Titles Deeds Ownership restrictions

Question 1

Condense history of title to real property consisting of a summary of the links in the “chain of title” extracted from documents bearing on the title status.

Answer 1

abstract of title

Question 2

Formal declaration before an authorized official, by the person who executed the instrument, that it is a free act.

Answer 2

acknowledgement

Question 3

Information a person has actually learned by reading, seeing, or hearing.

Answer 3

actual notice

Question 4

A method of obtaining title to real property by occupying it in an open and hostile manner contrary to the interests of the owner.

Answer 4

adverse possession

Question 5

The act of transferring ownership, title, or an interest or estate in real property.

Answer 5

alienation

Question 6

Written instrument that serves to transfer the rights or interests of one person to another.

Answer 6

assignment

Question 7

A successive listing of all previous holders of title (owners) back to an acceptable starting point.

Answer 7

chain of title

Question 8

The taking of private real property for a public purpose under the right of eminent domain for a fair price.

Answer 8

condemnation

Question 9

A claim based on the principle of “unjust enrichment”; favors parties who have performed labor or delivered materials or supplies for the repair or building of an improvement to real property.

Answer 9

construction lien

Question 10

The recording of a document or an instrument in the public records designed to give adequate notice to all.

Answer 10

constructive notice

Question 11

A type of conveyance; a written instrument to transfer title to real property from one party to another.

Answer 11

deed

Question 12

A right, privilege, or interest in real property that one individual has in lands belonging to another: a legal right to trespass: right-of-way authorizing access to or over land.

Answer 12

easement

Question 13

An easement that runs with the land and benefits an adjacent parcel of land.

Answer 13

easement appurtenant

Question 14

An easement created by a court of law in cases where justice and necessity dictate it, such as when property is landlocked.

Answer 14

easement by necessity

Question 15

A right acquired by an adverse user to use the land of other, created through a court of law after longtime uninterrupted use.

Answer 15

easement by prescription

Question 16

A type of easement that benefits an individual or business entity and is not related to a specific adjacent parcel, for example, utility easements.

Answer 16

easement in gross

Question 17

The constitutional right given to a unit of government to take private property involuntarily if taken for public use and fair price is paid to the owner.

Answer 17

eminent domain

Question 18

Unauthorized use of another person’s property.

Answer 18

encroachment

Question 19

The beneficial interest in real estate that implies that an individual will receive legal title at a future date.

Answer 19

equitable title

Question 20

Reversion of property to the state when an owner dies without leaving a will or any known heirs.

Answer 20

escheat

Question 21

A provision in a deed containing a covenant or warranty to perform any further acts the grantee (buyer) might require to perfect title to the property.

Answer 21

further assurance

Question 22

A claim that may affect all of the properties of a debtor.

Answer 22

general lien

Question 23

An instrument of conveyance containing the strongest and most comprehensive promises of further assurance possible for a grantor (seller) to convey to a grantee (buyer).

Answer 23

general warranty deed

Question 24

Party who receives a deed or grant; buyer.

Answer 24

grantee

Question 25

The provision in a deed that specifies the names of the parties involved, the words of conveyance, and a description of the property.

Answer 25

granting clause

Question 26

Party who signs and gives a deed; seller.

Answer 26

grantor

Question 27

An agreement for the tenant to pay a fixed (base) rent and the landlord pays all of the expenses associated with the property.

Answer 27

gross lease

Question 28

An agreement for the tenant to lease the land only and erect a building on the land.

Answer 28

ground lease

Question 29

A provision in a deed to real property that stipulates the estate or interest the grantee is to receive and the type of title conveyed.

Answer 29

habendum clause

Question 30

Without a will.

Answer 30

intestate

Question 31

Title insurance issued for the unpaid mortgage amount to protect the lender against title defects.

Answer 31

lender’s policy

Question 32

A claim on property for payment of some obligation or debt.

Answer 32

lien

Question 33

A pending legal action.

Answer 33

lis pendens

Question 34

An agreement for the tenant to pay fixed rent plus property costs such as taxes, insurance, and utilities.

Answer 34

net lease

Question 35

A formal statement by an attorney regarding the status of a title after examination of the chain of title.

Answer 35

opinion of title

Question 36

An agreement for the tenant to pay rent based on the gross sales received by doing business on the leased property.

Answer 36

percentage lease

Question 37

The authority of government to protect the property, life, health, and welfare of its citizens.

Answer 37

police power

Question 38

A provision in a deed guaranteeing that the buyer may enjoy possession of the property in peace and without disturbance by reason of other claims on the title by the seller or anyone else.

Answer 38

quiet enjoyment

Question 39

A type of deed that will effectively convey any present interest, claim, or title to real property that the seller (grantor) may own.

