Also known as: purchasers for value without knowledge · purchaser for value without notice · bona fide purchaser · BFP · good faith purchaser
Written by attorneys · grounded in primary & secondary sources — see below
A subsequent acquirer of property who pays valuable consideration and lacks actual or constructive notice of any prior unrecorded claim. The status shields the acquirer from subordination to that prior interest under applicable recording statutes.
MetroMall conveyed the shopping center by warranty deed to Horizon Retail REIT. Horizon paid fair market value and conducted a title search that revealed no recorded claims by the Carter Family Trust. When the trust later asserted its earlier unrecorded equitable interest, Horizon's status as purchaser for value without knowledge gave it priority to the premises and the tenant's rent.
Linda held an unrecorded equitable interest under a land-sale contract with Carlos. At the foreclosure sale AutoFin Credit Corp. purchased the property for value after a clean title search. Because AutoFin lacked notice of Linda's claim, its status as purchaser for value without knowledge made its legal title paramount to the leasehold held by Precision Auto Repair.
Select any source to read its text and confirm it supports the definition.
Esme obtained a tractor by fraud and then sold it to Pinnacle Clean. Pinnacle paid fair market value, had no notice of the fraud, and took possession. Because the source of Esme's title was defective, Pinnacle's status as purchaser for value without knowledge protected it from the original owner's conversion claim under the cited restatement rule.
Allied executed a forged deed to Stephen that was never recorded. State A later purchased the same building for cash, searched the records, and recorded its own deed without notice of the forgery. Under the recording act State A's status as purchaser for value without knowledge shielded it from the true owner's claim despite the void deed.
Liberty Growers paid forty percent of the price under an installment contract and took possession. A food-processing corporation later asserted an earlier unrecorded contract for the same parcel. The court awarded title to the prior claimant but recognized Liberty Growers as purchaser for value without knowledge to the extent of its payments, granting an equitable lien for that amount.
The purchaser must pay valuable consideration and take without actual or constructive notice of the prior unrecorded interest at the time of acquisition. Failure to meet either element defeats the protection under notice or race-notice recording acts.
Yes. When publicly available information such as board minutes or newspaper articles specifically identifies the property and a possible prior claim, a reasonable purchaser must investigate further. Ignoring that information prevents the purchaser from claiming lack of notice.
The purchaser receives protection only to the extent of payments already made. The court may award title to the prior unrecorded claimant while granting the installment purchaser an equitable lien for the amount paid.
In some jurisdictions the purchaser prevails if the recording act protects subsequent purchasers who take without notice and record first. The forged deed is void, yet the statute may still shield the later purchaser depending on the type of recording act and chain-of-title rules.