Key Terms

Question 1

The act of placing documents in the public record

Answer 1

Recording

Question 2

The act of entering documents affecting or conveying interests in real estate in the record’s office established in each county

Answer 2

Recording

Question 3

A deed or mortgage ordinarily is not effective against subsequent purchasers or mortgagees until it is ___.

Answer 3

Recorded

Question 4

Anyone who has an interest in a parcel of real estate can take certain steps, called ___, to ensure that other’s know about the individual’s interest.

Answer 4

Giving notice

Question 5

What are the 2 basic types of notice?

Answer 5

1) Constructive notice
2) Actual notice

Question 6

___ is the legal presumption that information may be obtained by an individual through due diligence.

Answer 6

Constructive notice

Question 7

Properly recording documents in the public record serves as ___ to the world of an individual’s rights or interest, as does the physical possession of a property.

Answer 7

Constructive notice

Question 8

Who is responsible for discovering the interest through constructive notice?

Answer 8

Prospective purchaser or lender

Question 9

___ is also called direct knowledge

Answer 9

Actual notice

Question 10

___ means not only that information is available, but also that someone has given the information and actually knows it.

Answer 10

Actual notice

Question 11

An individual who has searched the public records and inspected the property has ___ notice.

Answer 11

Actual notice

Question 12

If it can be proved that an individual has had ___ notice of information, that person cannot use a lack of constructive notice to justify a claim.

Answer 12

Actual

Question 13

If it can be proved that an individual has had actual notice of information, that person cannot use a.lack of ___ to justify a claim

Answer 13

Constructive notice

Question 14

An unrecorded deed is an example of a lack of ___.

Answer 14

constructive notice

Question 15

___ refers to the order of rights in time.

Answer 15

Priority

Question 16

Questions about priority of rights in real estate should be referred to a(n) ___.

Answer 16

Attorney

Question 17

The record of a property’s ownership

Answer 17

Chain of title

Question 18

The ___ begins with the earliest owner, and each owner is linked to the next so that a chain is formed.

Answer 18

Chain of title

Question 19

An unbroken ___ can be traced through linking conveyances from the present owner back to the earliest recorded owner.

Answer 19

Chain of title

Question 20

Chain of title does not include ___ and ___ or any other document that is not directly related to ___.

Answer 20

liens
encumbrances
ownership

Question 21

If ownership cannot be traced through an unbroken chain, a(n) ___ or ___ in the chain of title is said to exist.

Answer 21

Gap or cloud

Question 22

A court action intended to establish or settle the title to a particular property, especially when there is a cloud on the title

Answer 22

Suit to quiet title

Question 23

A(n) ___ might be required when a grantor acquired title under one name and conveyed it under another name.

Answer 23

Suit to quiet title

Question 24

A(n) ___ might be required when there is a forged deed in the chain of title.

Answer 24

Suit to quiet title

Question 25

In a suit to quiet title, often times the simple procedure of obtaining any relevant ___ deeds is used to clear title and establish ownership

Answer 25

Quitclaim

Question 26

An examination of all the public records to determine whether any defects exist in the chain of title

Answer 26

Title search

Question 27

Examining the records of the conveyances of ownership, beginning with the present owner and then traced back to its origin.

Answer 27

Title search

Question 28

Title searches begin with the ___ and trace ___ to its ___

Answer 28

Begin with the present owner, trace back to its origin

Question 29

A report of what the title search found in the public record

Answer 29

Abstract of title

Question 30

The person who prepares an abstract of ttitle

Answer 30

Abstractor

Question 31

Who prepares a report of what the title search found in the public record?

Answer 31

Abstractor

Question 32

The ___ searches all the public records and then summarizes the various events and proceedings that affected the title throughout its history.

Answer 32

Abstractor

Question 33

The ___ begins with the original grant (root) and then provides a chronological list of recorded instruments.

Answer 33

Abstract of title

Question 34

The abstract of title begins with the ___ and then provides a(n) ___ list of ___.

Answer 34

Begins with the original grant (root) Provides a chronological list of recorded instruments

Question 35

A(n) ___ includes all recorded liens and encumbrances along with their current statuses.

Answer 35

Abstract of title

Question 36

An abstract of title includes all ___ and ___ along with their current statuses

Answer 36

Liens and encumbrances

Question 37

A list of all public records examined is provided as evidence of the ___.

