Unit 7: Title Records

Action To Quiet Title

A court action that establishes ownership when ownership cannot be traced through an unbroken chain of title. If ownership cannot be traced through an unbroken chain, a gap in the chain of title or cloud on the title is said to exist.

Torrens System

A method of evidencing title by registration with the proper public authority, generally called the registrar ; named for its founder, Sir Robert Torrens.

Title Insurance

A policy insuring a property owner or mortgagee against loss by reason of defects in the title to a parcel of real estate, other than encumbrances, defects, and matters specifically excluded by the policy.

Certificate Of Title

A statement of opinion on the status of the title to a parcel of real property based on an examination of specified public records. A certificate of title is not a guarantee of ownership. Rather, it certifies the condition of the title based on an examination of the public records—a title search.

A sells a portion of property to B. B promptly records the deed in the appropriate county office. If A tries to sell the same portion of property to C, which of the following statements is TRUE? A)C has been given constructive notice of the prior sale because B promptly recorded the deed. B)Because C purchased the property from its rightful owner, C is presumed by law to be aware of B's prior interest. C)C has been given actual notice of the prior sale because B promptly recorded the deed. D)Because C's purchase of the property is the more recent, it will have priority over B's interest, regardless of when B recorded the deed.

A)C has been given constructive notice of the prior sale because B promptly recorded the deed.

Which statement BEST explains why instruments affecting real estate are recorded? A)Recording gives constructive notice to the world of the rights and interests claimed in the identified parcel of real estate. B)Recording proves the execution of the instrument. C)The instruments must be recorded to comply with the terms of the statute of frauds. D)Failing to record will void the transfer.

A)Recording gives constructive notice to the world of the rights and interests claimed in the identified parcel of real estate.

A lender making a loan secured by a mortgage will probably require the borrower to purchase A)a mortgagee's title insurance policy. B)an owner's title insurance policy. C)a mortgagor's title insurance policy. D)mortgage insurance.

A)a mortgagee's title insurance policy.

Standard title insurance protects the buyer from A)all of these. B)defects found in public records. C)defects known to the buyer. D)unrecorded liens not known by the policyholder.

A)all of these.

A buyer who wants to know whether the title for a property is in good standing would order A)an abstract. B)a deed. C)a suit to quiet title. D)a deed of trust.

A)an abstract.

All written documents that affect title to real estate should be A)made a part of the public record. B)posted on the property in the event of a sale or other transaction. C)maintained by real estate licensees as part of a transaction. D)published in a newspaper of general circulation.

A)made a part of the public record.

Results of a survey Unrecorded liens Rights of parties in possession of the property

American Land Title Association (ALTA) policy

Attorney's Opinion Of Title

An abstract of title that an attorney has examined and has certified to be, in the attorney's opinion, an accurate statement of the facts concerning the property's ownership.

Properly recording documents in the public record provides what type of notice to the world of an individual's rights or interest? A)Effective B)Constructive C)Actual D)Legal

B)Constructive

Mortgagee title policies protect which parties against loss? A)Buyers and lenders B)Lenders C)Buyers D)Sellers

B)Lenders

At MOST closings, what is the number of title policies issued? A)Four B)Two C)Three D)Six

B)Two

The legal process used to clear a title is A)a novation. B)a suit to quiet title. C)a lis pendens. D)a quitclaim deed.

B)a suit to quiet title.

In some areas of the country, acceptable proof of title is an abstract and A)deed. B)attorney's opinion of title. C)judicial opinion. D)sworn statement of the current property owner.

B)attorney's opinion of title.

The reason that deeds and liens and other claims are recorded is to give A)nominal notice. B)constructive notice. C)actual notice. D)direct notice.

B)constructive notice.

The recordation of a warranty deed A)gives actual notice of the grantee's rights. B)gives constructive notice of an individual's interest. C)prevents claims of parties in possession. D)provides defense against adverse possession.

B)gives constructive notice of an individual's interest.

Legal action taken on a title claimant's behalf to resolve all clouds on title is known as a A)foreclosure suit. B)suit to quiet title. C)partition suit. D)suit for damages.

B)suit to quiet title.

The maximum loss for which the company may be liable is A)the sale price of the property. B)the face amount of the policy. C)the amount of the loan. D)none of these.

B)the face amount of the policy.

The encumbrances and defects that will NOT be insured against under a title insurance policy are included in A)the citation clause. B)the list of exclusions. C)the nonexclusionary clause. D)the schedule of defects.

B)the list of exclusions.

The BEST reason for a buyer to obtain title insurance is A)that the mortgage lender requires it. B)to ensure that the seller can deliver marketable title. C)to pay future liens that may be filed. D)to ensure that the abstractor has prepared a complete summary of title.

B)to ensure that the seller can deliver marketable title.

