Chapter 3

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In addition to requiring a deed to be in writing, the statute of frauds also requires that the deed must be: a. delivered after the grantor's death b. recorded before it is acknowledged c. signed by the grantee d. signed by the grantor

Signed by the grantor Explanation: According to the statute of frauds, a deed must be in writing and signed by the grantor. It does not have to be signed by the grantee.

A home was purchased and then later resold by a third-party relocation company. Which type of deed would they use in order to make no assurances about defects that may have existed before they obtained title? a. Special warranty deed b. Warranty deed c. Reconveyance deed d. Quitclaim deed

A. Special warranty deed Explanation: A special warranty deed makes no assurances about title defects that may have existed before the grantor obtained title, only those that arose during the grantor's ownership.

When a grantor swears before a notary public that her signature on the deed is genuine and voluntary, it is called: a. delivery b. acknowledgment c. the covenant of right to convey d. execution

B. Acknowledgement Explanation: Acknowledgment occurs when a person declares to a notary public that she signed the relevant document voluntarily. A deed must be acknowledged to be recorded.

Which of the following is a requirement for conveying title to real property? a. Deed must be accepted by grantee b. Deed must be acknowledged c. Deed must be signed by grantee d. Deed must be recorded

A. Deed must be accepted by grantee Explanation: For a deed to convey title, the grantee must receive the deed and accept it.

How is the premium for a standard policy of title insurance paid? a. Once, at closing b. Monthly, as a part of the mortgage payment c. Quarterly d. Annually

A. Once, at closing Explanation: A title insurance premium is a one-time charge that is paid at closing.

An extended coverage title insurance policy covers all of the problems a standard coverage policy does, plus: a. problems that should be revealed by a property inspection b. recorded encumbrances c. forged deeds and incompetent grantors d. condemnation

A. Problems that should be revealed by a property inspection Explanation: While an extended coverage policy covers problems such as recorded encumbrances and forged deeds (just as a standard policy does), it also covers problems that can be revealed only by a physical inspection of the property. No title insurance policy covers condemnation or other government actions.

To be valid, a will generally must be: a. dated within one year before the testator's death b. acknowledged and recorded c. drafted by an attorney at law d. witnessed by at least two competent witnesses

D. Witnessed by at two competent witnesses Explanation: A will must be in writing, signed by the testator, and witnessed by two or more competent people.

A deed is recorded in order to: a. protect against adverse possession b. transfer title to the grantee c. validate the chain of title for the grantor d. provide constructive notice of the grantee's interest

D. provide constructive notice of the grantee's interest Explanation: While a deed transfers title to the grantee without recording, recording provides the world with constructive notice of the grantee's interest in the property.

Transferring ownership from one party to another, by any means, is called: a. alienation b. conveyance c. accession d. encumbrance

a. Alienation Explanation: Alienation is the general term that means the transfer of property to another owner by any means.

The government's power to condemn private property is called the power of: a. eminent domain b. dedication c. escheat d. accession

a. Eminent domain Explanation: The power to condemn private property for a public purpose is called the power of eminent domain.

The mortgagee's title insurance policy protects the: a. buyer b. lender c. buyer and seller d. seller

b. lender Explanation: The mortgagee is the lender, and the mortgagee's title insurance policy (extended coverage policy) protects the mortgagee (the lender).

Title insurance policies never protect a property owner from losses due to: a. latent title defects b. adverse possession c. encroachments d. governmental action

d. Government Action Explanation: No type of title insurance policy covers condemnation or other government actions.

The grantee of a deed discovers a cloud on the title. The grantee is most likely to prevail in a lawsuit if the grantor gave a: a. warranty deed b. special warranty deed c. quitclaim deed d. trustee's deed

A. Warranty deed Explanation: A warranty deed (or general warranty deed) gives the greatest protection to a real estate buyer. In a warranty deed, the grantor makes promises that warrant against defects in the title that arose either before or during the grantor's period of ownership.

A valid deed must contain: a. an adequate description of the property b. a habendum clause c. a recital of consideration d. warranties

A. an adequate description of the property Explanation: A deed must always contain an adequate description of the property. While a deed may contain a habendum clause and a recital of consideration, these are not essential elements.

A grantee who fails to record his or her deed: a. could lose title to a subsequent good faith purchaser b. does not take title to the property c. allows title to revert to the grantor d. will still be listed in the grantor/grantee indexes

A. could lose title to a subsequent good faith purchaser Explanation: Without the constructive notice provided by recording, a grantee could lose title to a subsequent good faith purchaser.

