What does the shelter rule accomplish?

• A. Shelters grantors only
• B. Shelters their grantees who would otherwise be unprotected
• C. Shelters all parties without regard to protection status
• D. Shelters mortgagees from loss

Answer: (B)

The shelter rule is about extending bona fide purchaser protection to a downstream transferee who would otherwise have been unprotected. If someone takes from a bona fide purchaser for value without notice, that later holder can be treated as a bona fide purchaser for the purposes of title. This shelters their grantees as well, preserving the chain of title for buyers further down the line.

In practice, a grantee who receives from a BFP can rely on that status to keep their own ownership free from challenges that might have arisen because of defects earlier in the chain. It ensures the transfer chain isn’t broken by one link that wouldn’t itself qualify as a BFP.

This does not mean it protects all parties or every type of claimant (such as mortgagees) and it doesn’t grant protection to the grantor.