Owner A received and recorded a deed to a California property in January 2024. Owner B later received a deed to the same property in March 2024, paid fair market value, recorded the deed immediately, and had no actual or constructive notice of Owner A's prior deed at the time of purchase. Under California's race-notice recording statute, which owner prevails?
Correct Answer
B) Owner B, because Owner B recorded first and had no notice of Owner A's prior deed at the time of purchase
California is a race-notice recording state under Civil Code §1214. A subsequent purchaser prevails over a prior unrecorded interest only if three elements are all satisfied: (1) the subsequent purchaser paid value (i.e., is a bona fide purchaser), (2) the subsequent purchaser had no actual or constructive notice of the prior interest at the time of purchase, and (3) the subsequent purchaser recorded first. Owner B satisfies all three elements — paid fair market value, had no notice of Owner A's deed, and recorded before Owner A — and therefore prevails.
Why This Is the Correct Answer
Why the Other Options Are Wrong
Deep Analysis of This Transfer Of Property Question
Background Knowledge for Transfer Of Property
Real World Application in Transfer Of Property
Common Mistakes to Avoid on Transfer Of Property Questions
Related Topics & Key Terms
Key Terms:
More Transfer Of Property Questions
Determining who pays what at closing involves:
Closing is always the _____ step in real estate transactions.
Depreciation on rental property for federal tax purposes is calculated over:
A title company examines the public records and finds that all deeds in the property's history are properly recorded and connect in an unbroken sequence. This unbroken sequence of ownership is called the
In a jurisdiction where a later purchaser must both lack notice and record before the earlier claimant records, what kind of recording act applies?
- → A buyer records a deed at the county recorder's office. What is the primary purpose of recording?
- → A buyer drives past the property and sees someone other than the seller living there and maintaining the yard. This observation should put the buyer on what type of notice?
- → In a covered purchase transaction, the borrower receives a final form showing the loan terms, cash to close, and settlement charges shortly before consummation. What form is this?
- → Along with the signed offer, Quinn Brooks delivers a check to demonstrate serious intent to complete the transaction if the offer is accepted. What is this deposit called?
- → On a settlement statement, the buyer's earnest money reduces the remaining cash needed to close. How is that item characterized?
- → On a settlement statement, an item increases the buyer's amount due at closing. How is that item characterized?
- → On the seller's settlement statement, the purchase price of $400,000 appears as what?
- → At closing, the purchase price of $350,000 appears on the buyer's side of the settlement statement. Is this amount a debit or a credit to the buyer?
- → Under TRID rules, the lender must deliver the Closing Disclosure to the borrower at least how many business days before loan consummation?
- → In an escrow closing, the escrow agent discovers that the seller has not yet provided the signed deed. What should the escrow agent do?
People Also Study
Buyer Representation Agreement
8% of exam
Property Ownership
10% of exam
Land Use Controls and Regulations
8% of exam
Valuation and Market Analysis
10% of exam
Previous Question
A California property seller asks the escrow officer about the Preliminary Change of Ownership Report (PCOR). The escrow officer explains that the PCOR is required to be filed:
Next Question
A California property sells for $1,100,000 and is reassessed at that amount. The property is subject to the Proposition 13 base tax rate of 1%, a voter-approved bond rate of 0.05% of assessed value, and a fixed Mello-Roos charge of $2,400 per year. What is the total annual property tax bill?