Unit 9 Test Bank (Chapter 14)

For delivery of a deed to be valid:

The grantor must have the intent to deliver

• For a deed to be validly delivered, the grantor must have the present intent to transfer title to the grantee. The physical act of handing over the deed is not sufficient without this intent. Similarly, the intent to deliver is sufficient even if the deed is not physically handed over, as long as the grantor's actions demonstrate a clear intent to transfer ownership.

Grant Woods conveys a tract of land to Dee Dee Fitzpatrick. Dee Dee does not record her deed. Grant then conveys the same tract of land to Joe Arpaio, who also does not record his deed, but Joe is unaware of Dee Dee’s acquisition. Then Grant conveys the same property to Larry Davis who knows about Dee Dee and Joe but records his deed.

Who has title to the property under a race state statute?

Who has title under a race/notice statute?

Larry

• Under a race statute, the first person to record their deed has title to the property, regardless of whether they knew about prior unrecorded conveyances. 

Joe

• Under a race/notice statute, the winner is a bona fide purchaser (BFP) who buys without notice of prior claims and records first. Joe bought without knowing about Dee Dee and paid value, so he is a BFP. Larry knew about prior buyers, so he cannot win. Dee Dee didn’t record before Joe, so she also loses.

Which of the following is not a warranty given under a general warranty deed?

The warranties are limited to the time the grantor held title

• A general warranty deed provides the grantee with five covenants or warranties that protect the grantee against defects in the title. These warranties are not limited to the time the grantor held the title but extend back to the property's origins.

​A deed contained the language, “I, Jacob Smith, of Washington County, warrant and defend unto Christina Smith ... the following real estate ...” Although the deed included all the necessary requirements, the parties are now unclear as to the type of deed given and what warranties, if any, were given. Which of the following statements is correct?

This is not a deed because there is no language of conveyance.

• went through every other option gah dam

Constructive delivery:

Occurs when a third party is involved in delivery

• Constructive delivery is a legal concept where the transfer of ownership of property occurs without a physical transfer of the item itself. This often happens when a third party, such as an escrow agent, holds the property or a deed on behalf of the grantee, and the grantor relinquishes control with the intent to transfer ownership. The delivery is considered "constructive" because, while the property is not physically handed over to the grantee, the law recognizes the actions of the parties as a valid transfer of ownership. 

​A bargain and sale deed is the same as a special warranty deed.

True

• A bargain and sale deed is considered the same as a special warranty deed because both convey ownership while providing only limited protection to the buyer. In both cases, the grantor implies they own the property and have the right to sell it but only warrant against defects or claims that arose during their ownership—not before. This makes them functionally equivalent and less protective than a general warranty deed but more protective than a quitclaim deed.

​In a notice jurisdiction, the first party to record takes title.

False 

• A notice jurisdiction is a type of real property recording statute that prioritizes a subsequent bona fide purchaser over an earlier unrecorded interest, provided the subsequent purchaser had no knowledge (actual, constructive, or inquiry notice) of the prior claim. This means the later buyer wins even if they don't record first, as long as they were unaware of the previous sale when they bought the property. 

Title insurance endorsements can provide coverage for boundary disputes.

True

• Boundary disputes are a common risk that can be covered by a specific endorsement, such as a survey endorsement, which provides coverage for issues related to property lines and boundaries.

In a race-notice jurisdiction, the first bona fide purchaser to record takes title.

True

Recording involves the copying of documents and retention of those copies.

True

What document do most title companies require when a corporation is selling property to another?

A board resolution 

• When a corporation sells property, it is an action that requires formal approval from the board of directors. A board resolution is the official document that records this decision, authorizing the corporation to proceed with the sale. Title companies require this document to ensure that the individual signing the closing documents has the legal authority to do so on behalf of the corporation, thereby protecting against future claims that the sale was not properly authorized.

Summary of transfers and recording:

Day 1   0 → A

Day 2   0 →     B (bfp)

Day 3   B records

Day 4   A records

​In a race/notice state, who would take title to the property?

B

• BFP is bona fide purchaser 

  • A bona fide purchaser (BFP) is someone who buys property for value (pays money or something of value) without notice of any prior claims, interests, or defects in the title. In other words, they act in good faith, believing the seller truly owns the property and has the right to sell it.

