Real Estate - LAW quiz questions

The history of the title to a parcel of real estate, including deeds, wills, mortgages and all items affecting, encumbering, or transferring the title is called the "opinion of title." "guaranty policy." "affidavit of title." "abstract of title."

"abstract of title

An instrument or document which protects the insured parties (subject to specific exceptions) against defects in the examination of the title record and against hidden risks, such as forgeries, is called (a/n) "chain of title." "certification of title." "title insurance policy." "abstract of title."

"title insurance policy."

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

A missing heir.

A loss to the insured that resulted from a forged document is covered by a(n) I. extended coverage title insurance policy. II. standard coverage title insurance policy. I only II only I and II Neither I nor II

I and II

Which of the following affects the validity of a deed? Illiteracy Omission of the habendum clause. Error in stating the true amount of consideration. Insufficient description of the land to be conveyed.

Insufficient description of the land to be conveyed.

Which of these is NOT essential to the validity of a deed? Competent grantor Monetary consideration. Description Delivery

Monetary consideration

Which of the following statements regarding title insurance is TRUE? I. Title insurance coverage passes from seller to buyer with conveyance of title. II. Title insurance must be renewed every 5 years. I only II only I and II Neither I nor II

Neither I nor II

An abstract of title performs which of the following functions? I. Guarantees a clear title. II. Insures the title. I only II only I and II Neither I nor II

Neither I nor II An "abstract of title" is a full summary of the various instruments affecting the property (conveyances, wills, judicial proceedings, liens and other encumbrances, satisfaction of liens, etc.) arranged in chronological order of recording. It does not guarantee or assure the validity of title as it merely describes recorded items and not such items as encroachments or forgeries.

In the states where it is available, which of the following would NOT be covered under an extended coverage owner's title insurance policy? Rights of parties in possession. Unrecorded physical easements. The effect of zoning regulations. Unrecorded mechanics' liens.

The effect of zoning regulations

When a missing heir is claiming an interest in property this title defect could be cured by: a special warranty deed. a quiet title proceeding. partition. a general warranty deed.

a quiet title proceeding

aining land by any natural or man-made cause is accretion. accession. avulsion. reliction.

accession

When a title insurance policy is issued an inspection of the records has been made. premiums are paid on an annual basis. Both of these. Neither of these.

an inspection of the records has been made.

An "abstract of title" is best described as a(n) digest of the title history to a particular property. summary of each deed in a title search. appraisal of the lands and the improvements. summary of all the improvements and encroachments on the property.

digest of the title history to a particular property.

The power or right of governmental bodies to take real estate for public use is called "lis pendens." "ad valorem." "eminent domain." "estate."

eminent domain

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

American Land Title Association (ALTA) An "ALTA" extended coverage policy is normally required by to 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.

In a widely publicized dispute, William O'Hara refused to sell his land to the local school board. O`Hara believed that the price the school board offered for the land was not sufficient. If the school board wanted to pursue the matter in court, what proceeding would it institute to attempt to force O'Hara to sell the land? Foreclosure Condemnation Escheat None of these

Condemnation

The absence of which of the following would invalidate a deed? Signature of the grantee Delivery Capacity of the grantee Recordation

Delivery To be valid a deed must (1) be in writing, (2) be signed by a grantor, (3) have a grantor competent to convey title, (4) identify the grantor and grantee, (5) have words of conveyance (granting clause), (6) have an adequate description of the property, (7) be delivered to the grantee (either personally, through escrow or by recording). The grantee need not be competent (e.g., he can be the grantor's 3 year-old child) and he need not sign the deed. The deed need not be recorded.

