The Bona Fide Purchaser
by Attorney William Bronchick
You get a deed from a seller in foreclosure. Before you can record the deed, the seller gives a second deed to your competitor. The competitor records his deed at the country first. Who wins?
This is an interesting issue that most investors don't seem to grasp. First, understand there are two issues here: one is ownership, the other is notice. The recording of a deed is NOT necessary to transfer ownership of real estate. The simple act of executing a deed and delivering it to the buyer passes ownership.
The recording system gives constructive notice to the world of the transfer of title to property. Recording simply involves bringing the original deed to the local county courthouse or clerk and recorder’...
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