• In a race-notice state, the buyer must be a bona fide purchaser (BFP) and record first to have priority. B is a BFP (purchased without notice of A’s deed) and recorded before A, so B meets both conditions. Therefore, B takes title over A.

The Kapinskis owned and occupied lot 18 from 1935 to 1950 in a state in which the adverse possession period is 25 years. In 1950, the lot was conveyed to the Wyroskis. The Laurins purchased lot 19 in 1954. The lots were the sites of summer homes. A row of lilac bushes had always marked the boundary between lots 18 and 19, and the Kapinskis and Wyroskis put in and maintained a lawn and flower bed that bordered the lilacs. A boathouse for lot 18 was also located next to the lilac bushes. The boundary line as marked by the lilac bushes was incorrect and the bushes were actually located on the Laurins’ lot.  The result was that the incorrect boundary expanded the size and boundaries of the Wyroski lot.  In 1961, the Laurins bought an action to quiet title.

​The Kapinskis:

Have owned the property long enough to establish adverse possession through tacking 

• Wording sucks on this, but whatever

  • The Kapinskis occupied the property from 1935 to 1950 → 15 years.

  • The Wyroskis took possession in 1950 and continued using the same land up to 1961 → another 11 years.

  • Combined, that’s 26 years total, which meets the 25-year requirement for adverse possession.

    • This is possible through tacking, which allows successive owners to add (or “tack”) their periods of possession as long as there is privity (a voluntary transfer, like a deed, between them).

    • Because the Kapinskis conveyed the property to the Wyroskis, privity exists, and the two periods can be combined.
      Therefore, by 1961, they had satisfied the 25-year adverse possession period, making A the correct answer.

Summary of transfers and recording:

Day 1   0 → A

Day 2   0 →     B (bfp)

Day 3   B records

Day 4   A records

In a race state, who would take title to the property?

B

The Kapinskis owned and occupied lot 18 from 1935 to 1950 in a state in which the adverse possession period is 25 years. In 1950, the lot was conveyed to the Wyroskis. The Laurins purchased lot 19 in 1954. The lots were the sites of summer homes. A row of lilac bushes had always marked the boundary between lots 18 and 19, and the Kapinskis and Wyroskis put in and maintained a lawn and flower bed that bordered the lilacs. A boathouse for lot 18 was also located next to the lilac bushes. The boundary line as marked by the lilac bushes was incorrect and the bushes were actually located on the Laurins’ lot.  The result was that the incorrect boundary expanded the size and boundaries of the Wyroski lot.  In 1961, the Laurins bought an action to quiet title.

​With regard to the lilac bushes:

The lilac bush fence is sufficient for a claim of adverse possession.

An acknowledgment is a signature by a witness.

False

​A sheriff’s deed is an example of a judicial deed.

True

• A sheriff's deed is a legal document that provides ownership of a property to the highest bidder at a sheriff's sale. A sheriff's sale is a public auction of property, usually a foreclosure, that is conducted by a sheriff's office.

​The words of conveyance clause in a deed is referred to as the premises clause.

True

• The premises clause of a deed includes the names of the grantor and grantee, the words of conveyance, and a description of the property. Therefore, the words of conveyance clause are part of the premises clause.

Damage from second-home smoke is an example of a covered item under a title policy.

False

• A title policy, or title insurance, protects a homeowner from financial loss due to defects in a property's title. It does not cover physical damage to the property, such as damage from smoke. Physical damage would typically be covered by a standard homeowner's insurance policy.

Title companies use the grantor/grantee index system.

False

• Grantor/grantee index: This is the traditional method used by county recorders or registries to organize deeds and real estate documents. It indexes documents by who sold (grantor) and who bought (grantee).

• Title companies: They usually rely on title plants or electronic title searches, not the county grantor/grantee index. Title plants are private databases that track chain of title, liens, and encumbrances, often with more efficient search capabilities than the public index.

• So while the grantor/grantee system exists in public records, title companies don’t primarily use it—they maintain their own records or databases.

Assume the following sequence of events:

Day 1 – O conveys to A (bfp)

Day 2 – O conveys to B

Day 3 – B records

Day 4 – O conveys to C (bfp)

Day 5 – A records

Day 6 – C records

Under a pure race statute, who has title?

