MI Licensing Exam Flashcards
What is TITLE?
evidence of a person’s right or interest in a piece of real estate.
Right to possession, use and enjoyment of land.
May be affected by covenants, conditions, restrictions (CCRs), also known as Building Use Restrictions (BURs) in Michigan.
What are CCRs and where can you find them?
Covenants, Conditions, Restrictions. These are encumbrances NOT liens.
They can be found in Schedule B-II of Title Commitment and Schedule B of a Title Policy.
Define COVENANT
agreement or promise between 2 parties. Typically give protection to the purchaser against insufficient title. Example: covenant of warranty in a warranty deed where the grantor assures the grantee that the grantor holds interest to the property being conveyed and agrees to be subject to legal action if the covenant is breached.
What types of covenants are given in a Warranty Deed?
covenants against encumbrances, covenants for further assurance (to do whatever is necessary to rectify title deficiencies), covenants of right to convey, covenants of quiet enjoyment, covenants of siesin (assurance that the seller is the rightful owner), covenants of warranty (defend against claims of 3rd parties)
Define CONDITIONS
Conditions are provisions contained in a deed or other instrument that may affect a person’s right to use, possess or enjoy land.
Makes particular right in real estate contingent upon the occurrence of a future event.
A condition usually appears with a provision that will divest/take away a person’s right or interest upon occurrence of a certain event. Example: if the property is sold within 5 years, it shall revert back to the grantor.
Define RESTRICTIONS
A restriction is a provision contained in a deed or other instrument which prohibits or limits certain uses, occupation or improvements of land. May be in the form of either a covenant or condition.
May be public or private.
Public: imposed by governmental entities, found in form of zoning ordinances.
Private: created by owners of land and enforceable by those parties. Example: Booze cannot be sold on the premises.
Private restrictions may be referred to as “covenants running with the land”.
What does it mean that “covenants run with the land”?
They will affect the right to use the property until it is terminated by all parties who have a right to enforce it.
What is an APPURTENANT Easement?
an easement which benefits one parcel of land and burdens another.
The benefited parcel is the dominant parcel/estate. The burdened parcel is the servient parcel.
Pass with conveyance of title to the dominant (benefited) estate. Example: an access road to property
What does an Owner’s Title Policy insure?
that there is a right of access to and from the real estate
What does an Owner’s Title Policy exclude?
rights of the government to appropriate land for a highway
that all taxes WILL be paid
that the mortgagor will make payments on time
What is a title agent looking for when examining a survey?
Date of survey, surveyor’s signature, location of garage (and other structures)
How many acres are contained in a standard section?
640 Acres
What is the present system of surveying known as?
The Rectangular System
After a claim has been paid and the insured made whole, the right of subrogation provided in the title policy is vested in WHO?
the insurance company
To release a mortgage of record, who must execute the satisfaction?
The mortgagee
To obtain marketable title to real property, an owner needs an unbroken chain for how many years? AKA How far back does a title search go?
40 years
The ownership of realty implies a whole group of rights, the total of which is a fee simple estate. Some of the lesser interests include all but one of the following:
- Leasehold interest
- Life Estate interest
- Remainder Interest
- Quit Claim
Quit claim
An agent must report a change in name/mailing address to the Dept. of Insurance within how many days
30 days
What type of conveyance is issued to married couples?
Tenants by the entireties
Failure to pay insurer premium collected is considered:
A Breach of Fiduciary Duty
Where do exceptions go on a title policy?
Schedule B
What document allows you to correct a minor clerical error in a legal description?
Affidavit of Scrivener’s Error
Does the personal representative in a supervised probate need court order to sell a property?
Yes
What is an improper inducement?
unfair method of competition or deception
What is a RESPA violation?
any kind of kickback or incentive
What type of legal description has township,
range, and section number?
Rectangular Survey System
How much is county transfer tax?
rate of $0.55 per every $500
Which Circuit Court does the Office of Insurance and Financial Services use?
Circuit Court of Ingham County
How long is the Michigan Marketable Title Act?
40 years
Where on the policy would you find encumbrances?
Schedule B - Exceptions
Is a Deed in Trust recorded?
No.
In MI, who is not protected by the CPL?
the seller
What type of Death Certificate is recorded?
A certified death certificate
What does Chapter 12 Bankruptcy deal with?
Liquidating or rehabilitating the estate
Is a Construction Lien voluntary?
no
Who appoints the title insurer?
Commissioner
What is the state transfer tax?
rate of 3.75 per every $500.00
What is the flat recording fee?
$30.00 (except in Wayne/Macomb county)
What is required before transfer docs can be recorded?
a tax certificate from the county treasurer showing that there are no delinquent real estate taxes
What is the chain of title?
a term to describe the series of transactions affecting title to a particular parcel
What is an abstract?
a written history/summary of all the recorded documents which evidence the series of transactions or chain of title
What does a title search and examination do?
This is a search of all recorded instruments which constitute a chain of title that determine the ownership of title to real estate and identify those other interests or encumbrances which affect such title.
What is a title plant?
A place (physical or electronic) that has tax Maps, Surveys, very old land records, a copy of the Register of Deed’s info
What is a lien?
an encumbrance or claim of another obtained for the purpose of securing payment for a debt OR the performance of an obligation. May also be referred to as a security interest.
may be either voluntary or involuntary.
What is a voluntary lien?
a lien that is granted by one party to another. Example: Mortgage to secure the purchase of a home.
What is an involuntary lien?
a lien that has not been granted by a person holding interest in land, but is obtained through judicial or statutorily prescribed proceedings (AKA a court order). Example: Mechanic’s Lien
How long is a Mechanic’s/Construction Lien valid for?