A valid deed must have which of the following? I. Words of conveyance. II. Grantor's signature. III. Competent grantee. I and II I and III II and III I, II and III

I and II

An owner can defeat a claim of adverse possession by I. evicting the adverse claimant within the statutory time period. II. resuming actual possession within the statutory time period. I only II only I and II Neither I nor II

I and II

Escrow agents must I. treat information as confidential. II. strictly comply with the escrow instructions. I only II only I and II Neither I nor II

I and II

In order to receive title by adverse possession, the claimant must do which of the following? I. Be open and notorious. II. Have actual possession. III. Register with public agencies at the time of first possession. I only III only I and II I, II and III

I and II

The power of eminent domain I. may be exercised by a district school board seeking to obtain property for a public school. II. requires that just compensation be paid to the landowner when exercised. I only II only I and II Neither I nor II

I and II

Title insurance will give protection against I. undisclosed heirs. II. forgery in the chain of title. III. zoning restrictions. II only III only I and II II and III

I and II

To acquire title by adverse possession, the adverse claimant I. must maintain actual, open, hostile and continuous possession for the statutory time period set by the state. II. may tack the time of his possession to that of a previous adverse possessor if the two were successors in interest. I only II only I and II Neither I nor II

I and II

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 I. adverse possessor. II. owner of an unrecorded deed. I only II only I and II Neither I nor II

I and II

Which of the following is TRUE regarding title insurance? I. The policy will protect the insured party's interest forever. II. Subsequent owners of the piece of property must obtain their own title insurance if they want it. I only II only I and II Neither I nor II

I and II

Which of the following statements concerning adverse possession is correct? I. A license cannot be converted into adverse possession. II. Adverse possession generally cannot be perfected over land held by the state. I only II only I and II Neither I nor II

I and II To claim adverse possession the claimant usually cannot have ever had permission (license, easement or lease) to use the land. In addition, although the state can claim adverse possession against private land, private individuals cannot claim state land by adverse possession.

A quitclaim deed transfers all rights the grantor may I. hold when the deed is delivered. II. acquire in the future. I only II only I and II Neither I nor II

I only

A title insurance company would do which of the following before issuing a standard policy? I. Examine the chain of title. II. Require a surveyor's certification against encroachments. I only II only I and II Neither I nor II

I only

An owner's title insurance policy protects I. the owner, his heirs and devisees. II. all subsequent owners. I only II only I and II Neither I nor II

I only

The abstract of title prepared for a specific parcel of real estate provides a I. full historical summary of all matters affecting title. II. guarantee of title. I only II only I and II Neither I nor II

I only

When a real estate sales transaction is to be closed in escrow, the escrow officer I. is neutral with respect to the interest of each party to the transaction. II. serves in place of an attorney for the parties to the transaction. I only II only I and II Neither I nor II

I only

Which of the following title defects will, if loss results, fall under the coverage of a standard form owner's title insurance policy? I. Forged grantor's signature in recorded chain of title. II. Title lost through adverse possession not yet confirmed by suit. I only II only I and II Neither I nor II

I only

if the buyer in a real estate transaction deposits funds in escrow, the escrow agent can pay out funds in accordance with written instructions of the I. principals to the escrow transaction. II. buyer alone in the event the buyer is unable to obtain the financing which was a condition of the agreement to purchase. I only II only I and II Neither I nor II

I only

For a buyer to be certain the property he is purchasing has no encroachments he should obtain a I. survey. II. standard title insurance policy. I only II only I and II Neither I nor II

I only The standard policy does not cover unrecorded facts a survey or inspection would reveal. An encroachment can be determined only by a survey or inspection

An abstract of title I. shows the history of ownership of the parcel. II. guarantees a valid title. I only II only I and II Neither I nor II

I only - shows the history of ownership of the parcel.

