Deeds & Recording Acts

CONTENTS OF A VALID DEED: What are the essential requirements of a valid deed?

• A valid deed must:

  • Be in writing

  • Be signed by the grantor

  • Identify the grantor and grantee

  • Contain operative words of conveyance (e.g., "I hereby convey")

  • Adequately describe the property

  Note: Consideration is not required.

CONTENTS OF A VALID DEED: Is consideration required for a valid deed?

No - unlike contracts deeds do not need consideration.

DELIVERY OF THE DEED: What is the general rule for delivery of a deed?

A deed is effective only if the grantor has the present intent to transfer title.

Intent—not physical delivery—is controlling.

Parol evidence is admissible to prove or disprove intent.

DELIVERY OF THE DEED: What is the most important issue when analyzing delivery of a deed?

• Whether the grantor intended to presently transfer title.

  • Physical possession alone is not determinative

DELIVERY OF THE DEED: When is there a presumption that a deed has been validly delivered?

• When the deed is in the grantee’s possession, but presumption is rebuttable

DELIVERY OF DEED: When is there a presumption that delivery has NOT occurred?

• When the deed remains in the grantor’s possession.

DELIVERY OF DEED: What presumption arises when a deed has been recorded?

Recording creates rebuttable presumption of valid delivery

DELIVERY OF DEED: Can a grantor make a conditional delivery directly to the grantee?

• Generally, NO. Usually either absolute delivery or no delivery

DELIVERY OF DEED: May parol evidence prove an oral condition attached to an unconditional deed?

Majority Rule: Parol evidence is inadmissible to prove that the oral condition rebuts a valid delivery

ESCROW: What is an escrow?

An escrow is the delivery of a deed to a third party, who releases it only after specified conditions are met.

ESCROW: What are the requirements of a valid commercial escrow?

The deed must be:

• irrevocably delivered,

• with intent to relinquish control,

• delivered to a proper escrow agent,

• pursuant to a written escrow agreement.

ESCROW: What happens if the grantor retains the power to reclaim the escrowed deed?

• No valid delivery occurs and escrow is invalid.

ESCROW: What is a donative escrow?

A gift of land delivered into escrow,

where possession is delayed until the grantor dies.

The grantee receives a future interest.

ESCROW: Does a donative escrow have to satisfy the Statute of Frauds?

No.

Because it is a conveyance rather than a contract.

DOCTRINE OF RELATION BACK: When should you discuss the Doctrine of Relation Back?

• Whenever escrow exists and:

  • Grantor dies or becomes incompetent

  • or otherwise incapable of conveying title

What is the Doctrine of Relation Back?

Once escrow conditions are fulfilled,

title relates back to the date the deed was deposited into escrow.

DOCTRINE OF RELATION BACK: What is the major exception to the Doctrine of Relation Back in relation to a BFP?

• A subsequent Bona Fide Purchaser who acquires legal title before escrow closes prevails.

• If another buyer later purchases the property knowing full well that a prior deal exists, you cannot be considered an innocent buyer if you have notice of a prior claim.

RECORDING ACTS: What is the purpose of the Recording Acts?

To protect subsequent purchasers who rely on the public record.

RECORDING ACTS: What is the general rule under the Recording Acts?

Prior interests are ineffective against protected subsequent purchasers unless properly (duly) recorded.

RECORDING ACTS: What are the requirements for proper recordation (Duly Recorded)

The instrument must:

• be filed in the proper office,

• be properly executed,

• be acknowledged.

BONA FIDE PURCHASER: Who is a Bona Fide Purchaser?

• Innocent buyer who purchases property for valuable consideration, in good faith, and without any notice of prior claims, defects in the title

BFP: What qualifies as valuable consideration?

Something of pecuniary value.

Love and affection are insufficient.

BFP: What are the three types of notice under the Recording Acts?

• Actual notice

• Constructive notice

• Inquiry notice

BFP: What is actual notice?

Personal knowledge of a prior interest.

Reliable information—not mere rumor.

BFP: What is constructive notice?

Notice arising from a properly recorded instrument within the chain of title.

Whether the purchaser actually searched the records is irrelevant.

BFP: What is inquiry notice?

Notice arising from facts that would cause a reasonable purchaser to investigate further:

• visible possession,

• obvious use,

• suspicious circumstances.

BFP: What is the minority rule regarding quitclaim deeds?

Taking by quitclaim deed automatically places the purchaser on inquiry notice.

RECORDING STATUTES: What is a Notice Statute as it relates to a BFP?

A subsequent BFP prevails if, at the time of purchase, the purchaser lacked notice of prior interests.

Recording first is unnecessary.

RECORDING STATUTE: What is a Race Statute?

The first party to record prevails,

regardless of notice.

RECORDING STATUTE: What is a Race-Notice Statute?

A subsequent purchaser prevails only if they:

• purchase without notice, and

• record first.

RECORDING STATUTE: What is the common-law priority rule?

First in time,

First in right.

RECORDING SYSTEMS: What are the two methods of indexing recorded deeds?

• Grantor-Grantee Index (search by name of grantors)

  • Tract Index (search by the property in question)

EFFECT OF RECORDING: What protection does proper recording provide?

It protects the grantee under the Recording Acts.

EFFECT OF RECORDING: What does recording NOT accomplish?

• validate an invalid deed,

• defeat interests arising by operation of law (such as adverse possession or implied easements).

CHAIN OF TITLE: What is a wild deed?

A deed recorded outside the chain of title.

It does not provide constructive notice.

CHAIN OF TITLE: What is the Shelter Rule?

• Lets a buyer "take shelter" under the legal protections of a prior owner who cleared a property's title. It ensures that if a protected buyer sells the property, the next buyer gets those exact same protections, even if that new buyer knows about old claims.

  • Example: Imagine an owner sells a piece of land to Buyer A. Buyer A does not record the deed, making it a "hidden" claim. Later, the original owner wrongly tries to sell the same land to Buyer B. Buyer B checks the public records, sees no issues, pays fair money, and records the deed. Buyer B is now a BFP. Buyer B wants to sell the land to Buyer C. Buyer C learns about Buyer A's hidden claim. Now, imagine Buyer B wants to sell the land to Buyer C. Buyer C learns about Buyer A's hidden claim. Under normal rules, Buyer C might lose out. But under the shelter rule, Buyer C "steps into the shoes" of Buyer B. Because Buyer B was a protected BFP, Buyer C is also legally protected.

CHAIN OF TITLE: What is the Clean Hands (Wash Through) Doctrine?

• A non-BFP cannot cleanse prior notice by transferring to a BFP and then taking that BFP reconvey back.

CHAIN OF TITLE: What does it mean to "stand on your own as a BFP"?

• A purchaser who independently qualifies as a BFP is protected, even if the seller was not a BFP.

In other words, under Shelter Rule: It ensures that if a person buys property safely as an innocent purchaser, they can freely sell the property to anyone else, even if that second buyer knows about a prior claim.

CHAIN OF TITLE: What is Estoppel by Deed (After-Acquired Title)?

• If a grantor conveys property before obtaining title and later acquires title, the after-acquired title automatically passes to the earlier grantee.

• MAJORITY: A later BFP may prevail if the earlier deed was outside the chain of title.

• Example: Imagine you sell a piece of land to your neighbor today, even though you don't own it yet. Next year, you finally buy or inherit that exact same land. Under this rule, ownership automatically transfers to your neighbor. You are legally "stopped" (or blocked) from changing your mind.