Big News Ad Company has leased a portion of Farmer Jane’s land for the purpose of installing a billboard sign. The lease is for 50 years and is unrecorded. The sign was built on the leased space and is clearly visible to anyone who visits the property. Farmer Jane sells the leased land to Farmer Bill. Farmer Bill threatens to terminate Big News’s lease unless it pays him more rent. Farmer Bill claims that since the lease was not recorded he is a bona fide purchaser and is not bound by the lease terms. Will Farmer Bill be successful with his claim against Big News?
Fill in the blank(s) with the appropriate word(s).
Farmer Bill will not be successful in his claim against Big News Ad Company. As a bona fide purchaser, Farmer Bill will receive ownership of the purchased farm land subject to any claims or interests held by others that he has actual or constructive notice of at the time of purchase. Since the lease is not recorded, Farmer Bill will not have constructive notice of the lease; but Farmer Bill will have actual notice of the lease. The fact that the billboard sign is visible from a visit to the property means Farmer Bill has actual notice that Big News may have some rights to land where the sign is located. Due to this actual knowledge, Farmer Bill will purchase the land subject to those rights and will not be able to terminate Big News lease.
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