Title Flashcards
What is the percentage weight of Insurance Regulations in the UTAH TITLE EXAM?
10%
What are the qualifications required for licensing under 31A-23a-107?
- Intent in good faith to engage in the business
- Competent and trustworthy
- Over 18 years old
What is the purpose of licensing according to 31A-23a-101?
- Promoting professional competence
- Providing maximum freedom of marketing methods
- Preserving and encouraging competition
- Regulating insurance marketing practices
- Governing qualifications and procedures for licensing
- Promoting uniform licensing requirements
What must a person do to be licensed under general requirements (31A-23a-105 – 108)?
- File an application
- Satisfy character requirements
- Satisfy continuing education requirements
- Satisfy examination requirements
- Satisfy training period requirements
- Maintain errors and omission coverage
- Submit to a criminal background check
What are the additional requirements for Title Insurance Producers under 31A-23a-204?
- Agency must be owned or managed by someone licensed for 3 to 5 years
- Maintain financial protection of $50,000
What are the continuing education requirements for individuals with less than 20 years of experience?
12 credit hours with 3 hours of ethics every 2-year licensing period
True or False: A licensee must notify the commissioner within 30 days of a change of address.
True
What can happen to a licensee after a hearing for persistent violations of insurance law?
- Revocation
- Suspension
- Probation
- Limitation of license
What is the maximum fine for individual producers for violations of insurance statutes?
$2,500 for each violation
Fill in the blank: The commissioner may impose a fine of up to _______ for each day of non-compliance with an order.
$10,000
What is the role of the Title and Escrow Commission according to 31A-2-404?
- Make rules for title insurance matters
- Concur in issuance and renewal of licenses
- Establish fees for title licensees
- Advise on critical industry matters
Who appoints the members of the Title and Escrow Commission?
The governor with the consent of the Senate
What is required for title insurers regarding solvency according to 31A-4-105?
Maintain a deposit equivalent to the minimum required capital or surplus
What is the effective date for changes to escrow charges once filed?
30 days after the change is filed
Fill in the blank: A licensee may request reinstatement of a lapsed license no later than _______ after the license lapses.
one year
What is the maximum fine for a class B misdemeanor?
$10,000 for a corporation; $5,000 for an individual
What actions must a licensee report to the commissioner?
- Administrative action taken against them
- Criminal prosecution in any jurisdiction
What is the duration limit for a probation period imposed by the commissioner?
24 months
True or False: Title insurers must file rates and supplementary information with the commissioner.
True
What should a licensee maintain to receive communications from the DOI?
A valid business email address
What must an insurer or agency do when terminating the appointment of an individual or agency?
Electronically terminate the appointment no later than 30 days after the effective date of termination.
What constitutes ‘unfair claim settlement practices’?
Examples include:
* Knowingly misrepresenting material facts
* Altering a policy application without consent
* Failing to settle clear claims
* Delaying claims investigation
* Threatening to deny claims without clear reasons.
Within how many days must insurers complete their investigations after receiving a properly executed proof of loss?
30 days.
What is the definition of ‘rebate’ in the context of insurance?
A licensee paying, allowing, giving, or offering to pay, allow, or give, directly or indirectly, a refund of premium or portion of premium.
True or False: A title insurer may pay any rebate or reduction of any rate as an inducement to obtain title insurance business.
False.
What must a licensee maintain with the commissioner?
- Address and telephone numbers of the principal place of business
- Valid business email address
- Individual’s residence address (individual licensees only).
What does ‘controlled business’ refer to in insurance regulations?
Referring title business that financially benefits the person who refers the business is prohibited unless records of transactions are maintained.
What actions are prohibited under false advertising regulations?
Making communications that contain false or misleading information, including promising nonobligatory payments of future dividends.
Fill in the blank: Insurers must pay a claim within ______ days after the insurer is furnished written proof of the fact of a covered loss.
30.
What is required of title insurers regarding documentation necessary to support policy insuring provisions?
They may not intentionally delay, neglect, or refuse to record or deliver documentation.
What is the penalty for failing to provide a written explanation of the basis for denial of a claim?
It constitutes an unfair claim settlement practice.
What must be included in the records of each transaction maintained by a licensee?
- Insurance contract details
- Names of others paid
- Records of complaints.
What are the consequences for insurers that fail to pay claims within the required time frame?
They may be penalized for delaying payment of claims.
What constitutes a fraudulent insurance act?
- Misrepresenting facts on an application
- Withholding information with intent to deceive.
True or False: A title producer may provide gifts to clients in connection with social events like birthdays.
False.
What is the maximum expenditure allowed per guest for a title producer’s open house?
$15.
What is the required retention period for records maintained by a licensee?
Current calendar year plus 3 years.
