Titles - Chain of title

Learning Outcomes

After reading this article, you will be able to explain the concept of chain of title, identify how recording acts affect title, recognize what makes a title marketable or unmarketable, and apply these principles to MBE-style questions. You will also be able to spot common exam traps involving wild deeds, late recordings, and the impact of defects in the chain of title.

MBE Syllabus

For MBE, you are required to understand the rules governing title to real property, especially as they relate to the chain of title and recording acts. This article covers:

• The definition and significance of chain of title in real property law.
• The operation of recording acts (notice, race-notice, and race statutes).
• The effect of wild deeds, late recordings, and other breaks in the chain.
• The requirements for marketable title and how defects in the chain affect it.
• The impact of chain of title issues on bona fide purchasers and exam scenarios.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Which of the following is most likely to render a title unmarketable?
   1. A mortgage that will be paid off at closing.
   2. A wild deed outside the chain of title.
   3. A properly recorded easement for utilities.
   4. A zoning ordinance restricting use.
2. Under a notice recording statute, who prevails if O conveys Blackacre to A (who does not record), then to B (who pays value and has no notice), and then A records before B?
   1. A, because she recorded first.
   2. B, because she paid value and had no notice.
   3. O, because he conveyed twice.
   4. The state, because the recording statute is unclear.
3. What is a "wild deed" in the context of chain of title?
   1. A deed that is forged.
   2. A deed recorded but not connected to the chain of title.
   3. A deed with ambiguous property description.
   4. A deed delivered after the grantor's death.

Introduction

A clear chain of title is essential for determining who owns real property and whether a buyer can obtain marketable title. The chain of title is the sequence of recorded documents tracing ownership from the present owner back to an accepted starting point. Breaks or defects in this chain can create serious problems for buyers and sellers, especially under the recording acts.

Key Term: Chain of Title The sequence of recorded documents that establish the history of ownership and encumbrances for a parcel of real property.

The Role of Recording Acts

Recording acts protect bona fide purchasers by allowing them to rely on the public records. There are three main types of recording statutes:

• Notice statutes: Protect a subsequent purchaser who acquires without notice of a prior unrecorded interest.
• Race-notice statutes: Protect a subsequent purchaser who acquires without notice and records first.
• Race statutes: Protect whoever records first, regardless of notice.

Key Term: Wild Deed A deed that is recorded but not connected to the chain of title, so it does not provide constructive notice to subsequent purchasers.

Breaks in the Chain: Wild Deeds and Late Recordings

A wild deed arises when a deed is recorded but is not linked to the chain of title, often because a prior deed was not recorded. Wild deeds do not give constructive notice to later purchasers, so a bona fide purchaser may take free of the interest.

Late recordings occur when a deed is recorded after a subsequent conveyance. If the deed is not in the chain of title at the time a later purchaser checks the records, it may be ignored for notice purposes.

Marketable Title and Chain Defects

A marketable title is one that is free from reasonable doubt or risk of litigation. Defects in the chain of title—such as wild deeds, missing links, or ambiguous descriptions—render title unmarketable. Buyers can refuse to complete the transaction if the seller cannot cure the defect before closing.

Key Term: Marketable Title Title that is free from reasonable doubt and not subject to significant risk of litigation, making it acceptable to a reasonable buyer.

Worked Example 1.1

O conveys Blackacre to A, who does not record. O then conveys Blackacre to B, who pays value and has no notice of A's deed. B records. Later, A records. Who owns Blackacre in a notice jurisdiction?

Answer: B owns Blackacre. Under a notice statute, a bona fide purchaser without notice prevails over a prior unrecorded interest, even if the prior interest is later recorded.

Worked Example 1.2

O conveys Blackacre to A, who records. A then conveys to B, but B does not record. Later, A conveys Blackacre again to C, who pays value and has no notice of B's deed. C records. B then records. Is B's deed a wild deed?

Answer: Yes. B's deed is outside the chain of title because it was not recorded before A conveyed to C. C is protected as a bona fide purchaser, and B's late recording does not give notice to C.

Exam Warning

In MBE questions, always check whether a deed is in the chain of title at the time a subsequent purchaser checks the records. Wild deeds and late recordings often appear as traps.

Revision Tip

If you see a question about a "wild deed," remember it does not provide constructive notice. Only deeds properly connected to the chain of title count for notice purposes.

Summary

The chain of title is the backbone of real property ownership. Recording acts determine whose interest prevails when there are multiple conveyances. Wild deeds and late recordings can break the chain and render title unmarketable. Always check the chain of title and the applicable recording statute to determine who has superior rights.

Key Point Checklist

This article has covered the following key knowledge points:

• Chain of title is the sequence of recorded documents showing ownership history.
• Recording acts (notice, race-notice, race) protect certain purchasers depending on notice and recording.
• Wild deeds are recorded but not in the chain of title; they do not give constructive notice.
• Late recordings may be ignored if not in the chain at the relevant time.
• Marketable title requires a clear, unbroken chain; defects make title unmarketable.
• Exam questions often test wild deeds, late recordings, and the effect of chain defects.

Key Terms and Concepts

• Chain of Title
• Wild Deed
• Marketable Title