Before closing, a buyer walks the property and sees that a neighbor's fence is built several feet inside the boundary line. Nothing about the fence or any claim to that strip of land appears in the public record. What type of notice does the buyer have of the neighbor's possible claim to the strip?
Correct Answer
D) Inquiry notice, because a visible encroachment puts the buyer on a duty to investigate
An open, visible condition that contradicts the record title, such as an encroaching fence or an occupant who is not the seller, puts a purchaser on inquiry notice. The buyer is charged with whatever a reasonable investigation of that condition would have revealed, which here includes a possible claim of adverse possession or a prescriptive easement in the strip behind the fence. The buyer plainly knows the fence is there, but no one has stated that the neighbor claims the land, so knowledge of the claim is imputed from the visible condition rather than held directly. Nothing in the public record mentions the strip, so recording supplies no notice at all.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The chain of title is the sequential history of all transfers of ownership for a specific property, from the original source (typically a government patent or grant) to the present owner. An unbroken chain is essential for marketable title.
The closing process, also called settlement, is the final step in a real estate transaction where documents are signed, funds are disbursed, and title is officially transferred from the seller to the buyer.
Constructive notice is the legal presumption that a person has knowledge of information that is available through public records or visible inspection of the property, regardless of whether they actually knew about it.
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