What is prohibited regarding the payment of commissions in connection with controlled business?
Sharing commissions if it results in unlawful rebates or compensation.
What must a title producer do before issuing a title insurance commitment?
Have sufficient evidence of a bona fide real estate transaction or request from a proposed insured.
Fill in the blank: A title insurer may not use other entities to ______ these rules.
avoid.
What practices are considered unfair inducements in obtaining title insurance business?
Furnishing services not related to title insurance, waiving established fees, and providing gifts of value.
What must a title producer do if it has a financial interest in an insurer?
Maintain records of transactions.
What does the term ‘defamation of insurer’ refer to?
Making false statements that harm the reputation of an insurer.
What is required of a title producer regarding advertising?
Advertisements must be purely self-promotional and not misleading.
What is the maximum expenditure per guest for a title producer’s open house?
$15 per guest
What type of items can a title producer distribute as self-promotional items?
Novelty items which are non-edible and may not be personalized or bear the name of the donee
Under what conditions can a title producer conduct continuing education programs?
- Must address title insurance or related topics
- At least one hour in duration
- $15 or less per person for each hour
- No more than one program per client office per quarter
What is the maximum value for flowers or gifts a title producer can provide for personal events?
$75
What information may a title producer include in a property profile?
- Last vesting deed of public record
- Plat map reproduction and/or locator map
- Tax and property characteristics information
- Covenants, Conditions and Restrictions
True or False: A title producer can provide information about specific properties only to clients or prospective clients.
False
What are the three types of authority a producer can have?
- Express
- Implied
- Apparent
What is required for a contract to be legally binding?
- Offer
- Acceptance
- Consideration
What is the definition of ‘consideration’ in contract law?
A bargained-for exchange between the parties that is of legal value
What is a ‘Warranty Deed’?
A deed in which the Grantor gives warranty of title and encumbrances through the entire title chain
Fill in the blank: Title to personal property may be conveyed by a _______.
Bill of Sale
What is the difference between real property and personal property?
Real property is land and everything permanently attached to it, while personal property is movable and not recognized as real property.
What is a ‘Quitclaim Deed’?
A deed in which the Grantor transfers title or any interest in title without warranty
What does ‘capacity’ refer to in contract law?
The legal ability to enter into a contract
What are the elements of promissory estoppel?
- Promise
- Reasonable, detrimental reliance
- Enforcement necessary to avoid injustice
What is the Statute of Frauds?
A legal principle that requires certain contracts to be in writing to be enforceable
True or False: An insurance contract is a contract of adhesion.
True
What is ‘utmost good faith’ in insurance contracts?
Honest intentions free from intention to defraud
What is the effect of a mutual mistake in contract law?
The contract may be voidable by the adversely affected party
What is the definition of ‘real property’?
A parcel of land and everything that is permanently attached to the land
What is an example of personal property?
Car, kitchen table, lawn mower, clothing, pets
What is a ‘Deed in Lieu of Foreclosure’?
A deed where the Grantor conveys title to a lender in exchange for the release of personal obligation to the debt
What constitutes a counteroffer in contract negotiations?
A response to an offer that terminates the original offer and becomes a new offer
What does ‘conveyance’ mean in real estate?
The act of transferring title to real property
What is the effect of a unilateral mistake in contract law?
Generally will not prevent formation of a contract unless the nonmistaken party knew of the mistake
What is the definition of ‘fraud’ in contract law?
Material misrepresentation with intention to deceive and reliance by the injured party
What is the Grantor’s personal obligation to the debt?
The Grantor is personally obligated to the debt associated with the property.
What is a Boundary Line Agreement?
Conveyances in which two parties agree to a new boundary line and convey any interest on each side of the boundary line without warranty.
Define involuntary conveyances.
The transfer of real property without the owner’s consent, typically done by a court or a party with a legal right to take title from the owner.
What is a Trustee’s Deed?
Deed issued in the foreclosure of real property by a Deed of Trust secured on the property by the Trustee on the Deed of Trust to the party that acquired the property at a foreclosure auction.
What is a Tax Deed/Auditor’s Deed?
Deed in which the county tax department takes the property five years of delinquent real property taxes and conveys title to the party that acquired the property at a tax sale auction.
What is a Sheriff’s Deed?
Deed in which a court issues a Writ of Execution to instruct the county sheriff’s office to sell property to satisfy the debt of a lien or judgment to convey title to the party that acquired the property at a sheriff’s sale auction.
What is a Quit Title Order?
An order issued by a Utah district court that will strip an owner of a right in a property and may convey that ownership right to another party.
What is a Condemnation Order?
An order issued by a Utah district court for the right of the government to take private property for public use, with payment of compensation to an owner.
What is Adverse Possession?
