Bona Fide Purchaser

Ordinarily, when there is dispute as to who owns real property, the Court will make a judgment ordering the specific piece of real property be conveyed to the rightful owner, and not order monetary damages for the value of said real property.

The reason for this is because specific property, as in property that is unique in some way beyond sentimentality is treated differently. Under the law, all real property is considered unique and therefore subject to the property being returned as specific property.

There is a big exception to this rule. Whenever there is a bona fide purchaser of the real property. A bona fide purchaser is someone who purchases a real property in good faith, for value, and who does not know about the title dispute (See Scheas v. Robertson (1951) 38 Cal.2d 119, 128.).

The reason for this is because we value certainty in the law, and if it was possible that you could lose your home because, through no fault of your own, the home actually belonged to someone other than the seller, people would become reticent to purchase homes. As a result, the law wants people to feel secure in their investments.

However, if the value of the property is well below market-value, it is possible you can contest that sale, or if the person purchasing the home knew it didn’t actually belong to the seller, or that title was in dispute, you can also contest the sale and receive the real property from them.

This is important in a probate context, because oftentimes the bad actor, whether it be a financial elder abuser, or a bad trustee will receive a piece of real property improperly and try to protect the property by transferring it to someone else. In most circumstances the person they transfer it to will not be a bona fide purchaser and you can rescind the sale.