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test 2
fin 321
240
Finance
Undergraduate 3
10/18/2016
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Term
t
 Definition
A gift deed conveys legal title.
Term
t
 Definition
A deed form conveys legal title
Term
convey
 Definition
the word ____ means transfer title
Term
F

grantor
 Definition
The person giving up ownership is called the grantee.
Term
F

grantor's
 Definition
The grantee’s signature is required in a deed.
Term
T
 Definition
For a deed to convey title to real property, it must contain the legal description of the property.
Term
t
 Definition
The signature of the grantor is required in most states for any deed to be valid.
Term
F

A granting clause is necessary in most states for a deed to be valid.
 Definition
Because it is implied, a granting clause is not necessary in most states for a deed to be valid.
Term
T

This is the covenant against encumbrances.
 Definition
The covenant which promises that the grantor will execute any instruments necessary to protect the grantee’s title is the covenant against encumbrances.
Term
F

For land title to be passed, the grantor must deliver the deed to the grantee.
 Definition
For land title to be passed, the deed must be recorded.
Term
T
 Definition
A general warranty deed protects the grantee against future problems with the grantee’s title that occurred before transfer.
Term
T
 Definition
Sylvia, as executor of a relative’s estate, realized that she had no authority to warrant and defend the acts of previous title holders when conveying the property to the new owners. She would probably use a special warranty deed.
Term
F

quitclaim deed
 Definition
A special warranty deed places the least obligations on the grantor.
Term
F

She can accomplish this goal with a will naming her nephew as recipient of her real estate
 Definition
Elaine wants to leave her real estate to her nephew, Farquart, but desires the flexibility to change her mind in the future. She can accomplish this goal with a joint tenancy with her nephew.
Term
F

not result
 Definition
A forged deed could result in a valid conveyance of title.
Term
T
 Definition
A legal process of acquiring additional property that is added to property already owned is called accession.
Term
F

by government entity
 Definition
A transfer of land by a private party to a government entity is called a public grant.
Term
F

an alienation of title.
 Definition
A change in ownership of any kind is known as a forfeiture of title.
Term
T
 Definition
When an adverse claimant tacks on his period of possession to that of a prior adverse occupant, this is called tacking.
Term
T
 Definition
An oral will, more properly known as a nuncupative will, is a will spoken by a person who is very near death.
Term
F