A legal doctrine supplemented by portions of Utah law in which a person in possession of land owned by someone else may acquire valid title to it, so long certain requirements are met.
What are the elements required to establish adverse possession?
- Actual
- Open
- Notorious
- Exclusive
- Hostile
- Continuous throughout Utah’s 7 year statutory period
What properties are restricted from Adverse Possession Claims?
- Government property
- Water rights (in Utah)
What is the legal doctrine of Boundaries by Acquiescence?
A legal doctrine that a long-standing marker indicating where property owners understand a boundary to be located become the actual boundary, even if a survey places it elsewhere.
What is the legal doctrine of Boundaries by Agreement?
Both parties agree, must mark boundary, actual line uncertain or in dispute, agreement must continue uncontested for 20 years.
What is Accession?
A property owner’s right to all that is added to real property naturally or by labor, including land left by floods, and improvements made by others, such as a concrete driveway.
What is Dedication in real property law?
The conveyance of land for public use or creation of an easement for public use.
What does Escheats refer to?
Reversion of property to the state upon the death of an owner who has neither a will nor any legal heirs.
What is Tenants in Common?
Ownership by two or more parties in which each tenant has a separate ownership right of possession.
What happens to a tenant in common’s ownership upon their death?
Their ownership right is retained by their estate.
What is Joint Tenancy?
Ownership by two or more individuals with shared ownership right of possession.
What happens to the ownership right upon the death of a joint tenant?
The ownership right will transfer by law to the other joint tenant.
What is Community Property?
A law that the assets of an individual in a spousal relationship are the assets of both spouses.
List the types of parties that can hold title to real property.
- Individual
- Corporation
- Limited Liability Company
- General Partnerships
- Limited Partnerships
- Trustee of a Trust
Define Monetary Encumbrance.
All mortgages, deeds of trusts, security instruments or lien in which the debt owed is secured with property.
What is a Voluntary Lien?
A lien established by the debtor granting a property interest in exchange for a monetary loan or debt.
What is a Deed of Trust?
Document in which a real property owner conveys a property interest to a lender, held in trust by an appointed trustee.
What is a Mortgage?
Document in which a real property owner conveys a property interest to a lender, requiring a court order to foreclose.
What is an Involuntary Lien?
A lien established by a court or recorded by a party without a grant or consent by the property owner.
What is a Judgment in terms of liens?
A monetary judgment given by a court in favor of a private creditor and recorded with the county recorder’s office.
What is a Mechanic’s Lien?
A lien recorded with real property by a person or entity that claims an interest in property related to labor or materials for the real property.
Define Legal Description.
A geographical description of real property that identifies its precise location and boundaries.
What are the two Base and Meridians in Utah?
- Salt Lake Base and Meridian
- Uintah Special Base and Meridian
What is a Township in the rectangular survey system?
A six square mile area containing 36 sections.
How many acres are in a Section?
640 acres.
What is a Metes and Bounds description?
A form of legal description that uses angles and distance of property boundaries.
What is required for a property owner to receive a residential tax exemption?
Application from a property owner for a 45% reduction in the county assessed value of the property.
When are property taxes due in Utah?
Property taxes become due and payable on November 1st of the tax year.
What is a rollback tax?
Tax charged by the county if property is removed from Farmland Assessment, calculated by assessing the full tax payment for the prior 5 year period.
What is the purpose of a Title Insurance Policy?
To provide warranties made by the Grantor to the Grantee regarding the ownership and rights to the property.
What happens if the rollback tax is not paid within 30 days of removal from Farmland Assessment?
The county may record a Notice of Rollback Tax Lien on the property.
What is the purpose of a Title Insurance Policy?
To provide warranties made by the Grantor to the Grantee regarding title ownership and rights.
List some warranties made by the Grantor to the Grantee in a Warranty Deed.
- Grantor lawfully owns fee simple title to the property
- Grantor has good right to convey the property
- Grantor guarantees quiet possession of the property
- The property is free from all encumbrances
- Grantor will warrant and defend Title to the premises
What is an Owner’s Policy of Title Insurance?
A policy that handles warranties and provides additional coverages under the terms of the policy.
Define a title insurance underwriter.
The company that insures the title policy and handles any claims against the policy.
What is the role of a title insurance agent?
A title company that issues title insurance policies on behalf of a title insurance underwriter.
What is a Commitment in title insurance?
A form in which the title insurer commits to insure real property subject to exceptions and requirements.
What does a Loan Policy of Title Insurance protect?
It protects the lender from damages resulting from warranties regarding title.
What is covered under the general risks of a Title Insurance Policy?
- Title vested other than stated
- Defects in lien or encumbrance
- Unmarketable Title
- No right of access
- Violations of laws or ordinances
What types of legal entities can hold a real property interest?
