On June 1, Brenda grants a mortgage lien on her Prince George's County property to First Bank, which does not record. On June 15, Brenda sells the property to Tom, who has no knowledge of the First Bank mortgage and pays full market value. Tom records his deed on June 15. On June 20, First Bank records its mortgage. Tom then discovers the mortgage. Under Maryland's race-notice statute, what is Tom's legal position regarding First Bank's mortgage?
Correct Answer
D) Tom takes the property free of First Bank's mortgage because he recorded his deed before First Bank recorded its mortgage and had no notice of it
Under Maryland's race-notice recording statute (Md. Code Ann., Real Prop. §§ 3-101 et seq.), Tom prevails over First Bank's unrecorded mortgage. Tom satisfies both elements: (1) he recorded his deed on June 15, before First Bank recorded its mortgage on June 20, and (2) he had no actual or constructive notice of First Bank's mortgage at the time he purchased. As a bona fide purchaser for value who recorded first without notice, Tom takes the property free of the prior unrecorded mortgage lien.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
A freehold estate conveys ownership rights, while a leasehold estate grants the right to possess and use property for a specific period without ownership.
Riparian rights concern properties bordering flowing bodies of water (rivers, streams), while littoral rights concern properties bordering non-flowing bodies of water (lakes, oceans).
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