Buyer in Good Faith: What If Inherited Property Was Sold to a Third Party?
Quick Answer: A later buyer can become a major obstacle to recovering inherited land if the buyer qualifies as a purchaser for value in good faith. Good faith is not simply a claim of ignorance; the buyer’s reliance on title, possession of the seller, notice of competing rights, annotations, and surrounding facts all matter.
What Is a Buyer in Good Faith?
Supreme Court decisions describe a buyer in good faith as one who purchases for value without notice of another person’s right or interest and with a well-founded belief that the seller has title and capacity to convey.
When Is Reliance on the Title Strongest?
Reliance on the face of a clean title is strongest when the seller is the registered owner, is in possession, and there is no known claim, restriction, or circumstance requiring further inquiry.
What Facts Can Defeat Good Faith?
- a lis pendens or adverse annotation;
- another family visibly occupying the property;
- knowledge of an inheritance dispute;
- documents showing the seller owns only an undivided share;
- obvious inconsistencies requiring investigation.
Why Timing Matters
If the buyer acquired and registered rights before receiving notice of the heir’s claim, the remedy may differ from a purchase made after a lis pendens or other notice. Once an innocent purchaser is protected, recovery of the land may be harder and damages against the fraudulent transferor may become more important.
Evidence to Gather
- title history and annotations;
- deed of sale and purchase price;
- proof of possession at the time of sale;
- communications with the buyer;
- lis pendens or adverse claim records;
- documents showing the seller’s actual hereditary share.