Unit 2 Module 2

A lien filed in the office of the Clerk of Superior Court that gives notice to the public that legal action may occur is called a notice of:

• lis pendens

• riparian suit

• action of quiet title

• judgment

Answer explanation

Lis pendens is a notice of pending litigation.

Which of the following is an example of subordination ?

• A married couple sign a deed of trust

• A lender in a superior position agrees to take a lower position

• A tenant agrees to terms in a contract contrary to public law

• When two similar properties are for sale, the one with the lower price will sell faster

Answer explanation

Subordination is changing the priority of a lien.

A party wants to obtain title through adverse possession. The legal action is called:

• lis pendens

• riparian suit

• suit to quiet title

• eminent domain

Answer explanation

An action or suit to quiet title asks the court to settle who has the highest claim to the property.

A river diverted ten nmiles upstream from a farm causing the water level of a lake bordering the farm to recede twenty feet. As a result of the drop, the farm owner gains 5,0000 square feet of land.This is an example of:

• reliction

• alluvion

• avulsion

• erosion

Answer explanation

Reliction is the extension of land when water permanently recedes.

Which of the following statments is TRUE regarding title insurance policies?

• The mortgagor policy eventually terminates when the borrower pays off the loan in full

• The mortgagee must pay an annual renewal fee to maintain title insurance protection

• Title insurance covers all possible claims against a property after the sale

• Title insurance covers defects that a closing attorney failed to identify prior to closing

Answer explanation

The mortgagee/lender policy terminates once the loan is paid in full. Title insurance is a one-time fee that does require additional policy payments .Title insurance cover the "sins of the past"

A mechanic lien is:

• automatic once a tradesmen provides labor or materials

• has a higher priority above all other liens.

• binding against all real property owned by the debtor

• specific to the property where work occurred.

Ricky purchases a home in 2020, which he financed with a properly recorded note and deed of trust. On September 15, 2021, he obtained a second mortgage for $60,000 to send a child to college, and the lender recorded it on September 16, 2021. On October 1,2022, Ricky entered into a contract to install solar hot water, which he failed to pay for. If Ricky defaults on his second mortgage loan and the solar system installer properly filed a mechanic's lien against his property, which of the following lien priority rankings is CORRECT?

• The first mortage, the second mortage, the mechanics lien

• The second mortage lien, the first mortage lien, the mechanic's lien

• The mechanics lien, the first lien, the second mortage

• The mechanic's lien, the second mortage, the first mortage

Answer explanation

Lien priority is determined by the date and time the lien is recorded.

Mr. Gardener planted several trees near his property boundary. After years of growing, roots and branches have extended over onto his neighbor's property. Which of the following is TRUE?

• The branches are encumbrance

• The neighbor cannot trim the tree branches

• The branches are considered a prescriptive easement

• The branches are considered an emblement

Answer explanation

An encroachment is an encumbrance on the property. Encroachments occur when an improvement intrudes on the land of another.

Thed owner of a property decides to sell. The property is subject to an appurtenant easement. Which of the following statement is TRUE?

• The dominant owner must negotiate with the buyer to continue to use of the appurtenant easement

• The appurtenant easement terminates upon transfer of the property

• The appurtenant easement is binding on the new owner without additional action

• The servient estate must seek permission to sell the property from the dominant estate

Answer explanation

An appurtenant easement "runs with the land" and automatically transfers when sold.

With an appurtenant easement, the property that is benefited by a right of way easement which crosses the property of another is known as the:

• dominant estate

• tenement estate

• servient estate

• prescriptive estate

Answer explanation

The dominate estate gets the benefit. The servient gets the burden.