(4) Recording Act

What is the general rule of the Recording Act?

All prior interests in land are void against subsequent purchasers for value if the prior interests are not duly recorded.

What is the purpose of the Recording Act?

To allow subsequent purchasers to rely on the public record when purchasing real property.

What does it mean for an instrument to be "duly recorded"?

It must be deposited in the proper recording office, properly executed, and acknowledged.

What are the requirements for an instrument to be duly recorded?

(1) Deposited in the proper recording office, (2) properly executed, and (3) acknowledged.

Who qualifies as a bona fide purchaser (BFP) under the Recording Act?

A subsequent purchaser who purchases for valuable consideration, in good faith, and without notice of a prior interest (except in race jurisdictions).

What are the elements required to qualify as a bona fide purchaser?

(1) Subsequent purchaser, (2) valuable consideration, and (3) without notice.

Who may qualify as a subsequent purchaser under the Recording Act?

A purchaser, mortgagee, or creditor if recognized by statute.

What constitutes valuable consideration under the Recording Act?

Consideration sufficient to support a contract that is pecuniary in nature.

Does love and affection constitute valuable consideration for purposes of BFP status?

No.

How are antecedent debts treated when determining whether valuable consideration exists?

Distinguish between a creditor merely securing an existing debt and one who changes position by accepting the property in satisfaction of the debt.

What changes in position may establish valuable consideration for an antecedent debt?

A different method of payment or a different place of payment.

What is the minority rule regarding creditors as purchasers?

The minority recognizes a creditor as a purchaser for Recording Act purposes.

What are the three types of notice recognized under the Recording Act?

Actual notice, constructive notice, and inquiry notice.

What is actual notice?

Firsthand knowledge of a prior interest or purchaser.

When evaluating actual notice, what distinction should you make?

Distinguish between a mere rumor and information from a reliable source.

What is constructive notice?

Notice imputed by law when a prior interest is properly recorded within the chain of title.

Is a purchaser charged with constructive notice even if the public records are never searched?

Yes, if the prior instrument was properly recorded within the chain of title.

What is inquiry notice?

Notice arising from facts that would cause a reasonable person to investigate further.

What typically gives rise to inquiry notice?

Activities or circumstances concerning the land that would prompt a reasonable investigation.

Is whether a purchaser made a reasonable inquiry a question of law or fact?

It is a question of fact.

What is the minority rule regarding quitclaim deeds and inquiry notice?

A purchaser taking by quitclaim deed is automatically placed on inquiry notice.

What caveat applies to all forms of notice under the Recording Act?

A purchaser is charged with all information that would have been discovered from the public record and reasonable inquiry, whether or not the purchaser actually investigated.

What is a notice recording statute?

A statute under which a subsequent bona fide purchaser prevails if, at the time of purchase, the purchaser had no notice of a prior interest.

What is a race recording statute?

A statute under which the first party to record prevails regardless of notice.

What is a race-notice recording statute?

A statute under which a subsequent purchaser prevails only if the purchaser buys for value, without notice, and records first.

What is the common-law rule governing competing interests in land?

First in time, first in right.

What are the two principal methods of recording indexes?

The grantor-grantee index and the tract index.

How does a grantor-grantee index organize recorded conveyances?

Conveyances are indexed according to the names of grantors and grantees.

How does a prospective purchaser search title using a grantor-grantee index?

Search backward through the grantee-grantor index to determine when the grantor acquired title, then search forward through the grantor-grantee index for any conveyances made by that grantor.

After searching the grantor's chain of title, whose records should also be searched?

The grantor's predecessor in interest.

How far back should a title search extend when using a grantor-grantee index?

Beyond the statutory period for adverse possession.

How does a tract index organize recorded conveyances?

By the particular parcel of land rather than by the names of the parties.

What protection does proper recordation provide?

It gives the grantee the protection of the recording system.

Does recording validate an otherwise invalid deed?

No.

Does recording protect against interests arising by operation of law?

No. Interests such as adverse possession and implied easements are not defeated merely by recording.

Testable Issue: What must an instrument satisfy to be duly recorded?

It must be deposited in the proper recording office, properly executed, and acknowledged.

Testable Issue: What are the elements of bona fide purchaser status?

The purchaser must be subsequent, give valuable consideration, and take without notice.

Testable Issue: What are the three forms of notice?

Actual notice, constructive notice, and inquiry notice.

Testable Issue: What are the differences among notice, race, race-notice, and common-law recording systems?

Notice protects purchasers without notice; race protects the first to record; race-notice requires both lack of notice and first recording; common law follows first in time.

Testable Issue: What are the two recording index systems?

The grantor-grantee index and the tract index.

Testable Issue: What does proper recordation accomplish?

It protects the grantee under the recording system but does not validate an invalid deed or defeat interests arising by operation of law.

Essay Rule: How should you analyze a Recording Act problem?

Determine whether the prior instrument was duly recorded, whether the subsequent purchaser qualifies as a bona fide purchaser, what type of notice existed, which recording statute applies, whether the title search was adequate, and whether proper recordation protects the competing interests.

Master Synthesis: What is the framework for analyzing Recording Act disputes?

Identify the applicable recording statute, determine whether each instrument was duly recorded, analyze bona fide purchaser status and notice, evaluate the chain of title and recording system, and apply the statute to determine priority.