CA Real Estate Exam Prep: Transfer of
Property Suitable Questions And
Answers
Title Insurance Suitable Answers Protects buyers and lenders (through separate
policies) against financial loss that might be incurred because of title defects discovered
after closing.
lender's policy Suitable Answers offers protection for an amount equal to the mortgage
loan balance.
Title Policy Suitable Answers includes a legal description, a list of items covered, and a
schedule of exceptions (or exclusions).
What does the the schedule of exceptions describe? Suitable Answers The schedule of
exceptions describes items the policy doesn't cover, such as:
Any liens recorded after the effective date of the title policy, including mechanic's liens,
taxes, and special assessments
Any claims not shown in public records
Claims against a title by anyone who lives or lived on the property unless there's a
recorded record of tenancy
If more than the standard title insurance is required, an extended coverage policy can
be purchased. True or false? Suitable Answers True
What does the standard policy protect against? Suitable Answers Protects against
defects that may exist but haven't been discovered, such as errors in the legal
description, forgery, or improperly recorded deeds.
What does an extended policy cover? Suitable Answers everything in the standard
policy as well as additional possible defects, such as unrecorded liens, an incorrect
survey, or boundary encroachments.
Extended policies are usually for the lender. True or false? Suitable Answers True
In the event of a claim, the title company will do what? Suitable Answers The title
company will either pay the debt or take the claimant to court. If the title company pays
the claim, it may seek reimbursement from the at-fault party.
, Chain of Title Suitable Answers establishes the path of property ownership from its first
owner to the current owner. The chain begins with the current owner and works
backwards.
Marketable Title Suitable Answers Good or clear title, reasonably free from the risk of
litigation over possible defects.
Cloud on Title (Title Defect) Suitable Answers any encumbrance, such as a lien or
inheritance claim, that prevents the seller from providing clear, marketable title.
What is the most common title defect? Suitable Answers the seller's existing mortgage
lien.
True or False?
1. California law requires the buyer to receive notice if title insurance won't be provided.
2. This notice does not have specific language that must be used, and the notice must
be acknowledged by the buyer. Suitable Answers 1. True
2. False
California Land Title Association (CLTA) Suitable Answers Trade association for title
insurance companies that issues standard policies of title insurance.
What is a deed? Suitable Answers a written and signed legal instrument that transfers
(conveys) title to real property from the owner (grantor) to the new owner (grantee). The
deed is the document that establishes proof of property ownership.
The deed is the document that establishes proof of property ownership. True or False?
Suitable Answers True
General Warranty Deed (full covenant and warranty deed) Suitable Answers offers the
greatest warranty to buyers (rarely used in California)
Grant Deed Suitable Answers A grant deed carries with it implied warranties that the
grantor has not encumbered the property (California uses the grant deed to convey
property in most transactions)
Gift Deed Suitable Answers the same as the grant deed, but specifies the title is
transferred with no consideration, or with consideration of "love and affection."
The general warranty deed provides six covenants (promises). What are they? Suitable
Answers Covenant of seisin
Covenant of right to convey
Covenant against encumbrances
Covenant of quiet enjoyment
Covenant of further assurances
Property Suitable Questions And
Answers
Title Insurance Suitable Answers Protects buyers and lenders (through separate
policies) against financial loss that might be incurred because of title defects discovered
after closing.
lender's policy Suitable Answers offers protection for an amount equal to the mortgage
loan balance.
Title Policy Suitable Answers includes a legal description, a list of items covered, and a
schedule of exceptions (or exclusions).
What does the the schedule of exceptions describe? Suitable Answers The schedule of
exceptions describes items the policy doesn't cover, such as:
Any liens recorded after the effective date of the title policy, including mechanic's liens,
taxes, and special assessments
Any claims not shown in public records
Claims against a title by anyone who lives or lived on the property unless there's a
recorded record of tenancy
If more than the standard title insurance is required, an extended coverage policy can
be purchased. True or false? Suitable Answers True
What does the standard policy protect against? Suitable Answers Protects against
defects that may exist but haven't been discovered, such as errors in the legal
description, forgery, or improperly recorded deeds.
What does an extended policy cover? Suitable Answers everything in the standard
policy as well as additional possible defects, such as unrecorded liens, an incorrect
survey, or boundary encroachments.
Extended policies are usually for the lender. True or false? Suitable Answers True
In the event of a claim, the title company will do what? Suitable Answers The title
company will either pay the debt or take the claimant to court. If the title company pays
the claim, it may seek reimbursement from the at-fault party.
, Chain of Title Suitable Answers establishes the path of property ownership from its first
owner to the current owner. The chain begins with the current owner and works
backwards.
Marketable Title Suitable Answers Good or clear title, reasonably free from the risk of
litigation over possible defects.
Cloud on Title (Title Defect) Suitable Answers any encumbrance, such as a lien or
inheritance claim, that prevents the seller from providing clear, marketable title.
What is the most common title defect? Suitable Answers the seller's existing mortgage
lien.
True or False?
1. California law requires the buyer to receive notice if title insurance won't be provided.
2. This notice does not have specific language that must be used, and the notice must
be acknowledged by the buyer. Suitable Answers 1. True
2. False
California Land Title Association (CLTA) Suitable Answers Trade association for title
insurance companies that issues standard policies of title insurance.
What is a deed? Suitable Answers a written and signed legal instrument that transfers
(conveys) title to real property from the owner (grantor) to the new owner (grantee). The
deed is the document that establishes proof of property ownership.
The deed is the document that establishes proof of property ownership. True or False?
Suitable Answers True
General Warranty Deed (full covenant and warranty deed) Suitable Answers offers the
greatest warranty to buyers (rarely used in California)
Grant Deed Suitable Answers A grant deed carries with it implied warranties that the
grantor has not encumbered the property (California uses the grant deed to convey
property in most transactions)
Gift Deed Suitable Answers the same as the grant deed, but specifies the title is
transferred with no consideration, or with consideration of "love and affection."
The general warranty deed provides six covenants (promises). What are they? Suitable
Answers Covenant of seisin
Covenant of right to convey
Covenant against encumbrances
Covenant of quiet enjoyment
Covenant of further assurances