1 year
What is a judgement lien and how long is it valid?
Issued by courts & ROD, attaches to the real property owned by the debtor. Valid for 5 years from date of recording. May be refiled.
what is an execution levy?
an order to seize property, expires 5 years from date of recording
Who is the mortgagee?
The party being granted a security interest in the property, such as a bank. They receive an assignment of mortgage, which is a transfer or conveyance of interest in real estate to another party. Example: servicing transfers
Is a deed in trust recorded in MI?
NO
who is a mortgagor?
the owner of the property, the person granting the security interest
what is a foreclosure?
the process by which a mortgage is enforced
In MI, what are the 2 types of foreclosure?
Judicial Action (takes 2-3 years)
By Advertisement (faster process than Judicial Action)
What is a Sherriff’s Deed?
Also known as a Deed in Lieu.
It tells us how long the owner has to redeem the property. Typical redemption period is 6 months but can be shortened if proof of abandonment exists
How does a lender come to own title to a property?
Through a Sherriff’s Deed or a Deed in Lieu
What is a vendee?
The party buying the property in a land contract
what is a vendor?
the owner/seller of a property in a land contract.
what is a vender’s lien?
an equitable lien - when a person (a vendee) is purchasing a property through a land contract.
What can a vendee NOT do?
Sign a warranty deed
How far apart are range lines?
6 miles
A system that describes real estate using feet, degrees and a point of beginning is called what?
metes and bounds
a mortgage that has been totally assigned should be satisfied by who?
the assignee of the mortgagee
A process by which parties who cannot agree and submit the dispute to the judgement of an impartial third party is called what?
Arbitration
what is NOT required on a conveyance?
the buyer’s signature
Define testate
a person who dies with a will
define intestate
a person who dies without a will
Who is considered a protected party?
A minor, persons unable to handle their own affairs
Is court supervision required in an independent probate?
no
what is evidenced by letters of authority?
the authority of a personal representative to act on behalf of an estate
What is a title defect?
any right held by another to claim property or make demand upon an owner of property. Common examples: missing conveyance or discharge of mortgage
Define real property
property that is fixed, permanent and unmovable in nature. Example: erected buildings on the surface of the land, everything beneath the surface of the land
Define ENCUMBRANCE
a right or interest in land which decreases the value but does not hinder the ability to sell or transfer the land. Example: mortgages, easements, restrictions. They are located on Schedule B-II of the commitment and Schedule B of the title policy.
Define ENCROACHMENT
a physical improvement which extends onto or is located on the land of another. Example: fence
What is an Easement in Gross?
personal in nature. an easement that benefits a particular person or entity. Allows a person or entity to legally use a property that is owned by someone else. Example: lake access, fishing access, utility access
How long is a notice of lis pendens effective for?
3 years from date of filing
Townships are how many miles?
six square miles
how many sections is each township divided into?
36
Which direction does the MI meridian run?
North/South
Which direction does the baseline run?
east/west
what is a range used for?
to identify the location of a township in relation to the MI Meridian
what is a section?
one square mile. Each section is made up of 640 acres
how long is a rod?
16.5 feet
how long is a link?
0.66 feet
Which act provides detailed regulations for aspects of condominium living, including selling, voting, financing, assessing, and terminating a condo association and its units?
MI Condominium Act
Which type of survey has a point of beginning, courses and distances?
metes and bounds
Are title policies a form of risk assumption or risk elimination?
risk elimination
what is an insurer or underwriter?
the title insurance company
who issues title insurance policies?
the agent of the underwriter
What is in Schedule A?
the name of the proposed insured, amount of insurance to be issued, current owner, legal description, effective date
What is in Schedule B-I?
Requirements to be met before the policy can be issued. Example: paying off a mortgage, recording a satisfaction of mortgage, executing and recording a deed
What is in Schedule B-II?
exceptions, encumbrances, standard exceptions
is there a Schedule C?
no
What is a Homeowner’s Policy of Title Insurance?
expanded OTP, can only be issued to a person (not an entity like LLC), cannot be used for commercial property, contains 32 covered risks
Where are exclusions found?
In the jacket of both the title commitment and the title policy.
What is subrogation?
right of the insurer to “step into the shoe” of the insured to enforce any rights which an insured may have against a third party.
what is arbitration?
the process by which parties who cannot agree among themselves submit the dispute to the judgement of an impartial 3rd party. Example: insured doesn’t agree with the way their claim is being handled, they would use arbitration
what is an endorsement?
an addendum or amendment that changes the terms or coverage contained in the title policy
what is a freehold estate?
direct ownership of the land
what is a nonfreehold estate?
not direct ownership of the land, but a right to use or occupy the land. example: leasehold
define tenancy in common
each tenant has same right to possess the property, as well as transfer/will/mortgage their interest. No survivorship feature. Assumed unless otherwise specified.
define tenants by the entirety
unique to husband/wife. contains a survivorship feature. cannot be severed by just 1 spouse - so if one party wants to transfer their interest, the other party must agree to it.
What is the fine if you are caught engaging in methods of unfair or deceptive acts or practices?
$500 for each violation not to exceed $5000 unless the person knew they’d be in violation, then it is $2500 for each violation not to exceed $25000
what is the fine if you are caught violating the rebates & inducements code?
$100 for each violation up to imprisonment
What is RESPA?
Real Estate Settlement & Procedures Act. Designed to help consumers become better shoppers for settlement services, eliminate kickbacks and referral fees that can unnecessarily increase cost of settlement services. Requires that borrowers receive certain disclosures. NO KICKBACKS FOR REFERRALS!!!! Violation is up to $10k
