Unit 8 Exam Flashcards
The BEST reason for a buyer to obtain title insurance is
The answer is to ensure that the seller can deliver marketable title.
Why?
Title insurance is considered the best defense of title and is assurance that the grantee is actually acquiring ownership and that the title is marketable.
Which of the following is acceptable evidence of marketable title?
The answer is title insurance policy.
Why?
Proof of ownership is evidence the title is marketable, and title insurance is used to prove ownership.
A buyer bought a house, received a deed, and moved into the residence but neglected to record the document. One week later, the seller died and the heirs in another city, unaware that the property had been sold, conveyed title to a relative, who recorded the deed. Who owns the property?
The answer is the buyer.
Why?
Constructive notice can be given in either or both of two ways: taking possession and/or recording one’s deed. The buyer took possession. The relative who purchased the property from the seller’s heirs was responsible for both checking the public records (which still showed the seller as owner because the buyer had not yet recorded the purchase) and visiting the property to inquire into the rights of any parties in possession. The relative-purchaser’s investigation would have revealed that the seller’s heirs did not have the right to sell the property in question.
