Real Property Foundations 8 - Property Recording Systems and Adverse Possession

Recording System for Property

Conveyancing Recap

  • The conveyancing process involves two steps:
    • Contract
    • Closing

Recording

  • After closing, the buyer receives a deed indicating ownership.
  • Recording is the process of making property rights public.
  • Any instrument related to land can be recorded (e.g., contract, mortgage, deed).
  • Recording puts the document on public record, making others aware of your rights.

Purpose of Recording

  • Recording helps resolve competing claims by providing notice of existing claims.
  • It informs others that a property has already been claimed.

Recording Acts

  • Recording acts are statutes that determine who wins in property disputes involving competing claims.
  • Three types of recording acts:
    • Race acts
    • Notice acts
    • Race-notice acts
Scenario
  • Seller Aesop conveys land to Hare, then conveys the same land to Tortoise.
  • The question is: Who owns the land, Hare or Tortoise?
  • Common law rule: First in time, first in right (i.e., whoever receives the land first wins).
  • Recording acts modify this rule to protect subsequent purchasers.
Race Jurisdiction
  • Under a race statute, whoever records first wins.
  • Example: Hare records before Tortoise; Hare owns the land.
Notice Jurisdiction
  • Under a notice statute, a subsequent purchaser without notice of a prior conveyance wins if the prior grantee failed to record.
  • Example: Hare doesn't record; Tortoise has no knowledge of the conveyance to hare; Tortoise wins, regardless of whether Tortoise records or not.
Race-Notice Jurisdiction
  • Under a race-notice statute, a subsequent purchaser without notice of the prior conveyance wins if they record first.
  • Example: Hare doesn't record; Tortoise has no notice of the conveyance to Hare, and Tortoise records first; Tortoise wins.

Bona Fide Purchaser (BFP)

  • Recording acts protect only bona fide purchasers (BFPs).

  • Requirements to be a BFP:

    • Must be a purchaser for value (i.e., bought the property, not received as a gift or inheritance).
    • Must have no notice of the prior conveyance (i.e., unaware that the property was already conveyed to someone else).
    • A BFP is a purchaser for value with no prior notice.

Adverse Possession

  • An alternative method to gain title without a deed.
  • Involves possessing land for a statutory period of time.
  • Based on the principle of "use it or lose it."

Elements of Adverse Possession

  • Possession must be continuous.
    • Regular use of the type an owner might make.
    • Intermittent use does not qualify.
  • Possession must be open and notorious.
    • Obvious enough to put the owner on notice that a trespass is occurring.
    • Use that is not obvious or use the possessor tries to hide does not qualify.
  • Possession must be actual and exclusive.
    • The possessor must actually be occupying the land without sharing it with the true owner or the public.
  • Possession must be hostile.
    • Entered without the owner's permission.
    • The possessor's state of mind is irrelevant.

Example

  • A neighbor grazes alpacas on David's vacant land.
  • If all elements are met for the statutory period, the neighbor can gain title through adverse possession.

Requirements Recap

  • The possession has to be continuous, open and notorious, actual and exclusive, and hostile.