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Real Property • Conveyances
PROP#193
Legal Definition
Under a race-notice statute, a subsequent Bona Fide Purchaser is only protected if they (1) take without notice, and (2) records before a prior grantee.
Typically, a race-notice statute uses language like, "without notice thereof whose conveyance is first recorded."
Typically, a race-notice statute uses language like, "without notice thereof whose conveyance is first recorded."
Plain English Explanation
Before we dive into this card, let's set some context. In a perfect world, when Amy conveys Whiteacre to Bob, Amy will immediately and permanently respect the fact that Whiteacre is now Bob's. In the real world, unfortunately, there are circumstances where Amy may convey Whiteacre to Bob and then later convey it again to Carl. Under common law, the courts dealt with this by giving Whiteacre to whoever was "first in time", meaning, Bob would prevail over Carl because Bob received his conveyance first from Amy.
As the world became more sophisticated, jurisdictions began passing Recording Acts, which were laws that attempted to solve these types of problems by requiring that people publicly record their conveyances. In other words, when Amy conveys Whiteacre to Bob, Bob has an obligation to publicly record the fact that he has received Whiteacre so that when Amy later tries to sell it to Carl, Carl has the ability to check to see if Amy has previously sold or conveyed it. Seems fair, right?
Unfortunately, there are three types of jurisdictions which handle these scenarios differently. You must learn each scenario so you can identify who ultimately has the superior claim to a piece of property that has been given to multiple parties.
In this card, we talk about race-notice statute jurisdictions.
Under a race-notice jurisdiction, a BFP will only prevail over a prior grantee if they record before the prior grantee does. Such statutes usually include language like "without notice thereof" and "first recorded".
As the world became more sophisticated, jurisdictions began passing Recording Acts, which were laws that attempted to solve these types of problems by requiring that people publicly record their conveyances. In other words, when Amy conveys Whiteacre to Bob, Bob has an obligation to publicly record the fact that he has received Whiteacre so that when Amy later tries to sell it to Carl, Carl has the ability to check to see if Amy has previously sold or conveyed it. Seems fair, right?
Unfortunately, there are three types of jurisdictions which handle these scenarios differently. You must learn each scenario so you can identify who ultimately has the superior claim to a piece of property that has been given to multiple parties.
In this card, we talk about race-notice statute jurisdictions.
Under a race-notice jurisdiction, a BFP will only prevail over a prior grantee if they record before the prior grantee does. Such statutes usually include language like "without notice thereof" and "first recorded".
Hypothetical
Hypo 1: Oz conveys Blackacre to Amy on January 1. Amy does not record. On January 10, Oz sells Blackacre to Bob. On January 11, Amy records her deed. On January 12, Bob records his deed. Result: Under a race-notice jurisdiction, Amy will prevail over Bob because she recorded first even though Bob is a bona fide purchaser. These types of jurisdictions want to incentivize people like Bob to immediately record.
Visual Aids
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