6a LAW AND PRACTICE- EXAM
144000 Explanation $138,240/ .96 (100% - 4% = 96%) = $144,000
A House sold at $138,240 which was at a loss of 4%. What was the original cost of the house? 144000 129200 153710 143000
abstract of title evidence of title certificate of title Explanation An abstract of title is the condensed history of title to 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. The abstract of title furnishes the raw data for the preparation of a policy of title insurance for the parcel of land in question.
A condensed history of title to a particular piece of real estate, including a summary of the original grant, and all subsequent conveyances and encumbrances affecting the property, is known as the: abstract of title evidence of title certificate of title
a quitclaim deed Explanation A quitclaim deed is one in which NO guarantees are offered about past claims to the property, with the exception of those held by the grantor.
A deed that contains no warranties, but in which the grantor does give up his own rights or claims, is known as: a quitclaim deed words of conveyance a deed restriction the granting clause
Quitclaim deed Explanation All parties who may have an interest in the property can, via a quit claim deed, correct the cloud on title.
A defect or a cloud on title of a property is best cured by: Quitclaim deed A partition action Obtaining title insurance Repudiating adverse claims
intestate Explanation A probate court determined the disposition of Bob's property in accordance to state statutes because Bob died intestate. INTESTATE: One who, having lawful power to make a will, has made none, or one which is defective in form. In that case, he is said to die intestate, and his estate descends to his heir at law.
A probate court determined the disposition of Bob's property in accordance to state statutes because Bob died testate with a will intestate with right of survivorship
marketable Explanation Marketable title is such that there are no defects preventing transfer.
A purchaser of real estate is generally entitled to receive from a seller the kind of title the courts describe as: marketable clouded saleable quiet
33 feet Explanation This is a hard one. A section is 1 mile by 1 mile. This means one edge of a section is 5280 feet (1 mile) long. Four acres (43,560 sq ft x 4 acres) contains a total of 174,240 sq. ft. 174,240 divided by 5280 equals 33. The dimension of this 4 acre easement is 5280 feet long by 33 feet wide.
A section is 1 mile by 1 mile. How wide is a four-acre (hint: one acre contains 43,560 sq ft) easement that runs along the western edge of a section? 33 feet 38 feet 45 feet 28 feet
all of these Explanation A standard title insurance policy includes a list of liens, judgments, and encumbrances in the schedule of exceptions, which is an indication of title condition.
A standard title insurance policy indicates: if there are any judgment liens on the property if the property is free and clear of all encumbrances what the current condition of the title is, subject to stated exceptions all of these
abstract of title Explanation An abstract is a historical accounting of contingencies, legal proceedings, and other events that affect a parcel.
A summary of the history of all conveyances and legal proceedings affecting a specific parcel of real estate is called: affidavit of title certificate of title title insurance policy abstract of title
provides constructive notice of ownership Explanation Recording a deed does not guarantee ownership as the document is not analyzed by the County Recorder. Recording places the deed into the public record which provides constructive public notice of it's existence. Someone who wants to learn the ownership of a property can find out by looking at the publicly available recorded deed. Recording is referred to as "constructive notice". "Actual notice" would occur if the owner directly provided the deed to an inquiring individual.
Deeds recorded with the county recorder: ensure ownership to the parcel of property provides actual notice of their existence informs the County or City Planning Department of ownership change provides constructive notice of ownership
Words of conveyance Explanation Although it is recommended that a deed be recorded, in Colorado it is not required. Required is: the signature of the grantor, words of conveyance (granting clause), that it be in writing, that the grantee is named, consideration (payment), a description of the ownership interests being conveyed, a legal desciption, delivery of the deed and acceptance by the grantee.
Essential elements for a deed include: Recording Words of conveyance Signatures of grantor and grantee All of the above
good funds Explanation The good funds rule requiring closing funds to be in the form of cash, wire transfers, money orders, cashier's checks, or other certified funds. A personal check is not verified funds.
Funds brought to the closing table must be in the form of: a personal check verified by the bank title company check good funds personal check
7 years Explanation The correct answer is 7 years. The key is "color of title," without it, a claim of adverse possession requires 18 years. Color of title means you have some written proof that you have title but it is legally defective. An example would be a deed transferring ownership to a property from a father to a child that was found in a drawer after the death of the father. Legally, the deed should have been delivered to the child while the father was still alive, so it is not valid. However, it certainly shows the father's intent. So, the child claims color of title, pays taxes, possesses the property and after 7 years if no one challenges it in court can claim the property under the law of adverse possession.
In order to acquire title by adverse possession in Colorado the claim would require 18 years of possession, unless the claimant has color of title and pays taxes on the property, then the period of possession required is: 15 years 7 years 18 years 9 years
give constructive notice to the world of the interest in a particular parcel of property the instrument purports to create Explanation In Colorado legal documents are not required to be recorded to be valid. Recordation gives construction notice to the world that the document exists, and establishes priority in the event of foreclosure.
