Real Property 9: Recording System
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What is the NOTICE statute?
("A conveyance of an interest in land shall not be valid against anny subsequent purchaser for value, without notice thereof, unless the conveyance is recorded.")
THE LAST BFP TO ENTER WINS.
If, at the time B takes, he is a BONA FIDE PURCHASER, he wins. It does not matter that A may ultimately record first, before B does.
What is the RACE-NOTICE statute?
("Any conveyance of an interest in land shall not be vaid against any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded.")
To prevail, B must be: (1) a BFP and (2) the winner in the race to record.
What type of recording statute does NY follow?
What are the requirements to be a BONA FIDE PURCHASER?
1. Must purchase Blackacre for VALUE;
2. He is WITHOUT NOTICE that someone else got there first.
What are the THREE forms of notice that a buyer may potentially be charged with?
Actual: Prior to B's closing, B gets LITERAL knowledge of A's existence.
Inquiry: Buyer has a DUTY TO INSPECT before transfer of title.
Record: B is on record notice of A's deed if at the time B takes, A's deed was recorded properly within the chain of title.
What results if a recorded instrument makes reference to an unrecorded transaction?
Buyer (grantee) is on INQUIRY NOTICE of whatever a REASONABLE follow-up would show.
What does it mean for a deed to be recorded within the CHAIN OF TITLE?
Deed is recorded in a sequence of recorded documents capable of giving record notice to later takers.
In most states, chain of title is established through a TITLE SEARCH of the GRANTOR/GRANTEE INDEX.
What are THREE chain of title problems?
1. The Shelter Rule
2. Problem of the Wild Deed
3. Estoppel by Deed
What is the SHELTER RULE?
One who takes from a BFP will prevail against ANY ENTITY that the transferor or BFP would have PREVAILED against.
Thus, transferee "takes shelter" in the statuts of her transferor and "steps into the shoes" of the BFP even though she otherwise FAILS to meet the requirements of BFP status.
What is the RULE OF THE WILD DEED?
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.
What is ESTOPPEL BY DEED?
One who conveys realty in which he hs no interest is estopped from denying the validity of that conveyance if he late acquires the interest that he had previously transferred.
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