What is a marketable title? A)A title for desirable property B)A title that is at market price C)A title that has no defects that could carry over as a problem for the new owner at whatever time the new owner decides to sell the property. D)A title that is available to the entire market without any discrimination

C)A title that has no defects that could carry over as a problem for the new owner at whatever time the new owner decides to sell the property.

Which of the following would cause a cloud on title? A)Gap in the chain of title B)A recorded lien that was paid off but not released C)All of these D)Missing the name of the grantor

C)All of these

Which of the following would create a cloud on title? A)A slight error in the legal description B)Misspelling of a grantor's name C)All of these D)An incorrect date

C)All of these

Direct knowledge is also known as A)constructive notice. B)both actual and constructive notice. C)actual notice. D)none of these.

C)actual notice.

Public records can help establish all of the following EXCEPT A)ownership. B)encumbrances. C)adverse possession. D)liens.

C)adverse possession.

A deed that has not been recorded will NOT provide A)an essential element. B)actual notice. C)constructive notice. D)competent parties.

C)constructive notice.

A title company will NOT cover against defects A)caused by incompetent grantors. B)caused by forged documents. C)that appear in a title search. D)resulting from an incorrect marital statement.

C)that appear in a title search.

A history of all recorded liens and encumbrances is revealed in A)the chain of title. B)the title insurance policy. C)the abstract. D)the unrecorded documents.

C)the abstract.

What does marketable title mean? A)The title has been certified by the title company. B)The title contains only minor issues, such as the misspelling of a grantor's name. C)The title guarantees that the property will be sold easily in the future. D)The title is free of defects.

D)The title is free of defects.

Homeowners are frantic because they want to sell their property and the deed is missing. Which of the following is TRUE? A)They must buy title insurance. B)They may need to sue for quiet title. C)They should execute a replacement deed to themselves. D)They do not need the original deed if it has been recorded.

D)They do not need the original deed if it has been recorded.

A title insurance policy that protects the interests of a mortgagee is called A)a certificate of sale policy. B)a leasehold policy. C)an ALTA policy. D)a lender's policy.

D)a lender's policy.

Documents referred to as title evidence include A)security agreements. B)general warranty deeds. C)special warranty deeds. D)policies of title insurance.

D)policies of title insurance.

Chain of title is MOST accurately defined as A)a report of the contents of the public record, including all legal proceedings, regarding a particular property. B)the examination of the record and hidden risks such as forgeries, undisclosed heirs, errors in the public records, and so on. C)an instrument or document that protects the insured parties (subject to specific exceptions) against defects in the record of a property's ownership. D)the record of a property's ownership.

D)the record of a property's ownership.

A policy of title insurance typically does NOT cover A)incorrect marital statements. B)forged documents. C)incompetent grantors. D)zoning changes.

D)zoning changes.

Actual Notice

Express information or fact; that which is known; direct knowledge.

Marketable Title

Good or clear title, reasonably free from the risk of litigation over possible defects.

Easements Zoning Defects known to the buyer

Neither Standard or ALTA

Constructive Notice

Notice given to the world by recorded documents. All persons are charged with knowledge of such documents and their contents, whether or not they have actually examined them. Possession of property is also considered constructive notice that the person in possession has an interest in the property.

Improperly delivered deeds Incorrect martial statements Forged documents Incompetent grantor Information in public records

Standard Title Insurance

Recording

The act of entering or recording documents affecting or conveying interests in real estate in the recorder's office established in each county. Until it is recorded, a deed or a mortgage ordinarily is not effective against subsequent purchasers or mortgagees.

Abstract Of Title

The condensed history of the recorded ownership of a particular parcel of real estate, consisting of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property and a certification by the abstractor that the history is complete and accurate. It does not reveal such items as encroachments or forgeries or any interests or conveyances that have not been recorded.

Title Search

The examination of public records relating to real estate to determine the current state of the ownership.

Priority

The order of position or time. The priority of liens is generally determined by the chronological order in which the lien documents are recorded; tax liens, however, have priority even over previously recorded liens.

Subrogation

The right acquired by the title company to any remedy or damages available to the insured when a title company makes a payment to settle a claim covered by a policy.

Chain Of Title

The succession of conveyances, from some accepted starting point, whereby the present holder of real property derives title. The chain of title does not include liens and encumbrances or any other document not directly related to ownership.

eligible

for recording, a document must be drawn and executed according to state law.

American Land Title Association (ALTA) policy

includes the protections of a standard policy plus additional protections. An extended policy protects the homeowner against defects that may be discovered by inspection of the property: rights of parties in possession, examination of a survey, and certain unrecorded liens. Most real estate sales contracts will include a requirement that an ALTA policy be provided.

Depending on the jurisdiction in which property is located, the public records are maintained by

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

abstractor

searches all the public records and then summarizes the various events and proceedings that affected the title throughout its history