Encumbrances And Title Insurance Flashcards
1
Q
Recordation/recording
A
Public filing of a document.
The first to record has priority, and has ownership of the property.
2
Q
Constructive notice
A
A public recordation of an event, meeting notice was published, but not necessarily given directly to the affected parties, while still technically being available in the public record
3
Q
Actual notice
A
Express notice given directly to a person of actual knowledge that is known
4
Q
When does the title officially changed hands?
A
With the transfer of the deed from the seller to the buyer
5
Q
All closing documents are recorded
True or false
A
False
Only the documents that impact ownership interest need to be recorded
6
Q
Until a deed is recorded ownership can be legally challenged, true or false
A
True
7
Q
Recordation
A
Protects the owners title against all claims of interest, not recorded in any public record
8
Q
Recording requirements in California
A
Must be in writing
Must be executed a.k.a. signed
Must be a knowledge before a **notary public **
Must have the name and address of the requester
There may be specific size of paper type requirements as well
9
Q
Lien types
A
- Voluntary Lien - individual agrees to have security placed against himself or his property
- Involuntary lien - creditor places in claim on real or personal property to legal means without the owners consent in order to collect unpaid debt
- General lien - a claim against an individual and all their property
- Specifically - a lien against a single property
10
Q
Voluntary Lien specific
A
Mortgage lien
11
Q
Involuntary lien general
A
- Estate and inheritance tax lien
- Deceased persons debt
- Income tax lien
- Judgment lien
12
Q
Involuntary lien specific
A
- Mechanics lien
- Real property tax lien
13
Q
Mortgage lien
A
Specific and voluntary lien
Affects one particular property. Voluntary buyers purchase real property or via financing and agree to the mortgage lien.
The property itself is loan collateral, if buyer, defaults, lender may foreclose property proceeds go to paying off lien priority
14
Q
Estate and inheritance tax lien
A
General and involuntary lien
The estate is allowed to sell sufficient property for taxes on a lien if owner dies, possessions then property
15
Q
Deceased persons, descendants debts
A
general involuntary Real property passes to devicee named in the will, or intestate without a will, property passes to the heirs according to the states laws descendent distribution.
The a decedents debts are first paid out of any personal property, not specific. Real property must be sold to pay any remaining that devicees or heirs may take title to the property after all attached liens, encumbrances creditors, have been satisfied.
16
Q
Federal and state tax lien
A
General and involuntary lien
Government may attach liens to real property when owners disobeying federal income tax, laws fail to pay gift, taxes, or when a property transfers ownership due to the owners death.
Example: Doesn’t pay income taxes government will file tax warrant in the county where the property is located
17
Q
Judgment lien
A
General and involuntary lien
When people win lawsuits over property owners, judgment means, ensure they get the money they won in the lawsuit
Creditors must record judgment with the county to create a lien on debtors property
18
Q
Lis pendens
A
A **legal notice **that a lawsuit is pending and send facts of title of the property. This serves as warning, a prospective buyers that a pending lawsuit could impact title.
- If title transfers to someone else after lis penden has been filed the judgment will attach to the property.
- lenders will usually file lis pendens when they begin foreclosure.
19
Q
Mechanics lien
A
Specific and involuntary lien
Protects anyone who furnishes, professionals and skilled services, labor, materials for real property, improvements, such as new construction and renovation.
This statutory lien recognizes that those who work in construction industry need a solid solution when their fees aren’t paid lien will show date work first began, placed higher, and priority to subsequently or encumbrances Either filed or on record it. “ materialmen’s liens”
20
Q
Real property tax lien
A
Specific and involuntary lien
Real property submit to government taxes to pay for government services and programs property taxes, in which the tax amount is based on properties, transaction value, or assessed on January 1 for the previous year. Lien is placed on property until owner pays the taxes.
If taxes are not paid, government come foreclose , the legal proceeding to do so it’s called “rem legal proceeding”
21
Q
A claim against an individual and all their property
A
General Lien
22
Q
A lien against a single property
A
Specific lien
23
Q
A general involuntary lien the IRS places against a property for dues and unpaid taxes
A
Income tax lien
24
Q
A general involuntary lien brought against the property due to a court decree resulting from a lawsuit
A
Judgment lien
25
Is a mechanics lien voluntary or involuntary
Involuntary
26
Is income tax lien, voluntary or involuntary?
Involuntary
27
Is income tax lien a general lien?
