A bona fide purchaser is defined as one who buys something for value without notice of another’s claim to the property and without actual or constructive notice of any defects in the seller’s title which would in essence, render the title unmarketable to that buyer. In other words, the bona fide purchaser is one who has in good faith paid a valuable consideration for real property without notice of adverse claims. [1]
However, according to Sprankling, bona fide purchasers may be defined somewhat differently depending on the type of jurisdiction. [2] For instance, in notice jurisdictions, the bona fide purchaser is also defined as in our definition supra. [3] However, in a race-notice jurisdiction, the Bona fide purchaser shares the same criteria as with notice jurisdictions, plus has the added burden of being the first to record. [4]
Therefore, the following examples will apply to notice and race jurisdictions respectively. In a notice jurisdiction, Joe buys Green Park from Sam for $50,000. At the time the sale closed, Joe was unaware that Peter stated a claim against the seller’s title. Because Joe had no knowledge of any title defects at the time the deed was delivered to him, he is considered a bona fide purchaser. [5]
In a race-notice jurisdiction, Bob sells Blue Ranch to Tina. Tina closes and goes to New York prior to recording the deed. However, Bob also sold the same property to Jeff. Jeff, took this property law class last semester and understood that he was in a race notice jurisdiction. While Jeff never received any notice that Bob had also sold the property to Tina, he knew that in a race notice jurisdiction, the first person to record who is void of any knowledge of a title defect at the time the deed was delivered would be the title holder and thus, he would be a bona fide purchaser.
[1] Garner, Bryan A. Blacks Law Dictionary, 9th. West Pub. Co., 1355 (2009).
[2] John G. Sprankling, Understanding property law 380 (2000).
[3] Id.
[4] Id. at 384.
[5] Id. at 383.
[6] Id. at 384.