Escrow & Title
Under NC's recording act, a bona fide purchaser for value (BFP) who takes without notice of a prior unrecorded claim and records first will:
ALose to the prior unrecorded claim
BPrevail over the prior unrecorded interest — NC's race-notice recording act protects subsequent purchasers who record first without notice✓ Correct
COnly prevail if the prior claim is more than 5 years old
DNeed to obtain title insurance to prevail
Explanation
Under NC's race-notice recording statute, a subsequent BFP who records first without notice of the prior unrecorded claim is protected and will prevail over that earlier unrecorded interest.
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Key Terms to Know
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.
EncumbranceAny claim, lien, charge, or liability attached to real property that affects its value or limits its use.
Abstract of TitleA condensed history of a property's title, summarizing all recorded documents and encumbrances affecting it from the earliest record to the present.
Chain of TitleThe sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.
State-Specific Concepts
Recording Requirements
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