Yes
28
Is property tax a general lien
No
Specific to property
29
What things can general liens take, claim, effect?
Boat, House, art, jewelry, land
30
What is a type of lien as a result for not paying child support
Judgment lien
31
What is Lis pendens
A _legal notice_ that a lawsuit is pending that **affects the title of the property**
32
General lien
A claim against a person and all of their property
33
Judgment liens
A lien placed as a result of legal action or lawsuit, **recorded in the county clerks office**
34
Estate and inheritance tax lien
A lien placed when a person dies in federal estate, taxes and _state inheritance taxes must be paid_, the descendants property **may be sold to pay the lien**
35
Deceased persons debt
- Taxes the heirs, other than those named in the will, who receive real property.
It will have to be paid out of the remaining or the state proceeds before the rest of the property can pass to them
36
Income tax liens
A lien imposed for nonpayment of taxes, maybe for various taxes **owed personal income tax**, employee withholding, tax, etc.
37
The collection of the monies for unpaid property taxes is by a foreclosure sale of the property
True or false
False
The collection of monies are for unpaid property taxes is by a **for sale of the property at a tax sale**
38
Which option describes a real property tax lien
Specific and involuntary
39
What type of involuntary lien is placed on a persons estate after their death if there are unpaid debt to creditors?
Deceased persons debt lien
Estate/inheritance tax lien
Deceased persons, debt lien
40
What defines an income tax lien
**Involuntary **lien placed against a property owners property for _dues and unpaid taxes_
41
Which of the following is true about ownership or title to a property
A. constructive notice to public. A real property ownership occurs when the deed is recorded.
B. The last party to record has priority.
C. The seller is responsible for paying the owners and lenders title insurance.
D. Title isn’t finalized until the deed has been recorded.
Constructive notice to the public of real property ownership occurs when the deed is recorded
42
Why is it important to publicly record a deed?
A. The title insurance policy scheduled exceptions will include anything that publicly recorded
B. Title insurance policies don’t cover publicly recorded events.
C. Title insurance policies must be publicly recorded to be legal.
D. Title representatives and attorneys who perform title searches look for documents that are publicly recorded.
D. Title representative and attorneys who perform title researches look for documents that are publicly recorded.
They look at the schedule of exemptions and will exclude items that are recorded
43
In addition to being properly executed, signed, what are other requirements for recording a document in California?
Acknowledgment before a notary public
44
Christina purchased a house from Thomas. When did she officially gain ownership of the property?
With the transfer of deed from the seller to the buyer
Don’t forget this
45
Encumbrance
A burden or impediment
46
Liens
Claims or charges against a property by someone other than the property owner
47
Payment bond
Bonding company will compensate the home owner if the contractor defaults in performance, including non-payments of subcontractors
48
Preliminary notice
Right to file a lien notice
49
Mechanics preliminary _bond_
When payment bond is in place, _bonding company will compensate the homeowner if the contract default in performance_ , including nonpayment of subcontractors
First come first serve, begins on the date. Materials are first delivered.
50
Preliminary notice requirements for a mechanics lien
File a lien- must be given to the homeowner within -20 days of commencement of work _
Lien claim must be **pursued within 90 days of filing a lien claim**
Even when extensions of credit are granted
Lien cannot be extended more than one year after the work is completed
51
Homeowner can file a notice of completion with the county recorder when:
- The work stops, and the homeowner uses completed work a.k.a. kitchen
- The homeowner excepts the work as completed
- **Work has stopped for 60 days**
- The owner has filed a notice of cessation **after work has stopped for 30 days**
_Notice of completion has to be filed within 10 days after work is completed_
If such notice has been filed, contractor has 60 days to file a mechanics lien
**Subcontractor** material supplier, or other professional under mechanics, lien provision has **30 days to file**
52
Release of mechanics lien
Title insurance company won’t insure the property if there is a mechanic lien
claimant a record release of mechanic lien or petition the court to expunge the lien, homeowner would be entitled to attorney fees and costs
53
Lien Release bond
When a contractor tries to foreclose on a property due to lien, the home, **owner must protest mechanics lien** and _file a lien release bond in the county recorders office_ , where the lien was recorded.
The bond must be a %150 of the amount claimed the property that the owner is trying to release. **Bond is designed to cover amount claimed by Contractor including legal fees**.
54
Notice of non-responsibility
If a contractor tries to do work without contract and tries to place a lien. You should file a **notice of nonresponsibility.
