Questions - Chapter 4

Question 1

All of the following are methods of title assurance EXCEPT:

A. color of title.
B. title insurance.
C. covenants of title in the deed.
D. title examination by an attorney.

Answer 1

4-1 A

Question 2

Voluntary alienation during life occurs only in which of the following ways?

A. will
B. foreclosure sale
C. deed delivery
D. devise

Answer 2

4-2 C

Question 3

Essential elements of a valid deed include all of the following EXCEPT:

A. acknowledgment.
B. writing.
C. competent grantor.
D. execution by grantor.

Answer 3

4-3 A

Question 4

The purpose of a deed’s being acknowledged is to:

A. make the deed valid.
B. make the deed eligible for delivery.
C. make the deed eligible for recording.
D. identify the grantee with certainty.

Answer 4

4-4 C

Question 5

Which of the following is the type of notice provided by recording?

A. actual
B. reasonable
C. protective
D. constructive

Answer 5

4-5 D

Question 6

Of the following types of deed, which provides the grantee with the greatest assurance of title?

A. special warranty
B. deed of confirmation
C. grant deed
D. general warranty

Answer 6

4-6 D

Question 7

Which of the following covenants assures the grantee that the grantor has the legal capacity to transfer title?

A. covenant of quiet enjoyment.
B. covenant of right to convey.
C. covenant of seisin.
D. covenant of warranty.

Answer 7

4-7 B

Question 8

Which of the following types of deeds is typically used where one is releasing any interest he/she may have in a parcel of real

A. quitclaim deed
B. special warranty deeds
C. grant deed
D. general warranty deeds

Answer 8

4-8 A

Question 9

A general warranty deed and a quitclaim deed are equally suitable for which of the following?

A. judicial deed.
B. deed of confirmation.
C. official deed.
D. deed of gift.

Answer 9

4-9 D

Question 10

A grantor left a deed for the grantee to find after the grantor’s death. The result was to:

A. convey the title during the grantor’s life.
B. convey the title after the grantor’s death.
C. have the title automatically escheat to the state.
D. none of the above.

Answer 10

4-10 D

Question 11

The type of deed used to remove a mortgage lien when the debt is satisfied is a:

A. deed of surrender.
B. grant deed.
C. deed of release.
D. special warranty deed.

Answer 11

4-11 C

Question 12

If the covenants in a general warranty deed are broken, the grantee’s remedy is which of the following?

A. Sue the grantor for damages in the amount of the loss up to the amount of the purchase price only.
B. Require the grantor to execute a deed of confirmation only.
C. Both sue the grantor for damages in the amount of the loss up to the amount of the purchase price and require the grantor to execute a deed of confirmation.
D. None of the above.

Answer 12

4-12 A

Question 13

The covenants in a general warranty deed will protect the grantee:

A. against the lawful claims of “all persons whomsoever:’
B. only against the lawful claims arising from the grantor’s period of ownership.
C. only if the grantee acquires a valid title insurance policy.
D. never; the general warranty deed provides no protection from the grantor to the grantee.

Answer 13

4-13 A

Question 14

A claim of title by adverse possession may be defeated by the property owner by which of the following?

A. permission
B. confirmation
C. will
D. condemnation

Answer 14

4-14 A

Question 15

The type of deed that guarantees the title only against defects that were created during the grantor’s ownership is which of the following?

A. general warranty
B. special warranty
C. surrender
D. release

Answer 15

4-15 B

Question 16

Which of the following statements regarding a title examination is correct?

A. The purpose of the title examination is to reassure the purchaser the seller had good and marketable title.
B. To determine if there are any items, recorded or not, that might negatively impact the seller’s title.
C. The purpose is to determine the quality of title.
D. The title examination only includes items related to title and does not typically include liens or property tax matters.

Answer 16

4-16 C

Question 17

The successive conveyances of a title are called:

A. releases.
B. remises.
C. links in the chain of title.
D. abstracts of title.

Answer 17

4-17 C

Question 18

A title insurance policy can be written to protect all of the following EXCEPT:

A. owner.
B. seller.
C. lessee.
D. mortgagee.

Answer 18

4-18 B

Question 19

A title insurance policy protects the insured against loss caused by:

A. defects in the title existing at the time the insured acquired title.
B. defects in the title created during the insured’s ownership.
C. defects in the title created after the insured’s ownership.
D. all of the above.