A holographic will is a will that is entirely handwritten, with no typed or preprinted words.
 Definition
A holographic will is a typed or preprinted will.
Term
grant
 Definition
The actual act of conveying ownership is known as a
Term
delivery, acceptance
 Definition
In addition to a grantor, grantee, land description, consideration and grantor signature, for a deed to convey ownership, there must be ____________________ and ____________________.
Term
general warranty
 Definition
The deed from that is considered to be the best for the buyer is the _________________________ deed
Term
habendum
 Definition
The “To have and to hold clause” is also known as the ____________________ clause.
Term
special warranty
 Definition
In a _________________________ deed, the grantor warrants the property’s title only against defects occurring during the grantor’s ownership and not against defects existing before that time.
Term
quitclaim
 Definition
In a ____________________ deed, if the grantor has no interest, right or title to the property described in the deed, none is conveyed to the grantee.
Term
intestate
 Definition
If a person dies without leaving a last will and testament she is said to have died ____________________.
Term
devise, devisee
 Definition
Real property that is willed is known as a ____________________ and the recipient is the ____________________.
Term
holographic
 Definition
A ____________________ will is a will that is entirely handwritten, with no typed or preprinted words.
Term
adverse possession
 Definition
Through the unauthorized occupation of another person’s land for a long enough period of time, it is possible to acquire ownership by _________________________.
Term
deed
 Definition
a written document that when properly executed and delivered conveys tile to land
Term
statute of frauds
 Definition
requires that transfers of real estate be in writing
Term
grant
 Definition
the act of conveying ownership
Term
consideration
 Definition
anything of value given to produce a contract
Term
covenants and warranties
 Definition
promises and guarantees found in a deed
Term
cloud on the title
 Definition
any claim, lien, or encumbrance that impairs title to property
Term
warranty deed
 Definition
a deed that contains the covenants of seizen, quiet enjoyment, encumbrances, further assurance, and warranty forever
Term
bargain and sale deed
 Definition
a deed that contains no covenants; it only implies that the grantor owns the property described in the deed
Term
quitclaim deed
 Definition
a deed with no covenants and no implication that the grantor owns the property
Term
intestate
 Definition
to die without a will
Term
holographic will
 Definition
a will written entirely in one’s own handwriting and signed but not witnessed
Term
adverse possession
 Definition
acquisition of real property through prolonged and unauthorized occupation
Term
color of title
 Definition
some plausible but not clear-cut indication of ownership
Term
easement by prescription
 Definition
acquisition of an easement by prolonged use
Term
alluvion
 Definition
waterborne soil deposited to produce firm, dry ground
Term
grantor
 Definition
person named in a deed who conveys ownership
Term
dedication
 Definition
private land voluntarily donated for use by the public
Term
accretion
 Definition
the process of land build-up due to the gradual accumulated of rock, sand, and soil
Term
alienation of title
 Definition
a change in ownership of any kind
Term
special warranty deed
 Definition
grantor warrants title only against defects occurring during the grantor’s ownership
Term
the most commonly used means of land title conveyance.
 Definition
A deed is
Term
warranty deed.
 Definition
A grantor warrants the extent and quality of title by using a
Term
Statute of Frauds
 Definition
What basic principle is involved in the requirement that a real property contract must be in writing to be valid?
Term
delivered and accepted.
 Definition
Title to real property passes to the grantee at the time the deed is
Term
invalid until recorded.
 Definition
A deed, which is properly completed and delivered but lacks the grantee’s signature is
Term
land
 Definition
To properly convey title to land and its building, a deed must describe the
Term
conveyance
 Definition
The words “grant and release” in a deed are words of
Term
seisen.
 Definition
The covenant, which states that the grantor is the owner and has the right to convey, is called the covenant of
Term
covenants
 Definition
The following are necessary to make a deed valid EXCEPT
Term
the lawful owner.
 Definition
The covenant of seizen warrants that one is
Term
executed and recorded.
 Definition
Title to real property will most likely transfer when the deed is
Term
against encumbrances.
 Definition
The covenant whereby the grantor guarantees that there are no tax liens, mortgages or assessments, except as stated in the deed, is called the covenant
Term
delivered and accepted
 Definition
The actual passage of title occurs when the deed is
Term
General warranty deed
 Definition
Which deed form gives the most guarantee and security to the grantee?
Term
fewer in number.
 Definition