- I post conspicuously on the property itself
- **Record within 10 days of learning that the unauthorized work**
- Include a property description and the name, address and property, interest of the person giving the notice, and a brief statement, stating that the person providing the notice is not responsible for any claims arising from the work
55
Mechanic’s lien timeline
**Preliminary notice**- within **20 days** of the start date
**Right to file a mechanics lien** - within **90 days of end date up to one year**
**Notice of completion** - within **10 days of end**
**Contractor has the right to file a mechanics lien** - within **60 days of end date**
All other **subcontractors** have right to file a mechanics lien - within **30 days of end date**
56
In California, mechanics liens, have priority over all other liens on the property
True or false
False
Well, there are strong rules in place to protect the rights to file a mechanic’s lien , other liens, such as property, tax lien, will take priority. Timing is also an issue.
57
Lien rights do not survive, foreclosure, or sale of property
True or false
False
58
The contractor or subcontractor must file a preliminary notice with the owner
20 days of work starting
59
Mechanics lien claimants must file the lien in court if the owner has not filed a notice of cessation or completion, what time frame?
Up to 90 days after work ends
60
Contractors filing a mechanics lien, must file the lien in court if the owner has filed a notice of cessation or completion
Up to 60 days after work ends
61
Subcontractors and material suppliers, filing a mechanics lien must file the lien if the owner has filed a notice of cessation or completion
Up to 30 days after work ends
62
When is Mechanics lien is enforced?
90 days after filing lien
63
A work contract doesn’t allow the contractor to claim a lien on the property
Allowed
Not allowed
Not allowed
In California, **any contract that takes away the right to a mechanics lien is considered void** and unforeseeable
64
The property owner can require the contractor to obtain a payment bond
Allowed
Not allowed
Allowed
65
The property owner can file a lien release bond if they want to dispute the lien and stop a foreclosure
Allowed
Not allowed
Allowed
66
The property owner can post and file a notice of non-responsibility to stop any unauthorized work and claims from occurring
Allowed
Not allowed
Allowed
67
A payment bond
Can be used to prevent subcontractors from making claims if the contractor was paid, but didn’t pay those the contractor hired, preventing the property owner from paying twice for the same work
68
A lien release bond
Used to stop the foreclosure so that the owner can dispute the lien
69
Statutory lien
Created by statute or law, a real estate, tax lien is an **involuntary statutory** lien created **without any action required of the property owner**
70
Equitable liens
Created by a court of common law.
The lienholder has a **equit(y)**able lien on property. Equitable liens, do not give the right of possession, they are simply a charge or _encumbrance_ on the property.
71
Equitable lien
_Involuntary_ lien **general**, equitable, Lien is placed as a result of a court order
A.k.a. **judgment lien**
72
This type of lien is created by the statute or law
Statutory lean
73
A real property tax lien is an example of **involuntary** version of this lien, created without any action required on the part of the property owner
Statutory lien
74
This type of lien is created by a court or common law
Equitable lien
75
This type of lean does not give the right of possession, it’s simply a change or encumbrance on the property
Equitable lien
76
Amount **owed by homeowner** is an example of involuntary version of this type of lien on a **home**
Equitable lien
77
Forclose
When **real property is encumbered** by a lien, the lender forecloses on the property & enforce a sale
78
California foreclosure
California uses a **non- judicial foreclosure** process, which means there is _no court involvement_ the property go through a trustee sale.
Beneficiary lender notifies trustee, a third-party that the trustors a.k.a. borrowers are default and instructs the trustee to begin foreclosure
The trustee files records, notice of default NOD WHICH NOTIFIES THE trustor AS WELL AS OTHERS who HAVE FILED A REQUEST OF NOTICE OF DEFAULT
TRUSTORS HAVE **THREE MONTHS**, NOT 90 DAYS, THE EXACT NUMBER TO REINSTATE THE LOAN BY PAYING ALL PAYMENTS
TRUSTEE FILES A NOTICE OF SALE NOS after 85 days have lapsed NOS must be 20 days from the end of the three month of NOD period.
The trustors may reinstate the loan by paying all amounts due including charges during the first 15 days of the NOS. During the final five days, the trust stores must pay the entire loan balance, referred to as redemption in order to keep the property.
The trustee conducts the sale of property no earlier than 21 days after the NOS is filed. ACL may be postponed for up to 365 days after which a new and OS will be filed providing for an additional 20 days for reinstatement and redemption as described above.
