ALTA Title Commitment 3

Question 1

Which of the following is typically listed as a standard exception in Schedule B-II of a title commitment?

Accepted Answer

Rights or claims of parties in physical possession not shown by the public records

Answer

The current purchase price of the property

Answer

The amount of the title insurance premium to be charged

Answer

The property's current assessed value for tax purposes

Question 2

Unrecorded mechanic's liens are listed as a standard exception in a title commitment because:

Accepted Answer

Potential lien claims for recent work may not yet be reflected in the public records

Answer

Mechanic's liens can never attach to real property under ALTA guidelines

Answer

All mechanic's liens are automatically waived at closing by operation of law

Answer

Only lenders, not owners, are affected by mechanic's lien claims

Question 3

The standard exception for 'easements or claims of easements not shown by the public records' is intended to protect the insurer against:

Accepted Answer

Claims of easement rights based on prescriptive use, implication, or other non-recorded means

Answer

Easements that have been properly recorded in the county recorder's office

Answer

Utility easements expressly created and granted by the current owner of record

Answer

Easements described in prior deeds within the property's chain of title

Question 4

In a title commitment, taxes that have been assessed but are not yet due and payable are typically:

Accepted Answer

Listed as a Schedule B-II exception that remains in the final policy

Answer

Removed from the commitment upon written request of the lender

Answer

Listed as a Schedule B-I requirement to be paid in full at closing

Answer

Ignored entirely because they have not yet become an enforceable lien

Question 5

The standard exception for 'any facts, rights, interests, or claims that could be ascertained by an inspection of the land' is designed to:

Accepted Answer

Exclude matters that a physical survey or on-site inspection might reveal but public records do not show

Answer

Require the buyer to hire a licensed private investigator before closing

Answer

Bring additional uninsured parties under the protection of the title commitment

Answer

Require the seller to prepare and deliver a written disclosure statement

Question 6

How can a buyer typically eliminate the standard exception for 'rights of parties in possession' from their owner's title policy?

Accepted Answer

By obtaining extended coverage and providing a current ALTA/NSPS survey confirming no adverse possession

Answer

By recording a notice of non-responsibility at the county recorder's office

Answer

By having the seller execute and record a declaration that no tenants occupy the property

Answer

By purchasing an inflation endorsement in addition to the standard owner's policy

Question 7

The primary purpose of listing specific exceptions in Schedule B-II of a title commitment is to:

Accepted Answer

Inform the proposed insured of matters that will NOT be covered under the final title policy

Answer

List all requirements that the seller must satisfy prior to the closing date

Answer

Identify every document that must be recorded at or after closing

Answer

Provide the proposed insured with a complete summary of the property's ownership history