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14 Cards in this Set
- Front
- Back
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Common Law Rule |
First in time, first in right. Common Law rule still applies if recording act doesn't apply or you're not eligible. Example: O to A, then O to B --> B loses to A |
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How to recording acts change the rule? |
Often they protect the subsequent bona fide purchaser (w/ valuable consideration & no notice of prior transaction --actual or constructive) Example: O to A (doesn't record), then O to B-->B can win |
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Golden rule? |
First to purchase and first to record always wins! |
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Shelter rule |
Later purchasers can shelter under a protected purchaser. Example: O to A (doesn't record); O to B (doesn't record/no notice); A records; C can buy from B, know about A's transaction, and still beat A in a notice jurisdiction. |
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Race statutes |
Rule: first to record wins "first recorded" |
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Notice statutes |
Rule: Subsequent purchasers protected against earlier purchaser only if they are bona fide purchasers: (1) had no actual notice of prior sale; (2) had no constructive notice of prior sale "purchaser in good faith" "without notice" |
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Race-notice statutes |
Rule: Subsequent purchasers protected against prior unrecorded instrument if and only if they (1) had no actual or constructive knowledge of prior transaction; and (2) first to record [CA] |
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Why do we need a recording system? |
1. Establishes a public record of land titles 2. Preserves in a secure place important documents (evidence) 3. Protects purchasers for value and lien creditors against prior unrecorded interests 4. Gives constructive notice to public |
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What methods of title assurance are there? |
1. Recording system 2. Title registration 3. Title Insurance-Pay lump sum, cover as long as you own property. If any problems w/ title, we will make you whole. |
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How to conduct a title search? |
Go backwards in time to an acceptable source (using the grantee index) for root of title, then search forward (using the grantor index) from that source. |
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What types of indexes are there? |
Grantor-Grantee index-most common method of indexing Tract index-Indexes documents by a parcel ID number assigned to the particular tract. |
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Inquiry notice? |
Constructivenotice based on facts that wouldcause a reasonable person to make inquiry into the possible existence of aninterest in real property |
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Constructive notice? |
constructivenotice based on properly recordedinstruments (presume they looked at records) |
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Land recording & the subprime mortgage crisis |
Many banks andinvestors on secondary market wanted to avoid paying transfer tax each timeproperty’s equitable interests were sold, so placed title within a MortgageElectronic Registration System (MERS), then bought/sold instruments related toproperty independently (split title?) These (types of) complicationsexacerbated by tranching – difficult to know who owns the mortgages |
