Chapter 7 Flashcards
All of these are acceptable evidence of an owner’s title EXCEPT
a. a recorded deed.
b. an abstract of title and attorney’s opinion.
c. a title insurance policy.
d. a certificate of title.
a. a recorded deed.
Feedback
A recorded deed is nothing more than that. A thorough examination of a property’s title history, an insurance policy backed by such an examination, and an official title document (Torrens certificate) can all serve as acceptable evidence of title.
To serve as public notice, a deed is recorded in the
a. city where the owner lives.
b. county or, in some states, the town where the property is located.
c. state capital.
d. largest city in the state.
b. county or, in some states, the town where the property is located.
Feedback
b. Because land is immobile, it makes sense to record all information about title to real property in the county where it is located. Some owners frequently relocate, and they would be hard to find.
Five years ago, a lien was recorded against a parcel of property by a construction company. The property is in county A, but the lien was recorded in county B. Now, a former partner of the construction company, who knew that a lien had been filed, is trying to buy the property. A title search in county A disclosed no liens against the property. Which of these is TRUE?
a. The former partner has constructive notice of the lien but not actual notice, because of the mistake in recording.
b. The former partner has actual notice of the lien but not constructive notice, because of the mistake in recording.
c. The former partner has both actual and constructive notice of the lien.
d. The former partner has no notice of the lien.
b. The former partner has actual notice of the lien but not constructive notice, because of the mistake in recording.
Feedback
b. The former partner is aware that a lien was filed, which is actual notice. Constructive notice is not given because the lien was not filed in the county where the property is located, which is where it would be expected to be filed.
Shortly after closing on a real estate purchase, the buyer discovered that there were serious flaws in the title that made it unlikely that the property could be resold in the future. What can the buyer do now?
a. Because the title was flawed, the buyer can legally void the sale, and the seller must return any consideration.
b. The buyer has no recourse.
c. Because the seller conveyed unmarketable title, the buyer is entitled to a new title report.
d. Because the buyer has accepted the deed, the only recourse is to sue the seller under any covenants contained in the deed.
d. Because the buyer has accepted the deed, the only recourse is to sue the seller under any covenants contained in the deed.
Feedback
d. The buyer and the buyer’s representatives should look at the evidence of ownership before closing. There is more leverage to get problems corrected before closing than after closing.
The reason that deeds and liens and other claims are recorded is to give
a. constructive notice.
b. actual notice.
c. direct notice.
d. nominal notice.
a. constructive notice.
Feedback
The recorder’s office is a central place to deposit and discover information.
A history of all recorded liens and encumbrances is revealed in the
a. title insurance policy.
b. unrecorded documents.
c. chain of title.
d. abstract.
d. abstract.
Feedback
d. The title insurance policy lists coverage and exceptions to the policy. Unrecorded documents have not been examined. The chain of title traces ownership. The abstract is the most complete documentation of recorded liens and encumbrances.
The person who prepares a certificate of title is the
a. broker.
b. abstractor.
c. buyer.
d. seller.
b. abstractor.
Feedback
b. The abstractor searches all of the public records, and then summarizes the various events that affected the title throughout its history.
Which of these would be covered in a standard title insurance policy?
a. Defects discoverable by physical inspection
b. Unrecorded liens
c. Forged documents
d. Easements and restrictive covenants
c. Forged documents
Feedback
c. Title insurance does not protect against claims of parties in possession because the grantee should have visited the property; nor does it cover unrecorded liens. Easements and restrictive covenants are found in the deed and should be known to the grantee.
A title insurance policy that protects the interests of a mortgagee is called
a. a leasehold policy.
b. a lender’s policy.
c. a certificate of sale policy.
d. an ALTA policy.
b. a lender’s policy.
Feedback
b. The mortgagee is the lender. The mortgagee’s policy is transferable.
In the states in which it has been adopted, the Marketable Title Act
a. establishes standardized forms for abstracts of title.
b. disqualifies use of an attorney’s opinion of title as acceptable evidence of title.
c. limits the time beyond which title records must be searched.
d. provides a certification system for qualifying title insurance companies.
c. limits the time beyond which title records must be searched.
Feedback
c. The law extinguishes certain interests and cures certain defects arising before the earliest date that the title must be examined
