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Constructive notice occurs after a

Rationale

Constructive notice occurs after a new owner records the deed.

Recording a deed provides constructive notice to the public, establishing the new owner's legal claim to the property. This formal act enables others to be aware of the ownership transfer, ensuring that the rights of the new owner are protected against claims from subsequent buyers or other parties.

A (new owner records the deed) CORRECT

When a new owner records the deed, they officially announce their ownership to the public, which constitutes constructive notice. This action ensures that anyone searching public records can see who the legal owner of the property is, preventing further disputes regarding ownership.

B (title company does a site search) YOUR ANSWER

While a title company performing a site search may uncover existing claims or liens on the property, this action does not itself create constructive notice. Constructive notice requires an official act, like recording a deed, to inform the public of ownership, rather than just an internal investigation by a title company.

C (property owner finds a squatter living on his property) YOUR ANSWER

Finding a squatter does not establish constructive notice because this situation merely reveals unauthorized occupancy without any formal declaration of ownership. The presence of a squatter can complicate ownership rights, but it does not serve to notify the public of the legal ownership status.

D (potential buyer warns the person in possession is a tenant) YOUR ANSWER

A potential buyer's warning regarding a person in possession does not create constructive notice. Constructive notice is established through formal actions, such as recording a deed, rather than informal communications or claims made by potential buyers without legal authority over the property.

Conclusion

Constructive notice is legally established when a new owner records their deed, thereby informing the public of their ownership rights. This process is crucial in property law, as it protects the new owner's interests against competing claims. Other scenarios, such as site searches or informal warnings, do not fulfill the criteria for constructive notice and do not provide the same legal protection.

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