The beneficiary makes the first bed to the trustee, anyone me over bid the beneficiary
The highest bidder wins and is convey title to the property
The previous owner receives a written notice, providing them 30 days to leave the property if they fail eviction process will proceed
79
A foreclosure sale is sold out in public auction to the highest bidder
True or false
True
80
Foreclosed Owner can still claim title to the property after the trustee sale
True or false
False
the buyer legally takes ownership once the foreclosure takes place
81
Foreclosure process is judicial
True or false?
False
In California foreclosures go through a non-judicial process
82
In California foreclosures, go through a **non-judicial** process, known as a trustee’s sale
After that the lender notifies the trustee that the borrower is in default (step one). What are the steps that take place assuming the borrowers take no action to reinstate the loan?
Beneficiary **Lender** makes the first bid
Highest bidder wins the property
83
Right of redemption with foreclosure, ceases, the right when the foreclosure sale is held
True or false
True
84
The right of redemption before closure requires repayment of the entire debt owed to the lienholder
True or false
True
85
Right of redemption foreclosure: Lender is not allowed to include costs associated with the foreclosure
True or false
False
86
Homestead exemption
Homestead exemption is to protect homeowner equity (the total value of the property, minus the amount owed) from creditors, holding unsecured debt, the property and Owner must meet certain qualifications
Prohibits a forced sale - home owners **equity is less than or equal to the amount owed on the mortgage loan _plus the amount of the homestead exemption_**
Protects equity in the event of a sale - **six-month rule** that offers them some additional protection from creditors. If the homeowner has failed a declaration of homestead and invest the proceeds within six months at another Homestead.
Homeowner $75,000
Home owner plus spouse $100,000
Home owner +65 and older spouse $175,000
Home owner with physically mentally disabled spouse $175,000
Home owner a 55 and older with the annual income of $25,000 = $175,000
87
Homestead exemptions in California qualified dwelling
House and land
Mobile home and land
Boat
Condominium
Plan development
Stock cooperative
Community apartment project
88
Homestead exemptions in California qualified homeowners
Community or separate property of household and life, or registered domestic partners
Separate property of an unmarried individual
To unmarried persons, sharing ownership, each can claim a separate homestead exemption on the dwelling they both occupy
89
Homestead exemptions in California
priority of claims
In order as:
- Tax liens on the Homestead
- Holders of the other liens, and encumbrances on the Homestead
- Home owner, and the amount of the homestead exemption
- The levying officer for the cost reimbursement, if not paid in advance
- Creditors who hold a judgment based on order of filing
90
Primary property in which the owner reside
Homestead
91
The total value of property, minus the amount owed
Equity
92
The value of the property that is exempt from liens by creditors
Homestead exemption
93
Rule that defines the period of time homestead exemption funds are safe from predators before it must be reinvested in a new home stead
Six month rule
94
With homestead exemption, sellers need to sell their home, all of the money from the sale will go to pay off their creditors first
True or false
False
because they have a homestead exemption and on their home, they can **receive up to $175,000 from the sale of their home** _before creditors will be paid_ a penny
95
Homestead exemption in California recap
Homestead exemptions are available on a wide variety of property types and additional amounts are given to different family units as well.
**It’s important to tell your clients** be informed about _homestead exemption_ in order to **protect the investments**. You’ve worked so hard to help them make.
96
Lien **priority** in California
_Property, tax liens, special assessments (Mell Roos)_
**mechanics liens**
_Homestead_ exemption amount
**Leviyng officer**
Other judgment, creditors of unsecured lines, usually in order of filing
Homeowner
If not enough money to pay off liens, an arrangement of subordination agreement will be made
97
Why is it important that liens be paid in full before Property is sold to a new owner?
Property **transfers to new owner**, and the lien **remains unpaid**, the unpaid lean can trigger a foreclosure
98
Special assessment
Government can help property and pay a portion making Mela Roos improvements such as sidewalks, roads powerlines, and considered a tax lien on the property, if not paid
99
Prioritizing liens in order
Property, tax liens, along with mello Roos
Secure liens/mechanics liens
Homestead exemption amount
Levying officer reimbursement
All other lines by filing date
Homeowner
100
What is a subordination agreement?