When a person dies without leaving a valid will, his property is transferred to heirs through: a. intestate succession b. escheat c. eminent domain d. statutory dedication

A. intestate succession Explanation: When a person dies intestate (without a will), state law provides for the distribution of that person's property to his heirs. This process is known as intestate succession.

A valid deed transfers title when: a. the grantor delivers it to the grantee b. it is acknowledged by the grantor c. the grantee signs it d. it is recorded

A. the grantor delivers it to the grantee Explanation: Title is not conveyed by a deed until the deed is actually delivered and accepted by the grantee.

To remove a cloud from the title of your property, you would most likely obtain a/an: a. special assessment b. quitclaim deed c. option d. trust deed

B. Quitclaim deed Explanation: A quitclaim deed can be used to remove a cloud on title. If someone who has a possible claim against the title executes a quitclaim deed in favor of the property owner, that releases any interest that person may have and clears the owner's title.

In a typical real estate transaction, when does the title pass to the purchaser? a. When possession of the property is transferred b. Upon delivery and acceptance of the deed c. When loan approval is obtained d. When the purchase and sale agreement is signed

B. Upon delivery and acceptance of the deed Explanation: Title transfers upon delivery and acceptance of the deed, which occurs when the transaction closes. (Possession may be transferred before or after the title.)

An adverse possessor's use and possession of the land must be: a. registered with the county clerk b. open and notorious c. by permission of the true owner d. by permission of the state government

B. open and notorius Explanation: An adverse possessor's use and possession of the land must be actual, open and notorious, hostile, exclusive, and continuous and uninterrupted. If the adverse possessor has the owner's permission, the possession is not hostile.

Title to land is passed from the government to a private party with a document called a/an: a. warranty deed b. patent c. covenant of seisin d. acknowledgment

B. patent Explanation: The government uses a patent to transfer title to a private party.

The deed that creates the least liability for the grantor is the: a. warranty deed b. quitclaim deed c. special warranty deed d. bargain and sale deed

B. quitclaim deed Explanation: Since there are no warranties in a quitclaim deed, signing it creates no liability for the grantor.

In a title insurance policy, the title company: a. certifies that there are no defects in the grantor's title b. agrees to reimburse the policy holder for the defects of record that are excluded from coverage c. agrees to indemnify the policy holder against losses due to defects covered by the policy d. insures the title only against defects arising during the grantor's period of ownership

C. Agrees to indemnify the policy holder against losses due to defects covered by the policy Explanation: While title insurance does not guarantee that there are no defects in the grantor's title, the title company does agree to indemnify the policy holder against losses due to those defects that are covered.

A testator devises: a. a bequest b. a codicil c. real property d. personal property

C. real property Explanation: Real property is devised; personal property is bequeathed.

The usual reason for using a quitclaim deed is to: a. convey after-acquired title b. give the greatest protection to the grantee c. warrant that there are no encumbrances d. cure clouds on the title

Cure clouds on the title Explanation: Quitclaim deeds are used to cure clouds on title. Unlike warranty deeds, quitclaim deeds do not convey after-acquired title and they do not contain any warranties.

Who benefits the most from recording a warranty deed? a. Beneficiary b. Notary public c. Grantor d. Grantee

D. Grantee Explanation: The grantee is the one who has acquired an interest in the land, and she is the one who benefits the most from recording the deed to provide constructive (legal) notice of that interest.

What instrument is used to assign certain legal powers to another person? a. Attorney in fact b. Certificate of no defense c. Estoppel certificate d. Power of attorney

D. Power of attorney Explanation: The document used to assign legal powers to another person (for example, authorizing someone else to sign a contract on one's behalf) is a power of attorney. The person who is appointed to act is known as an attorney in fact.

To acquire marketable title, an adverse possessor may have to: a. record a declaration of escheat b. apply for inverse condemnation c. file a quiet title action d. comply with the rules for statutory dedication

file a quiet title action Explanation: A quiet title action is a lawsuit to determine the ownership of property. After fulfilling the requirements for adverse possession, the adverse possessor often has to file a quiet title action to make her title marketable.

Before a deed can be recorded, it must be: a. delivered to the grantee b. acknowledged by the grantor c. certified by a title company d. published in a title report

b. Acknowledged by the grantor Explanation: A deed must be acknowledged before it can be recorded.

The covenants in a warranty deed warrant against: a. any title defects that may arise in the future b. title defects that arose only during the grantor's period of ownership c. title defects that arose either before or during the grantor's period of ownership d. after-acquired title

c. title defects that arose either before or during the grantor's period of ownership Explanation: With a general warranty deed the grantor warrants against title defects that arose either before or during the grantor's period of ownership. On the other hand, the covenants in a special warranty deed protect against title defects that occurred only during the grantor's period of ownership.


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