Some states have real estate "notice" statutes for recording property ownership. These notice statutes invalidate a buyer's property ownership if she has notice that another owner has purchased the property from the same seller prior to her purchase. However, if the buyer does not have notice of the prior conveyance, then he is the owner because he is deemed to be a bona fide purchaser.
What Qualifies as Notice?
Courts qualify notice as one of three types:
- Actual Notice: the buyer has acquired actual knowledge either by word of mouth or by seeing the possession of property that a previous conveyance (transfer of ownership) has occurred.
- Constructive Notice: the buyer has constructive knowledge when the prior conveyance has been recorded because the buyer can easily look it up.
- Inquiry Notice: the buyer knows of some fact that would put a reasonable person on notice and would prompt them to investigate the matter further.
- Even if a document is defective on its face or defectively recorded, it would still constitute as constructive or inquiry notice because buyers are charged with the concept of good faith to make a reasonable investigation when suspicions are aroused.
What Is the "No Notice Before Recording" Requirement?
In states that have recording acts that do not require notice, a buyer that purchases the property can still be the true owner despite knowing about another buyer. This is because a race statute in a recording act grants ownership to the first person that records their conveyance, regardless of who first bought the property.
Do I Need to Consult with an Attorney before Recording?
Because the laws of each state differ greatly when it comes to real estate, an experienced real estate lawyer in your area can be of great value to you. The notice statute and the Recording Acts are difficult to understand, and a lawyer can make sure that you comply with the laws to ensure that your property interest is "bona fide" and made secure against all others.