Unit 7 key points

Question 1

Constructive notice

Answer 1

Assumed when due diligence would reveal its existence

Question 2

Actual notice

Answer 2

Has direct knowledge of docs in the public records and facts revealed by an inspection

Question 3

To serve as CONSTRUCTIVE NOTICE and provide PRIORITY over subsequent docs

Answer 3

a written doc that affects an estate, right, title, or interest in land must be DRAFTED and EXECUTED, and must be recorded in public records

Question 4

Who searches public records?

Answer 4

Title companies that provide title insurance to buyers based on what the search reveals

Question 5

Unrecorded docs that may affect title

Answer 5

Tax lien, may not be recorded immediately, yet are still given priority and require a search of tax records

Question 6

Chain of title

Answer 6

Record of property ownership. Does NOT include liens and other encumbrances

Question 7

Cloud on Title

Answer 7

Caused by a gap. Resolved by a suit to quiet title

Question 8

Abstract of Title

Answer 8

Summary report of what the title search reveals, including all recorded liens and encumbrances and lists records searched (not forgeries that are unrecorded). Prepared by abstractor or attorney.

Question 9

Marketable Title

Answer 9

A reasonably well-informed and prudent purchaser would accept because it does NOT have any serious defects to prove its validity, so that it does not expose the buyer to litigation or threaten the purchaser’s QUIET ENJOYMENT

Question 10

Title Insurance

Answer 10

Owner’s policy and protects from losses arising from defects in title and hidden defects, but also identifies exclusions from coverage that typically include readily apparent title defects