Mortgage lien holder A agreed to modify the order of priority and be paid after mortgage lien holder B
101
What happens if there is excess money after liens are paid
It is used to pay the expenses of the sale of the property
If there is money left after that, it goes to the former owner of the home
102
What will happen if the lien holders have not been paid?
The former owner will lose the property
The former owner might owe a debt to the lien holders who are not fully paid off
The former owner may face a deficiency judgment, after foreclosure, which means losing the property in owing the lien holders
103
What can a property owner do to stop? Contractors performing an authorized work from filing mechanics liens later?
File a lien release
File a notice of completion
Post and file a notice of non-responsibility
Require the contractor obtain a payment bond
Post and file a notice of non-responsibility
104
What’s it called when lienholders allow another lienholders claim to have priority over their own?
Equitable lien
Lis pendens
Subordination agreement
Voluntary Lien
Subordination agreement
105
Who has the right to make the first bed during a trustee sale in California?
Anyone
The beneficiary lender
The trustee
The Trustor borrowers
The beneficiary lender
106
What is the six month rule for homestead exemption?
The property owner must reinvest the homestead exemption amount within six months in another homestead to protect it from creditors
107
Which of the following options describes a subordination agreement
An agreement between two lien holders to modify the order of lien priority
108
California home owner Randy, owes creditors they place a lien on his home. He owes $35,000 on his mortgage and the properties market value is $250,000. What happens in the situation
The homeowner exemption will protect some of his equity, but the courts me force the sale of his home
109
In California, which Lim can be filed later than other liens, and still have priority over them
Mechanics lien
Can’t take priority over other liens if the starting date of the project was before other liens filing date
Don’t forget this
If mechanics lien was placed before other liens, it takes priority
110
What does the right of redemption allow?
It allows property owner to pay back any debts or liens against the property until a foreclosure sale is held
111
Public records
Open to public
Used by buyers to ;
- Verify property ownership
- Identify encumbrances against the property
Prospective buyers can use public records to verify the ownership of the property. They are considering purchasing as well determine if there are any encumbrances against the property.
112
Public records for a deed
Used to establish proof of ownership
Legal document
Used to establish proof of ownership
Assurance to buyer that seller has the right to sell the property a marketable title
A marketable title is a title that is clear and free of encumbrances
113
Public records for chain of title
Establishes path and proof of ownership
Establishes title history, or the path and proof of ownership
Established through a search for successive conveyances, a title and encumbrances in the public record
Must be unbroken for the title to be good or marketable
Established through the search for successive conveyance of title, starting with the current deed, and going back in time, usually 40 to 60 years. For the title, to be good, the chain must be unbroken.
114
Public records abstract of title
Provide a summary of the title history, accompanied by a lawyer’s opinion of Title
- Provide a summary of the chain of title
- Contains a description of the property
- Summarizes any records related to the title
- Updated, abstract, continuation and certified by an attorney, lawyers, opinion of title
The lawyers opinion of title is a statement of opinion regarding the validity of the title
Atturny ensures it is unbroken and clear., Then update the abstract of title with what is referred to as an abstract, continuation and provides a written lawyers opinion a title.
115
Public records certificate of title
A summary of the title based off of the title abstracts own title
Lot box, and general indexes
Similar to abstract of title, but based on the title companies title plant
- title search similar to an abstract title
- Based on the title companies owner previously obtain records at the property held in the title plant
- Often not accompanied by a lawyer’s opinion of Teitel, as many of the records used have already been validated
The certificate of title is the next document that is used by title companies that use their own collective records by previous title searches of the public records. These records are stored and lot books and general indexes held by the title companies themselves. These records have come to be called title plants. They are often not accompanied by a lawyer’s opinion of titles, as many of the records have already been validated.
116
Public records grantee of title
Oh, and examination and guarantee of the condition of the title, at the time of the search made by the title company
Provides a summary of the title history, and an insurance by the title company of title status based on public records. It does not cover items found in public record.
- similar to the abstract and certificate of title
- Made further assurance of guarantees as the condition of the title based on public records
- The first form of insurance offered by title companies
With a grantee of the title, title companies provided buyers further insurance about the condition of the title, according to public records
117
Establishes proof of ownership
Deed
118
Assures that title to the property is free and clear of liens, and only subject to loan payoff and any taxes owed
Marketable title
119
Establishes the title history or path, and proof of ownership
Chain of title
120
Provide a summary of the chain of title history, usually accompanied by a lawyers opinion a title
Abstract of title
121
provides a summary of the chain of title history, similar to an abstract of title, but is based on the title company’s title plant
Certificate of title
122
The purpose of the title search is to collect evidence that the title is a marketable title, meaning it’s clear and free of encumbrances
True or false
True
123
For Title to be clear, the chain of title must be unbroken
True or false
True
124
A certificate of title can be issued using the title companies on records
true or false
True
125
Prior to closing, and Atturny will update the abstract of title and provide a written lawyers. Opinion of Title, which verifies that the title is clear after reviewing the title records, thoroughly and verifying, there are no title defects.
