Wiley CPA REG MCQ: Property Law

The following REG question is from the Wiley CPA Review REG Online Test Bank.

Purdy purchased real property from Hart and received a warranty deed with full covenants. Recordation of this deed is:

A: Not necessary if the deed provides that recordation is not required.
B: Necessary to vest the purchaser’s legal title to the property conveyed.
C: Required primarily for the purpose of providing the local taxing authorities with the information necessary to assess taxes.
D: Irrelevant if the subsequent party claiming superior title had actual notice of the unrecorded deed.

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Jeff - another71.com 10 years ago

Answer D is correct because recordation of a deed gives constructive notice “to the world” that title to the property has been conveyed. Therefore, the primary purpose of recording is to protect the grantee against subsequent purchasers by putting subsequent purchasers “on notice.” If the subsequent party claiming superior title had actual notice of the unrecorded deed, then the recordation objective would have been met and recordation of the deed would be irrelevant with regard to this particular party. An unrecorded deed is binding upon all persons having actual notice of its existence.