Recording acts decide who wins when the same land is conveyed twice. At common law the answer was simple and harsh: first in time, first in right. Every state has replaced that with a statute that protects certain later purchasers, so the question becomes whether the second buyer qualifies for protection under the local act. Three statutory types exist, and identifying which one governs is always the first step.
Rule
- Race. The first to record wins, whether or not that person knew about the earlier conveyance. A small minority of states.
- Notice. A subsequent bona fide purchaser who takes without notice of the earlier deed wins, even if she never records.
- Race notice. A subsequent purchaser wins only if she takes without notice and records first. The most common type.
- Bona fide purchaser. Must give value, which excludes gifts and heirs, and must take in good faith.
- Three kinds of notice. Actual notice, meaning real knowledge. Record or constructive notice, from a properly recorded instrument in the chain of title. Inquiry notice, from visible possession or from a reference in a recorded document that a reasonable buyer would follow up.
- The shelter rule. Someone who takes from a protected purchaser gets that protection too, even if she would not have qualified in her own right.
Leading cases
- Luthi v. Evans: a blanket conveyance of all the grantor's interests in a county did not give constructive notice to a later purchaser, because a searcher could not find it in the index for that tract.
- Messersmith v. Smith: a deed that was recorded but improperly acknowledged did not give constructive notice, because an instrument outside the recording requirements is treated as unrecorded.
- Guillette v. Daly Dry Wall, Inc.: a buyer was bound by restrictions in deeds the common grantor had given to neighbors, because those recorded deeds out were within the reasonable scope of a title search in that state.
Where students go wrong
The first mistake is skipping the statute type. The same facts produce different winners under race, notice and race notice, so quote the operative words of the statute before applying them.
The second is treating recording as a magic act. An instrument recorded outside the chain of title, or defectively executed, is often treated as not recorded at all and gives nobody constructive notice.
The third is forgetting inquiry notice. Someone visibly living on the land, or a reference in a recorded deed to an unrecorded agreement, puts a reasonable buyer on inquiry and defeats good faith.
FAQ
What is a bona fide purchaser?
Someone who pays value for the property in good faith and without notice of a prior claim. A donee or an heir gives no value and so cannot qualify.
What is a wild deed?
A recorded instrument that cannot be found by a standard search because a link in the chain was never recorded. It generally gives no constructive notice.
What is the shelter rule?
A rule allowing a grantee to stand in the shoes of a protected purchaser, so that a buyer with notice can still take free of a prior claim if her seller was protected.
Related terms
Working through this in your own casebook takes longer than reading it here. Syllume starts from your syllabus and turns each assigned case into a brief you can study from.