True or false
True
126
Supplies. An examination of the title history, and a guarantee of its current condition based on what is known on public record.
Guarantee a title
127
Provide a summary of the title history. Prior to closing, and Atturny will update the abstract of the title and provide a written certificate of title opinion that the title is clear after reviewing the title records, thoroughly and verifying, there are no title defects.
Abstract of title
128
Establishes path and proof of ownership. For a title to be clear, the chain of title must be unbroken
Chain of title
129
Preliminary report
Issued after title insurance has been ordered and outlines the history of the title, and what will be covered by the title insurance policy, if issued
130
Title insurance policy
Ensures the policy owner against financial loss is the title to the real estate has defects beyond what is no in the public records
131
Preliminary report
Similar to a title search for abstract, and that it provides a bit of title information from public records for the buyer, but is not a title search itself and is used for outlining what will or will not be covered under the insurance policy, should it be used.
132
Title insurance policy
Most commonly used an insurer is the policy owner against financial loss if the title to the real estate has defects.
133
Preliminary report
- issued before a title insurance policy
- Describe the property, and what title defects will and will not be covered under the insurance policy
- List the current status of the title in the public record (tax, Liens, or other encumbrances)
- first document which outlines the events and coverages of the insurance policy that is being applied for
- Contains a history of title similar to an abstract of title based off the companies records
- does not take place of a title search or abstract, used to rule out other defects in title
134
Title insurance policy
- Insurance policy owner against financial loss if the title to the real estate has Deepak
- Protects against title defects, existing at the time of title transfer only
- Issued only if Teitel is acceptable and certificate of title opinion is provided by an attorney
Last document is title insurance policy, ensures, the policy owner against financial loss of title to the real estate is discovered to have defects. Policy **only protects** the insured against title defects, **existing at the time** _the title of transferred_. **Only issued if an attorney verifies** that the abstract the title is acceptable and provides a written certificate of title opinion .
135
Level of title insurance coverage
Standard
Defects that may exist, but have not been discovered or disclose, such as:
- Forgery or impersonation
- Errors or omissions and legal descriptions
- Improperly recorded deed
- Prior mortgage or Lim
136
Level of title insurance coverage
Extended
Defects that are part of standard coverage, as well as additional defects, such as:
- Incorrect survey, and boundary encroachments
- Recorded liens
- Pre-existing zoning violations
137
Describes the property and identifies any outstanding and conferences or, includes what will, and what will not be covered by the insurance policy
Preliminary report
138
Fires in a real estate, transaction must be given and acknowledge (sign) a separate notice if no title insurance is provided for the transaction
True or false
True
139
Title insurance companies make except referral fees and issue. Preliminary report for free.
True or false
False
Excepting referral fees are giving away, free, preliminary report, Oregon state and federal law
are ESPA, and California rebate laws prevent insurers from receiving or giving this kind of indirect payment for title services
140
Title insurance companies often serve as escrow agents
True or false
True
141
Lenders policy
Required if property is being financed
Protect lenders interest in the property for the same amount of the loan
142
Owners policy
The value of the policy decreases as the loan is paid down
Protects the owner and is optional
143
Schedule of exceptions
Insurance company will list a schedule of exceptions, typical Events, not covered, include:
- Liens and encumbrances not shown in public records
- claim of a person living on the property if there is no public record of tenancy
- A mechanics lien filed by a contractor who worked on the property and was not paid
- Taxes and special assessments if liens or not placed on public record
- Disclosed an undisclosed, easements and rights of way
144
Owners extended coverage
Additional insurance buyers can purchase to cover items included in the schedule of exceptions.