B

• Under a pure race statute, the first party to record their deed wins, regardless of notice or whether they were a BFP.

Day 1 − Grantor transfers title to A

Day 2 − Grantor transfers title to the same property to B

Day 3 − Grantor transfers title to the same property to C (bfp)

Day 4 − B records the deed from the grantor

Day 5 − Grantor transfers title to D

Day 6 − C records

Day 7 − D records

​Under a pure race state, who takes title to the property?

Under a race/notice statute, who takes title?

B

• Under a pure race statute, the first party to record their deed wins, regardless of notice or whether they were a BFP.

C

• We are under a race/notice statute, which requires:

  1. Bona fide purchaser (BFP) — buys for value without notice of prior claims.

  2. Records first to take priority over other BFPs.

  Timeline analysis:

  • A: Bought first, but we don’t know if they recorded. Not relevant because C is a BFP who records later.

  • B: Records on Day 4 but is not a BFP (purchased after A, so likely had notice). Cannot win.

  • C: BFP (bought without notice of A or B) and records on Day 6 — first BFP to record. ✅ Wins under race/notice.

  • D: Records on Day 7 but had notice of prior claims → cannot prevail.

  Key point: In a race/notice statute, the first bona fide purchaser to record wins, even if someone else recorded earlier but was not a BFP.

Adverse possession:

can occur even when a license for use is given - not me

fucked come back

probably tax one?

Acceptance:

Is required for a valid conveyance by deed

• In property law, for a deed to be considered a valid conveyance, it must be delivered by the grantor and accepted by the grantee. This is a fundamental requirement for the transfer of legal title.

Payment of taxes by the title holder precludes adverse possession.

False

• Adverse possession depends on the adverse possessor’s use being open, notorious, hostile, exclusive, and continuous for the statutory period.

• The title holder’s payment of taxes doesn’t interrupt or negate those elements.

• In fact, in some states, paying property taxes is one way an adverse possessor can strengthen their claim, but the owner’s taxes alone do not block it.

Aliases of the grantor should be noted on the deed.

True

• A deed is a legal document that transfers ownership of real estate. To ensure the legal validity and clarity of the transfer, it is a standard practice to include any aliases or other names used by the grantor (the person transferring the property) on the deed. This helps to prevent future title disputes and confirms that the person signing the deed is the same person who holds the title to the property, even if they are known by other names.

Title insurance affords coverage for forgeries on deeds.​

True

The habendum is the clause with the words of conveyance.

False

• The habendum clause is the part of a deed that defines the extent of the interest in the property being conveyed, often starting with the phrase "to have and to hold." The words of conveyance, such as "grant," "bargain," and "sell," are typically found in the granting clause of the deed, which precedes the habendum clause.

Summary of transfers and recording:

Day 1   0 → A

Day 2   0 →     B (bfp)

Day 3   B records

Day 4   A records

Suppose that A recorded on Day 1, in a race state, who would take title?

A

Which of the following title issues would not be covered under a standard title policy?

Prescriptive easement 

• A standard title policy generally protects against defects that are recorded or publicly known, such as:

  • Previously recorded mortgages

  • Recorded easements

  • Other recorded liens or encumbrances

• Prescriptive easements, however, arise through use over time (adverse possession-type claims) and are often unrecorded. Because they are not typically documented in the public record, a standard title policy does not cover them.

A locksmith was rekeying a foreclosed property when he fell six to eight feet into the home’s basement  through an opening in the floor of the house.  Source One had foreclosed on the property on October 4, 2012.  Source One then conveyed the property to Fannie Mae on November 16, 2012, but the deed was not recorded. The accident occurred on November 24, 2012.  The locksmith filed suit against Source One and Fannie Mae to recover for the injuries. The theory of the suit is that the owner of the home is liable for injuries to third parties from lack of repairs and failure to warn. Who could be held liable?

Fannie Mae because the land had been conveyed 

• recording affects notice for property law purposes, but tort liability for injuries follows ownership — the conveyance date matters, not the recording date

Title insurance affords coverage for zoning violations.

False

​A recorded deed cuts off the rights of future buyers of the same property.

True

Title insurance covers mechanic’s liens.

False

• A standard title insurance policy protects against defects or claims that are recorded or exist in the public record at the time of the policy.