Answer 39

quitclaim deed

Question 40

A covenant in a deed that warrants that the grantor (seller) holds the property by virtue of a fee simple title and has a complete right to dispose of same.

Answer 40

seisin

Question 41

Claims that affect only the property designated in the lien instruments or agreements.

Answer 41

specific liens

Question 42

A lessee leasing a property to a third party for a period of time less than the original lease (also referred to as subletting).

Answer 42

sublease

Question 43

Having left a will.

Answer 43

testate

Question 44

Evidence of ownership of real property, such as a deed.

Answer 44

title

Question 45

A policy of insurance that protects the holder from any loss resulting from defects in the title.

Answer 45

title insurance

Question 46

An examination of all of the public records to determine whether any defects exist in the claim of title.

Answer 46

title search

Question 47

An agreement for the tenant to pay specified rent increases based on a predetermined index (CPI) at set future dates.

Answer 47

variable lease

Question 48

A provision in a deed guaranteeing that the seller will for all time defend the title and possession for the buyer.

Answer 48

warranty forever

Question 49

1. Which type of easement gives an electric company the authority to install and maintain electric power lines?

Answer 49

In gross

Question 50

2. Rent is $1,800 per month plus 3 percent of gross sales. The total rent for last month was $2,400. The gross sales for the same month were

Answer 50

$20,000

1800-2400 = 600

600 / .03 = 20,000

Question 51

3. Courts at various levels have ruled that
   a. constructive notice is superior to actual notice.
   b. actual notice is superior to constructive notice.
   c. neither constructive notice nor actual notice is required.
   d. constructive notice and actual notice have equal legal priority.

Answer 51

D

Question 52

4. A 92-year-old man is being forced from his home because of a governmental taking. The home has been in his family for four generations. What recourse, if any, does he have?

Answer 52

He may request a condemnation proceeding to protest the amount of compensation being offered by the governmental body

Question 53

5. For a deed to be valid, a competent

Answer 53

grantor and two witnesses must sign the instrument.

Question 54

6. The type or form of deed most commonly used to clear clouds on the title of real property is the

Answer 54

quitclaim deed.

Question 55

7. If the sale contract does not specify the type of deed to be delivered, the seller is required to provide a

Answer 55

general warranty deed.

Question 56

8. The process of taking property under the power of eminent domain is called
   a. escheat.
   b. foreclosure.
   c. condemnation.
   d. voluntary alienation.

Answer 56

C

Question 57

9. The type of deed in which the grantor does not warrant the title in any manner EXCEPT agaisnt the grantor’s acts or the acts of the grantor’s representatives is called a

Answer 57

special warranty deed.

Question 58

10. The covenant against encumbrances in a deed is designated to guarantee that the

Answer 58

grantor has not encumbered the property in any manner except as noted on the deed.

Question 59

11. The purpose of recording a deed is to

Answer 59

give constructive notice of ownership.

Question 60

12. In answering questions pertaining to quality of title, real estate licensees are
    a. required to give opinions because of their role as experts.
    b. required to advise prospective buyers to have a lawyer render an opinion or obtain title insurance.
    c. allowed to give their opinions because of their role as experts.
    d. allowed to give their opinions only when specifically asked by the buyer.

Answer 60

B

Question 61

13. The seisin clause in a deed specifies

Answer 61

that the grantor actually owns the property and has the right to sell it.

Question 62

14. The deed that contains the covenant guaranteeing that the grantor will forever be responsible for warranting title and will defend the title and possession is a
    a. general warranty deed.
    b. special warranty deed.
    c. public patent deed.
    d. bargain and sale deed.

Answer 62

A

Question 63

16. An owner placed a condition in the deed that stipulated that a commercial building could NOT be erected on the property until at least the year 2020. This is an example of
    a. police power.
    b. a deed restriction.
    c. subdivision restrictive covenant.
    d. governmental restriction on ownership.

Answer 63

B

Question 64

18. When a lis pendens is filed properly with the county clerk, it becomes a type of
    a. attachment on the subject property.
    b. vendor’s lien.
    c. constructive notice.
    d. easement by prescription.

Answer 64

C

Question 65

19. Which lien is first in priority?
    a. A property tax lien effective on January1, 2011
    b. A special assessment lien certified on December 31, 2010
    c. A first mortgage lien filed on July 15, 2011
    d. A construction lien filed on November 30, 2010

Answer 65

A

Question 66

21. A married couple signed a contract to purchase a home in a residential subdivision. When the couple had the lot surveyed before closing, they discovered that the contractor had built the neighbor’s garage three inches inside the west boundary of their lot . The garage in its present location is an example of
    a. a deed restriction.
    b. an easement by prescription.
    c. an implied easement.
    d. an encroachment.

