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Constructive Notice in Real Estate

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  • 0:04 Constructive Notice in…
  • 1:36 Example of Constructive Notice
  • 2:59 Actual Notice
  • 3:49 Comparisons
  • 4:28 Lesson Summary
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Lesson Transcript
Instructor: Tisha Collins Batis

Tisha is a licensed real estate agent in Texas. She holds bachelor's in legal studies and a master's degree in criminal justice.

This lesson will define constructive notice in real estate and provide examples. Additionally, actual notice in real estate will be discussed and compared with constructive notice to give the reader a better understanding of the types of notice in real estate.

Constructive Notice in Real Estate

Living in Texas and having most of her family in Oklahoma left Casey traveling several times a year for visits. She knew from years of driving on the highways that the speed limit in Oklahoma was significantly lower than the one in Texas and was always ready to slow down when she got close to the border. One day, she was pulled over by a police officer in a small Oklahoma town. She had been speeding and realized she would probably receive a speeding ticket. What she wasn't prepared for was the written warning the police officer gave her due to the cracks in her windshield. He explained that these cracks were a violation of Oklahoma law. The laws were published on the Oklahoma Highway Patrol's website and available for review at area offices. Casey was driving on Oklahoma roads and therefore responsible for following the laws. This is similar to constructive notice in real estate.

Constructive notice in real estate is notice that is given to the public via recorded documents about interests and rights in real estate. Every member of the public is expected to know about these recorded documents and what is in them, even if they haven't actually read the documents themselves. Since the documents are available for review, it's expected that everyone has done so. Constructive notice can even be provided through publications in a local newspaper. Remember Casey and the written warning? She was expected to know and follow the Oklahoma laws while driving because the laws are published and made available to highway drivers.

Public Notice Sign
sign

Example of Constructive Notice

Let's take a look at an example of constructive notice in real estate.

Jinger is a real estate agent in Amarillo, Texas. She is representing Marcella in the purchase of some unimproved land. The land was not listed on the multiple listing services in Texas and is a private sale. The owner, Paula, and Marcella are friends, and Marcella came to Jinger to help with the paperwork. The local appraisal district website lists Paula's name along with the words ''et al'' behind her name. Jinger wrote a contract listing Marcella as the buyer and Paula as the seller, got everyone's signatures, and sent the executed contract to the title company.

A couple of weeks later, the escrow officer at the title company called Jinger and told her that there was a problem. All of the owners were not listed on the contract, nor were there signatures from all of the owners. Jinger thought that Paula was the only owner. She did not realize that ''et al'' meant ''and others.'' The land was actually part of an estate, which Paula's daughter and son also owned. Jinger had to add these individuals to the contract and get their signatures on everything as well. Since the information about the owners of the property was provided on the appraisal district documents and recorded at the county office, the information was available for Jinger's review.

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