Escrow & TitleIntermediateArizona Exam

Arizona's recording statutes provide that an unrecorded deed is:

AVoid and unenforceable against all parties, including the original grantor and grantee, since Arizona requires recording for a deed to have any legal effect

BValid between the original parties but may not be enforceable against subsequent bona fide purchasers who record firstCorrect

CEffective only if notarized by a licensed Arizona notary, since a notarized signature is the minimum requirement for an unrecorded deed to bind the grantor

DAutomatically forwarded to the county recorder by the title insurance company as part of standard post-closing procedures required by the title commitment

Why Valid between the original parties but may not be enforceable against subsequent bona fide purchasers who record first Is Correct

Answer B: Valid between the original parties but may not be enforceable against subsequent bona fide purchasers who record first

An unrecorded deed is valid between the grantor and grantee but does not provide constructive notice to third parties. A subsequent bona fide purchaser who records first (with no notice of the prior deed) will generally prevail.

Exam Tip: Escrow & Title

Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.

Key Escrow & Title Terms in This Question

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

Title Insurance

Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.

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Key Terms to Know

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

Escrow

A neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.

Abstract of Title

A condensed history of a property's title, summarizing all recorded documents and encumbrances affecting it from the earliest record to the present.

Chain of Title

The sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.

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