Instruments affecting real estate are recorded with the County Clerk's office, in the county where the property is located in order to: give constructive notice to the world of the interest in a particular parcel of property the instrument purports to create satisfy the legal requirements for recording to comply with the terms of the statute of frauds to prove the validity of the instrument
General warranty deed Explanation A Torrens certificate is used in Eastern Colorado and is considered evidence of title. Title insurance indicates the condition of title. An abstract and attorney's opinion would be an indication of the condition of title. A general warranty deed conveys ownership, but does not name the current liens and defects upon the title and is NOT proof that the title is marketable.
Marketable title means that the ownership and possession of property is readily transferable since it is free from valid claims by outside parties. Which of the following would NOT be acceptable as evidence of marketable title? Torrens certificate Title insurance Abstract and opinion General warranty deed
Constructive notice Explanation Constructive notice is recording documents in the public record.
Proper recordation of documents affecting title and interest to real estate legally provides: Constructive notice Legal notice Actual notice Unilateral notice
first loans for residential properties Explanation The Real Estate Settlement Procedures Act applies primarily to new loans for the purpose of purchasing residential property. Truth in lending laws pertain to equity loans and seconds.
RESPA applies primarily to: construction loans refinancing of existing loans owner carry loans first loans for residential properties
Loan Estimate and Closing Disclosure forms Explanation The Real Estate Settlement Procedures Act requires the use of Loan Estimate and Closing Disclosure forms.
RESPA requires the use of a: real estate attorney in every transaction licensed Title Company to close every transaction Loan Estimate and Closing Disclosure forms federally related form in every transaction
24 hours prior to close Explanation Legally, settlement statements are supposed to be available for inspection 24 hours prior to closing. As a matter of practicability, many closings occur as soon as the closing documents are ready. (The parties waive the 24-hour period.)
Settlement statements are to be available for inspection by the buyer: one week prior to closing 24 hours prior to close one hour prior to closing prior to the commencement of the closing
Eastern Explanation The Torrens System is used in the eastern part of Colorado. When a certificate of title is first applied for in the Torrens System, the title is searched or examined, a court hearing is held (as in a land court), and a decree confirming title and ordering registration (as with the registrar of deeds) is issued. A certificate of title is then given to the owner, after which the property may be conveyed by executing deeds, delivering the certificate of title to be cancelled, and issuing a new certificate to the new owner. The title registered in a Torrens system is usually guaranteed and marketable, making title insurance unnecessary and greatly reducing the time spent researching the state of the title during subsequent conveyances.
The Torrens System is most commonly used in which part of Colorado? Northern Southern Eastern Western
schedule of exceptions Explanation The schedule of exceptions is included in every title insurance policy. It lists all of the liens and defects that are currently of record and are not insured against.
The part of a title insurance policy that sets forth all encumbrances and defects that are not insured, is called the: schedule of defects citation clause non-exclusionary clause schedule of exceptions
chain of title Explanation The chain of title is the record of ownership from the first patent (instrument used to convey ownership from the government to the first private owner) to its current owner.
The succession of conveyances whereby the present owner of record derives title is called the: chain of title certificate of title title insurance Torrens Certificate
title passes when the registrar issues a new Torrens Certificate Explanation When the registrar in the county issues a new Torrens Certificate, title passes.
Under the Torrens System: title passes when the registrar issues a new Torrens Certificate the Torrens official performs exactly the same functions as the recorder of deeds the original deed is mailed to the sheriff after it has been registered the owner can cancel registration of a title at any time
a record of all previous owners of the property Explanation Title insurance documents include all liens and defects of record and easements, but not the chain of title.
When Anthony purchased his home, the title insurance company's report included all of the following EXCEPT: a list of outstanding mortgage loans against the property a report of existing tax liens against the property a record of all previous owners of the property a list of tax districts impacting the property
an encumbrance but not a lien Explanation Liens are a financial interest in property. All liens are encumbrances, but all encumbrances are not liens. An easement is an encumbrance but not a lien.
When the preliminary title report reveals an easement on the subject property, it indicates that the easement is: an encumbrance but not a lien a lien against the real estate but not an encumbrance both a lien and encumbrance against the parcel of real estate neither a lien nor an encumbrance
Location Survey Explanation All of the others except location survey show evidence of a marketable title.
Which of the following is NOT an example of a marketable title? Title Insurance Abstract of Title Location Survey Certificate of Title
Title insurance policy Explanation Marketable title means that someone has clean ownership of a property and thus the right to sell it to another. A trust deed secures a promissory note and pledges real property as collateral for a loan. A warranty deed conveys ownership of property from the grantor to the grantee, a title insurance policy discloses liens, clouds, and defects on the title. An affidavit is nonspecific.
Which of the following is accepted as evidence of marketable title? Trust deed Warranty deed Title insurance policy Affidavit
the three parties agree to divide the property 40 percent, 30 percent, 30 percent between them Explanation If the ownerships interests were unequally divided like this it would invalidate the joint tenancy and create the default of tenancy in common.
Which of the following situations would cause a deed to create tenancy in common instead of joint tenancy with right of survivorship? the parties agree that all have the right of possession the three parties agree to divide the property 40 percent, 30 percent, 30 percent between them the parties receive their interests at the same time all parties are named on a single deed conveying the property
none Explanation NO TITLE INSURANCE POLICY INSURES AGAINST EVERY THREAT!
Which title insurance guarantees against every threat: standard policy extended policy mortgagee's policy none