Escrow & TitleIntermediateCalifornia Exam

Under the California 'race-notice' recording statute, a subsequent buyer is protected if they:

ARecord their deed first, regardless of knowledge of prior transfers, per customary closing procedure in California
BRecord their deed first AND take without knowledge of a prior unrecorded transferCorrect
CAre the first to take possession of the property, under standard California escrow and title practice
DPurchase the property at fair market value, as typically handled by an escrow officer

Why Record their deed first AND take without knowledge of a prior unrecorded transfer Is Correct

Answer B: Record their deed first AND take without knowledge of a prior unrecorded transfer

California has a race-notice recording statute: a subsequent purchaser is protected if they (1) record first AND (2) took without actual or constructive notice of a prior unrecorded interest. Both conditions must be met — recording alone is not enough if the buyer knew of the prior transfer.

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.

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