On Day 1 an owner sells a parcel to Alice, who pays full value but does not record her deed. On Day 10 the same owner sells the same parcel to Bob, who pays value, has no actual or constructive knowledge of Alice's prior deed, and records that same Day 10. On Day 15 Alice finally records her older deed. The state's recording act protects a later purchaser only if that purchaser bought without notice and recorded before the prior claimant. Under that statute, Bob prevails over Alice. Which type of recording statute is at work?
Correct Answer
A) Race-notice recording statute
The statute requires both elements: the later purchaser must lack notice (which Bob did) AND must record first (which Bob also did). A statute that protects a later purchaser only when both conditions are met is a race-notice recording statute.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A transfer tax is a tax imposed by state, county, or local government on the transfer of real property from one owner to another. It is typically based on the sale price or a flat rate per dollar of consideration.
An abstract of title is a condensed history of all recorded documents and proceedings that affect the title to a specific parcel of real property. It is a summary, not a guarantee, of title condition.
Actual notice means a person has direct, personal knowledge of a fact or interest in real property. This can come from being told, seeing something firsthand, or any form of direct awareness.
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- → 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?
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