Compared to a warranty deed, the covenants and warranties found in a grant deed are
Term
none
 Definition
How many covenants does a bargain and sale deed contain?
Term
quitclaim deed.
 Definition
A deed which does not imply that the grantor owns title is a
Term
quitclaim deeds.
 Definition
Covenants or warranties are found in all of the following EXCEPT
Term
is probated and distributed according to the will.
 Definition
A person owns property in severalty. He dies testate so the property
Term
an administrator.
 Definition
A person appointed by a court to settle the estate of a deceased person who died intestate is
Term
A permission to enter
 Definition
Which of he following would defeat a claim of adverse possession?
Term
holographic will.
 Definition
An unwitnessed handwritten will is called a
Term
observing the adverse occupant.
 Definition
A landowner can break an adverse claim by all of the following EXCEPT
Term
color of title.
 Definition
That which gives the appearance of title, but is not in fact title is
Term
accretion.
 Definition
When land is gradually added to an existing parcel by the action of water, the process is called
Term
Avulsion
 Definition
Which of the following would NOT involve the documented transfer of title?
Term
Reliction
 Definition
Which of the following is a result of one’s land area being increased by receding water?
Term
streets and roads
 Definition
In most subdivisions, the developer donates to the public
Term
trust deed
 Definition
One can transfer title to real property by all of the following EXCEPT
Term
county recorder.
 Definition
An instrument effecting the title to a parcel of real estate gives constructive notice to the world when it is recorded with the
Term
deed
 Definition
A public records office will record which of the following documents affecting land?
Term
constructive notice.
 Definition
Notice of ownership given by one’s presence on his land is called
Term
to provide constructive notice of their existence.
 Definition
Deeds are recorded
Term
constructive notice.
 Definition
The recording of an instrument in the proper county provides the public with
Term
in person
 Definition
An acknowledgement can be witnessed by a notary public
Term
It may be witnessed by a notary public.
 Definition
Which of the following is true of an acknowledgement?
Term
through January 1, 2010.
 Definition
A notary public’s commission expires on January 1, 2010. He may take a valid acknowledgement
Term
submitting the original document which is photocopied and placed on file.
 Definition
Documents are recorded by
Term
valid
 Definition
A deed, which is not recorded, is
Term
a promissory note.
 Definition
All of the following real estate documents are usually recorded EXCEPT
Term
Succession of property owners
 Definition
Which of the following most correctly describes “chain of title”?
Term
grantee index.
 Definition
Albert owns a certain parcel of land. You cold most easily find Albert’s name and this parcel listed in the
Term
lis pendens index.
 Definition
Information regarding pending law suits would be found in the
Term
A history of all recorded activity affecting a parcel of real estate
 Definition
What is an abstract of title?
Term
a title search.
 Definition
To be certain that the seller is actually the owner of the property, the buyer should order
Term
certificate of title.
 Definition
A report on the claims to title is prepared. It contains a listing of the full chain of title for 80 years. It concludes with a statement of an attorney stating the current condition of the title and who presently has claim to it. In most states this document would be known as a
Term
the conditions of the purchase agreement for this sale.
 Definition
A title report usually includes all of the following EXCEPT
Term
unrecorded liens.
 Definition
Most title insurance does not insure against
Term
It insures the owner against defects in title
 Definition
Which statement is true of title insurance?
Term
forgery and impersonation.
 Definition
A standard owner’s title insurance policy covers
Term
unrecorded encroachments.
 Definition
Standard owner’s title insurance coverage insures against all of the following EXCEPT
Term
unrecorded easements.
 Definition
A preliminary title insurance report will show all of the following EXCEPT
Term
a mortgagee’s title policy.
 Definition
A lender wanting title insurance coverage on a property it is taking as collateral would ask for
Term
lender
 Definition
A title insurance policy in favor of the mortgagee will insure the
Term
at the inception of the policy.
 Definition
Title insurance premiums are paid
Term
marketable title.
 Definition
Title that is free from reasonable doubt as to who is the owner and his ability to convey the property, is called
Term
cuts off inactive claims to rights or interests.
 Definition
The Marketable Title Act, as presently used in the United States
Term
quiet title suit.
 Definition
A request for a court-appointed hearing to determine the lawful ownership of a parcel of land is called
Term
Eliminates the need to search back further in time than the most recent quiet title action
 Definition
A Torrens certificate of title does which of the following?
Term
F

