Real Estate Test Unit 7

Question 1

abstract of title

Answer 1

the condensed history of the recorded ownership of a particular parcel of real estate, consisting of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property and a certification by the abstractor that the history is complete and accurate

Question 2

action to quiet title

Answer 2

a court action that establishes ownership when ownership cannot be traced through an unbroken chain of title

Question 3

actual notice

Answer 3

express information or fact; that which is known; direct knowledge

Question 4

American Land Title Association (ALTA) policy

Answer 4

a title insurance policy that protects the interest in a collateral property of a mortgage lender who originates a new real estate loan

Question 5

attorney’s opinion of title

Answer 5

an abstract of title that an attorney has examined and has certified to be, in the attorney’s opinion, an accurate statement of the facts concerning the property’s ownership

Question 6

chain of title

Answer 6

the succession of conveyances, from some accepted starting point, whereby the present holder of real property derives title

Question 7

certificate of title

Answer 7

a statement of opinion on the status of the title to a parcel of real property based on an examination of specified public records

Question 8

constructive notice

Answer 8

notice given to the world by recorded documents. all persons are charged with knowledge of such documents and their contents, whether or not they have actually examined them. possession of property is also considered constructive notice that the person in possession has an interest in the property

Question 9

gap

Answer 9

a defect in the chain of title of a particular parcel of real estate; a missing document or conveyance that raises doubt as to the present ownership of the land

Question 10

marketable title

Answer 10

good or clear title, reasonably free from the risk of litigation over possible defects

Question 11

priority

Answer 11

the order of position or time. the priority of liens is generally determined by the chronological order in which the lien documents are recorded; tax liens, however, have priority even over previously recorded liens

Question 12

quiet title

Answer 12

a court action to remove a cloud on the title

Question 13

recording

Answer 13

the act of entering or recording documents affecting or conveying interests in real estate in the recorder’s office established in each county. until it is recorded, a deed or a mortgage ordinarily is not effective against subsequent purchasers or mortgages

Question 14

suit to quiet title

Answer 14

a court action intended to establish or settle the title to a particular property, especially when there is a cloud on the title

Question 15

subrogation

Answer 15

the right acquired by the title company to any remedy or damages available to the insured when a title company makes a payment to settle a claim covered by a policy

Question 16

title insurance

Answer 16

a policy insuring a property owner or mortgagee against loss by reason of defects in the title to a parcel of real estate, other than encumbrances, defects, and matters specifically excluded by the policy

Question 17

title search

Answer 17

the examination of public records relating to real estate to determine the current state of the ownership

Question 18

Torrens system

Answer 18

a method of evidencing title by registration with the proper public authority, generally called the registrar