Eight months ago Larry rented his single-family house to Teresa and Thomas, pursuant to a written one-year lease. During lease negotiations, Teresa and Thomas asked for and got an option to purchase the house for $210,000 at the end of the lease term. The written lease, which the tenants promptly recorded, contains an integration clause and fails to mention the option. The purchase option is set forth in a side letter agreement, which was not acknowledged or recorded. The side letter is sufficient to satisfy the statute of frauds. Two months ago, Larry agreed to sell the house to Pamela for $240,000 pursuant to an unacknowledged, unrecorded contract of sale. When Pamela inspected the house, Teresa and Thomas weren't there, although Larry told her that the furnishings in the house belonged to the tenants. Under the contract between Larry and Pamela, the one-year lease is a permitted encumbrance, and at closing Larry is to assign his interest in the lease to Pamela. Larry "forgot" to tell Pamela about the tenants' purchase option.

1. Pamela closes the purchase without learning of the tenants' purchase option and records her deed. At the end of the one-year lease, the tenants notify Pamela that they are exercising their option to purchase for $210,000. What result?
2. After signing the contract, Pamela decides to introduce herself to Teresa and Thomas- soon she'll be their new landlord. Early during their conversation, they mention their option and the likelihood that they'll exercise it. Pamela says she knows nothing about their option and plans not to honor it. What result? Does it matter what type of recording act the state has?
3. Assume that Pamela never inspected or visited the house prior to signing the contract of sale with Larry. Does this change the analysis in (a) or (b)?
4. Assume that Teresa and Thomas's lease is not recorded, but that Larry supplied Pamela with a copy of the lease (but not the side letter) while they were negotiating the contract of sale. Does this change the analysis in (a) or (b)?