Fri, January 30th, 2009
When is a Bona Fide Purchaser Allowed to Enforce Rights in Real Property?

For those who aren’t familiar with the term “bona fide purchaser”, the California Civil Code defines it as a “A purchaser or encumbrancer who pays valuable consideration for his interest in real property in good faith and who records his interest, receives his interest free and clear of all prior unrecorded claims in the property which are unknown to him.” 

Now that’s legal talk, of course.  Put it simply: if someone buys property and is unaware or was not made aware of a claim or restriction on the property, he/she buys it free from that claim or restriction. 

I’ve been involved in many lawsuits, often characterized as an action to quiet title or obtain declaratory relief, where one person buys property that has some restriction he/she is unaware of at the time of purchase.  This often arises where there is a restriction that is NOT RECORDED.  I capped that because if it’s recorded, there is no issue: the buyer should have known about the restriction.  If it is not recorded, the discovery leans toward whether the buyer knew about this anyway, or clearly should have known about this. 

In areas where there are large tracts of farmland, such as in the Turlock area, someone may have told his neighbor to go ahead and use the dirt path on the edge of the property for farming, but the neighbor never had this recorded.  Whether an easement was created is an issue;  whether a subsequent buyer of the grantor’s land knew of this restriction is an issue as well.  If the easement was recorded, then the buyer is not a bona fide purchaser (or good faith purchaser) and he/she takes the property with the restriction.

Posted by Nick Yonano at 05:26     0 Comments
Labels: adverse possession, disclosures, good faith purchaser, real estate, title dispute

---