An extended coverage title insurance policy provides coverage against which of the following? I. Unrecorded easements. II. Unrecorded liens. III. Rights of parties in possession. I and II II only II and III I, II and III

I, II and III

Every valid deed must contain I. words of conveyance. II. the name of the grantee. III. the name of the grantor. I only III only II and III I, II and III

I, II and III

Occupation of real property may ripen into legal title by adverse possession. The adverse possessor must in all cases I. be in actual possession of the subject property for the statutory period of time. II. show in his manner of possession that it is hostile to the true owner's title. III. obtain a judicial decree quieting the title or obtain a quitclaim deed from the ousted owner in order to have marketable title. II only I and II I and III I, II and III

I, II and III

Which of the following statements concerning the addition or subtraction of land is correct? I. "Accretion" is the gradual deposit of soil through natural causes. II. The sudden tearing away of land by action of water is called "avulsion". III. "Erosion" is the gradual loss of soil due to currents, tides or winds. I only II only II and III I, II and III

I, II and III

John Steele owns certain real estate clear of any mortgages or unpaid taxes. Which of the following encumbrances might cloud the title? I. A judgment. II. A recorded agreement of sale. III. An easement for a right of way. I only I and II II and III I, II and III

I, II and III A "cloud on the title" is any document, claim, unreleased lien or encumbrance that impairs the title. It may also refer to any encumbrance. The claim of a person holding a judgment or a recorded land sale contract (agreement of sale) and easements (rights of way) would be clouds on the title.

With written instructions, an escrow agent may do which of the following? I. Order the title insurance report and policies. II. Draft legal documents. III. Disburse funds as authorized by both principals. IV. Record documents. I and II I and III I, III and IV III and IV

I, III and IV

A standard title insurance policy ordinarily I. must be renewed every year. II. protects only the party named as the insured party in the written policy. I only II only I and II Neither I nor II

II only

A standard title insurance policy protects the insured against which of the following? I. The power of eminent domain. II. The lack of capacity of a grantor. III. Unrecorded easements. I only II only III only II and III

II only

A title insurance company will NOT insure property against I. forged documents. II. zoning restrictions. III. a mortgage of record. I only II only I and II II and III

II. zoning restrictions.

American Land Title Association (ALTA) extended coverage policy form protection is normally required by I. owners of real property. II. purchasers of real property. III. lenders secured by real property liens. I only II only III only I and II

III only

An owner's title insurance policy will NOT provide protection against I. expenses incurred in defending a title. II. lack of intent to deliver a deed. III. governmental regulation. I only II only III only I and III

III only

Harry hands Charlie a deed with the intent to pass title and asks Charlie not to record the deed until Harry dies. When does title transfer? Upon Harry's death. When Charlie records the deed. It is void. Immediately.

Immediately. The deed is valid as of the date it was delivered (when title was intended to pass), whether it is recorded then, later or never.

Ted gave a general warranty deed to his nephew John when John bought the apartment building Ted owned. John had the deed recorded. Later, John decided to convey the property back to Ted. How could this best be accomplished? John must give Ted a reconveyance deed. John must make a new deed to Ted, and Ted should record it. John must endorse the deed and return it to Ted. John must give Ted a reconveyance deed or make a new deed to Ted.

John must make a new deed to Ted, and Ted should record it

All but which one of the following terms describe the type of occupancy needed for adverse possession? Continuous Exclusive Lawful Open and notorious

Lawful

How can a lender be sure that he has an enforceable lien? Mortgagee's title insurance policy. Recordation. Deed. None of these.

Mortgagee's title insurance policy

Recording gives constructive notice. Which of the following also gives constructive notice? Express knowledge of a fact. Possession of land by a person other than the grantor. Knowledge of a deed that has not been delivered. None of these.

Possession of land by a person other than the grantor.

Which of the following deed forms may convey no ownership rights at all? Quitclaim deed Sheriff's deed Special warranty deed General warranty de

Quitclaim deed

If escrow instructions differ from the deposit receipt or preliminary sales contract, and the escrow instructions have been signed by both the buyer and the seller, which of the following is correct? The broker must write a new deposit receipt. The escrow instructions take precedence. The deposit receipt takes precedence. Everything is void, and the broker must start over.

The escrow instructions take precedence.

