Recordation and Title Insurance in Georgia

quitclaim deed (non-warranty deed)

"A deed that does not offer any warranties but simply releases the current owner's claims to the property Ex. When Bill and Martha divorced, Martha signed over her interest in their property to Bill through a quitclaim deed.

quiet title

A court action to remove a cloud on a title Ex. Because the records indicated there was an unpaid debt, which created a lien against the title—even though the debt had been paid off—the Martins initiated a suit to quiet the title.

Related to title insurance, what is "subrogation"?

A covered party grants permission to the title company to pursue the party who caused a claim or loss.

title commitment

A document outlining that a title insurance policy will be issued to the buyer provided certain conditions are met (usually a required payoff of liens or other title defects) Ex. A title commitment is issued after a detailed title search uncovers any outstanding liens, mortgages, or other title defects that would prevent the title from transferring clearly.

certificate of title

A statement of opinion on the status of a title to real property Ex. The certificate of title is issued after a review of public records.

insurable title

A title against which there may be known defects (such as easements), but the title company has notified the parties of the defect and has agreed to insure against it (not list it as a policy exception) Ex. A key concern is that sellers who offer insurable title instead of marketable title may not have to clear up title problems that come up before closing.

extended coverage policy

A title insurance policy that covers the buyer in case defects in title come up after closing Ex. An extended coverage policy is usually issed to be effective on the date of closing.

marketable title

A title that is reasonably free and clear of encumbrances so that the average buyer would not hesitate to consummate a sale Ex. Although Karen's title had a small lien on it for her outstanding mortgage, she would be paying that off at closing, so she had a marketable title

cloud on title

Aka title defect; any encumbrance, such as a lien or inheritance claim, that impedes the conveyance of a property; may be removed with a quitclaim deed Ex. Erica was in the process of buying a foreclosure property, when an unknown lien cropped up, creating a cloud on the title. The lien had to be removed before Erica could buy the property.

What's a quiet title action?

An action to locate and notify all who may have some claim on the title, and determine the validity of all claims

What is a title commitment?

An agreement by a title insurer to issue the final title insurance policy on the property

title insurance

An insurance contract insuring the policy owner against financial loss if the title to real estate is defective Ex. Because title defects sometimes are not public record, and are not found in a title search, Vince purchased title insurance to protect his interest

Torrens system

An optional alternative title search, used in only a handful of states, that only goes back to the previous title search, assuming that the last search was done appropriately Ex. The Torrens system is used in Colorado, Georgia, Hawaii, Massachusetts, Minnesota, North Carolina, Ohio, Pennsylvania, Virginia, and Washington.

Mario lives in a state that requires an abstract of title for property conveyance. The chain of title is broken approximately 50 years prior to the current date. Which of these properly identifies the status of Mario's title?

Depending on his state's laws, Mario may have marketable title.

Marketable title means that the title

Doesn't contain any serious defects or questionable validity Doesn't expose the buyer to possible future litigation or disruption of the buyer's quiet enjoyment of the property Should allow the purchaser to sell or mortgage the property again in the future

Which of the following best describes a marketable title?

Ensures the title to property is free and clear of liens and only subject to loan payoff and any taxes owed.

chain of title

Establishes the title history or the path and proof of property ownership through a public records search for successive conveyances of title and encumbrances; each owner is considered to be a "link" in the chain Ex. Karen's chain of title showed no gaps in ownership since the time it was built.

Which answer is true of a lender's title insurance policy?

Is assignable to future loan holders

How does title insurance affect the lender?

It protects the lender from loss due to defective titles

Which one of the following is a characteristic of an abstract of title?

It provides an attorney's opinion of the title.

Which document is used to give a buyer an overview of the title history and information about what is or isn't covered in a title insurance policy?

Preliminary report

Which of the following would constitute constructive notice of a title transfer?

Public recordation

A quit claim deed is used to ______.

Release someone's interest in the property, but otherwise offer no assurances as to title condition

Title commitments vary by state and company, but generally include the following sections:

Schedule A: Provides information related to the transaction Schedule B: Lists unrecorded matters that either couldn't be or weren't researched in preparing the report Schedule C: Lists recorded objections that could be found

Which one of the following assumptions does the Torrens system make?

That any issues that arose in the previous title search have been resolved

title

The legal concept of property ownership and the rights that go with it Ex. When the transaction between Karen and Vince is closed, Vince will have title to Karen's property.

subrogation

The substitution of one party for another whose debt the party pays, allowing the paying party the rights and remedies that would otherwise belong to the debtor. Ex. Because the title company paid his debt off, Mort, the contractor, agreed to subrogate his rights in the foreclosure.

Which of the following statements about the title commitment is true?

The title commitment is the title insurance company's promise to issue a title insurance policy.

Julia and her husband, Mark, are financing the purchase of their new home. Their lender requires that they have title insurance. When and how often will they need to pay the title insurance?

They will only pay once, at the time that the policy is issued.

What type of insurance is a form of indemnity insurance that can protect both the buyer and the buyer's lender?

Title insurance

Which one of the following protects the owner against financial loss if the real estate title has defects?

Title insurance

What's the purpose of a chain of title?

To establish history of past ownership

What is the purpose of marketable title acts?

To make creating abstracts easier and more accurate

Monica is selling her house. Her appraiser, Tom, is using a title search method that only looks back as far as when the last title search was performed. The method he's using assumes the last search was done accurately and legally, and that any issues were resolved. Which method is Tom using?

Torrens system

actual notice

actual notice is notice given directly to, and received by, a person

marketable title

has no defects or clouds to which a reasonable buyer would object. It's not necessarily a perfect title. Sellers can convey marketable title if the title search reveals no doubt about property ownership and there aren't any liens, debts, or encumbrances that won't be cleared at closing.

insurable title

one against which there may be known defects (such as easements), but the title company has notified the parties of the defect and has agreed to insure against it (not list it as a policy exception). As the less rigid title standard, insurable title is still acceptable to most buyers. A key concern is that sellers who offer insurable title instead of marketable title may not have to clear up title problems that come up before closing.

abstract of title

the document showing the chain of title for a property. It contains a description of the property and summarizes any records related to the title

inquiry notice

the idea that if someone were to perform a reasonable amount of research and inquiry, the information would be discovered

attorney title opinion.

when an attorney is the one to provide the certificate of title