  • Mechanic’s liens are typically unrecorded or arise after the policy is issued (for work done on the property).

  • Standard policies usually do not cover mechanic’s liens unless specifically endorsed.

Adverse possession cannot arise from a mistake on boundary lines.

False

• Adverse possession can arise even if the possessor mistakenly believes they own the land, including when there is a boundary line error. The key elements are that the possession is actual, open, notorious, hostile, exclusive, and continuous for the statutory period. A mistake about the exact boundary does not automatically prevent a claim, as long as the use meets these requirements.

If two persons have title to property, both must sign a deed of conveyance to the property.

True

• When a property is owned by two or more people, all parties who hold title to the property must sign the deed of conveyance to transfer ownership. This is because each person's signature is required to legally transfer their interest in the property to the new owner.

Assume the following sequence of events: 

Day 1 – O conveys to A (bfp)

Day 2 – O conveys to B

Day 3 – B records

Day 4 – O conveys to C (bfp)

Day 5 – A records

Day 6 – C records

Under a race notice statute, who has title?

A

Day 1 – O conveys to A (bfp)

Day 2 – O conveys to B

Day 3 – O conveys to C (bfp)

Day 4 – B records

Day 5 – A records

Day 6 – C records

Under a notice statute, who has title?

C

• Under a notice statute, the key rule is: A subsequent bona fide purchaser (BFP) who purchases without notice of prior unrecorded interests takes title, regardless of whether they record first.

• Timeline:

  • A (BFP) buys first, unrecorded.

  • B buys second, but may have notice of A → not a BFP?

  • C (BFP) buys third without notice of A or B → C is protected.

  • Recording order doesn’t matter in a notice statute; what matters is being a BFP at the time of purchase.

• Since C bought without notice of any prior claims, C takes title even though A recorded before C.

Day 1 – O conveys to A (bfp)

Day 2 – O conveys to B

Day 3 – O conveys to C (bfp)

Day 4 – B records

Day 5 – A records

Day 6 – C records

Under a race-notice statute, who has title?

A

• We are under a race-notice statute, which requires:

  1. The purchaser is a bona fide purchaser (BFP) — buys for value without notice of prior unrecorded interests.

  2. The purchaser records first to take priority over other BFPs.

  ---

  Timeline:

  • Day 1 – O → A (BFP)

    • A buys first, unrecorded.

  • Day 2 – O → B

    • B buys second, likely not a BFP (may have notice of A).

  • Day 3 – O → C (BFP)

    • C buys third, BFP.

  • Day 4 – B records

    • B is not a BFP, so recording doesn’t defeat A or C.

  • Day 5 – A records

    • A is a BFP and now records before C → satisfies race-notice requirements.

  • Day 6 – C records

    • C is a BFP but records after A, so loses.

  ---

  Conclusion:

  • A is a BFP and records before any competing BFP (C).

  • B loses because not a BFP.

  • C loses because records after A.

  ✅ Answer: A

A quitclaim deed does not pass title.

False

• A quitclaim deed does pass whatever interest the grantor has in the property, even if that interest is full ownership or partial ownership. The key is that it makes no guarantees or warranties about the quality of the title — the grantor simply “quits” any claim they may have.

  So while a quitclaim deed offers no protection against defects, it does transfer title if the grantor actually owns it.

Title insurance does not cover issues related to misplaced boundary lines.

False

• Some title insurance policies (especially standard ones) can cover boundary line issues, if the issue is reflected in the public record or if the policy includes certain endorsements. Misplaced boundaries aren’t automatically excluded; policies often protect against losses from encroachments or disputes over recorded boundaries.

  • The confusion comes because survey or physical encroachments not reflected in the records may not be covered unless a survey or boundary endorsement is added.

  • So the blanket statement “does not cover issues related to misplaced boundary lines” is false — it may be covered depending on the policy.

An "X" is not a sufficient signature for a deed.

False 

• An “X” can be a valid signature for a deed if the person signing intends it to be their signature. Courts generally allow marks (like an X) as long as there is evidence of intent and the signature is acknowledged or witnessed as required. It doesn’t have to be a full written name.

​A quitclaim deed does not serve to transfer title.