called an acknowledgment
 Definition
A formal declaration by a person signing that he or she did, in fact, sign the document is called a jurat
Term
T
 Definition
People record deeds to provide constructive notice to the world.
Term
T
 Definition
Mortgages, judgments and trust deeds are usually recorded however, 6-month leases are not.
Term
F

He should show up as a grantor of the property
 Definition
A man bought a home two years ago and sold it a year later. You would expect to find his name and a reference to the home in the mortgagee index.
Term
T
 Definition
When an attorney issues a certificate of title, he has based his opinion on an abstract of title.
Term
T
 Definition
Any subsequent purchasers of a property must obtain a new policy if they desire title insurance.
Term
F

covers the person named in the policy.
 Definition
Owner’s title insurance covers the mortgagee
Term
T
 Definition
Standard owner’s title insurance premiums are paid only once, when the policy is issued.
Term
T
 Definition
Prior to enactment of the Statute of Frauds in 1677 a landowner gave notice to the world of his claim to ownership by visibly occupying the land.
Term
T
 Definition
A person interested in a property is held by law to be responsible for making further inquiry of anyone giving visible or recorded notice. This is called “inquiry notice.”
Term
F

Most states do not require that documents be acknowledged before being eligible for recording.
 Definition
Most states do not require that documents be acknowledged before being eligible for recording.
Term
F

then placed in chronological order.
 Definition
Documents to be recorded are photocopied and then placed in alphabetic order.
Term
F

currently only 9 states
 Definition
Almost all states use the tract indexing system.
Term
T
 Definition
If a chain of title is broken, one must search outside the recorder’s office by searching probate court records and civil court actions to regain the title sequence.
Term
T
 Definition
When title is clouded by judgments against recent owners or pending lawsuits that might later affect title, information may be found in the judgment rolls or the lis pendens index.
Term
F

An abstract of title is a complete historical summary of all recorded documents concerning a particular tract of land.
 Definition
An abstract of title is a summary of all deeds or other documents dealing with the transfer of ownership.
Term
F

Title insurance is typically purchased at the time of purchase of the property.
 Definition
Title insurance is typically purchased after a property is purchased.
Term
F

decreases as the loan is paid off
 Definition
The amount of coverage provided by a lender’s title policy stays constant over the life of the policy
Term
T
 Definition
When a title defect must be removed, a quiet title suit may be the best solution.
Term
T
 Definition
Under the Torrens system, once a title is registered , any subsequent liens or encumbrances against it must be entered on the registrar’s copy in order to give constructive notice.
Term
constructive
 Definition
Notice given by the public records and by visible possession, coupled with the legal presumption that all persons are thereby notified is called ____________________ notice.
Term
actual
 Definition
____________________ notice is knowledge that one has actually gained based on what one has seen, heard, read, or observed.
Term
acknowledgement
 Definition
A formal declaration by a person signing a document that he or she, in fact, did sign the document is called a(n) ____________________.
Term
tract
 Definition
Of the two indexing systems, the ____________________ index is the simplest to use.
Term
chain, title
 Definition
A(n) ____________________ of ____________________ is the linkage of property ownership that connects the present owner to the original source of title.
Term
abstract, title
 Definition
A(n) ____________________ of ____________________ is a complete historical summary of all recorded documents affecting the title of a property.
Term
cloud
 Definition
A title defect is also known as a title ____________________.
Term
title report
 Definition
A report made by a title insurance company showing current title condition is called a _________________________.
Term
mortgagee’s
 Definition
A lender’s title insurance policy is also known as a ____________________ policy.
Term
marketable
 Definition
Title insurance has made titles to land much more ____________________.
Term
abstract of title
 Definition
a summary of all recorded documents affecting title to a given parcel of land
Term
reissue rates
 Definition
reduced rates offered by some title companies if previous owner’s policy is available
Term
witness
 Definition
one who signs a document stating that they have witnessed a parties signature
Term
judgment rolls
 Definition
where information on judgments against recent owners may be found
Term
notary public
 Definition
a person authorized to take acknowledgements
Term
title report
 Definition
a report made by a title insurance company showing current title condition
Term
abstracter
 Definition
expert in the field of title search
Term
tract index
 Definition
a system for listing recorded documents affecting a particular tract of land
Term
lis pendens index
 Definition
