Chapter 11: Recording Title

Question 1

What two objectives does recording a title achieve?

Answer 1

1. People can check the condition of titles.

2. Provides protection for owners with existing interest in the property

Question 2

Where are documents recorded?

Answer 2

In the county where the land in located

Question 3

Define the three kinds of notices.

Answer 3

Constructive notice: info made public; presumed to know it
Actual notice: direct knowledge gained by reading, seeing, hearing
Inquiry notice: presumed when a reasonable person would have made further inquiries

Question 4

What is a title cloud and how do you clear it?

Answer 4

It is a title defect of any claim or encumbrance. The process of removing it is called perfecting the title.

Question 5

What is a title search or title examination?

Answer 5

Looks at records to see who has rights of the property and the condition of the title.

Question 6

What is an abstract?

Answer 6

A condensed history of all documents affecting title.

Question 7

What is a chain of title?

Answer 7

A record of the property’s ownership. A missing owner is called a gap.

Question 8

What is a quiet title lawsuit?

Answer 8

Removes clouds on the title.

Question 9

Are all documents/assessments recorded?

Answer 9

No, real estate taxes and special assessments do not need to be recorded. Other liens against all property of a person do not need to be recorded.

Question 10

What is marketable title?

Answer 10

Title free from major defects.

Question 11

What is a color of title?

Answer 11

A claim of title that is good, but is not.

Question 12

What 3 kinds of records could be searched in a title search?

Answer 12

1. Title record indexes
2. Tax records
3. Court records

Question 13

What are the four evidences of proof of ownership?

Answer 13

1. Abstract with attorney’s opinion
2. Torrens certificate
3. Certificate of title
4. Title Insurance

Question 14

What is the abstract of title with lawyer’s opinion?

Answer 14

She reads the abstract and gives her opinion, but doe snot provide any guarantees of title.

Question 15

What is the Torrens system?

Answer 15

Used to assure and record title in a small # of states. Torrens certificates are prepared in duplicate.

Question 16

What is a certificate of title?

Answer 16

Prepared by title company after a title search. It expresses the opinion of the title status. no abstract issued.

Question 17

Do abstracts and certificates guarantee title?

Answer 17

No, there may undetected defects.

Question 18

What is title insurance?

Answer 18

It indemnifies the owner against loss due to title defects.

Question 19

How much does an owner’s title insurance policy cover?

Answer 19

The amount paid for the property.

Question 20

How much does a lender’s title insurance cover?

Answer 20

The loan amount.

Question 21

What is a certificate of sale policy?

Answer 21

Insures a purchaser of real estate at a court sale.

Question 22

Define subrogation.

Answer 22

A title company obtains the insured’s legal rights to defend a claim against title.

Question 23

What is standard coverage title insurance?

Answer 23

Protects against defects in public records, documents, etc…

Question 24

What is extended coverage?

Answer 24

Protects against defects only found through inspection of the property.

Question 25

What three things DOESN’T title insurance cover?

Answer 25

1. Defects and liens as stated in policy.
2. Defect known to buyer.
3. Changes to land as a result of zoning.

Question 26

What is the four step title insurance process?

Answer 26

1. Title Search
2. Title Report
3. Commitment to insure
4. Policy Inssued

Question 27

What are the parts of a title insurance policy?

Answer 27

Agreement to insure
Description of the subject matter
Schedule of exceptions
Conditions and stipulations
Endorsements