Real Property 2 Quiz 4

When buying a property you want to make sure the title you get is a good title, so you are not buying a problem or a lawsuit; you want to be sure the buyer actually owns the property.

This is making sure you have what?

• marketable title

• clean title

• open title

• closed title

 A contract said the sale was subject to the covenants of restrictive covenants, easements of record, and utility easements if any. The buyer wants to get out of the contract b/c the sidewalk is not level. 

The buyer said there was not marketable title b/c the city had to give special dispensation on the variance from the city. The buyer did not want to deal with this for fear of the city changing its mind. Is this a marketable title?

• Yes

• No

Answer explanation

the buyer was just looking for a way to get out of this deal

Title is considered ​ (a)   if a reasonably prudent person under the circumstances would refuse to accept title in the ordinary course of business. It is not necessary that the title actually be bad for it to be unmarketable. Marketable title assures the​ (b)   the quiet and peaceful enjoyment of the property, which must be free from​ (c)   . An encumbrance is anything that constitutes a burden or another’s claim upon the title, such as a right-of-way easement, a condition that may work a forfeiture of the estate, or a right to withdraw resources or minerals.

• unmarketable
• transferee
• encumbrances

if the property is not properly zoned then that is unmarketable title.

• Yes

• No

 the test of the ______(1 word) of a title is whether there is an objection thereto such as would interfere with a sale or with the market value of the property.

If the title insurance indicated there was a violation in the setback covenant. Does that mean the title is unmarketable?

• Yes

• No

Answer explanation

A violation of a restrictive covenant may render title unmarketable. (2) Insuring against a defect in title does not cure the defect.

it is well settled that merchantable title is not ​ (a)   title but rather title reasonably secure against the hazard, annoyance, and expense of future litigation. Merchantable title is that which a ​ (b)   person will accept as not subject to a doubt or cloud that would affect its ​ (c)   . 

• perfect
• reasonable
• market value

Title companies usually go back __ years

• 6

• 10

• 20

• 1

ULTA obliges the seller of real estate to provide a marketable title at the time of conveyance to include warranties of title in the deed and if the contract is for sale of a possessory interest to be able to deliver possession to the buyer w/o court action or breach of peace.

• True

• False

What is true about a Marketing Contract? Choose all that apply

• usually covers a short period of time, almost always less than a year

• The marketing contract specifies the price and other conditions of the sale

• Under a typical marketing contract, the purchaser obtains possession only after paying the full contract price