Also known as: bona fide third party purchaser · bona-fide third-party purchaser · BFP · bona fide purchaser · good faith purchaser
Written by attorneys · grounded in primary & secondary sources — see below
A purchaser who acquires an interest in property for value in good faith and without notice of prior claims or interests. The status shields the purchaser from unrecorded or defective prior interests under applicable recording statutes or doctrines protecting good-faith acquisition.
Horizon Retail REIT purchased a shopping center from MetroMall Corp. for fair market value and recorded its deed. The Carter Family Trust held an unrecorded equitable interest from earlier construction financing. Horizon had no actual or record notice of the trust claim. Horizon therefore holds superior title to the center and the right to collect rent from tenant Urban Threads LLC.
Belinda Baxter bought vacant land from a seller who had previously granted an unrecorded easement to Byron Bishop. Baxter paid value but saw a visible path across the parcel that should have prompted further inquiry. Because Baxter had inquiry notice of Bishop's claim, she does not qualify as a bona fide purchaser and Bishop's interest prevails.
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Brandon Black obtained a rare watch from its owner by fraud and immediately sold it to Beacon Bank for value. Beacon Bank had no knowledge of the fraud. The original owner may recover the watch from Black but cannot reclaim it from Beacon Bank because the bank is a bona fide purchaser.
A forger executed a deed conveying Benito Benitez's land to a straw buyer who then conveyed to Brighton Manufacturing. Brighton paid value, had no notice of the forgery, and recorded first. In a jurisdiction applying a notice statute, Brighton holds good title against Benitez.
Barbara Bennett contracted to buy land from a seller who had already conveyed an unrecorded interest to another party. Bennett paid half the price before learning of the prior claim. The court awards the land to the prior claimant but grants Bennett an equitable lien for the amount paid.
Brianna Burke purchased a painting from a gallery that had acquired it through a chain beginning with a theft decades earlier. Burke paid value and had no notice of the theft. Under the discovery rule applied to replevin actions, Burke's status as a bona fide purchaser prevents the original owner's successor from recovering the painting.
The purchaser must take in good faith, pay valuable consideration, and lack actual or constructive notice of the prior unrecorded interest at the time of acquisition. Failure on any element, such as inquiry notice from visible facts, prevents protection under notice or race-notice statutes.
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Protection depends on the type of recording statute and how the jurisdiction treats void deeds in the chain of title. Some statutes allow a subsequent purchaser without notice who records first to prevail even against the true owner, while others do not extend protection to forged instruments.
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A purchaser who has paid only part of the price may receive a lien for amounts paid rather than full title when a prior unrecorded claim exists. The court balances the prior claimant's rights against the purchaser's reliance on the contract.
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No. Consent procured by fraud or duress is ineffective against anyone except a bona fide purchaser of the chattel. The original owner may recover from the fraudulent party but not from the good-faith buyer for value.
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…ed. 1971) § 2-403:6 at 41 ( Anderson ). Nonetheless, the U.C.C. permits a person with voidable title to transfer good title to a good faith purchaser for value in certain circumstances. N.J.S.A. 12A:2-403(1). If the facts developed at trial merit application of that section, then Frank may have transferred good title to Snyder, thereby…