Unit 7

Question 1

Constructive notice

Answer 1

someone took deed down to courthouse and had it recorded

Question 2

How to serve a constructive notice

Answer 2

get recorded or physically move into property and take possession

Question 3

Actual notice

Answer 3

there has been a transfer of title and people have actual knowledge it happened but no one necessarily moved in or recorded deed

Question 4

Recording

Answer 4

act of places documents in public record

Question 5

Who has superior priority

Answer 5

he or she who records first has a superior priority

Question 6

Chain of title

Answer 6

record of a property’s ownership; law does not require these get recorded

Question 7

Title search

Answer 7

search the chain of title including past 40-60 years of conveyances up to the previous owner

Question 8

Action to quiet title

Answer 8

establish ownership by a court action

Question 9

cloud on a title

Answer 9

ownership cannot be traced through an unbroken chain, a gap in the chain

Question 10

Abstract of title

Answer 10

summary report of what the title search found in the public records

Question 11

Marketable title

Answer 11

title is acceptable to a reasonably prudent person and which will not subject the buyer to litigation; does not disclose the purchases to the hazard of litigation; and the purchaser could sell or mortgage the property at a later time

Question 12

Is a deed proof of ownership

Answer 12

no

Question 13

When do questions of a marketable title need to be raised?

Answer 13

before acceptance of the deed

Question 14

What is the best proof of title?

Answer 14

title insurance policy

Question 15

What provides proof of ownership?

Answer 15

Certificate of title accompanied by an attorney’s attorney’s opinion of title

Question 16

Title insurance policy

Answer 16

insures the title against a defect in the deed

Question 17

What types of coverage can you get on a title insurance policy?

Answer 17

standard or extended

Question 18

Does a title insurance policy cover defects or liens already listed in the deed?

Answer 18

no

Question 19

When is the annual premium paid for a title insurance policy?

Answer 19

day of closing

Question 20

What is evidence that a title is marketable?

Answer 20

proof of ownership

Question 21

Owners policy

Answer 21

goes to the new buyer; customary but not law; paid for by seller

Question 22

Lender’s policy

Answer 22

mortgagee that protects the lender that does not exceed the amount of the loan

Question 23

Torrens system

Answer 23

abstractor does title search, present information to a court, court holds hearing and judge issues opinion if title is marketable → if clear, issues document to buyer called Torrens certificate

Question 24

Torrens certificate

Answer 24

document submitted to buyer in Torrens system

Question 25

Do states that use the torrens system require title insurance?

Answer 25

not usually because opinion of court

Question 26

Subrogate

Answer 26

give up your right to sue to the insurance company

Question 27

Is a certificate of title guarantee of ownership

Answer 27

no

Question 28

Attorney's opinion of title

Answer 28

based on a review of the abstract and determines if sufficient evidence of title

Question 29

title insurance

Answer 29

contract under which the policyholder is protected from losses arising from defects in the title

Question 30

Owner's policy

Answer 30

issued for benefit of owner

Question 31

lender's policy

Answer 31

issued for the benefit of the mortgage lender

Question 32

What is the amount of the coverage for a mortgage loan determined by?

Answer 32

amount of the mortgage loan