Answer 66

D

Question 67

22. When a pathway to a property has been used continuously and without interruption for more than 20 years, it creates an
    a. implied easement.
    b. encroachment.
    c. alienation by adverse possession.
    d. easement by prescription.

Answer 67

D

Question 68

23. Soon after a man’s death a deed was discovered in his desk. The deed is for the man’s home and it deeded the property to a charitable organization. The man is survived by his son Andrew, who discovered the deed. The man died intestate. Based on this information, the house belongs to the
    a. state because the man died intestate
    b. charitable organization because the deed conveyed ownership to it.
    c. legal heir because the deed was never delivered and accepted.
    d. legal heir because the deed was not signed by the grantee.

Answer 68

C

Question 69

24. The owner’s title insurance policy is
    a. issued for an amount no greater than the purchase price of the property and is transferable.
    b. issued for an amount no greater than the purchase price of the property and is not transferable.
    c. a separate policy for the amount of the unpaid balance of the mortgage and is transferable.
    d. a sperate policy for the amount of the unpaid balance of the mortgage and is not transferable.

Answer 69

B

Question 70

25. A retail business rents a space in a mall. The lease calls for a base rent of $1500 a month plus 5 percent of the annual gross sales that exceed $360,000. If the annual gross sales are $472,000, what is the total annual rent for the business?
    a. $7,100
    b. $23,600
    c. $36,000
    d. $41,600

Answer 70

B

Question 71

Mortgagor gives, Mortgagee receives. Which is the mortgaror and which is the mortgagee : bank or borrower?

Answer 71

Borrower / buyer is mortgagor

Bank is mortgagee

(Borrower gives the mortgage to the bank saying “I will pay”)

Question 72

True or false: A mortgage is a loan

Answer 72

False.

The mortgage is a promise to pay the loan. A guarantee, that “if I don’t pay, you get the house back.”

Question 73

Which is the lender and which is the lendee: bank or borrower?

Answer 73

Bank is the lender

Borrower / buyer is the lendee

Question 74

Which is the lessor and which is the lessee: landlord or tenant

Answer 74

Landlord is the lessor

Tenant is the lessee

Question 75

Mortgage is sometimes called a

Answer 75

Trust deed

Question 76

What are the 3 parties or entities involved in a trust deed?

Answer 76

Trustee

Trustor

Beneficiary

Question 77

In a trust deed situation who is the trustor?

Answer 77

The buyer / borrower.

The trustor gives. The buyer has legal deed the house; they are “entrusting” (giving) it to a trustee.

Question 78

In a trust deed situation who is the trustee?

Answer 78

The Trustee receives. The trustee is a neutral 3rd party that holds the security (the deed) in trust to guarantee the borrower will pay the bank back.

Question 79

In a trust deed situation, what is the bank called?

Answer 79

The beneficiary.

The bank benefits if the trust gets broken. The bank is protected by the trust deed.

Question 80

Is a mortgage a voluntary or involuntary lien?

Answer 80

Voluntary.

The buyer chooses to borrow money.

Question 81

A right or interest in real property other than ownership or tenancy interest. (Such as a lien) A claim against the property.

Answer 81

Encumbrance

Question 82

True or false: A mortgage is an encumbrance

Answer 82

True

Question 83

True or false. Any lien is an encumbrance, and any encumrance is a lien

Answer 83

False.

Any lien is an emcumbrance, but not all encumbrances are liens

Question 84

“Encumber” means

Answer 84

To restrict or burden

Question 85

A document that uses a property to secure the payment of a debt or the discharge of an obligation

Answer 85

Lien

Question 86

True or false: A voluntary lien does not have to be recorded

Answer 86

True. (But it’s a good idea)

Question 87

A real estate transaction is not complete until

Answer 87

It is recorded. (County Treasurer)

Question 88

Lien against just one property

Answer 88

Specific lien

Question 89

Lien against all properties of the owner

Answer 89

General lien

Question 90

What kind of lien would property taxes create?

Answer 90

Involuntary, specific.

(Going against just one property)

Question 91

A written instrument that makes a property collateral for a loan

Answer 91

Trust deed (deed of trust)

Question 92

A mechanichs lien may be established as of the date

Answer 92

The work began, or the materials were furnished

Question 93

True or false: A mechanic’s lien may take priority over all liens

Answer 93

False. Taxes and special assessments can take priority.

(However mechanic’s liens can take priority over mortgages if the work began before first mortgage)

Question 94

First in time, first in right

Answer 94

Priority of liens