a publicly available index whereby a person can learn of any pending lawsuits that may affect title
Term
vested
 Definition
possessed by; owned by
Term
constructive notice
 Definition
notice given by public records or by visible possession coupled with the legal presumption that all persons are thereby notified
Term
title cloud
 Definition
a title defect
Term
certificates of title
 Definition
an opinion by an attorney as to who owns a parcel of land
Term
quiet title suit
 Definition
court-ordered hearings held to determine land ownership
Term
title plant
 Definition
a duplicate set of public records maintained by a title company
Term
actual notice
 Definition
knowledge gained from what one has seen, heard, read, or observed
Term
owner’s policy
 Definition
insurance to protect a property owner against monetary loss if his title is found to be imperfect
Term
inquiry notice
 Definition
claims to property rights the law presumes a reasonably diligent person would find through further investigation
Term
lender’s policy
 Definition
a title policy written to protect a real estate lender
Term
opinion of title
 Definition
a statement as to the ownership of a property that is made by an attorney after reading the abstract
Term
a closing statement
 Definition
All of the following are real estate contracts EXCEPT
Term
a contract.
 Definition
A meeting of the minds creating enforceable rights is called
Term
express contract.
 Definition
The agency relationship of a real estate broker with his client is most often established by
Term
bilateral contract.
 Definition
A lease is an example of a
Term
bilateral contract
 Definition
A contract that results when a promise is exchanged for a promise is called
Term
a unilateral contract.
 Definition
When one party to a contract makes a promise without first receiving any promise of performance from the other, it is called
Term
valid
 Definition
Assuming that no fraud is intended, what is the status of a contract signed by an illiterate person?
Term
it is signed by an unmarried minor.
 Definition
A real estate contract can be declared void if
Term
by the death of either buyer or seller before acceptance.
 Definition
In the absence of a special provision for such an event, an offer to purchase will probably be voided
Term
voidable
 Definition
A contract entered into by a minor is
Term
voidable.
 Definition
When a contract appears to be good and binding but, in fact, one of the parties may legally reject it, the contract is said to be
Term
ire an attorney and sue for non-performance.
 Definition
The buyer agreed to buy the property at the seller’s asking price. They shook hands on the deal. Later, the seller refused to sell. If the buyer still wants to buy, he can
Term
monetary consideration.
 Definition
All of the following are essential elements of a contract EXCEPT
Term
Acceptance
 Definition
Which of the following is an essential element of a contract?
Term
Corporations
 Definition
Which of the following are considered to be legally competent?
Term
majority
 Definition
To be legally competent, a person must reach the age of
Term
John, with a properly recorded power of attorney from Jay.
 Definition
John and Jay are brothers who received title to a property from their father. When they decided to sell the property, Jay was out of town. In order to properly transfer title, the deed could be signed by
Term
a power of attorney.
 Definition
The broker has the power to sign documents for the principal. This is probably because she holds
Term
offeror
 Definition
The party making an offer is called the
Term
Accept it
 Definition
An offeree who wishes to bind the offeror to the contract may do which of the following with an offer?
Term
He would have to revoke the offer before the seller accepted it.
 Definition
A man put up $10,000 as earnest money on a property for sale. The next day, he needed the money back and attempted to cancel his offer. Which of the following is true?
Term
acts in excess of the authority given to him by the seller under a listing agreement.
 Definition
A real estate broker could most likely be held liable to a buyer if the broker
Term
voidable
 Definition
A contract created under duress is
Term
He can declare the lease void and start eviction proceedings.
 Definition
When the prospective tenant signed the lease, he indicated that he would be using the building to sell appliances. Later, the landlord discovered that illegal bingo games were being played there. What can the landlord do?
Term
The written one would prevail
 Definition
Two persons make an oral agreement. A day later they put it in writing with several small changes. What is true about the agreement in a court of law?
Term
the statute of frauds.
 Definition
The requirement that transfers of real property be in writing is known as
Term
contract in which certain things are still to be done.
 Definition
An executory contract is a
Term
specific performance.
 Definition
If a contract is breached and the damaged party wants the contract carried out, he would sue for
Term
canceled.
 Definition
The term “rescinded” in real estate means
Term
liquidated damages.
 Definition
The sum of money agreed upon in advance to be the damages in the event certain problems occur later is best described as
Term
F

