A bona fide purchaser' (BFP) referred to more completely as a
bona fide purchaser for value without notice'
is a term used in the law
of real property
and personal property
to refer to an innocent party who purchases property without notice of any other party's claim to the title of that property. A BFP must purchase for value, meaning that he or she must pay for the property rather than simply be the beneficiary of a gift. Even when a party fraudulently conveys
property to a BFP (for example, by selling to the BFP property that has already been conveyed to someone else), that BFP will, depending on the laws of the relevant jurisdiction
, take good (valid) title
to the property despite the competing claims of the other party, so long as the BFP properly records the transaction pursuant to local property law. However, parties with claim to ownership in the property will retain a cause of action (a right to sue) against the party who made the fraudulent conveyance.
A BFP will not be bound by equitable interests of which he/she does not have actual or imputed notice, as long as he/she has made "such inspections as ought reasonably to have been made".Kingsnorth Finance Trust Co Ltd
1 WLR 783
BFPs are also sometimes referred to as "Equity's Darling". However, as Jeffrey Hackney
has pointed out, the title is somewhat misleading; in cases where legal title is passed to a bona fide
purchaser for value... Read More