False

William Small purchased three lots located in the El Encanto subdivision in Tucson, Arizona, from the Mullins. Small had the lots reconfigured so that he could build a certain style and positioned home, but then changed his mind. The plat map still carried the original lot lines. Over the course of 12 years, three homes and two swimming pools along with patio home walls between each of the lots were added. Architects for the homes used the plat maps. The result was that the homes, pool, and walls encroached on the boundary lines of the other lots, according to the legal description Small had put on the deeds.  If the adverse possession statute in Arizona is 10 years:

​Those who own the encroaching homes and pools have acquired title.

• The scenario describes a situation that meets the requirements for adverse possession. The key elements are:

  • Hostile possession: The use of the land was not permissive, as the homes and pools were built on the property of another without permission.

  • Actual possession: The structures (homes, pools, and walls) were physically present on the land.

  • Open and notorious possession: The encroachment was visible and obvious.

  • Exclusive and continuous possession: The encroaching party used the land exclusively and continuously for the statutory period.

  • Statutory period: The adverse possession statute in Arizona is 10 years, and the encroachment has existed for 12 years, which is longer than the required period.

• Since all the conditions for adverse possession have been met, the title to the encroached land would be acquired by the owners of the homes and pools.

​An identity sheet is used:

To reconcile different spellings of names or names with middle initials in the chain of title.

• An identity sheet is used in title searches to make sure that all variations of a person’s name in the chain of title (different spellings, use of middle initials, maiden names, etc.) are correctly connected to the same individual. This helps prevent gaps in title due to clerical errors or name inconsistencies.

Jane and Richard Cohen, a married couple, own a mini-storage facility as tenants by the entirety with right of survivorship.  Richard made a contract to sell the property to U-Store-It, a national mini-storage company.  Richard only signed the contract and also the deed. U-Store-It recorded the deed.  Which of the following is accurate?​

The deed is not valid because it is missing a signature.

• The property is owned by Jane and Richard Cohen as "tenants by the entirety," which is a form of concurrent ownership available only to married couples.

• A key characteristic of a tenancy by the entirety is that neither spouse can unilaterally convey or encumber the property without the consent and signature of the other spouse.

• Since Richard made a contract to sell and signed the deed without Jane's signature, the deed is invalid.

• Therefore, U-Store-It does not own the property, and the deed's recording does not make it valid.

A deed need not be recorded to be valid.

True

• A deed is a legal document that transfers ownership of real estate. While recording a deed with the county recorder's office is highly recommended to provide public notice of the transfer and protect the new owner's interest, it is not a requirement for the deed to be valid between the parties involved. The deed becomes effective upon delivery and acceptance.

Title insurance protects against the exceptions listed.

False

The presence of eccentric habits will serve to establish the lack of mental capacity for a deed.

False

• Mental capacity to execute a deed is determined by whether the grantor understands the nature of the transaction and the property being conveyed, not by unusual or eccentric behavior. Simply having eccentric habits does not automatically prove incapacity — the person must be shown to lack understanding of what they are signing.

If a deed is executed, acknowledged and recorded, there is presumption of delivery and acceptance.

True

• When a deed has been executed, acknowledged by a notary, and recorded, it is legally presumed that the deed has been delivered and accepted. This presumption can be challenged, but the burden of proof is on the party who claims that the deed was not delivered or accepted.

​A title insurance policy:

Protects against a recorded easement overlooked in a title search.

• A title insurance policy is a form of indemnity insurance that protects against financial loss from defects in title to real property. The policy typically covers issues that existed prior to the purchase of the property, such as a recorded easement that was missed during the title search. It does not cover issues that arise after the policy is issued, nor does it typically cover zoning issues or prescriptive easements.

For adverse possession, which of the following is not required?

 

Permissive use

A dispute between landowners - fuck you for putting this in here

• Permissive use would actually defeat adverse possession, because the possession must be hostile, not with the owner’s permission.

• Open and notorious use – the possession is visible so the owner could notice.

• Exclusive possession – the possessor is using the land as their own.

• Hostile or adverse use – the possession is without the owner’s permission.

