Unit 7 - Title Records

Question 1

What is Notice

Answer 1

Anyone with a parcel of real estate taking certain steps to ensure that the existence of the interest is made available to the public by Constructive and Actual Notice

Question 2

What is Constructive Notice

Answer 2

The legal presumption that information has been obtained by an individual through due dilligence. A document searchable by public record

Question 3

What is Actual Notice

Answer 3

Not only that the information of an interest in property is available, but also that someone is actually aware of it. “someone told you”

Question 4

What is Recording

Answer 4

The act of placing documents in the public record. Document must be drawn and executed according to state law.

Question 5

What is Priority

Answer 5

Refers to the order in which documents or liens were recorded. Date recorded earliest gets first priority.

Question 6

What are Unrecorded Documents

Answer 6

Types of liens that are not recorded. (real estate taxes and special assessments) - Off the record liens

Question 7

What is Chain of Title

Answer 7

The record of a property’s ownership, beginning with the earliest owner.

Question 8

What is a “cloud” on a title

Answer 8

If ownership cannot be traced through an unbroken chain, a gap in the chain of title.

Question 9

What is an Action to Quiet Title

Answer 9

A court action used to establish ownership because of a “cloud” on the title

Question 10

What is a Title Search

Answer 10

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

Question 11

What is the Marketable Title Act

Answer 11

Some states have adopted law that limits the time beyone which the title must be searched

Question 12

What is a full Abstract of Title

Answer 12

A summary report of what the title search found in the public records. Prepared by an Abstractor.

Question 13

What is an Abstractor

Answer 13

Person who prepares the report of a full Abstract of Title

Question 14

What is Marketable Title

Answer 14

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

Question 15

What 3 things are a must for a Marketable Title

Answer 15

-Disclose no serious defects and not depend on doubtful questions of law or fact to prove its vality
- Not expose a purchaser to the hazard of litigation or threaten the quiet enjoyment of the property
-Convince a reasonably well-informed and prudent purchaser, acting on business principles and with knowledge of the facts and thir legal significance, that the purchaser could sell or mortgage the poperty at a later tim.
“ Same guarantees as a General Warranty Deed”

Question 16

What is Proof of Ownership

Answer 16

Evidence that title is marketable. A certificate of title, title insurance, or a Torrens certificate is commonly used to prove ownership

Question 17

What is a Certificate of Title

Answer 17

A statement of opinion of the title’s status on the date the certificate is issued. A certificate of title is not a guarantee of ownership. May be prepared by title company, abstractor, or attorney. Owner, mortgage lender, or buyer may request certificate

Question 18

What is Title Insurance

Answer 18

A contract under which the policyholder is protected from losses arising from defects in the title.

Question 19

What does Title Insurance Protect Against

Answer 19

Protects insurer from an event that occurred before the policy was issued.

Question 20

What is maximum loss for which the company can be liable with title insurance

Answer 20

Cannot exceed the face amount of the policy

Question 21

What is Subrogation

Answer 21

When a title company makes a payment to settle a claim covered by a policy, the company generally qcquires the right to any remedy or damages available to the insured.

Question 22

What does Standard coverage protect against

Answer 22

-defects fond in public records
-forged documents
-incompetent grantors
-incorrect marital statements
-improperly delivered deeds

Question 23

What does ALTA stand for

Answer 23

American Land Title Association

Question 24

What are 2 types of title insurance policies

Answer 24

-Owners Policy: issued for the benefit of the owner (new buyer) and the owner’s heirs or devisees and is issued for the property’s purchase price
-Lenders Policy (Mortgagee Policy): issued for the benefit of the mortgage lender and the amount of the mortgage loan will determine the amount of coverage

Question 25

What is the Torrens System

Answer 25

A legal registration system used to verify the ownership of real estate. Provides evidence of title without the need for an additional search of public records.