Answer 19

4-19 A

Question 20

With reference to the metes and bounds property description, which of the following is correct?

A. It is a description by distances and directions.
B. It is the primary method of description used in the original 13 colonies.
C. It must have a point of beginning.
D. All of the above.

Answer 20

4-20 D

Question 21

Which of the following legal descriptions would not be considered adequate for conveyance in a deed?

A. reference to metes and bounds
B. reference to a previously recorded deed
C. informal reference
D. reference to plat book and page

Answer 21

4-21 C

Question 22

Of the following types of deed, which provides the grantor with the greatest liability?

A. special warranty
B. deed of confirmation
C. grant deed
D. general warranty deed

Answer 22

4-22 D

Question 23

In a metes and bounds description, the description must close; that is, it must do which of the following?

A. end at the northeast corner of property
B. end at the point of beginning
C. end at a known government marker
D. none of the above

Answer 23

4-23 B

Question 24

Lucy Landlord owns a house that she leases to Tim Tenant. Which of the following estates in real property exists during the time of Tim Tenant’s lease?

A. leasehold estate
B. freehold estate
C. neither a leasehold nor a freehold
D. both a leasehold and a freehold

Answer 24

4-24 D

Question 25

Which of the following is an adequate property description?

A. 123 Smith Road, North Carolina
B. the old Martin place
C. Book 1968, page 924, Halifax County, North Carolina
D. none of the above

Answer 25

4-25 C

Question 26

A ________ property description has a point of beginning.

A. government rectangular system
B. legal
C. points and calls
D. metes and bounds

Answer 26

4-26 D

Question 27

If a person dies intestate and has no heirs, his property will ________ to the state.

A. devise
B. escheat
C. demise
D. grant

Answer 27

4-27 B

Question 28

A home is sold for $103,250. What is the amount of excise tax to be paid by the seller?

A. $206
B. $207
C. $103
D. $104

Answer 28

4-28 B

Question 29

Two adjoining lots contain the same front footage. Lot A is 900 feet deep and Lot B is 780 feet deep. If Lot A contains 3.45 acres, how many acres are in Lot B? (Round width to whole number.)

A. 2.99 acres
B. 3.98 acres
C. 5.56 acres
D. 16.11 acres

Answer 29

4-29 A

Lot A
3.45 X 43,560 = 150,282 square feet
150,282 / 900 = 167 front feet

Lot B
167 X 780 = 130,260 square feet
130,260 / 43,560 = 2.99 acres

Question 30

A tract of land measuring 165 wide 350 deep recently sold for $138,600. What is its price per front foot? (Round to the nearest whole dollar.)

A. $0.41
B. $269
C. $396
D. $840

Answer 30

4-30 D

Question 31

Carla recently purchased a tract containing 6.48 acres for $79,035. What would be the selling price of a 50 x 225 foot section of this land if she sells it for the same cost per square foot that she had originally paid for it (Round answer to the whole dollar.)

A. $3,150
B. $6,300
C. $11,250
D. $40,178

Answer 31

4-31 A

6.48 X 43,560 = 282,268.8 total square feet
$79,035 / 282,268.8 = $0.28 per square foot
$0.28 X 50 X 225 = $3,150 price for lot

Question 32

A tract of land measuring 750’ x 825’ is divided into two tracts by a stream that runs diagonally through the property. How many acres are in each portion of the property?

A. 14.20 acres
B. 10.65 acres
C. 7.10 acres
D. 3.55 acres

Answer 32

4-32 C

750 X 825 = 618,750 / 43,560 = 14.2 / 2 = 7.1

Question 33

A house was recently sold for $329,560. How much is due for the revenue stamps in this transaction?

A. $660
B. $330
C. $659
D. $329

Answer 33

4-33 A

$329,560 / 500 = 659.12

If the answer is not a whole number always round up to the next dollar, $660.
- If the answer is a whole number don’t change it

Question 34

A buyer recently purchased a lot containing .3817 acres. How many square feet does this lot contain?