​The Mansurs and the Muskopfs own adjoining lots in a subdivision located along Lake Winnipesaukee. Because of mistakes in surveys and the placement of the boundaries, there is some confusion about where the boundaries are located.  The boundaries are accurate on the plat map and their deeds use the plat map as a description.  However, the way the boundaries have been on the lots is different and the Mansurs have been using part of the Muskopf lot.  The plat map was first recorded in 1958 and the developer conveyed the lots to the original owners who then conveyed to the Mansurs and Muskopfs.  All of the owners before also used the lots the way the Mansurs and Muskopfs have. Which of the following is correct?

The boundaries are as the Mansurs and Muskopfs are using them 

• This is a classic boundary by acquiescence / prescriptive use situation. Even though the plat map and deeds show one boundary, the physical use of the lots over time can establish the actual boundary if:

  • The owners have longstanding, continuous, and visible use of the property in a certain way.

  • Successive owners have recognized and acquiesced in that use.

  • This use has been open and notorious for a sufficient period.

• Here, the Mansurs and Muskopfs (and prior owners) have consistently used the lots according to the current physical boundaries. Courts often recognize the “de facto” boundaries established by long-term use, even if they differ from the plat map and deed descriptions.

Day 1 – O conveys to A (bfp)

Day 2 – O conveys to B

Day 3 – O conveys to C (bfp)

Day 4 – B records

Day 5 – A records

Day 6 – C records

Under a race statute, who has title?

B

• Under a pure race statute, the only thing that matters is who records first.

  • A and C are BFPs, but recording order is key.

  • B records on Day 4, before A (Day 5) and C (Day 6).

  • Even if B is not a BFP, in a pure race statute, the first to record wins.

​The tract index allows users to track title through the tract itself and not through transfers.

True

• A tract index organizes property records by the parcel or tract of land itself, rather than by the names of grantors and grantees. This allows users to follow the chain of title for a specific piece of property without relying on individual ownership transfers. It’s especially useful when names change frequently or are spelled differently.

The existence of a confidential relationship is a prerequisite to establishing undue influence.

True

• In many jurisdictions, to establish undue influence, courts often require the existence of a confidential or fiduciary relationship between the parties. This relationship creates a situation where one party may dominate or control the other, making it easier to show that the weaker party’s free will was overcome. Without such a relationship, it is much harder to prove undue influence.

• The confusion comes from the fact that some modern cases allow undue influence to be shown by other evidence of coercion or manipulation, but in the context of your course/quiz, the confidential relationship is considered a prerequisite.

Under the UPA, title to real property can be held and conveyed in the partnership name.

True

• Under the Uniform Partnership Act (UPA), a partnership is a legal entity that can hold, own, and convey real property in its own name. This allows the partnership, rather than individual partners, to buy, sell, or encumber property, and the partnership itself is responsible for the rights and obligations related to that property.

The warranty that the title to the property is free from encumbrances is given in which deed?

Warranty deed

Establishing undue influence requires:

Proof of a fiduciary relationship. - not me

Proof of a confidential relationship.

• To establish undue influence, there generally must be evidence of a confidential relationship between the parties — meaning one person placed trust and confidence in another who then used that position to gain an unfair advantage.

  • A fiduciary relationship is a type of confidential relationship, but the broader and more accurate requirement is a confidential relationship, not necessarily a formal fiduciary one.

​A misplaced the fence on his property boundary.  The fence is six inches too far and is on his neighbor's, B's, property.  A puts grass and trees in the area by the fence and cares for it for 27 years.  A:

​Has acquired title by adverse possession.

Actual and exclusive possession requires the adverse possessor to be on the property at all times.

False

• Adverse possession requires the possessor's use of the property to be continuous and exclusive, but this does not mean they must be physically present on the property at every moment.

Undue influence constitutes grounds for setting aside a conveyance by deed.

True

• Undue influence is a legal term describing a situation where one person takes advantage of a position of power or trust over another person to gain an unfair benefit. When undue influence is proven in court, it can serve as a legal basis to invalidate or "set aside" a legal document, such as a deed, which transfers property. This is because the court determines that the person's consent to the transaction was not given freely and willingly, but was instead coerced.

Summary of transfers and recording:

Day 1   0 → A

Day 2   0 →     B (bfp)

Day 3   B records

Day 4   A records

​In a notice state, who would take title to the property?

B

• In a notice state, the key rule is: Asubsequent bona fide purchaser (BFP) who buys without notice of prior unrecorded interests takes title, regardless of whether they record first.

