New York Bona Fide Purchaser, Possession, Duty To Inquire - State Court Cases

The link below contains a compilation of New York state court cases addressing, either directly, indirectly, or in passing, the effect of possession by an occupant of real property by one other than the seller/vendor thereof on a prospective real estate purchaser's status as a bona fide purchaser.

More specifically, the cases deal with the effect of on a purchaser's status as bona fide purchaser in situations where the occupancy and possession of the real property by someone other than the owner/seller triggered a duty to inquire on the part of the purchaser as to possible unrecorded property rights of the persons in possession of the real estate.

These cases are presented here to remind the reader of the importance of giving this issue the serious consideration it deserves when attempting to undo/unwind/void an abusive real estate transaction (ie. foreclosure rescue sale leasebacks, fraudulent inducement in the execution of a deed, forgeries, other real estate swindles) where, after scamming or otherwise abusively relieving an unwitting homeowner of his/her title, the scammer either sells the property to a third party, or encumbers the property with a loan from a mortgage lender, whether or not said 3rd party purchaser or mortgage lender had any actual knowledge of the fraud.

Voiding the deeds and mortgages in these cases (in situations where the instruments are voidable, as opposed to being absolutely void - "void ab initio") will turn on whether the subsequent third party purchaser or encumbrancer, despite lacking in actual knowledge of the fraud or other abusive transaction, can otherwise be charged with notice of the fraud, thereby making bona fide purchaser/encumbrancer status unavailable to them and, consequently, subjecting the deeds or mortgages to being voided/rescinded/set aside.

This case law compilation represents raw research only, but I post it with the view that some readers may find a part of the contents a helpful starting point for additional legal research in an effort to void certain abusive real estate transactions involving unwitting, financially strapped homeowners who have been screwed out of the equity in their homes by unscrupulous real estate operators.

For the cases, see Effect Of Persons In Possession Of Real Estate Other Than The Owner/Vendor On A Buyer's Status As A Bona Fide Purchaser - New York State Court Cases.

For other states, generally, see Bona Fide Purchaser Doctrine, Possession Of Property By Occupants Other Than The Vendor & The Duty To Inquire.

See the National Consumer Law Center's Dreams Foreclosed: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams for an extensive review of one type of home equity ripoff to which the bona fide purchaser doctrine may apply.

See Foreclosure Rescue Scams (a chapter in a longer publication from the National Consumer Law Center) for a lawyer's guide to making a case on behalf of a victimized homeowner in attempting to void or set aside an abusive transaction.