Chapter 1 Summary - Cengage



Chapter Summary

1. The role of a legal assistant in title examinations varies from state to state. In some states, a legal assistant performs the title examination. A real estate closing assistant usually does not perform a title examination but is responsible for ordering the title examination and reviewing it.

2. A bona fide purchaser for value is a person who purchases real property in good faith for valuable consideration without notice of any claim to or interest in the real property by any other party. A bona fide purchaser for value takes the property free and clear of any claims to or interest in the property that the bona fide purchaser does not have notice of.

3. A bona fide purchaser for value can have two kinds of notice: actual notice and constructive notice. Actual notice occurs when a purchaser has direct knowledge or information about title matters. Constructive notice is a presumption of law that charges a purchaser with the responsibility of learning about all title matters that result from an inspection of the property or an examination of the public real property records.

4. A title examination gives a bona fide purchaser for value actual knowledge of documents recorded in the public real property records, of which by law, the bona fide purchaser has constructive notice.

5. Recording statutes are state statues which regulate the recordation of real property documents. There are three types of recording statutes: race, notice, and race-notice. A race recording statute provides that the first person to record between conflicting claims will have priority. A notice recording statute provides that between conflicting claims, the person who buys without notice of the other conflicting claim would have priority regardless of when the document is recorded. A race-notice recording statue which is the most common, provides that in order to have priority over a conflicting claim a person must buy the property without notice of the claim and record the deed first ahead in time of the conflicting claim.

6. Title examinations are generally conducted in the courthouse of the county where the real property is located. The minimum information required for a title examination is: a) a legal description of the property to be examined, b) the name of the current owner, and c) copies of all deeds, surveys or any prior title examinations or title insurance policies that affect the property.

7. The indices used during a title examination are the grantor and grantee index. A grantee index is an alphabetical index by last name of all people who are grantees of any property during a given year within a county. The grantee index would list purchasers, holders of mortgages and deeds of trust, easements, tenants and holders of liens. A grantor index is an alphabetical index by last name of all people who are grantors of real property within a county. The grantor index would list the names of sellers, borrowers, mortgagors, grantors of easements, etc.

8. A judgment is a money debt which can become a lien when recorded. A judgment, once entered in the public records, becomes a lien on all property owned by the judgment debtor at the time of recording and all future property acquired after recording by the judgment debtor.

9. A lis pendens is a notice that there is a lawsuit pending regarding the title to the real property.

10. A title report will generally contain the following information: a) the name of the current owner of the property; b) a legal description of the property; c) existing unpaid loans or mortgages; d) any other unpaid loans; e) status of taxes; f) a list of all easements, covenants and other restrictions; g) any objections to marketability; and h) any other matters that affect title.

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