Unit 7

Question 1

Who maintains public records

Answer 1

recorders of deeds,
county clerks,
county treasurers,
city clerks,
collectors, and
clerks of court.

Question 2

What are the two types of notice

Answer 2

constructive notice and actual notice.

Question 3

What is a constructive notice

Answer 3

the presumption that information has been obtained by an individual through due diligence

Question 4

What is an actual notice

Answer 4

information has actually been attained through due diligence

Question 5

What is required to be eligible for recording

Answer 5

document must be drawn and executed according to state law

Question 6

Recording acts give legal priority to interests recorded first by what principle

Answer 6

the first in time, first in right or first come, first served principle

Question 7

What are some exceptions to this principle

Answer 7

liens for property taxes, special assessments, and delinquent amounts owed to the Internal Revenue Service

Question 8

What things are typically unrecorded until after it is done

Answer 8

real estate taxes

special assessments

Question 9

What are some examples of real estate taxes that are not recorded until after they are due

Answer 9

inheritance

franchise

Question 10

Are there liens that are considered off the record

Answer 10

yes

Question 11

What is the chain of title

Answer 11

the record of a property’s ownership

Question 12

If ownership cannot be traced through an unbroken chain, then what can be done to ensure your right to the title

Answer 12

a court action called an action to quiet title

Question 13

What is a title search

Answer 13

an examination of the public records to determine whether any defects exist in the chain of title

Question 14

What law makes removes any interests or problems of the property from the time before the original title was founded

Answer 14

the Marketable title act

Question 15

What is a full abstract of title

Answer 15

a summary report of what the title search

Question 16

Who prepares an abstract of title

Answer 16

an abstractor

Question 17

What is a marketable title

Answer 17

title that is acceptable to a reasonably prudent person and which will not subject the buyer to litigation

Question 18

What does a marketable title need or must do

Answer 18

show no serious defects and doubtful validity;
pose no risk of litigation against the purchaser or threaten the quiet enjoyment
convince a reasonably well-informed and prudent purchaser, using business principles and their legal significance, that the purchaser could sell or mortgage the property at a later time.

Question 19

When do questions about a marketable title need to be asked

Answer 19

before the acceptance of the deed

Question 20

Are title searches and reviews sometimes customary in the sales contract

Answer 20

yes

Question 21

What is a suit of quiet title

Answer 21

A lawsuit for the ownership a property that requests anyone who thinks they have interest in the property to bring forth their evidence for the court to decide who owns it

Question 22

What level of governement is public records done

Answer 22

county level

Question 23

Who usu performs a title search

Answer 23

an attorney or title company

Question 24

Doing a title search for your client might be considered what

Answer 24

conflict of interest

Question 25

What is proff of ownership

Answer 25

evidence that the title is marketable

Question 26

What are typically used to convey proof of ownership

Answer 26

certificate of title
title insurance
Torrens certificate

Question 27

Even though a certificate of title and an attorneys opinion of title are often used as evidence of title, what is wrong with them

Answer 27

they do not guarentee the title because they do not protect the buyer from UNrecorded defects

Question 28

What is usu obtained as protection against unrecorded defects

Answer 28

title insurance

Question 29

What is the first thing that title companies do when assessing a property

Answer 29

a preliminary report of title or commitment to issue a title policy

Question 30

When is the premium for title insurance policies paid

Answer 30

at the closing of the transaction

Question 31

When a title company makes a payment to settle a claim covered by a policy, the company generally acquires what right

Answer 31

subrogation which is a right to any damages available to the insured

Question 32

What does a standard title insurance policy cover

Answer 32

Defects found in public records

Forged documents

Incompetent grantors

Incorrect marital statements

Improperly delivered deeds

Question 33

Can you purchase extended coverage with titile insurance

Answer 33

yes

Question 34

Who provides the extended title insurance

Answer 34

an American Land Title Association (ALTA) policy

Question 35

What does an ALTA policy protect against

Answer 35

defects that may be discovered by inspection of the property: rights of parties in possession, examination of a survey, and certain unrecorded liens

Question 36

Are ALTA policies usu included in sales contracts

Answer 36

yes

Question 37

What does even extended title insurance not protect agaisnt

Answer 37

Defects and liens listed on the title 
restrictive covenants 
easements
some water rights 
current taxes and special assessments 
Defects known to buyer
Changes in land use brought about by zoning ordinances

Question 38

What does the Torrens system do

Answer 38

provides a certificate of title issued that doesnt need further validation