A.24,275
B. 21,875
C. 17,825
D. 16,627

Answer 34

4-34 D

Question 35

Title to real estate passes when a valid deed is:

A. signed and recorded
B. signed, delivered and accepted
C. filed and microfilmed
D. executed and mailed

Answer 35

T4-1 B

Transfer of real estate occurs when the deed is signed by the grantor, delivered to the grantee and accepted. It is not necessary for a deed to be recorded in order to be valid. In NC the Conner Act requires deeds to be recorded only to give constructive notice and protect the owner from claims by third parties, not to make the transfer of the real estate valid between the grantor and the grantee.

Question 36

Title to real estate inherited from a person who died testate is referred to as a:

A. legacy
B. bequest
C. devise
D. descent

Answer 36

T4-2 C

A person who dies with a will dies testate. The passing of the real property through a will is called a devise.

Question 37

Which of the following is an essential element of a valid North Carolina deed?

A. a seal
B. recordation
C. the signature of the grantee
D. words of conveyance

Answer 37

T4-3 D

Deeds do not need to be sealed, notarized or recorded in order to be valid. They only need to be notarized in order to be recorded and they are only recorded to protect against outside third party claims. Only the grantor is required to sign a deed, not the grantee.

Question 38

When the grantor does NOT wish to convey certain property rights:

A. exceptions must be noted in a separate document
B. the deed must convey the property with all rights intact
C. exceptions may be noted in the deed of conveyance
D. the grantor must convey the entire premises and have the grantee reconvey the rights to be retained by the grantor

Answer 38

T4-4 C

An owner may always reserve or except certain items from the transfer. They note these reservations or exceptions in the deed. A good example would be an owner transferring a parcel of real estate and excepting or reserving the mineral rights as noted in the deed of conveyance.

Question 39

A trespasser built a log cabin in a remote area of a national park and occupied the structure for more than 25 years. That person will never be able to claim the property under adverse possession statutes because.

A. the possession was not notorious
B. the possession was not open
C. the property was not privately owned
D. the property was not properly fenced

Answer 39

T4-5 C

Adverse possession is the taking of private property from a private owner. A person cannot claim adverse possession of government owned land such as a national park. In order to claim adverse possession the use must be open, continuous, exclusive, adverse and notorious. In NC the period of exclusive use in order to claim adverse possession is 20 years.

Question 40

The seller conveyed a quitclaim deed to the buyer. Upon receipt of the deed, the buyer may be certain that:

A. the seller owned the property
B. there are no encumbrances against the property
C. the buyer now owns the property subject to certain claims of the seller
D. any and all of the seller’s interests in the property belong to the buyer

Answer 40

T4-6 D

A quit claim deed contains no warranties of ownership or encumbrances. A quit claim deed only terminates the rights or interests of a seller if the seller had those rights or interests in the property.

Question 41

Which of the following statements about North Carolina deeds is correct?

A. A general warranty deed is the best way for the buyer to receive title.
B. A special warranty deed gives the seller the greatest degree of liability.
C. A bargain and sale deed is very much like the special warranty deed.
D. A gift deed must be recorded within 30 days to remain valid.

Answer 41

T4-7 A

The highest and best deed is a general warranty deed and it is typically used in residential sales transactions. It makes the most promises by the grantor, imposes upon the grantor the most liability and offers the grantee the greatest protection. The NC Offer to Purchase and Contract requires a seller to provide the buyer with a General Warranty Deed.

Question 42

Which of the following is TRUE regarding a special warranty deed?

A. A grantor makes additional warranties beyond those given in a general warranty deed.
B. The grantor retains an ownership interest in the property.
C. The grantor is warranting that no undisclosed encumbrances exist against the property.
D. The grantor’s warranties are limited to the time the grantor owned the property.

Answer 42

T4-8 D

A special warranty deed is limited. It only protects the grantee as to actions which occurred during the grantor’s term of ownership.

