Chapter 6 - Recordation, Abstract and Title Insurance Flashcards
Constructive Notice (Legal Notice)
-Notice given by public records and by visible possession, coupled with legal presumptions that all persons are thereby notified
-Charges public w/ responsibility of looking in public records AND property itself to obtain knowledge of all who claim a right of interest
Inquiry Notice
Information the law presumes one would have where circumstances, appearances or rumors warrant further inquiry
Actual Notice
Knowledge gained from what one has seen, heard, read or observed.
Acknowledgement
Formal declaration by a person signing the document that they did in fact sign the document
Tract Index
Simplest system for listing recorded documents affecting a particular tract od land
Grantor/Grantee Indexes
Alphabetical indexes bound in book form
Chain of Title
The linkage of property ownership that connects the present owner to the original source title
Abstract of Title
A complete historical summary of all recorded documents affecting the title of the property
Opinion of Title
An attorney’s opinion as to the the status of the title
Title Insurance
An insurance policy that defends against defects in title not listed in the title report or abstract
Title Commitment
-Commits the title company to insure the property
-Snapshot that shows the condition of title at a specific moment in time.
Loan Policy
- Gives title protection to a lender who has taken real estate as collateral for a loan
- Only covers title problems
Differences:
1) Protects only for the amount owed on the mortgage loan
2) does not make exceptions for claims of ownership that could have been determined by physically inspecting the property
3) Is assignable to subsequent holders of that same loan
Title Plant
A duplicate set of public records maintained by the title company
Marketable Title
Title that is free from any reasonable doubt as to who the owner is
Quiet Title Suit
Court-ordered hearings held to determine land ownership
- Quiets the claims of those without a genuine interest in the property
- Clean up a disputed title
Torrens System
- A state sponsored method of registering land titled
- Show ownership and claims against that ownership as established by a court of law
- Everything is on a single page
Marketable Title Act
- Legislation aimed at making abstracts easier to prepare and less prone to error
- There is a statutory period that cuts off claims to rights of interests in land that have been inactive for longer than the statutory period
Statute of Frauds
- Requires that written deeds be used to transfer real estate ownership
An investor is considering the purchase of a 100-unit apartment building that is fully occupied.
By their presence, the tenants are giving constructive notice of their right to be there.
When a person is aware of another’s rights or interest in real property, that person is said to have:
Actual notice
(It is gained by what one has actually seen, heard, read or observed)
Documents are recorded by
Submitting the original document which is photocopied and placed on file
An unrecorded deed to land is binding upon
The parties to the deed, but not subsequent purchasers, subsequent lenders or the public generally
Priority of a recorded instrument is determined by the date of
Recordation
Grantor is also known as
The Seller
In completing a title search, what does an abstracter do first
Check the grantee index to verify the present owner’s claim of title
Instruments are recorded in the public record in what order
Chronological order, as received for recordation
Among the sources which have to be checked to establish an unbroken chain of title would be
Records of civil records, probate courts, mortgage records and judgment rolls all have to be checked.
The name of the borrower would be filed alphabetically in the
Mortgagor Index
What is not normally checked in searching a title to parcel of land
Chattel mortgage records - records of mortgages on personal property
Lis Pendens Index
Where pending lawsuits are indexed
Title insurance companies were originally organized to provide protection for
Attorneys and abstractors
Before a title company will issue a title insurance policy on a property
Title insurance companies require a title report showing the apparent condition of the title before issuing a title insurance policy
- No physical inspection of the property is required
Binder
Commitment of the insurance company to issue a title policy to a property.
Current Survey
Would disclose any encroachments on the property, but would not be disclosed by an abstract of title, title insurance or an attorney’s opinion of title
The premium for a title insurance policy is
A single premium, paid upon issuance
Lender’s policy
A title insurance policy issued for the protection of a lender who has taken real estate as collateral for a loan
- Issued in an amount equal to the original amount of the mortgage loan
- It declines as the loan is amortized
When both an owner’s and a lender’s policy of title insurance are purchased simultaneously
the combined cost is slightly more then for the owner’s policy alone
Should a title insurance company elect to fight a claim in court, the legal expenses incurred will be
assumed by the title insurance company without affecting the coverage
The Torrens certificate of title is more meaningful than an attorney’s certificate of title because
It was founded on judicial decision, whereas an attorney’s certificate is founded on an opinion of the condition of the title
A quiet title suit is necessary for a
Torrens certificate
In a search of the grantors index one will find seller’s names listed in
Alphabetical order. All grantors named in documents recorded during that year.