Encourage your clients to discuss options with her insurance, representative or an attorney to be sure they’ve covered to the full extent
145
The schedule of exceptions likely to be covered
- claims made known on the public
-Claims made by a person granted ownership on and on recorded deed
146
The schedule of exceptions that would not be covered
- claim is made by a person living on the property through a lease
- Mechanics liens that are filed after the title insurance policies effective date
-Disclosed and undisclosed easements and right of way
-Taxes and special assessments that haven’t been placed on public record
147
A title that is free and clear from reasonable doubt as to property ownership or defects
Marketable title
148
The title history establishes path and proof of ownership
Chain of title
149
A search a public records to provide an abstract of title
Title search
150
Obtained from a title insurance company to provide evidence of title and summary of title history
Abstract of title
151
A statement of opinion regarding the validity of a title abstract
Lawyer’s opinion of Title
152
Title companies collection, a title abstracts records, organized by lot or parcel number
Lot book
153
Title companies collection of title abstracts records organized by name
General indexes
154
The collected records lot books and general indexes of a title company used to issue a certificate of title
Title plant
155
A title search performed using a title companies title plant
Certificate of title
156
A title search that also guarantees the validity of a title as far as public records allow by the issuing title company. First form of title insurance
Guarantee a title
157
Ensures the policy owner against financial loss, if the title to the real estate has defects
Title insurance policy
158
Document given to a buyer to inform them of the condition of the titles, and what will be, and will not be covered by the title insurance policy
Preliminary report
159
Alternative to obtaining a sellers affidavit of title. Protects the buyer from title defects that are not seen on the public record at the time of the title search.
Extended coverage policy
160
Common types of title issues
- Errors in public records
- Unknown liens
- missing errors ( heir comes for house)
- forgeries (false documents)
- Survey or boundary issues (property lines)
161
Title issues
- they can make financing difficult
- They put ownership in question
- They can make it difficult to resolve the property later
162
To medicate title issues, initiate an action to quiet title
Way to mitigate
Not a way to mitigate
Way to mitigate
163
Purchase title insurance to medicate the effects of title issues
Way to mitigate
Not a way to mitigate
Way to mitigate
164
I asked the buyer, you want to protect yourself before the sale
Purchase title insurance
165
The cloud has appeared on the title, and, as the owner, you want to remove it
Initiate a quiet title suit
166
A cloud has appeared on the title to the property you own, and want to sell. You need to locate a person who may have some claim on the title and obtain a document from that person to prove that a debt, for instance, has been paid or corrected.
Initiate a quiet title suit
167
As a buyer, do you want to be reimbursed after the sale is a title issue does arise
Purchase title insurance
168
You should advise client to terminate the purchase if the property title search reveals a cloud on the title
True or false
False
Most properties have an existing mortgage and may have other title issues identified by the title company. You should advise your clients to work with the title ensure to make sure the title is cleared before or at closing.
169
You should advise your clients that foreclosed properties may have hidden title issues
True or false
True
170
You’re working with a client, Danny, who’s found his dream home in the neighborhood where he grew up. Unfortunately, the title search find some issues, and the title company refuses to issue a policy. Danny still wants to go forward with the purchase, and since he’s paying cash, he doesn’t have to worry about obstacles from a lender. In California, what is one thing that has to happen in the situation?
- Danny must receive written notice that no title insurance will be provided
- The escrow agent must record the refusal to provide title insurance with the county clerk and recorder.
- The seller must use a warranty deed to transfer ownership rather than a grant deed
- You must refused to continue representing Danny in order to protect your license
- Danny must receive written notice that no title insurance will be provided
California law requires the buyer to receive notice if title insurance won’t be provided. This notice has specific language that must be used, and the notice must be acknowledged by the buyer.
171
Which of the following protects the owner against financial loss if the real estate title has defects
- Abstract of title
- Chain of title
- Deed
- Title insurance
Title insurance
172
Which document is used to give a buyer an overview of the title history and information about what is or isn’t covered in an insurance policy?
- Abstract of title
- Guarantee of title
- Preliminary report
- Title insurance
Preliminary report
173
Paula is bidding on a property that’s being sold at a foreclosure auction. She’s excited about the great deal she’s getting on the property after she finds out she submitted the winning bid. What could cause Paula’s great deal to turn into a nightmare?
- The lender has the option to refuse her bed and revoke the deep transferring ownership to Paula
- The previous owner may redeem the property by ping Paula at least 50% of the properties market value
- The title insurance company may charge her additional fees after closing to continue the title policy
- The title to the property may have hidden issues that cost her a lot of money to clear
the title to the property may have hidden issues that could cost her a lot of money to clear
