Chapter 6 - Recordation, Abstract and Title Insurance

Question 1

Constructive Notice (Legal Notice)

Answer 1

-Notice given by public records and by visible possession, coupled with legal presumptions that all persons are thereby notified
-Charges public w/ responsibility of looking in public records AND property itself to obtain knowledge of all who claim a right of interest

Question 2

Inquiry Notice

Answer 2

Information the law presumes one would have where circumstances, appearances or rumors warrant further inquiry

Question 3

Actual Notice

Answer 3

Knowledge gained from what one has seen, heard, read or observed.

Question 4

Acknowledgement

Answer 4

Formal declaration by a person signing the document that they did in fact sign the document

Question 5

Tract Index

Answer 5

Simplest system for listing recorded documents affecting a particular tract od land

Question 6

Grantor/Grantee Indexes

Answer 6

Alphabetical indexes bound in book form

Question 7

Chain of Title

Answer 7

The linkage of property ownership that connects the present owner to the original source title

Question 8

Abstract of Title

Answer 8

A complete historical summary of all recorded documents affecting the title of the property

Question 9

Opinion of Title

Answer 9

An attorney’s opinion as to the the status of the title

Question 10

Title Insurance

Answer 10

An insurance policy that defends against defects in title not listed in the title report or abstract

Question 11

Title Commitment

Answer 11

-Commits the title company to insure the property
-Snapshot that shows the condition of title at a specific moment in time.

Question 12

Loan Policy

Answer 12

• Gives title protection to a lender who has taken real estate as collateral for a loan
• Only covers title problems
  Differences:
  1) Protects only for the amount owed on the mortgage loan
  2) does not make exceptions for claims of ownership that could have been determined by physically inspecting the property
  3) Is assignable to subsequent holders of that same loan

Question 13

Title Plant

Answer 13

A duplicate set of public records maintained by the title company

Question 14

Marketable Title

Answer 14

Title that is free from any reasonable doubt as to who the owner is

Question 15

Quiet Title Suit

Answer 15

Court-ordered hearings held to determine land ownership
- Quiets the claims of those without a genuine interest in the property
- Clean up a disputed title

Question 16

Torrens System

Answer 16

• A state sponsored method of registering land titled
• Show ownership and claims against that ownership as established by a court of law
• Everything is on a single page

Question 17

Marketable Title Act

Answer 17

• Legislation aimed at making abstracts easier to prepare and less prone to error
• There is a statutory period that cuts off claims to rights of interests in land that have been inactive for longer than the statutory period

Question 18

Statute of Frauds

Answer 18

• Requires that written deeds be used to transfer real estate ownership

Question 19

An investor is considering the purchase of a 100-unit apartment building that is fully occupied.

Answer 19

By their presence, the tenants are giving constructive notice of their right to be there.

Question 20

When a person is aware of another’s rights or interest in real property, that person is said to have:

Answer 20

Actual notice
(It is gained by what one has actually seen, heard, read or observed)

Question 21

Documents are recorded by

Answer 21

Submitting the original document which is photocopied and placed on file

Question 22

An unrecorded deed to land is binding upon

Answer 22

The parties to the deed, but not subsequent purchasers, subsequent lenders or the public generally

Question 23

Priority of a recorded instrument is determined by the date of

Answer 23

Recordation

Question 24

Grantor is also known as

Answer 24

The Seller

Question 25

In completing a title search, what does an abstracter do first

Answer 25

Check the grantee index to verify the present owner's claim of title

Question 26

Instruments are recorded in the public record in what order

Answer 26

Chronological order, as received for recordation

Question 27

Among the sources which have to be checked to establish an unbroken chain of title would be

Answer 27

Records of civil records, probate courts, mortgage records and judgment rolls all have to be checked.

Question 28

The name of the borrower would be filed alphabetically in the

Answer 28

Mortgagor Index

Question 29

What is not normally checked in searching a title to parcel of land

Answer 29

Chattel mortgage records - records of mortgages on personal property

Question 30

Lis Pendens Index

Answer 30

Where pending lawsuits are indexed

Question 31

Title insurance companies were originally organized to provide protection for

Answer 31

Attorneys and abstractors

Question 32

Before a title company will issue a title insurance policy on a property

Answer 32

Title insurance companies require a title report showing the apparent condition of the title before issuing a title insurance policy - No physical inspection of the property is required

Question 33

Binder

Answer 33

Commitment of the insurance company to issue a title policy to a property.

Question 34

Current Survey

Answer 34

Would disclose any encroachments on the property, but would not be disclosed by an abstract of title, title insurance or an attorney's opinion of title

Question 35

The premium for a title insurance policy is

Answer 35

A single premium, paid upon issuance

Question 36

Lender's policy

Answer 36

A title insurance policy issued for the protection of a lender who has taken real estate as collateral for a loan - Issued in an amount equal to the original amount of the mortgage loan - It declines as the loan is amortized

Question 37

When both an owner's and a lender's policy of title insurance are purchased simultaneously

Answer 37

the combined cost is slightly more then for the owner's policy alone

Question 38

Should a title insurance company elect to fight a claim in court, the legal expenses incurred will be

Answer 38

assumed by the title insurance company without affecting the coverage

Question 39

The Torrens certificate of title is more meaningful than an attorney's certificate of title because

Answer 39

It was founded on judicial decision, whereas an attorney's certificate is founded on an opinion of the condition of the title

Question 40

A quiet title suit is necessary for a

Answer 40

Torrens certificate

Question 41

In a search of the grantors index one will find seller's names listed in

Answer 41

Alphabetical order. All grantors named in documents recorded during that year.