Answer 37

Scope of search

Question 38

Good or clear title, reasonably free from the risk of litigation over possible defects

Answer 38

Marketable title

Question 39

To be ___, a title must disclose no serious defects and not depend on doubtful questions of law or fact to prove its validity.

Answer 39

marketable

Question 40

To be ___, a title must not expose a purchaser ot the hazard of litigation or threaten the quiet enjoyment of the property

Answer 40

marketable

Question 41

To be ___, a title must convince a reasonably well-informed and prudent purchaser, acting on business principles and with knowledge of the facts and their legal significance, that he could sell or mortgage the property at a later time

Answer 41

marketable

Question 42

___ means that the chain of ownership is free and clear of defects and should any problem arrise, the title insurer will cover the issue as per the insurance policy

Answer 42

Marketable

Question 43

___ title is often referred to by banks in a foreclosure sale

Answer 43

Insurable

Question 44

___ title means that the title insurance company knows that there are defects on the title, but believes that the risks of those defects becoming problematic is low.

Answer 44

Insurable

Question 45

A statement of opinion regarding title status and the date the certificate is issued

Answer 45

Certificate of title

Question 46

A(n) ___ certifies the condition of the title's history based on an actual examination of the public records (title search)

Answer 46

Certificate of title

Question 47

An opinion of title status based on a review of the abstract by an attorney

Answer 47

Attorney's opinion of title

Question 48

Many buyers purchase ___ to defend the title from any defects that cannot be discovered in public records

Answer 48

Title insurance

Question 49

A contract under which the policyholder is protected from losses that arise from defects in the title

Answer 49

Title insurance

Question 50

___ insurance protects from an event that occurred before the policy was issued.

Answer 50

Title

Question 51

After conducting a title search, title companies will issue a(n) ___ that describes the type of policy that will be issued.

Answer 51

Preliminary report of title

Question 52

A(n) ___ is also called a commitment to issue a title policy.

Answer 52

Preliminary report of title

Question 53

What 5 things are included in a preliminary report of title?

Answer 53

1) Name of insured party 2) Legal description of real estate 3) estate or interest covered 4) conditions & stipulations under which policy is ussed 5) Schedule of all exemptions, including encumbrances and defects found in public records, and any known unrecorded defects

Question 54

The substitution of one creditor for another, with the substituted person succeeding to the legal rights and claims of the orginal claimant

Answer 54

Subrogation

Question 55

When a title company makes a payment to settle a claim covered by a policy, the company generally acquires the right to any remedy or damages available to the insure. this right is called ___.

Answer 55

Subrogation

Question 56

___ is used by title insurers to acquire from the injured party rights to sue to recover any claims the insurers have paid

Answer 56

Subrogation

Question 57

___ title insurance policies normally insure the title as it is known from public records.

Answer 57

Standard coverage

Question 58

___ title insurance polices insure the title as it is known from public records, as well as against such hidden defects as forged documents, conveyances by incompetent grantors, incorrect marital statements, and improperly delivered deeds.

Answer 58

Standard coverage

Question 59

___ title insurance polices includes the protections of standard policies plus additional protections.

Answer 59

Extended coverage

Question 60

___ title insurance polices include additional protections, such as defects that may be discovered by inspection, examination of survey, and unrecorded liens not known by the policyholder

Answer 60

Extended coverage

Question 61

What kind of title insurance policy provides coverage against defects and liens listed in the policy, defects known to the buyer, and changes in land use brought out by zoning ordinances?

Answer 61

Neither

Question 62

Uninsurable losses that are named in a title insurance policy, such as zoning ordinances, restrictive covenants, easements, certain water rights, and current taxes and special assessments

Answer 62

Exclusions

Question 63

Title insurance policy that is issued for the benefit of the new buyer, and their heirs or devisees

Answer 63

Owner's policy

Question 64

The owner's policy is issued for benefit of the ___ and is almost always paid for by the ___ at closing.

Answer 64

Benefit of the buyer Paid for by the seller

Question 65

Title insurance policy that is issued for benefit of the mortgage company

Answer 65

Lender's policy

Question 66

The lender's policy is usually paid for by the ___ at closing.

Answer 66

Buyer

Question 67

As mortgage loan balance is reduced, what happens to the coverage in the lender's title insurance policy?

Answer 67

Coverage decreases

Question 68

A lessee's interest can be insured with a(n) ___ title insurance policy

Answer 68

Leasehold

Question 69

___ title insurance polices are available to insure the title to property purchased in a court sale

Answer 69

Certificate of sale