Chapter Eight - Title and Title Protection

Question 1

TITLE AND TITLE PROTECTION

Answer 1

• State Recording Acts are essential to title protection.
• Recording: entering into public record.

Question 2

Constructive Notice

Answer 2

• Constructive Notice: is notice that is deemed to be given because the facts are readily available.

Question 3

Actual Notice

Answer 3

• Actual Notice: when one knows a fact concerning a property through direct knowledge or when notice is expressly given.

Question 4

Acknowledgement

Answer 4

• Acknowledgement: a formal declaration made by person singing the document the he is indeed singing as a free and voluntary act. Taken by:
• Notories
• Attorneys
• County Clerk
• Registrars
• Surrogates

Question 5

Bona Fide Purchaser

Answer 5

• A party who has paid value for an estate in real property without actual constructive notice of an already existing estate in the same parcel.

Question 6

TITLE INSURANCE

Title Insurance Defined

Answer 6

• Title Insurance: a contractof indemnity under which a title insurance company, for a one time payment agrees to indemnify the insured.
• Title company also defends any lawsuite attacking the title which is based on a defect covered by the policy.
• Total policy coverage diminishes as damage payments are made to the insured.

Question 7

Exclusions

Answer 7

• Exclusions: those matters that the policy expressly indicates are not within the coverage provided. (Condemnation…)

Question 8

Exceptions

Answer 8

• Exceptions: relate to matters that were never intended to be the subject of title insurance.
• They are matters that the title company cannot insure because the constitute objections to the title.

Question 9

Examination of Title Records Prior to Purchase

Abstract

Answer 9

• Abstract of Title: condensed historical records of all grants affecting the property.
• Cahin of Title: attempts to trace an unbroken chain of former owners back fro 60 years.

Question 10

Undiscovered or Hidden Defects

Answer 10

• An owner’s title insurance policy insures title against loss from both undiscovered and undiscoverable defects.

Question 11

Run-Down Search / Continuation

Answer 11

• conducted to reveal any matters of record which have occurred between the time of the initial search and the closing of title.

Question 12

Action to Quiet Title

Answer 12

• Legal action necessary to clarify the status of title and remove any clouds on the title.

Question 13

Examination of Title

Answer 13

• Examination of Title: process of reviewing the info discovered in a search or abstract by those who will prepare a Committment (title report and binder).

Question 14

Committment

Answer 14

• Issuance of a committement is based on the results of the title search, judgement search, and tax assessment search.
• Outlines terms and conditions.
• Terminates nine months from its effective date or the closing of title, which ever occurs first.

Question 15

Uniform and Ununiform Provisions

Answer 15

• Uniform: same policy by policy.
• Ununiform: differ from policy to policy.

Question 16

Title Insurance Coverage

Answer 16

• Title to the insured land is in the name of the insured.
• Any defect in or lien or encumbrance on the title.
• Protection against loss arising from lack of right of access to the property.
• Marketability: title that if free of defects and and liens.

Question 17

FORMS OF TITLE INSURANCE

Answer 17

• Owner’s (Fee) Policy:
• Mortgage or Loan Policy

Question 18

Affidavits of Title

Answer 18

• Representations made by the seller and buyer.

Question 19

Subrogation

Answer 19

• The right to take legal action against a third party responsible for a loss to an insured for which a claim has been paid.

Question 20

Ednorsements

Answer 20

• Endorsement: a written statement that is used to modify the contents and coverages of a title insurance policy or committment.

Question 21

The New Jeersey Department of Banking and Insurance

Answer 21

• Regulates policy forms and endorsements as well as premiums and charges.