Question 43

Regarding title recordation, which of the following statement(s) is/are true? l. Physically taking possession of the property is constructive notice. ll. Public notice of recording documents is actual notice.

A. l only
B. ll only
C. Both l and ll
D. Neither l nor ll

Answer 43

T4-9 D

Actual notice are those things that we see, witness or observe. Therefore physically taking possession would be actual notice. Recordation, the act of placing documents into a public database provides constructive notice.

Question 44

Which of the following would be considered an essential element of a valid deed in North Carolina? I. Acknowledgement II. Witnessed

A. I only
B. II only
C. Both I and II
D. Neither I nor II

Answer 44

T4-10 D

Deeds neither have to be acknowledged (notarized) or witnessed to be valid. They will need to be acknowledged in order to be recorded. However, recordation is not required for a deed to be valid. Recordation is required under the Conner Act to provide constructive notice. While a deed may need to be notarized to be recorded. It does not have to be notarized to be valid.

Question 45

All of the following may be discovered in a title search, EXCEPT:

A. the legal description of the property
B. liens and judgments
C. easements
D. encroachments

Answer 45

T4-11 D

Encroachments which are physical items such as a building, tree or fence would not typically appear in the public records. These items would generally only be discovered by the parties obtaining a survey.

Question 46

Which of the following is TRUE?

A. The grantor under a special warranty deed warrants that the grantee’s title will be defended and protected against any claims whatsoever.
B. The grantor under a general warranty deed promises that the grantee’s title will be defended and protected only against claims resulting from the grantor’s ownership.
C. The grantor under a quitclaim deed only conveys any interest the grantor may have in the property.
D. A minor will convey absolute ownership interest in a property as long as the signature is obtained in the presence of a parent.

Answer 46

T4-12 C

A quitclaim deed states that the grantor is surrendering a right or interest in the property “if they have any.”

Question 47

The recording of a deed:

A. is required in order to fully transfer the title of the real estate
B. makes the deed enforceable
C. ensures the grantee’s interest in a parcel of real estate
D. warrants the grantee’s title to real property

Answer 47

T4-13 B

There is a difference between a deed being valid and enforceable. Recordation is not required to make a deed valid, it is required to make the deed enforceable against third party interests. The Conner Act requires recordation in order to provide constructive notice.

Question 48

The recordation of a warranty deed:

A. guarantees ownership
B. protects the interests of the grantee
C. prevents claims of parties in possession
D. provides defense against adverse possession

Answer 48

T4-14 B

Recordation protects the interests of a grantee against third party claims.

Question 49

Don, a real estate broker, has agreed to prepare a deed for the seller in a transaction in which he is the listing agent. If he does not charge the seller a separate fee for this service: .

A. He has done nothing illegal since he did not charge a separate fee for his service.
B. He may have his license suspended or revoked by the North Carolina Real Estate Commission.
C. He has not violated any rules or laws as long as he obtains consent from both parties prior to engaging in this act.
D. There is no violation as long as he has a broker’s license.

Answer 49

T4-15 B

Real estate licensees do not prepare deeds. The drafting of deeds and other legal documents is considered the practice of law and should always be conducted by licensed attorneys.

Question 50

When the seller of the property gives a deed to a buyer “by, through, or during” the current ownership period of time, what type of deed is given?

A. General warranty deed
B. Special warranty deed
C. Quitclaim deed
D. Trustees deed

Answer 50

T4-16 B

This is a special warranty deed limited to the time or term of the grantor’s ownership.

Question 51

Under the North Carolina Conner Act, all the following documents must be recorded to be enforceable against third parties, EXCEPT:

A. an easement
B. a deed of trust
C. a purchase contract
D. a set of restrictive covenants

Answer 51

T4-17 C

All rights or interests in real property must be recorded in NC in order to be enforceable. A purchase contract is not typically recorded because the buyer does not yet have a legal right or title to the real estate.

Question 52

Determine the excise tax to be paid on a house that sells for $268,210 if the buyer makes a $25,000 down payment and the seller takes back a second mortgage for $50,000?

A. $536.42
B. $537
C. $533
D. $538

Answer 52

T4-18 B