the recording system
what are the 3 typical situations where a dispute over title typically arises?
(a) 2 or more claimants dispute who holds the present possessory estate in land; (b) a title dispute may arise b/w the holder of the present possessory estate and someone claiming a non-possessory interest (such as a lien or easement) in the same land; and (c) 2 or more holders of non-possessory interests in property may dispute their respective priority
O → A (DNR) O → B (DNR) A records (O → A deed) A → C (DNR) B records (O → B deed) C records (A → C deed) Who prevails under a race notice statute?
C satisfies the first 3 elements. C does not satisfy the 4th element because C recorded their deed after B recorded their deed and therefore they are not a BFP. However, C still wins bc C's grantor (A) would win against B in a suit. A was a BFP and is protected by the statute, and A was the first to record. A then sold to C. If A & B were in dispute, A would win. So since B & C are in a dispute, A, as C's grantor, protects C. This is called the shelter rule.
O → A (DNR) O → B (DNR) B records O → B deed (latent defect) B → C (C is BFP) C records B → C deed Who prevails, A or C, in a notice jur?
C would've had to have been (1) subsequent to A, (2) paid value, and (3) without notice. C satisfies all 3 things and wins in a notice jur.
C (QCD) → F (DNR) C (1/2 mineral interest) → M (latent defect in C → S deed - notary) S (1/2 mineral interest) → E (S records C → S deed) (E records S → E deed) (F records C → F QCD) F sues S & E to quiet title. (notary signature means the person was personally in presence of notary @ time of signing. here, the notary lied and said C was present when signing it in her presence, but C did not sign it in front of notary. this is a latent defect) in a race notice jur, what is the outcome?
E satisfies the first 3 requirements. has to satisfy the 4th requirement: has to record his deed before F. E recorded his deed from C before
in regard to filing first?
MA approach: consider it filed even if , so the subsequent purchaser cannot satisfy the first recorded element ??
what are the 2 approaches jurisdictions take when one property is conveyed by 1 person to multiple people, in regard to notice?
MA approach: does not provide constructive notice. a purchaser is not bound to examine the record after the date of a recorded conveyance to discover whether the grantor made a prior conveyance recorded later. MS approach: a deed recorded late - after another deed from the same owner - gives constructive notice to subsequent purchasers. buyer must perform extensive searches
if documents reflecting the existing property owner's interest are properly recorded in the county land records, can a subsequent purchaser be deemed a BFP?
NO
O → A (DNR) O → B (DNR) A records (O → A deed) A → C (DNR) B records (O → B deed) C records (A → C deed) Who prevails under a notice statute?
Since C was the last purchase, they are the fist one in line to be a BFP. Actual conflict is b/w B and C. Requirements: (1) C is subsequent purchaser to B; (2) C paid, so is a purchaser; (3) C was without notice bc B hadn't recorded their deed until after C's purchase C satisfies all 3 requirements in a notice jurisdiction and is a BFP
O → A (does not record) O dies → H is O's heir H → B (B records) Who prevails? A or B?
When O conveyed the property to A, that conveyed what interest O had in the property → A now owns the interest. When O died, it did not transfer to H since O isn't the owner anymore at the time of his death; it did not pass to H bc it belonged to A. However, under the recording act rule, B wins. When B is about to purchase they check the record to see what title H can convey to B. The record search will reflect that O was the record owner at the date of O's death bc A did not record the O → A deed. A could've protected themself by recording their deed, but they did not.
what is the rule for notice jurisdictions? (roughly 1/2 the states)
a (1) subsequent bona fide purchaser of property (2) for value who has (3) no notice (either actual or constructive) of a prior interest already held by a 3rd party will prevail over that interest.
what is the rule for race notice jurisdictions? (roughly 1/2 the states)
a BFP is a subsequent purchaser for value without notice of the prior interest, who records his or her interest first *same first 3 elements as a notice jurisdiction but adds a 4th: (4) the subsequent purchaser must be the first to record
what is the primary exception to the first in time rule? (created by recording act statutes)
a bona fide purchaser (subsequent purchaser of an interest in land without notice of an interest already held by a 3rd party) prevails in a title dispute with a first in time claimant
what is the shelter rule?
