Law Q1

Title insurance will give protection against 1. undisclosed heirs 2. forgery in the chain of title 3. zoning restrictions

1 & 2

When a real estate sales transaction is to be closed in escrow, the escrow officer 1. is neutral with respect to the interest of each party to the transaction 2. serves in place of an attorney for the parties to the transaction

1 only

With written instruction, an escrow agent may do which of the following? 1. order the title insurance report and policies 2. draft legal documents 3. disburse funds as authorized by both principals 4. record documents

1, 3 and 4

A standard title insurance policy ordinarily 1. must be renewed every year 2. protects the party named as the insured party in the written policy

2 only

A title insurance company will NOT insure property against 1. forged documents 2. zoning restrictions 3. a mortgage of record

2 only

An abstract of title 1. shows the history of ownership of the parcel 2. guarantees a valid title A. 1 only B. 2 only C. 1 and 2 D. Neither 1 or 2

A. 1 only

An owner's title insurance policy protects 1. the owner, his heirs and devisees 2. all subsequent owners

A. 1 only The interest of the names insured is covered forever. The policy need not be renewed. If the insured sells the property and is sued 10 years later because of a defect in the title, he would still be covered by the policy. His heirs and devisees are extended the same protection. However, new owners (not heirs or devisees) would need their own policies for their protection.

An owner's policy of title insurance continues in force... A. as long as the insured has liability B. as long as annual premiums are paid C. for a maximum of 50 years D. as long as the buyer resides on the property

A. as long as the insured has liability

When a real estate sales transaction is to be closed in escrow, the escrow agent.... A. protects the interest of each party to the transaction B. serves as an attorney for the parties to the transaction C. acts only on express written instructions from the broker D. is a subagent of the broker

A. protects the interest of each party to the transaction

Quieting a title means to A. remove a cloud on the title by court action B. option title by adverse possession C. mortgage the property D. partition property owned by tenant in common who cannot agree to sell the property

A. remove a cloud on the title by court action

When a deed is delivered into escrow by the seller A. title remains with the seller until escrow conditions have been met B. the escrow officer must record the deed the same day C. title immediately vests in the buyer D. none of these

A. title remans with the seller until escrow conditions have been met. 11

An extended coverage title insurance policy provides coverage against which of the following? 1. unrecorded easements 2. unrecorded liens 3. rights of parties in possession

All three an extended coverage policy will cover everything the standard policy covers plus unrecorded liens, easements, any unrecorded instruments affection the title, rights of parties in possession, encroachments, defects I[n surveys, etc. It will not cover items specifically excluded or government regulations.

A title plant is a A. policy of title insurance B. collection of real estate records C. subdivision map D. corner marker

B. Collection of real estate records Correct. A title plant is the title company's files of abstracts and other data relating to real estate transactions and other activities affecting ownership of the land in the area covered by the title company

An escrow company acts as A. principal B. agent for both buyer and seller C. holder in due corse D. insurer

B. agent for both buyer and seller

Abstract of title is a A. contract for a deed B. condensed history of the title C. guarantee of title D. survey of the property

B. condensed history of the title

The cost of owner's title insurance is based primarily on A. age a property B. cost of property C. the number of covenants in the warranty deed D. All of these

B. cost of property Correct. The cost of an owner's policy would be based on the amount the insured could lose. This would be the cost of the property.

A standard title insurance policy protects against problems arising from all of the following EXCEPT A. a prior grantors lack of legal capacity to convey title B. governmentally-imposed zoning restrictions C. forgery of documents D. missing heirs

B. governmentally-imposed zoning restrictions

Tracing the conveyances and encumbrances of real property is known as A. chain of title B. title search C. cloud on title D. recordation of title

B. title search A title search is an examination of the public records to determine what, if any defects there are in the chain of title. It's normally performed by a title company.

Escrow agents must 1. treat information as confidential 2. strictly comply with the escrow instructions

Both

Very often a preliminary title report for an owner's title insurance policy states that it is subject to the "rights of the parties in possession" because the party in possession may be an.. 1. adverse possessor 2. owner of an unrecorded deed

Both

A standard title insurance policy would give coverage for which of the following? A. a governmentally-imposed restriction on the use of the property B. a claim on the title that the purchaser could have discovered upon a physical infection of the property C. A missing heir D. All of these

C. A missing heir

In the states where it is available, which of the following would NOT be covered under an extended coverage owners title insurance policy? A. rights of parties in possession B. Unrecorded Physical easements C. The effect of zoning regulations D. Unrecorded mechanics' liens

C. The effect of zoning regulations

The best way to discover a flaw in the recorded title to a piece of real property is by A. calling the county surveyor B. taking out property insurance C. a search of title D. hiring a lawyer

C. a search of title

A standard coverage title policy insures against A. building code changes B. unrecorded easements C. forged recorded deeds D. all of the above

C. forged recorded deeds

In order to determine the condition of the title, a purchaser should secure a(n) A. survey from a licensed surveyor B. estoppel statement from the lender C. title search from a title insurance company D. certificate of no defense from the seller

C. title search from a title insurance company

Which type of title insurance policy insures against unrecorded easements, encroachments and observable defects? A. Owner B. Purchaser C. Mortgagee D. American Land Title Association (ALTA)

D. American Land Title Association (ALTA) An "ALTA" extended coverage policy is normally required by the lenders. An extended coverage policy will cover everything the standard policy covers plus unrecorded liens, easements, any unrecorded instruments affecting the title, rights of parties in possession, encroachments, defects in surveys, etc.

Chain of title is A. a certificate of title issued under the Torrens system B. a list of all previous owners C. the heir in a will to inherit property after a death of a testator D. a listing of all recorded instruments affecting the subject property

D. a listing of all recorded instruments affecting the subject property

A title insurance policy standard form, insures A. that there are no tax liens against the property. B. that these are no judgment liens against the property C. the property is free and clear of all encumbrances D. the title only as it appears of record, subject to printed exceptions.

D. the title only as it appears of record, subject to printed exceptions before issuing a title policy the insurer will inspect the public record. The policy will then insure the title as it appears on the records, subject to printed exceptions. This could mean there are tax liens, judgment lien, or other clouds, but these would appear as exceptions. The property may or may not be free of encumbrances.

Which of the following statements regarding title insurance in TRUE? 1. Title insurance coverage passes from seller to buyer with conveyance of title 2. Title insurance must be renewed every 5 years

Neither