Notice vs. Race Notice Jurisdiction - How to Differentiate Between the Two on the MBE and MEE

             There seems to be some legitimate confusion within the UBE subject of Property concerning the difference(s) between Notice and Race Notice Jurisdiction.  This blog post is designed to clean up some of that confusion.

BAR EXAM NOTE – It is crucialto pay close attention to the verbiage used in an MBE or MEE fact pattern as that is our first indication as to whether we are dealing with a notice or race notice statute.  A typical “notice” statute will read something like this:

“No conveyance is valid against a subsequent bona-fide purchaser who has no notice of the original conveyance, unless the conveyance is first recorded.”

A typical “race-notice” statute will read something like this:

“No conveyance is valid against a subsequent bona-fide purchaser who has no notice of the original conveyance and who has recorded the deed to his conveyance first.”

In other words, the second purchaser, to prevail, must be a bona-fide purchaser and must record his deed before the first purchaser does.

Now, as to the definitions of these statutes, please note that notice jurisdiction means a jurisdiction whose rule allows a subsequent bona-fide purchaser to prevail over an earlier purchaser if the earlier purchaser’s deed was not recorded and the subsequent purchaser did not know of the earlier transfer.

As for race notice jurisdiction, this means that a jurisdiction whose rule allows a subsequent bona-fide purchaser to prevail over an earlier purchaser if, and only if, the subsequent purchaser did not know of the earlier transfer and the subsequent purchaser’s deed was recorded before the first purchaser’s deed.

In short, Race notice = Look for word "first" in statute. The word "first" is indeed in your MBE Q's statute? Apply race-notice. Notice = Did you look for the word "first" in the statute? And you did not find the word "first"? Apply Notice.

Lastly, do not forget the extra rule where someone who purchases from a bona fide purchaser, even with notice, still gets to keep if he records first in a race-notice jurisdiction otherwise known as the “Shelter Rule.”

Perhaps this chart will be of some use:

Conclusion

            It is extremely important to understand the difference between Notice and Race Notice statutes / jurisdictions.  Success on the likely 2-3 MBE questions in this area of law, and perhaps success on a MEE issue depends on your knowledge of the law. For more information concerning this section of Property law, another area of Property law, or a different legal topic tested on the UBE, please do not hesitate to contact us at PassYourBarExam@gmail.com