12. Recording Statutes
    Race Notice Statute
    • "Any conveyance of an interest (O to A) in land shall not be valid against any subsequent purchaser for value (B), without notice thereof (B), whose conveyance is first recorded (B)."
    • To prevail, B must 1) be a BFP and B must 2) win the race to record.
  13. Chain of Title
    the sequence of recorded documents capable of giving record notice. In most states, the chain of title is established through a title search of the grantor-grantee index.
  14. Chain of Title Problems
    Shelter Rule
    • 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 fails to meet BFP status.
    • Exists to protect B (BFP), to make B's life easier B can transfer w/out being penalized for O's double dealings
  15. Chain of Title Problems
    Wild Deed
    If a deed, entered onthe 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.
  16. Chain of Title Problems
    Estoppel by Deed
    One who conveys realty in which he has not interest is estopped from denying the validity of that conveyance if he later acquires the previously transferred interest