What is the principle of 'race notice' in property law?

The principle of 'race notice' in property law is a specific rule that applies in situations where multiple parties have claimed interests in the same property. Under this principle, the priority of ownership is determined in part by whether a purchaser is a bona fide purchaser (BFP) who takes title without notice of any prior claims, and secondly, by who records their interest first.

In the correct choice, it highlights that a bona fide purchaser who does not have notice of any conflicting claims and who records their interest first will prevail over other claims. This means that if a purchaser buys a property without knowing about prior unrecorded claims and then promptly records their deed, they are afforded protection against those prior claims that were not known to them at the time of purchase. This principle encourages buyers to conduct thorough title searches and record their transactions to secure their interests.

As for the other options, the first buyer to pay in full does not take precedence unless they meet the requirements of being a BFP without notice and recording first. Occupying the property can establish claims but does not necessarily grant priority over recorded interests. Lastly, obtaining a title insurance policy does provide protection against certain risks, but it does not determine priority in the case of competing claims; the recording and notice