- Individual person
- Corporation
- General Partnership
- Limited Partnership
- Limited Liability Company
- Trust or Trustees of a Trust
What is a Fee Simple Estate?
The ownership of all real property interest included on the land.
Fill in the blank: A _______ is a policy that can be issued with either an owner’s policy or lender’s policy form that insures the status of title and validity of a real property lease.
[Leasehold policy]
What is the role of endorsements in a title policy?
To provide additional coverages or exclusions not already contained in the title policy.
What are the requirements for a notary public in Utah?
- Be 18 years of age or older
- Lawfully reside in Utah for 30 days
- Able to read, write, and understand English
- Application with fee
- Bond of $5,000 filed with the lieutenant governor
What is a Mechanic’s Lien?
A lien placed on a property to secure payment for work performed or materials supplied.
What is the significance of a judgment in relation to real property?
A judgment does not create a lien on real property unless it is filed in the Registry of Judgments.
True or False: Judgments in favor of state agencies must be recorded with the county recorder to have an effective lien.
False
What is required to release a lien created by a judgment?
A document must be recorded in the office of the county recorder of each county where the lien is recorded.
What are the fiduciary responsibilities of escrow producers?
To manage trust funds without commingling them with personal funds and to act as a trustee.
What types of funds may be deposited into an escrow account?
- Premiums
- Fees or taxes paid with premiums
- Funds from escrow settlements or closings
- Amounts for bank charges
What must be included in a notary acknowledgment for electronic documents?
The notary’s full name, commission number, and expiration date.
What must the contract between the insurer and licensee allow for EFTs?
The contract must allow EFTs in and out of the licensee’s trust account and require specific authorization for each transfer.
What account must the licensee have for EFTs?
A separate account for EFTs with each insurer.
What are the requirements for an individual or agency producer to do escrow?
- Licensed with title line of authority and escrow subline of authority
- Appointed by a title insurer authorized to do business in the state
- Issues an owner’s policy or lender’s policy as part of the transaction
- Money deposited in a federally insured financial institution and in a separate trust account
- Money deposited is the property of persons entitled under escrow provisions
- The money is segregated escrow by escrow in the records
- Earnings may be paid out in accordance with escrow conditions
- The escrow does not require holding construction or 1031 money
- Physical office in Utah staffed by a person with an escrow subline of authority
Under what conditions can a producer do escrow for personal property?
For escrows involving mobile homes, grazing rights, water rights, or other personal property authorized by the commissioner.
What are the restrictions on money held in escrow?
- Not subject to the producer’s debts
- May only be used to fulfill the terms of the individual escrow
- May not be used until escrow conditions are met
What must a producer do with assets received into escrow other than money?
- Preserve and protect the asset from loss, theft, or damages
- Comply with the duties and responsibilities of a fiduciary or bailee
When can cash be disbursed from the escrow account?
Cash may be disbursed on the same day the cash is deposited.
When can a wire transfer be disbursed from the escrow account?
A wire transfer may be disbursed on the same day the wire transfer is deposited.
What types of financial instruments may be disbursed on the same day they are deposited?
- Cashier’s check
- Certified check
- Official check
- Personal check not to exceed $500 per closing
- A check drawn on the escrow account of another title insurance producer
What are the conditions for disbursing a check not described in the previous flashcard?
- Within the time limits under the Expedited Funds Availability Act
- Upon notification from the financial institution that final settlement has occurred
What must a producer maintain regarding escrow money?
A record of a receipt or disbursement of escrow money.
What types of costs may a borrower pay according to FHA requirements?
- Lender’s origination fee
- Deposit verification fees
- Attorneys’ fees
- Appraisal fees
- Title insurance
- Document preparation
- Survey
- Credit report
- Transfer stamps and recording fees
- Home inspection fees up to $200
- Wire transfer fees (refinance only)
- Courier fees (refinance only)
- Fees to payoff bills (refinance only)
What costs may a veteran borrower NOT pay according to VA requirements?
- Attorneys’ fees
- Brokerage fees/commissions
- Prepayment penalties
- HUD/FAH inspection fees for builders
What does the Real Estate Settlement Procedures Act (RESPA) prohibit?
No person shall give or accept any fee, kickback, or thing of value for real estate settlement services involving a federally related mortgage loan.
What is required before disbursing funds in the recording and disbursement procedures?
Record first, then disburse funds.
What is a 1031 Exchange?
A tax-deferred exchange of investment properties.
What is the first leg of a 1031 Exchange?
Proceeds of the sale of investment property go to an exchange company.
What does constructive notice refer to?
A legal presumption that a party has notice of certain facts by due diligence or inquiry into public records.
Who is responsible for the recording of the executed deed?
The Grantee.
What are the requirements to record under R592-14?
Acknowledgments and presumptions.
