Chapter 9- Book Quiz (plus)

A document that protects against hidden risks, such as forgeries and loss due to defects in the title, subject to specific exceptions, is called

• an abstract of title.

• a certificate of title.

• a chain of title.

• a title insurance policy.

Answer explanation

The answer is a title insurance policy. Title insurance is a contract under which the policyholder is protected from losses arising from defects in the title and is considered the best defense of title. (p. 143-144)

The date and time a document was recorded establishes which of the following?

• Subrogation

• marketable title

• chain of title

• priority of rights

Answer explanation

The answer is priority of rights. Priority refers to the order of rights in time. The date and time a document is recorded establishes the priority of the right or interest. (p. 141)

If a property has encumbrances, it

• cannot be sold.

• can be sold if a buyer agrees to take it, subject to the encumbrances.

• cannot have a deed recorded without a survey.

• can be sold only if title insurance is provided.

Answer explanation

The answer is can be sold if a buyer agrees to take it, subject to the encumbrances. In a conference is a right, claim, or interest held by someone other than the landowner. The fact that the title is encumbered does not prevent that title from being transferred, but the new owner’s title would be subject to those existing encumbrances. (p. 140, 142)

The person who prepares an abstract of title for a parcel of real estate

• write a brief history of the title after inspecting the county records for documents affecting the title.

• issues a certificate of title.

• inspects the property.

• insures the condition of the title.

Answer explanation

The answer is write a brief history of the title after inspecting the county records for documents affecting the title. An abstractor examines public records in the recorder of deeds and other government offices. Following the search, the abstractor prepares a summary report of events and proceedings throughout the title’s history. This report is an abstract of title. (p. 142)

Which of the following is acceptable as the evidence of marketable title?

• A trust deed

• An affidavit

• A title insurance policy

• A warranty deed

Answer explanation

The answer is a title insurance policy. A deed by itself is not considered sufficient evidence of ownership. Title insurance is a contract under which the policyholder is protected from losses arising from defects in the title and is considered the best defensive title. (p. 143)

To be eligible for recording in Pennsylvania, a document must be in writing, properly executed and

• the signature verified.

• countersigned.

• witnessed.

• acknowledged.

Answer explanation

The answer is acknowledged. To be eligible for recording in Pennsylvania, a document must be in writing, properly executed (signed), and acknowledged before a notary public. (p. 140)

A title search of the public records may be conducted by

• Anyone.

• Attorneys and abstractors only.

• Attorneys, abstractors, and real estate licensees only.

• Anyone who obtains a court order under the Freedom of Information act.

Answer explanation

The answer is anyone. By entering documents into the public record, the information becomes available to anyone who may be interested in researching the title to a parcel of real estate. Access to public records is unlimited. (p. 142)

A purchaser went to the county building to check the records, which showed that the seller was the grantee in the last recorded deed and that no mortgage was on record against the property. The purchaser may assume which of the following?

• The seller did not mortgage the property.

• The seller has good title.

• No one else is occupying the property.

• All taxes are paid and no judgments are outstanding.

Answer explanation

The answer is the seller did not mortgage the property. Recording a mortgage serves constructive notice of the claim to the property by the mortgage holder. Because there was no mortgage in the public record, the purchaser may assume that the seller did not mortgage the property. (p. 140-141)

What is the primary purpose of recording a deed in the public records?

• To verify the property's market value.

• To confirm the property's zoning classification.

• To ensure the property is free of liens.

• To provide public notice of ownership.

Which of the following documents is typically used to transfer ownership of real estate?

• A deed.

• A mortgage.

• A lease agreement.

• An easement.