In Texas, property rights often turn on one critical question:
Was the buyer a “bona fide purchaser”?
If so, that buyer may take property free and clear of prior unrecorded claims—even if someone else technically had an earlier interest.
This doctrine can completely change the outcome of:
- Real estate disputes
- Fraud claims
- Divorce property transfers
- LLC asset transfers
- Probate conflicts
- Fraudulent conveyance litigation
Here is how the Bona Fide Purchaser (BFP) doctrineworks under Texas law.
The Texas Recording Statute
The doctrine begins with Texas Property Code § 13.001(a), which states:
“A conveyance of real property… is void as to a creditor or to a subsequent purchaser for a valuable consideration without notice unless the instrument has been acknowledged, sworn to, or proved and filed for record as required by law.”
This means:
An unrecorded deed is valid between the parties, but it may be void against:
- A creditor, or
- A later purchaser who:
- Pays value, and
- Has no notice of the prior claim.
That later purchaser is the Bona Fide Purchaser.
What Is a Bona Fide Purchaser in Texas?
Under Texas case law, a BFP is someone who:
- Acquires property in good faith
- Pays valuable consideration
- Has no actual or constructive notice of another’s claim
See Madison v. Gordon, 39 S.W.3d 604 (Tex. 2001).
If all three elements are met, the BFP takes title free of prior unrecorded interests.
What Counts as “Notice”?
This is where things get technical.
Texas recognizes three types of notice:
1. Actual Notice
You actually knew about the prior claim.
2. Constructive Notice
The claim was properly recorded in county records.
Under Texas Property Code § 13.002:
“An instrument that is properly recorded… is notice to all persons of the existence of the instrument.”
If it’s recorded, you are deemed to know about it—even if you never looked.
3. Inquiry Notice
If circumstances would cause a reasonable person to investigate further, you are charged with knowledge of what that investigation would reveal.
For example:
- Someone else is in possession of the property
- A deed looks suspicious
- There are visible boundary inconsistencies
Texas courts hold that possession by a third party can trigger inquiry notice.
Why This Matters in Real Cases
Example 1: The Unrecorded Deed
Person A sells land to Buyer 1.
Buyer 1 never records the deed.
Later, Person A fraudulently sells to Buyer 2.
Buyer 2 records immediately and had no notice.
Buyer 2 likely wins.
Example 2: Divorce Property Transfers
Spouse transfers separate property to an LLC but fails to record properly.
A later purchaser acquires the property for value and without notice.
The BFP doctrine may defeat later claims—even in family litigation.
Example 3: Fraudulent Conveyance Disputes
Under the Texas Uniform Fraudulent Transfer Act (now TUFTA / UVTA), a transfer made to hinder creditors may be voidable.
But if property ends up in the hands of a BFP, recovery becomes significantly harder.
See Texas Business & Commerce Code § 24.009(a).
Does a Lis Pendens Affect Bona Fide Purchasers?
Yes.
Under Texas Property Code § 12.007, a properly filed lis pendens gives constructive notice of pending litigation affecting title.
Once filed, a subsequent purchaser cannot claim BFP protection.
This is why lis pendens strategy is critical in real property litigation.
What Does NOT Count as “Valuable Consideration”?
Love and affection.
Nominal transfers.
$10 deeds between family members.
To qualify as a BFP, the purchaser must give real value.
The Big Picture: Texas Is a “Notice” State
Texas is a “notice” jurisdiction.
A subsequent purchaser who:
- Pays value
- Lacks notice
Wins over prior unrecorded interests.
This incentivizes:
- Prompt recording
- Title searches
- Proper due diligence
Failure to record can destroy your priority.
Litigation Strategy Considerations
When evaluating a property dispute, ask:
- Was the earlier instrument recorded?
- Was there possession triggering inquiry notice?
- Was value actually paid?
- Is there evidence of bad faith?
- Was a lis pendens filed timely?
The BFP doctrine often decides title cases before trial.
Final Thoughts
The Bona Fide Purchaser doctrine is one of the most powerful and misunderstood principles in Texas property law.
It can:
- Protect innocent buyers
- Defeat unrecorded deeds
- Complicate divorce property claims
- Limit fraudulent transfer recovery
- Shape real estate litigation outcomes
If you are involved in a property dispute, timing and notice can matter more than who was “first.”
And once a true BFP is involved, undoing a transaction becomes exponentially more difficult.
At David C. Barsalou, Attorney at Law, PLLC, we help clients navigate business, family, tax, estate planning, and real estate matters ranging from document drafting to litigation with clarity and confidence. If you’d like guidance on your situation, schedule a consultation today. Call us at (713) 397-4678, email barsalou.law@gmail.com, or reach us through our Contact Page. We’re here to help you take the next step.