When transactions involving the sale of real estate are placed in escrow, this means that: a designated agent agreed to by the parties holds the necessary documents until the terms are met. they are completed in secrecy. the broker holds the papers until the registration of title is completed. the broker is no longer involved.

a designated agent agreed to by the parties holds the necessary documents until the terms are met.

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

a listing of all recorded instruments affecting the subject property. The chain of title is the recorded history of matters that affect the title to a specific parcel of real property, such as ownership, liens and other encumbrances, usually beginning with the original recorded source of the title. It shows the successive changes of ownership, each linked to the next so that a chain is created.

When a title search reveals that there is a broken chain of title, this is best cured by a suit for specific performance. a general warranty deed. partition. a quiet title proceeding.

a quiet title proceeding. Quiet title action is court action intended to establish or settle the title to a particular property. It is used to extinguish easements, remove clouds on the title, etc.

A standard title insurance policy insures against: prescriptive easements. a recorded deed that was forged. claims of persons in possession of the property at the time the purchaser takes title. All of these.

a recorded deed that was forged.

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

a search of title. 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.

Which of the following affects the validity of a deed? Illiteracy Omission of the habendum clause. Error in stating the true amount of consideration. Insufficient description of the land to be conveyed.

a sovereign power. A "patent" is an instrument that conveys title to real property from the state or federal government (a "sovereign power") to an individual.

The addition to one's land by the gradual deposit of soil through natural causes is annulation. avulsion. accretion. ademption.

accretion.

A declaration made by a person to an official stating that a deed has been freely and voluntarily executed is called a(n) acknowledgment. authorization. authentication. execution.

acknowledgment.

An escrow company acts as principal. agent for both buyer and seller. holder in due course. insurer.

agent for both buyer and seller.

The transferring of title to real property to another is defined as proration. alienation. prescription. consideration.

alienation

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

as long as the insured has liability.

The escrow agent represents:

both buyer and seller.

The responsibility for selecting a title and escrow company under conventional financing rests with: the broker. the buyer. the seller. both the buyer and the seller.

both the buyer and the seller.

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

collection of real estate records. 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.

Abstract of title is a: contract for a deed. condensed history of the title. guarantee of title. survey of the property

condensed history of the title.

A person cannot successfully claim that he did not know about the content of any recorded document. This is due to the legal principle known as caveat emptor (let the buyer beware). actual notice of the facts. the statute of frauds (requiring documents to be in writing). constructive notice.

constructive notice.

Title to real property is alienated by creating a cloud on the title. filing a declaration of homestead. recording a lien. conveying a title.

conveying a title.

The cost of owner's title insurance is based primarily on: age of property. cost of property. the number of covenants in the warranty deed. All of these.

cost of property.

A quitclaim deed is most commonly used to cure title defects. give notice to the world that an owner has rights in the property. deed any future rights to a certain piece of property. convey fee simple title.

cure title defects.

The turning over of land by a developer to a public use is called subordination. dedication. condemnation. escalation.

dedication

A person receiving ownership of real property through a valid will is called a(n) testator or testatrix. legatee. executor or executrix. devisee.

devisee.

The transfer of title by descent means the owner died testate, and the property passed to his heirs. transferred his property interest by gift. died intestate and the property passed to his heirs. transferred his property interest by sale.

died intestate and the property passed to his heirs.

A landowner is advised by the government that a public utilities company plans to cross his property with a power line. If the landowner refuses, the utilities company can seek to acquire this right through use of police power. eminent domain. accretion. partition action.

eminent domain.

A standard form policy of title insurance does NOT protect against loss resulting from encroachments on the property. failure to deliver an earlier recorded deed. lack of capacity of the grantor. forgery in the chain of title.

encroachments on the property.

When a person dies intestate and no heirs can be found for intestate succession, the real property will revert to the government through a process known as reconveyance. reversion. escheat. eminent domain.

escheat.

