Key Terms Flashcards
The act of placing documents in the public record
Recording
The act of entering documents affecting or conveying interests in real estate in the record’s office established in each county
Recording
A deed or mortgage ordinarily is not effective against subsequent purchasers or mortgagees until it is ___.
Recorded
Anyone who has an interest in a parcel of real estate can take certain steps, called ___, to ensure that other’s know about the individual’s interest.
Giving notice
What are the 2 basic types of notice?
1) Constructive notice
2) Actual notice
___ is the legal presumption that information may be obtained by an individual through due diligence.
Constructive notice
Properly recording documents in the public record serves as ___ to the world of an individual’s rights or interest, as does the physical possession of a property.
Constructive notice
Who is responsible for discovering the interest through constructive notice?
Prospective purchaser or lender
___ is also called direct knowledge
Actual notice
___ means not only that information is available, but also that someone has given the information and actually knows it.
Actual notice
An individual who has searched the public records and inspected the property has ___ notice.
Actual notice
If it can be proved that an individual has had ___ notice of information, that person cannot use a lack of constructive notice to justify a claim.
Actual
If it can be proved that an individual has had actual notice of information, that person cannot use a.lack of ___ to justify a claim
Constructive notice
An unrecorded deed is an example of a lack of ___.
constructive notice
___ refers to the order of rights in time.
Priority
Questions about priority of rights in real estate should be referred to a(n) ___.
Attorney
The record of a property’s ownership
Chain of title
The ___ begins with the earliest owner, and each owner is linked to the next so that a chain is formed.
Chain of title
An unbroken ___ can be traced through linking conveyances from the present owner back to the earliest recorded owner.
Chain of title
Chain of title does not include ___ and ___ or any other document that is not directly related to ___.
liens
encumbrances
ownership
If ownership cannot be traced through an unbroken chain, a(n) ___ or ___ in the chain of title is said to exist.
Gap or cloud
A court action intended to establish or settle the title to a particular property, especially when there is a cloud on the title
Suit to quiet title
A(n) ___ might be required when a grantor acquired title under one name and conveyed it under another name.
Suit to quiet title
A(n) ___ might be required when there is a forged deed in the chain of title.
Suit to quiet title
In a suit to quiet title, often times the simple procedure of obtaining any relevant ___ deeds is used to clear title and establish ownership
Quitclaim
An examination of all the public records to determine whether any defects exist in the chain of title
Title search
Examining the records of the conveyances of ownership, beginning with the present owner and then traced back to its origin.
Title search
Title searches begin with the ___ and trace ___ to its ___
Begin with the present owner, trace back to its origin
A report of what the title search found in the public record
Abstract of title
The person who prepares an abstract of ttitle
Abstractor
Who prepares a report of what the title search found in the public record?
Abstractor
The ___ searches all the public records and then summarizes the various events and proceedings that affected the title throughout its history.
Abstractor
The ___ begins with the original grant (root) and then provides a chronological list of recorded instruments.
Abstract of title
The abstract of title begins with the ___ and then provides a(n) ___ list of ___.
Begins with the original grant (root)
Provides a chronological list of recorded instruments
A(n) ___ includes all recorded liens and encumbrances along with their current statuses.
Abstract of title
An abstract of title includes all ___ and ___ along with their current statuses
Liens and encumbrances
A list of all public records examined is provided as evidence of the ___.
Scope of search
Good or clear title, reasonably free from the risk of litigation over possible defects
Marketable title
To be ___, a title must disclose no serious defects and not depend on doubtful questions of law or fact to prove its validity.
marketable
To be ___, a title must not expose a purchaser ot the hazard of litigation or threaten the quiet enjoyment of the property
marketable
To be ___, a title must convince a reasonably well-informed and prudent purchaser, acting on business principles and with knowledge of the facts and their legal significance, that he could sell or mortgage the property at a later time
marketable
___ means that the chain of ownership is free and clear of defects and should any problem arrise, the title insurer will cover the issue as per the insurance policy
Marketable
___ title is often referred to by banks in a foreclosure sale
Insurable
___ title means that the title insurance company knows that there are defects on the title, but believes that the risks of those defects becoming problematic is low.
Insurable
A statement of opinion regarding title status and the date the certificate is issued
Certificate of title
A(n) ___ certifies the condition of the title’s history based on an actual examination of the public records (title search)
Certificate of title
An opinion of title status based on a review of the abstract by an attorney
Attorney’s opinion of title
Many buyers purchase ___ to defend the title from any defects that cannot be discovered in public records
Title insurance
A contract under which the policyholder is protected from losses that arise from defects in the title
Title insurance
___ insurance protects from an event that occurred before the policy was issued.
Title
After conducting a title search, title companies will issue a(n) ___ that describes the type of policy that will be issued.
Preliminary report of title
A(n) ___ is also called a commitment to issue a title policy.
Preliminary report of title
What 5 things are included in a preliminary report of title?
1) Name of insured party
2) Legal description of real estate
3) estate or interest covered
4) conditions & stipulations under which policy is ussed
5) Schedule of all exemptions, including encumbrances and defects found in public records, and any known unrecorded defects
The substitution of one creditor for another, with the substituted person succeeding to the legal rights and claims of the orginal claimant
Subrogation
When a title company makes a payment to settle a claim covered by a policy, the company generally acquires the right to any remedy or damages available to the insure. this right is called ___.
Subrogation
___ is used by title insurers to acquire from the injured party rights to sue to recover any claims the insurers have paid
Subrogation
___ title insurance policies normally insure the title as it is known from public records.
Standard coverage
___ title insurance polices insure the title as it is known from public records, as well as against such hidden defects as forged documents, conveyances by incompetent grantors, incorrect marital statements, and improperly delivered deeds.
Standard coverage
___ title insurance polices includes the protections of standard policies plus additional protections.
Extended coverage
___ title insurance polices include additional protections, such as defects that may be discovered by inspection, examination of survey, and unrecorded liens not known by the policyholder
Extended coverage
What kind of title insurance policy provides coverage against defects and liens listed in the policy, defects known to the buyer, and changes in land use brought out by zoning ordinances?
Neither
Uninsurable losses that are named in a title insurance policy, such as zoning ordinances, restrictive covenants, easements, certain water rights, and current taxes and special assessments
Exclusions
Title insurance policy that is issued for the benefit of the new buyer, and their heirs or devisees
Owner’s policy
The owner’s policy is issued for benefit of the ___ and is almost always paid for by the ___ at closing.
Benefit of the buyer
Paid for by the seller
Title insurance policy that is issued for benefit of the mortgage company
Lender’s policy
The lender’s policy is usually paid for by the ___ at closing.
Buyer
As mortgage loan balance is reduced, what happens to the coverage in the lender’s title insurance policy?
Coverage decreases
A lessee’s interest can be insured with a(n) ___ title insurance policy
Leasehold
___ title insurance polices are available to insure the title to property purchased in a court sale
Certificate of sale
