CA Real Estate Exam Prep -
Transfer of Property Questions &
Answers
Protects buyers and lenders (through separate policies) against financial loss that might be
incurred because of title defects discovered after closing. - correct answer ✔✔Title Insurance
offers protection for an amount equal to the mortgage loan balance. - correct answer
✔✔lender's policy
includes a legal description, a list of items covered, and a schedule of exceptions (or exclusions).
- correct answer ✔✔Title Policy
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 - correct answer ✔✔What does the the schedule of exceptions describe?
True - correct answer ✔✔If more than the standard title insurance is required, an extended
coverage policy can be purchased. True or false?
,Protects against defects that may exist but haven't been discovered, such as errors in the legal
description, forgery, or improperly recorded deeds. - correct answer ✔✔What does the
standard policy protect against?
everything in the standard policy as well as additional possible defects, such as unrecorded
liens, an incorrect survey, or boundary encroachments. - correct answer ✔✔What does an
extended policy cover?
True - correct answer ✔✔Extended policies are usually for the lender. True or false?
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. - correct answer ✔✔In the
event of a claim, the title company will do what?
establishes the path of property ownership from its first owner to the current owner. The chain
begins with the current owner and works backwards. - correct answer ✔✔Chain of Title
Good or clear title, reasonably free from the risk of litigation over possible defects. - correct
answer ✔✔Marketable Title
any encumbrance, such as a lien or inheritance claim, that prevents the seller from providing
clear, marketable title. - correct answer ✔✔Cloud on Title (Title Defect)
the seller's existing mortgage lien. - correct answer ✔✔What is the most common title defect?
1. True
2. False - correct answer ✔✔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.
Trade association for title insurance companies that issues standard policies of title insurance. -
correct answer ✔✔California Land Title Association (CLTA)
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. - correct answer ✔✔What is a deed?
True - correct answer ✔✔The deed is the document that establishes proof of property
ownership. True or False?
offers the greatest warranty to buyers (rarely used in California) - correct answer ✔✔General
Warranty Deed (full covenant and warranty deed)
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) - correct
answer ✔✔Grant Deed
the same as the grant deed, but specifies the title is transferred with no consideration, or with
consideration of "love and affection." - correct answer ✔✔Gift Deed
Covenant of seisin
Covenant of right to convey
Covenant against encumbrances
Covenant of quiet enjoyment
Covenant of further assurances
Transfer of Property Questions &
Answers
Protects buyers and lenders (through separate policies) against financial loss that might be
incurred because of title defects discovered after closing. - correct answer ✔✔Title Insurance
offers protection for an amount equal to the mortgage loan balance. - correct answer
✔✔lender's policy
includes a legal description, a list of items covered, and a schedule of exceptions (or exclusions).
- correct answer ✔✔Title Policy
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 - correct answer ✔✔What does the the schedule of exceptions describe?
True - correct answer ✔✔If more than the standard title insurance is required, an extended
coverage policy can be purchased. True or false?
,Protects against defects that may exist but haven't been discovered, such as errors in the legal
description, forgery, or improperly recorded deeds. - correct answer ✔✔What does the
standard policy protect against?
everything in the standard policy as well as additional possible defects, such as unrecorded
liens, an incorrect survey, or boundary encroachments. - correct answer ✔✔What does an
extended policy cover?
True - correct answer ✔✔Extended policies are usually for the lender. True or false?
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. - correct answer ✔✔In the
event of a claim, the title company will do what?
establishes the path of property ownership from its first owner to the current owner. The chain
begins with the current owner and works backwards. - correct answer ✔✔Chain of Title
Good or clear title, reasonably free from the risk of litigation over possible defects. - correct
answer ✔✔Marketable Title
any encumbrance, such as a lien or inheritance claim, that prevents the seller from providing
clear, marketable title. - correct answer ✔✔Cloud on Title (Title Defect)
the seller's existing mortgage lien. - correct answer ✔✔What is the most common title defect?
1. True
2. False - correct answer ✔✔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.
Trade association for title insurance companies that issues standard policies of title insurance. -
correct answer ✔✔California Land Title Association (CLTA)
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. - correct answer ✔✔What is a deed?
True - correct answer ✔✔The deed is the document that establishes proof of property
ownership. True or False?
offers the greatest warranty to buyers (rarely used in California) - correct answer ✔✔General
Warranty Deed (full covenant and warranty deed)
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) - correct
answer ✔✔Grant Deed
the same as the grant deed, but specifies the title is transferred with no consideration, or with
consideration of "love and affection." - correct answer ✔✔Gift Deed
Covenant of seisin
Covenant of right to convey
Covenant against encumbrances
Covenant of quiet enjoyment
Covenant of further assurances