A properly executed quitclaim deed will always convey a(n) fee title to the property. existing interest in the property. first lien on the property. after-acquired interest in the property.

existing interest in the property.

A standard coverage title policy insures against building code changes. unrecorded easements. forged recorded deeds. all of these.

forged recorded deeds.

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

governmentally-imposed zoning restrictions.

An ALTA extended title insurance policy would NOT cover: unrecorded deeds. unrecorded easements. unrecorded homestead rights. governments regulating the use of property through zoning ordinances.

governments regulating the use of property through zoning ordinances.

Effective delivery of a deed depends upon the physical transfer of a deed to the grantee. intention of the grantor. notarization of the grantor's signature. recording of the deed by the grantor.

intention of the grantor.

Involuntary alienation of an estate means an estate cannot be transferred without the consent of the owner. aliens are forbidden ownership in fee simple. ownership of estates may be transferred by operation of law. no one can be compelled to relinquish title without his consent.

ownership of estates may be transferred by operation of law.

When a person dies testate, the real property escheats and is sold at an auction by the state. goes to his next of kin. passes by devise. goes to the administrator.

passes by devise.

The word "hostile" as applied to adverse possession means the tenant hates the landlord. possessor claims ownership, rejecting other claims. possessor will defend the land by force if necessary. possessor has fenced off the land.

possessor claims ownership, rejecting other claims.

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

protects the interest of each party to the transaction.

An escrow to purchase property was opened on September 1, 2005, and all instructions were placed in escrow, with closing scheduled for December 1, 2005. Prior to the closing of the escrow, the seller requested the escrow agent to change the closing date to January 2, 2006 for income tax purposes. However, the buyer would not agree to this. The escrow agent should: A. change the closing date. b. refuse to change the closing date without the buyer's approval. c. take a position as a reconciler and try to bring the buyer and the seller to an agreement. d. change the date after the seller signs a release relieving the escrow agent from all liability for making the change.

refuse to change the closing date without the buyer's approval

Quieting a title means to: remove a cloud on the title by court action. obtain title by adverse possession. mortgage the property. partition property owned by tenants in common who cannot agree to sell the property.

remove a cloud on the title by court action.

The covenant whereby the grantor warrants that he is the owner and the possessor of the property being conveyed is called the covenant of seizen. quiet enjoyment. habendum. quantum.

seizen.

George McGraw sold his house to Sylvia White. The deed McGraw used to convey title warranted only that he would defend the title against defects arising during the period of his tenure and ownership of the property. The type of deed McGraw gave to White was a special warranty deed. bargain and sale deed. trust deed. quitclaim deed.

special warranty deed. limits its warranties to defects arising during the grantor's period of ownership from any action by, through or under the grantor.

The right of alienation is defined as the "right to execute and deliver a deed". the "right to transfer an interest in real property". the "right to make a will". "statutes of descent and distribution".

the "right to transfer an interest in real property".

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

the title only as it appears of record, subject to printed exceptions.

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

title remains with the seller until escrow conditions have been met.

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

title search from a title insurance company. 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.

Tracing the conveyances and encumbrances of real property is known as: chain of title. title search. cloud on title. recordation of title.

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.

Jones sold real property to Smith, and each fully performed his duties and obligations as stated in the escrow instructions. Jones died prior to the recordation of the deed. The escrow is voidable by Jones' heirs. void, as death always terminates an escrow. invalid, and the heirs of Jones may ask the court to set aside the contract. valid, and Smith is entitled to demand that the transaction close and the deed be recorded as provided in the escrow

valid, and Smith is entitled to demand that the transaction close and the deed be recorded as provided in the escrow instructions. Contracts involving property or money, as opposed to contracts for services, are binding on the heirs.

A purchaser's title insurance policy protects the grantor. grantee. vendor on a land sales contract. vendee on a land sales contract.

vendee on a land sales contract. A person buying property under a land sale contract (the vendee), would receive a purchaser's policy.