implied contract.
 Definition
A contract that results not from a written or oral agreement but from the actions of the parties involved is called an expressed contract.
Term
T
 Definition
If a contract is considered voidable, it is valid until voided.
Term
F

Voidable
 Definition
If a contract is made under duress, it would be void.
Term
F

Consideration, signatures and competent parties are necessary for a valid real estate contract but not acknowledgement.
 Definition
An acknowledgement is necessary for a valid real estate contract.
Term
T
 Definition
A real estate contract can be declared void if it is not signed.
Term
F

requirements of mutual agreement.
 Definition
The absence of duress, menace and undue influence are requirements of lawful objective.
Term
T
 Definition
The broker and the seller know of major plumbing repairs to be made. They sell the house to a buyer “as is” but do not disclose the plumbing problems. The buyer discovers the defects after closing and sues the broker and seller. Most likely, the buyer can collect, because the defect should have been disclosed.
Term
F

Money or anything worth money would be considered valuable consideration.
 Definition
Money or anything worth money exchanged in a contract is classified as unilateral consideration.
Term
T
 Definition
A contract can be discharged by novation
Term
T
 Definition
The statute of limitations concerns time limits for filing a lawsuit.
Term
F

promise is exchanged for a performance
 Definition
A unilateral contract results when a promise is exchanged for a promise.
Term
F

any change
 Definition
A minor change in the terms of a contract does not constitute a counteroffer.
Term
T
 Definition
A fraud is an act intended to deceive for the purpose of inducing another to part with something of value.
Term
F

A mistake arises from ambiguity in negotiations and mistake of material fact.
 Definition
A mistake includes innocent misrepresentation, ignorance, inability, or poor judgment
Term
T
 Definition
The purpose of requiring consideration is to demonstrate that a bargain has been struck between the parties to the contract.
Term
F

Unless prohibited by the contract, rights, benefits, and obligations under a contract can be assigned to someone else.
 Definition
Rights, benefits, and obligations under a contract can not be assigned to someone else.
Term
F

Partial performance may be acceptable to the innocent party because there may not be a great deal at stake.
 Definition
Partial performance may never be accepted as a remedy for breach of contract.
Term
T
 Definition
Under certain circumstances, the innocent party can unilaterally rescind a contract.
Term
T
 Definition
An alternative to mutual recession is novation.
Term
F

breaching party
 Definition
A lawsuit for specific performance is an action in court to force the innocent party to carry out the remainder of the contract.
Term
expressed
 Definition
A(n) ____________________ contract occurs when the parties to the contract declare their intentions either orally or in writing.
Term
unilateral
 Definition
A(n) ____________________ contract results when a promise is exchanged for performance.
Term
void
 Definition
A contract that has no binding effect on the parties who made it is a(n) ____________________ contract.
Term
forbearance
 Definition
A promise not to act by one or more of the parties to a contract is known as ____________________.
Term
offer, acceptance
 Definition
As a requirement of a valid contract ____________________ and ____________________ requires that one party makes an offer to another party.
Term
consideration
 Definition
For an agreement to be enforceable it must be supported by ____________________ to demonstrate that a bargain has been struck between the parties to the contract.
Term
parol
 Definition
Under certain circumstances the ____________________ evidence rule permits oral evidence to complete an otherwise incomplete or ambiguous written contract.
Term
executory
 Definition
A contract that is in the process of being carried out is said to be ____________________, that is, in the process of being performed.
Term
specific performance
 Definition
A lawsuit for _________________________ is an action in court by the innocent party to force the breaching party to carry out the remainder of the contract according to the precise terms, price and conditions agreed upon.
Term
liquidated damages
 Definition
Once the seller accepts an offer, if the buyer fails to complete the purchase, the seller may keep the buyer’s deposit as ______________________________.
Term
unilateral contract
 Definition
a contract in which one party makes a promise or begins performance without first receiving any promise to perform from the other
Term
mutual agreement
 Definition
an act intended to deceive for the purpose of inducing another to part with something of value
Term
competent party
 Definition
a person who is considered legally capable of entering into a contract
Term
offeror
 Definition
the party who makes an offer
Term
void contract
 Definition
a contract that is not legally binding on any of the parties that made it
Term
counteroffer
 Definition
an offer made in response to an offer
Term
rescind
 Definition
to cancel a contract and restore the parties involved to their respective positions before the contract was made
Term
duress
 Definition
use of force to obtain contract agreement
Term
forbear
 Definition
not to act
Term
assign
 Definition
to transfer one’s rights in a contract to another person
Term
money damages
 Definition
damages that can be measured in and compensated by money
Term
breach of contract
 Definition
failure, without legal excuse, to perform any promise called for in a contract
Term
specific performance
 Definition
contract performance according to the precise terms agreed upon
Term
liquidated damages
 Definition
a sum of money called for in a contract that is to be paid if the contract is breached
Term
voidable contract
 Definition
a contract that is able to be voided by one of its parties
Term
attorney-in-fact
 Definition
the person holding a power of attorney on behalf of another
Term
mutual agreement
 Definition
a meeting of the minds
Term
consideration
 Definition
an act or promise given in exchange for something
Term
statute of frauds
 Definition
requires all contracts for the sale of land to be in writing to be enforceable in a court of law
Term
novation
 Definition
the substitution of a new contract for an existing one
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