A broker is helping a buyer purchase a rural property in Larimer County, Colorado. The title search reveals a recorded deed of trust from 2018 and a recorded mechanic's lien from 2021, but the seller claims there is also an unrecorded easement granted to a neighbor in 2019. Which of these encumbrances will bind a subsequent purchaser who has no actual knowledge of any of them?
Correct Answer
A) The 2018 deed of trust and the 2021 mechanic's lien only
Under C.R.S. § 38-35-109, recorded instruments provide constructive notice to all subsequent purchasers. The 2018 deed of trust and the 2021 mechanic's lien are both recorded and therefore bind a subsequent purchaser regardless of actual knowledge. The 2019 unrecorded easement, however, is not in the chain of title and does not provide constructive notice. A bona fide purchaser without actual or constructive notice of the unrecorded easement takes the property free of it.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Real property is immovable land and anything permanently attached to it, while personal property (also called chattels) is movable.
Tenancy by the entirety is a form of co-ownership available only to married couples that includes the right of survivorship and protection from individual creditors. Neither spouse can unilaterally sell or encumber the property.
Tenancy in common is a form of co-ownership in which two or more persons hold separate, undivided interests in property without the right of survivorship. Each owner can hold unequal shares and can independently transfer their interest.
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