Maine Real Estate License Practice Exam

Who owns the home after Bonnie sells it to Vincent and then to Michael?

1. Bonnie still owns the home

2. Michael owns the property because he paid the highest price

3. Michael owns the property because he recorded first at the Registry of Deeds

4. Vincent owns the property because he bought it three hours earlier than Michael

The correct answer is: Vincent owns the property because he bought it three hours earlier than Michael

In real estate transactions, the principle of "first in time, first in right" applies, which means that the first party to complete and record their interest in a property typically has a superior claim to it. When Bonnie sells the home to Vincent, he becomes the legal owner of the property at that moment, provided the transaction is valid and there are no issues like fraud or prior claims. If Michael later purchases the property from Bonnie, he does not acquire ownership unless Vincent's title to the property was somehow flawed or Vincent then willingly sold the property to Michael, effectively transferring the title. However, if both transactions occurred without any issues, the critical factor that dictates ownership is the act of recording the deed. If Michael recorded his deed after Vincent did, it does not grant him ownership of the property if Vincent's transaction happened first. In this scenario, Vincent would continue to own the property due to the timing of the deed recordings. Therefore, Vincent retains ownership as he completed the transaction before Michael, underscoring the importance of recording timelines in property ownership disputes.