RE Unit 4
Jacobson deeds property to Keene, who neither records her deed nor takes possession of the property. Jacobson later deeds the same property to Linder, who records his deed and takes possession. Linder is not aware of the earlier conveyance to Keene. Who holds the legal title to the property?
Linder, because his deed was recorded first.
Which of the following would give a buyer the MOST protection against losses resulting from title defects?
Owner's title insurance policy
A second mortgage can be distinguished form a first mortgage by the date the mortgage was
Recorded. Priority of rights is determined by the date of public notice. The most accepted form of public notice is document recordation
Which of the following is true about the recording of documents?
Recording real estate documents provides constructive notice of their contents to the public.
Who bears the obligation to disclose lead-based paint in residential properties built before 1978?
Seller and all brokers (Federal law requires this disclosure before a prospective buyer is obligated under contract to purchase the home)
A lender making a loan secured by a mortgage will probably require the borrower to buy
a mortgagee's title insurance policy
A document that summarizes all recorded interests affecting title to a given parcel of land is an ___
abstract of title
In MOST cases, for a deed to be recorded, it must be
acknowledged. Deeds need to be acknowledged by the grantor(s) to be recorded
Defects in title are covered only if they are found ____ closing
after
A title search follows documents from the current to the first known source. In doing so, the examiner is following or creating the
chain of title
All the documents that comprise the history of the title are the ______________________.
chain of title
A deed that has not been recorded may NOT provide
constructive notice.
A new loan will show on the closing statement as a buyer ___.
credit
An item paid in arrears will be a ___ to the buyer
credit
When prorating, an item paid in advance will be a ___ to the buyer.
debit
An item that has been paid in advance typically shows on the closing statement as
debit buyer, credit seller
Monthly OA dues of $900 were paid in advance on the first of the month with the seller owning the day of closing. For a closing on October 20, using a 360-day year, the dues would be prorated as
debit buyer, credit seller $300 (items paid in advance will be a buyer owes seller (BOS). $900 / 30 total days x 10 days the buyer owns the property = $300)
The sales price of the property will show on the closing statement as
debit buyer, credit seller. The sales price is a debit from the buyer, who agreed to pay the price, and a credit to the seller
A prorated item that has been paid in arrears typically shows on the closing statement as
debit seller, credit buyer
In many cases it is better to ___ asbestos than to ___ it.
encapsulate, abate
Standard coverage title insurance protects against all of the following except
encroachment
A defect or problem that is not covered by standard or extended title insurance is an ___
exception
Before closing on the purchase of a duplex, the buyer asked his attorney to render a title opinion. The attorney's title opinion will do all of the following EXCEPT
guarantee the buyer obtains marketable title
A mortgagee's title insurance policy protects the
lender (mortgagee) requires the borrower to purchase a mortgagees title insurance policy to protect the lender's security interest in the property
A recorded notice stating that a pending lawsuit may affect title to a particular property is a ___
lis pendens
The obligation of real estate professionals in a transaction involving a property built before 1978, which therefore may have lead-based paint, is to 1. give the buyer the disclosure 2. make sure the seller inspects the property and removes all lead-based paint 3. make sure all parties are in compliance with the law 4. give the buyer an EPA booklet and have the buyer sign the disclosure
make sure all parties are in compliance with the law
Most deeds to be recorded must be _____________________.
notarized
Title insurance premiums are paid
once, at the time the policy is issued (typically paid at closing)
A chain of title is a
property history of successive conveyances and recorded interests
Shared items, such as property taxes and water bills, will be ___________________ between the buyer and the seller.
prorated
The priority of a recorded instrument is determined by the date of ___
recording
All of the following would be prorated at closing EXCEPT 1. rents 2. taxes 3. security deposits 4. water bill
security deposits
When a buyer records the deed from the seller, the legal consequence is to
serve as constructive notice of the buyers ownership interest
The requirements for recording are determined by
state law
Legal action taken on a title claimant's behalf to resolve all clouds on title is known as a
suit to quiet title
Before closing, a cloud on the title was found. Which of the following should the seller use to clear the title? 1. Abstract with a title opinion 2. Title commitment 3. Title insurance 4. Suit to quiet title
suit to quiet title (these determine ownership, recognize other valid claims and "quiet" invalid claims)
Which of the following would benefit most from and therefore be most concerned with, recording a mortgage?
the mortgagee (lender) wants to make certain that the mortgage is recorded, to provide notice of the mortgagee's lien against the property
Protection against incomplete or defective records of the title to land can best be obtained by securing ___
title insurance
When an attorney or title insurance company traces the ownership of a parcel of land to the beginning of its recorded history, the process is known as a___
title search
The BEST way for a seller to prove marketable title to real property is
to buy an owner's title policy for the buyer
An example of a stigmatized property is one that
was the site of a suicide. State law determines whether it may be disclosed.