• Timeline:

  • Day 1: O → A (unrecorded)

  • Day 2: O → B (BFP, buys without notice of A)

  • Day 3: B records → establishes public notice

  • Day 4: A records

• Since B purchased without notice of A, B is protected and takes title, even though A recorded first.

Some states require a corporate seal on a deed transferring corporate real property.

True

August 1, 2019 – Mortgage recorded

January 3, 2020 – Lien recorded

January 31, 2020 – Owner conveys to Buyer 1; Buyer 1 records

These transactions take place in a notice/race state.

Suppose on February 11, 2020, the owner conveys to Buyer 2.  Assume Buyer 1 does not record.  If the owner defaults, who gets the property?

✅ The mortgage company

Explanation:

Timeline:

• Aug 1, 2019 – Mortgage recorded → establishes first priority lien.

• Jan 3, 2020 – Lien recorded → junior to the mortgage.

• Jan 31, 2020 – Owner conveys to Buyer 1 (records) → Buyer 1 is a subsequent purchaser.

• Feb 11, 2020 – Owner conveys to Buyer 2

Key points:

1. In a notice/race state, a bona fide purchaser (BFP) who buys without notice of prior interests and records first is protected.

2. Here, Buyer 1 already had notice of the mortgage because it was recorded before Buyer 1 purchased.

3. Buyer 2 also has notice of the mortgage (because it was recorded earlier).

4. Mortgages and liens take priority over subsequent purchasers, regardless of recording order.

✅ Therefore, if the owner defaults, the mortgage company forecloses first and gets the property.

Junior liens or buyers only get paid after the senior mortgage is satisfied.

Assume the following sequence of events:

Day 1 – O conveys to A

Day 2 – O conveys to B (bfp)

Day 3 – B records

Day 3 – O conveys to C (bfp)

In a notice state, who will have title to the property?

Not c

B

• Timeline:

  • Day 1 – O → A: A buys first, unrecorded.

  • Day 2 – O → B (BFP): B buys second, without notice of A → B is a BFP.

  • Day 3 – B records: Gives constructive notice of B’s claim.

  • Day 3 – O → C (BFP): C buys after B records.

• Analysis:

  • A is first, but unrecorded, so later BFPs may take title.

  • B is a BFP at the time of purchase because they had no notice of A.

  • C buys after B has recorded, so C has notice of B’s claim → C is not a BFP.

The deed must contain a recital of the purchase price paid.

False

• A deed does not need to state the purchase price to be valid. What is required is:

  • Identification of the grantor and grantee

  • Words of conveyance

  • Description of the property

  • Signature of the grantor

  The recital of the purchase price is optional and does not affect the validity of the deed.

Execution of a deed by a grantor and placement in the grantor's safe deposit box is sufficient for delivery.

False 

• For a deed to be considered legally delivered, the grantor must demonstrate an intent to transfer the deed to the grantee. Placing the deed in a safe deposit box under the grantor's control does not show this intent, as the grantor can still retrieve or destroy the deed at any time. 

In a pure race jurisdiction, only bona fide purchasers can take good title when dual claims are made.

False

• In a pure race jurisdiction, the first person to record their deed takes good title, regardless of whether they are a bona fide purchaser. A bona fide purchaser is a person who purchases a property for value without notice of any prior claims. The statement is incorrect because the "race" in a pure race jurisdiction refers to the race to the courthouse to record the deed, and the winner of this race takes title. The concept of a bona fide purchaser is relevant in other types of recording acts, such as notice and race-notice jurisdictions, but not in a pure race jurisdiction.

​Thelma Gregor says that she recorded her deed on her property in 1945.  The city of Fairbanks is unable to locate any evidence of recording, but also notes that a records page that listed recorded deeds is missing from one of the 1945 record books. The original owner of the property has since died. Thelma wants to know if she still owns her property.

Thelma owns her property through adverse possession.

• Even if the deed cannot be found in public records, Thelma may still have valid ownership if she has possessed the property openly, continuously, and exclusively since 1945.

• Recording a deed is primarily for notice purposes to protect against later purchasers or creditors. Lack of a recorded deed does not necessarily defeat ownership if she has been in continuous, actual possession for the statutory period required for adverse possession.

• She does not need to re-sign a deed herself, and ownership is not automatically lost just because the record is missing.