REE-4433 Chapter Notes - Chapter 8: Constructive Notice, Title Insurance, Fide
1 May 2018
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- Title
o A buyer can acquire such rights to real estate only as the seller has the power to
convey
o Sellers have three methods available to prove that they have good title
▪ Abstract and opinion
▪ Title insurance
▪ Torrens system
o Recording Statutes
▪ Recording Defined
• The act of placing in the public record documents that give the
world notice of the information therein
• Takes place in local governmental offices
• Gives constructive notice to the rest of the world that the
property has been conveyed to a new owner
• Once the purchaser or agent has examined the records, the
constructive notice that had been presumed by the law upon
record becomes actual notice
• Inquiry notice occurs when a purchaser has possession of certain
facts imposing a further duty to inquiry
• A deed that has not been recorded is still valid between the seller
and the purchaser
• If the deed is not recorded, third parties may acquire better rights
to the property than the purchaser
• If a major error exists in the deed, the recording does not protect
a purchaser who has recorded the deed
▪ The Common Law Approach
• The first deed prevails over the later deeds
▪ Types of Statutes
• Notice and race-notice statutes protect the bona fide purchaser
who:
o Pays valuable consideration for the property
o Buys in good faith
o Has no notice of the earlier sale
• Under recording statutes, the date on which the critical
documents were place on public record becomes important in
determining who has the right to property
▪ The Notice Statute
• An unrecorded conveyance is not valid against later bona fide
purchasers
▪ The Race-Notice Statute
• A later purchaser not only must be bona fide but also must record
the deed before other purchasers
▪ The Race Statute
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