a person who takes from a bona fide purchaser protected by the recording act has the same rights as his grantor a subsequent purchaser has the same rights as his/her grantor. in any conflict b/w a grantor and another party, if the grantor would prevail, then the subsequent purchaser will also prevail
race notice statute rule
a race notice statute protects the subsequent purchaser who first records his own conveyance only if all prior conveyances in his chain of title are also recorded aka → every deed in a subsequent purchaser's chain of title must be properly recorded in order to defeat a prior purchasers
what is the general rule for conflicting title claims? ("first in time rule")
at common law, the person who first acquires an interest in property prevails over anyone who acquires an interest later
what does bonafide purchaser (good faith purchaser) for value mean?
bonafide purchaser = party who purchases a property in good faith and for valuable consideration without notice of a defect in the title valuable consideration = purchase
The recording act in each state defines the precise requirements for BFP status. These acts generally provide that a later purchaser is charged with ____________ ____________ of a ________________ ___________ ____________ in property - even if he or she fails to search the records - and accordingly cannot qualify for protection as a BFP
constructive notice recorded prior interest
O → A (DNR) O → B (DNR) B records O → B deed (latent defect) B → C (C is BFP) C records B → C deed Who prevails, A or C, in a race race notice jur?
have to be (1) subsequent, (2) paid value, (3) without notice, and (4) first to file. latent defect, so it depends on which jur you're in. in a jur that follows Messersmith (minority): the O → B deed isn't legally filed/valid bc there was a latent defect, so there's a chain of title problem. C cannot satisfy the first filed requirement bc their grantor (B)'s defect means the deed was invalid, and the chain of title is messed up. since the chain of title is messed up, C is not a BFP. A wins bc they're first in time and C is not a BFP (under the minority approach)
how does the recording system protect new buyers?
if the prospective buyer commissions a search of the public records as to whether the seller can convey a clear title, then the buyer can buy the land secure in the knowledge that the law will protect her title against any unknown prior interests of which the land records do not provide notice
what does the recording system protect property owners from?
losing their property to later purchasers
Orr (plaintiff) secured a legal judgment against William Elliott in the amount of $50k. The recorded judgment misspelled Elliot's name ("Eliot" instead of "Elliott"). Elliott subsequently sold a piece of property to Rick Byers (defendant) in 1979, which the sale should have triggered Orr's judgment lien, but, bc his name was misspelled, the lien was not identified. Orr brought suit against Byers, Elliott, and Byers's bank to enforce his judgment lien, arguing that the misspelling of Elliott's name was so similar to the proper spelling that the subsequent purchasers of Elliott's land had constructive knowledge of the judgment lien against him. what is the majority rule on idem sonans? what is the minority rule on idem sonans?
majority: minority:
O → A A records O → A deed (latent defect) O → B B records O → B deed what is the outcome in a majority of jur? minority?
majority: B would be on record notice of A, bc that deed is on the record. A wins. minority: the latent defect does not count as a record. B wins
how do the minority of jurisdictions treat latent defects in deeds?
minority: latent defects in the deed means it's invalid so not it's not technically recorded, which means that it does not provide notice (Messersmith)
C (QCD) → F (DNR) C (1/2 mineral interest) → S (latent defect in C → S deed - notary) S (1/2 mineral interest) → E (S records C → S deed) (E records S → E deed) (F records C → F QCD) F sues S & E to quiet title. (notary signature means the person was personally in presence of notary @ time of signing. here, the notary lied and said C was present when signing it in her presence, but C did not sign it in front of notary. this is a latent defect) in a notice jur, what is the outcome?
there is a latent defect in the deed from C → S. C doesn't have the interest to convey, she conveyed it to F through a QCD. S messed up the notarization of the deed, so it's ineffective. S believes he has title so he conveys it to E. F's argument: C conveyed an interest to S & E that wasn't hers to convey anymore. E's argument: I am a BFP, I acquired my title subsequent to you, paid value, and w/o notice of F (bc F hadn't recorded his deed). E was not on actual or constructive, so E wins in a notice jur
what is the rule for race jurisdictions? (only Louisiana and North Carolina)
under a race recording statute, the first purchaser for value to record prevails priority is determined simply by which purchaser wins the "race" to the recorder's office. notice is irrelevant.
how do the majority of jurisdictions treat latent/patent defects in deeds?
when a defect in a deed does not appear on the face of the deed (latent), the deed provides constructive notice. If the defect is patent (visible on the face of the deed), then the deed is deemed to not give constructive notice.
what is the doctrine of idem sonans?
when an improperly spelled name sounds substantially like the true name, the spelling error is ignored. this doctrine is used to cure technical defects in legal documents or written instruments.
